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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant To Section 14(A) Of
The Securities Exchange Act Of 1934
Filed by the Registrant /x/
Filed by a Party other than the Registrant: / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
ACCEL INTERNATIONAL CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(l)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------
5) Total fee paid:
-----------------------------------------------------------------
/ / Fee paid previously by written preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-1 1(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form Schedule or Registration Statement No.
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3) Filing Party:
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4) Date Filed:
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LOGO
ACCEL International Corporation
2000 Proxy Statement
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ACCEL INTERNATIONAL CORPORATION
75 WEST STREET
SIMSBURY, CONNECTICUT 06070
August 4, 2000
2000 ANNUAL MEETING OF STOCKHOLDERS
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
2000 Annual Meeting of Stockholders of ACCEL International Corporation (the
"Corporation" or "ACCEL") to be held at 10:00 a.m., local time on September 7,
2000, at the offices of Day, Berry & Howard LLP, 25th floor, CityPlace I,
Hartford, Connecticut. A notice of the meeting, a proxy statement and a proxy
card accompany this letter.
At the meeting, you will be asked to consider and vote upon the following:
- the election of our directors to serve until our next annual meeting;
- proposed amendments to our Certificate of Incorporation and Bylaws in the
forms attached as Appendices A and B to the proxy statement; and
- proposed amendments to our 1996 Stock Incentive Plan in the form attached
as as Appendix C.
The proposed amendment and restatement of our Certificate of Incorporation,
if adopted, would:
- increase the number of authorized shares of common stock from 15 million
shares to 30 million shares;
- eliminate the prohibition against stockholder action without a meeting;
- eliminate some anti-takeover and supermajority vote provisions; and
- reduce the minimum number of directors of the Corporation from nine to
seven.
The proposed amendment to our Bylaws, if approved, would:
- permit the bylaws to be made, repealed, altered, amended or rescinded by
the vote of our stockholders holding a majority of our outstanding shares
entitled to elect directors, rather than by stockholders holding 80% of
the shares as currently required;
- decrease the stockholder vote necessary to approve an amendment to our
Certificate of Incorporation that would contravene any bylaw, from the
vote of stockholders holding 80% or more of our outstanding shares
entitled to elect directors, to the vote of the holders of only a
majority of the shares; and
- permit the Board of Directors to designate the date, time and place of
all meetings of stockholders.
The proposed amendments to our Certificate of Incorporation and Bylaws will
require the affirmative vote of the holders of 80% or more of the
outstanding shares.
The proposed amendments to the 1996 Stock Incentive Plan, if approved,
would:
- increase the total number of shares of common stock with respect to which
awards may be granted from 1,500,000 to 2,500,000, and Directors stock
options from 500,000 to 750,000; and
- provide that the Board of Directors by unanimous vote may grant up to
150,000 stock options with an option price not less than $ 2.00 to an
outside director who, in the opinion of the Board, performs services for
the Corporation or its subsidiaries not contemplated by Director fees or
other grants in the Plan. This action may only be taken independently by
the Board excluding the Director receiving the special grant. Director
stock options granted are provided at an option price of not less than
$2.00.
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The proposed amendments to the 1996 Stock Incentive Plan will require the
affirmative vote of a majority of the holders of the shares voting in person or
by proxy at the meeting.
Your Board of Directors recommends that you vote FOR the election of the
nominees for director, FOR the amendments to our Certificate of Incorporation
and Bylaws, and FOR the amendments to our 1996 Stock Incentive Plan.
Details of the important information concerning the items of business
scheduled for the annual meeting appear in the accompanying proxy statement.
Please give this material your careful attention.
Whether or not you plan to attend the meeting, please complete, sign and
date the accompanying proxy card and return it in the enclosed prepaid envelope.
If you attend the meeting, you may vote in person even if you have previously
returned your proxy card. Your prompt cooperation will be greatly appreciated.
We are gratified by your continued support of our company.
Sincerely yours,
GERALD H. PASTOR
President and Chief Executive Officer
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ACCEL INTERNATIONAL CORPORATION
75 WEST STREET
SIMSBURY, CONNECTICUT 06070
August 4, 2000
We will hold the 2000 Annual Meeting of Stockholders of ACCEL International
Corporation at the offices of Day, Berry & Howard LLP, CityPlace I, Hartford,
Connecticut on September 7, 2000, at 10:00 a.m., local time, for the following
purposes:
1. To elect our directors to serve until our next annual meeting.
2. To approve and adopt an amended and restated Certificate of
Incorporation and amendments to the Bylaws. The proposed changes to our
Certificate of Incorporation and Bylaws, if approved, would:
- increase the number of authorized shares of common stock from 15
million shares to 30 million shares;
- eliminate the prohibition against stockholder action without a
meeting;
- eliminate some anti-takeover and supermajority vote provisions;
- reduce the minimum number of directors of the Corporation from nine to
seven; and
- permit the Board of Directors to designate the date, time and place of
all meetings of stockholders.
3. To approve and adopt amendments to our 1996 Stock Incentive Plan. The
proposed amendments, if approved would:
- increase the total number of shares of common stock with respect to
which awards may be granted from 1,500,000 to 2,500,000 and Directors
stock options from 500,000 to 750,000; and
- provide that the Board of Directors by unanimous vote may grant up to
150,000 stock options with an option price not less than $2.00 to an
outside director who, in the opinion of the Board, performs services
for the Corporation or its subsidiaries not contemplated by Director
fees or other grants in the Plan. This action may only be taken
independently by the Board excluding the Director receiving the
special grant. Director stock options granted are provided at an
option price of not less than $2.00.
4. To act on such other matters as may be properly brought before the
meeting or any adjournments, postponements or continuations of the
meeting.
We have described all of these matters more fully in the accompanying proxy
statement, which you should read carefully.
Your Board of Directors has fixed the close of business on July 14, 2000,
as the record date for the meeting. Only stockholders of record at the close of
business at this time are entitled to notice of and to vote at the meeting or
any adjournments, postponements or continuations of the meeting. A complete list
of stockholders entitled to vote at the meeting will be available for
examination by any stockholder at the place where the meeting is to be held for
at least 10 days before the meeting and also at the meeting.
All stockholders are invited to attend the meeting. To ensure your
representation at the meeting, however, you are urged to mark, sign and return
the enclosed proxy in the accompanying envelope, whether or not you expect to
attend the meeting. No postage is required if you mail it in the United States.
In the event that you attend the meeting, you may vote in person even if you
have returned a proxy.
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Your vote is important. To vote your shares, please sign, date and complete
the enclosed proxy and mail it promptly in the enclosed return envelope.
By Order of the Board of Directors
GERALD H. PASTOR
President and Chief Executive Officer
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
QUESTIONS AND ANSWERS ABOUT THE MEETING..................... 7
SUMMARY..................................................... 8
The Meeting................................................. 8
Record Date; Vote Required.................................. 8
Annual Meeting Proposals.................................... 8
Proposed Amendments to Certificate of Incorporation and
Bylaws.................................................... 8
Proposed Amendments to 1996 Stock Incentive Plan............ 9
THE MEETING................................................. 10
Date, Time and Place of Meeting............................. 10
Matters to be Considered at the Meeting..................... 10
Vote Required............................................... 10
Voting of Proxies........................................... 11
Revocability of Proxies..................................... 11
Record Date; Stockholders Entitled to Vote; Quorum.......... 11
Solicitation of Proxies..................................... 11
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS..................... 12
Nominees for Directors...................................... 13
Compensation of Directors................................... 15
Meetings and Committees of the Board of Directors........... 15
PROPOSAL NO. 2 -- AMENDMENTS TO CERTIFICATE OF INCORPORATION
AND BYLAWS................................................ 16
General..................................................... 16
Increase in Number of Authorized Shares..................... 16
Amendment Permitting Action by Written Consent.............. 17
Amendment Eliminating Anti-takeover and Supermajority
Provisions................................................ 17
Amendment Reducing Minimum Number of Directors.............. 20
Amendment to Permit Directors to Establish Place, Date, and
Time for Stockholders' Meetings........................... 20
PROPOSAL NO. 3 -- APPROVAL OF THE ADOPTION OF AMENDMENTS TO
THE 1996 STOCK INCENTIVE PLAN............................. 21
General..................................................... 21
The Plan.................................................... 21
Summary of the Provisions of the Plan....................... 21
Proposed Amendments to the Plan............................. 24
Section 5:Shares Available................................ 24
Section 13: Directors' Stock Options...................... 24
FORWARD LOOKING STATEMENTS.................................. 26
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS............. 26
MARKET PRICE AND DIVIDEND INFORMATION....................... 27
EXECUTIVE COMPENSATION...................................... 28
Executive Officers.......................................... 28
Summary Compensation Table.................................. 29
Options Granted in Last Fiscal Year......................... 29
Aggregate Option Exercises in Last Fiscal Year and Fiscal
Year-End Option Values.................................... 30
Beneficial Ownership of Management.......................... 30
Report of the Compensation Committee........................ 30
Performance Graph........................................... 31
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE..... 34
RELATIONSHIP WITH INDEPENDENT AUDITORS...................... 34
STOCKHOLDER PROPOSALS....................................... 34
OTHER MATTERS............................................... 34
WHERE YOU CAN FIND MORE INFORMATION......................... 34
APPENDIX A PROPOSED AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION............................................. 36
APPENDIX B PROPOSED AMENDMENT TO THE BYLAWS................ 43
APPENDIX C PROPOSED AMENDMENTS TO 1996 STOCK INCENTIVE
PLAN...................................................... 44
</TABLE>
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QUESTIONS AND ANSWERS ABOUT THE MEETING
Q: What do I need to do now?
A: Just sign and mail your proxy card in the enclosed return envelope as
soon as possible, so that your shares may be represented at the meeting.
The meeting will take place on September 7, 2000. Your Board of Directors
recommends that you vote in favor of each proposal being submitted to you
for approval.
Q: Can I change my vote after I have mailed in my signed proxy card?
A: Yes. You can change your vote at any time before we vote your proxy at
the meeting. You can do so in one of three ways. First, you can send
written notice stating that you would like to revoke your proxy to our
Secretary at the address given below. Second, you can complete a new proxy
card and send it to our Secretary at the address given below. Third, you
can attend the meeting and vote in person. You should send any written
notice or new proxy card to:
Kathleen J. Wilson
Vice President and Corporate Secretary
ACCEL International Corporation
75 West Street
Simsbury, Connecticut 06070
You may request a new proxy card by calling Kathleen J. Wilson at
(860) 843-7607.
Q: Where can I find more information?
A: You may obtain more information, as set forth in "Where You Can Find
More Information" on page 34.
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SUMMARY
Because this a summary, it does not contain all the information that may be
important to you. Before you decide how to vote on each proposal, you should
carefully read this entire proxy statement and all of its appendices. For a
description of the documents referred to in this statement, you should review
"Where You Can Find More Information" beginning on page 34.
THE MEETING (PAGE 10)
The meeting will be held on September 7, 2000 at 10:00 a.m., local time at the
offices of Day, Berry & Howard LLP, CityPlace I, Hartford, Connecticut. At the
meeting you will be asked:
- to elect nine directors;
- to approve a proposed amended and restated Certificate of Incorporation and
amendments to our Bylaws;
- to approve proposed amendments to our 1996 Stock Incentive Plan; and
- to act on any other items that may be submitted to a vote at the meeting.
RECORD DATE; VOTE REQUIRED (PAGE 11)
You can vote at the meeting if you owned shares of our common stock at the close
of business on July 14, 2000. You can cast one vote for each share of common
stock that you owned at the time. The directors nominees who receive the most
votes of those cast will be elected. The proposed amendments to our Certificate
of Incorporation and Bylaws must be approved by the holders of at least 80% of
the outstanding shares of our common stock. The proposed amendments to the 1996
Stock Incentive Plan will require the affirmative vote of a majority of the
holders of the shares voting in person or by proxy at the meeting. You can vote
your shares by attending the meeting and voting in person; or you can mark the
enclosed proxy card with your vote, sign it and mail it in the enclosed return
envelope. You can revoke your proxy as late as the date of the meeting either by
sending in a new proxy or by attending the meeting and voting in person.
ANNUAL MEETING PROPOSALS (PAGE 12,16,21)
ELECTION OF DIRECTORS (PAGE 12)
- At the meeting you will be asked to elect the following director nominees:
David T. Chase, Raymond H. Deck, Richard Desich, Gregory B. Grusse, Richard
A. Lawrence, Gerald H. Pastor, John T. Redding, Thomas J. Renwick, and
Robert N. Worgaftik to serve until the 2001 annual meeting of stockholders.
PROPOSED AMENDMENTS TO CERTIFICATE OF INCORPORATION AND BYLAWS (PAGE 16)
At the meeting you will be asked to approve an amended and restated Certificate
of Incorporation and amendments to our Bylaws. The proposed amendments, if
approved would:
- increase the number of authorized shares of common stock from 15
million shares to 30 million shares;
- eliminate the prohibition against stockholder action without a
meeting;
- eliminate some anti-takeover and supermajority vote provisions;
- reduce the minimum number of directors of the Corporation from nine to
seven;
- permit the bylaws to be made, repealed, altered, amended or rescinded
by the vote of our stockholders holding a majority of our outstanding
shares entitled to elect directors, rather than by stockholders
holding 80% or more of the shares as currently required;
- decrease the stockholder vote necessary to approve an amendment to our
Certificate of Incorporation that would contravene any bylaw, from the
vote of stockholders holding 80% or more of our outstanding shares
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entitled to elect directors, to the vote of the holders of only a
majority of the shares; and
- permit the Board of Directors to designate the date, time and place of
all meetings of stockholders.
PROPOSED AMENDMENTS TO 1996 STOCK INCENTIVE PLAN (PAGE 21)
At the meeting you will be asked to approve amendments to our 1996 Stock
Incentive Plan that will:
- increase the total number of shares of common stock with respect to
which awards may be granted from 1,500,000 to 2,500,000, and Directors
stock options from 500,000 to 750,000; and
- provide that the Board of Directors by unanimous vote may grant up to
150,000 stock options with an option price not less than $2.00 to an
outside director who, in the opinion of the Board, performs services
for the Corporation or its subsidiaries not contemplated by Director
fees or other grants in the Plan. This action may only be taken
independently by the Board excluding the Director receiving the
special grant. Director stock options granted are provided at an
option price of not less than $2.00.
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THE MEETING
DATE, TIME AND PLACE OF MEETING
We will hold the meeting on September 7, 2000, at 10:00 a.m., local time,
or at any adjournment or postponement thereof, at the offices of Day, Berry &
Howard LLP, CityPlace I, Hartford, Connecticut for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders.
MATTERS TO BE CONSIDERED AT THE MEETING
At the meeting, we will ask our stockholders to consider and vote upon the
following matters:
- the election of directors to serve until our next annual meeting;
- a proposal to amend our Certificate of Incorporation and Bylaws in order
to:
(a) increase the number of authorized shares of common stock from 15
million shares to 30 million shares;
(b) eliminate the prohibition against stockholder action without a
meeting;
(c) eliminate some anti-takeover and supermajority vote provisions;
(d) reduce the minimum number of directors of the Corporation from nine to
seven;
(e) permit the bylaws to be made, repealed, altered, amended or rescinded
by the vote of our stockholders holding a majority of our outstanding
shares entitled to elect directors, rather than by stockholders
holding 80% or more of the shares as currently required;
(f) decrease the stockholder vote necessary to approve an amendment to our
Certificate of Incorporation that would contravene any bylaw, from the
vote of stockholders holding 80% or more of our outstanding shares
entitled to elect directors, to the vote of the holders of only a
majority of the shares; and
(g) permit the Board of Directors to designate the date, time and place of
all the meetings and stockholders.
- a proposal to amend the 1996 Stock Incentive Plan in order to:
(a) increase the total number of shares of common stock with respect to
which awards may be granted from 1,500,000 to 2,500,000, and Directors
stock options from 500,000 to 750,000; and
(b) provide that the Board of Directors by unanimous vote may grant up to
150,000 stock options with an option price not less than $ 2.00 to an
outside director who, in the opinion of the Board, performs services
for the Corporation or its subsidiaries not contemplated by Director
fees or other grants in the Plan. This action may only be taken
independently by the Board excluding the Director receiving the
special grant. Director stock options granted are provided at an
option price of not less than $2.00.
The stockholders will also consider and vote upon such other matters as may
properly be brought before the meeting or any adjournment or postponement
thereof.
VOTE REQUIRED
A plurality of the votes cast by the stockholders present in person or by
proxy and entitled to vote will elect directors. This means that the directors
receiving
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the greatest number of votes cast will be elected. With regard to the election
of directors, you may vote in favor of or withhold your vote from each nominee;
and votes that are withheld will be excluded entirely from the vote and will
have no effect. There is no cumulative voting with respect to the election of
directors.
The proposal to amend the Certificate of Incorporation and Bylaws will
pass if the holders of 80% or more of our outstanding shares entitled to elect
directors vote in favor.
The proposal to amend the 1996 Stock Incentive Plan will pass upon the
affirmative vote of the holders of a majority of the shares voting in person or
by proxy at the meeting.
Pursuant to applicable law, broker non-votes and abstentions will not be
counted in favor of any proposal presented at the meeting or the election of any
nominee for director. If you abstain from voting on the proposal to amend the
Certificate of Incorporation and Bylaws, then you will in effect be voting
against it. Broker non-votes will also have the same effect as a negative vote
on the proposal. Abstentions and broker non-votes will not count against the
proposals to amend the 1996 Stock Incentive Plan and to elect directors.
VOTING OF PROXIES
Shares of our common stock represented by properly executed proxies
received in time for the meeting, unless previously revoked, will be voted at
the meeting as specified by the stockholders on the proxies. If no specification
is made, shares represented by these proxies will be voted as recommended by
your Board of Directors.
If any other matters properly come before the meeting for consideration,
the person or persons named in the form of proxy enclosed herewith and acting
thereunder will have discretion to vote on the matters in accordance with their
best judgment, unless the proxy indicates otherwise. We have no knowledge of any
matters to be presented at the meeting other than those matters referred to and
described in this proxy statement.
REVOCABILITY OF PROXIES
If you give a proxy, you have the power to revoke it at any time before it
is voted by a later appointment received by our Secretary or by giving notice of
revocation to our Secretary in writing or in open meeting.
RECORD DATE; STOCKHOLDERS ENTITLED TO VOTE; QUORUM
Only stockholders of record at the close of business on July 14, 2000, will
be entitled to receive notice of and to vote at the meeting. As of the record
date, 9,084,004 shares of common stock were issued and outstanding. Each share
of common stock is entitled to one vote on each matter on which the holders of
common stock are entitled to vote. A majority of the outstanding shares of
common stock entitled to vote must be represented in person or by proxy at the
meeting in order for a quorum to be present.
SOLICITATION OF PROXIES
Your Board of Directors is soliciting proxies, the form of which is
enclosed, for the meeting. The cost of this solicitation will be borne by us. We
have hired Corporate Investor Communications, Inc. to solicit proxies for us at
a fee of $4,500 plus expenses. Our officers, directors, regular employees or
individuals from the firm hired by us may communicate with stockholders
personally or by mail, telephone, telegram or otherwise for the purpose of
soliciting proxies. We and our authorized agents will request brokers and other
custodians, nominees and fiduciaries to forward proxy soliciting material to the
beneficial owners of shares held of record by these persons and will reimburse
their reasonable out-of-pocket expenses in forwarding the material. This proxy
statement is being mailed on or about August 4, 2000.
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PROPOSAL NO. 1 - ELECTION OF DIRECTORS
NOMINEES FOR DIRECTORS
In accordance with our Bylaws, the Board of Directors has fixed the number
of directors at nine. Directors are elected annually to serve until the next
annual meeting of stockholders, and until their successors are elected and
qualified. The election of directors is decided by a plurality of the votes cast
by the shares entitled to vote in the election. In the absence of instructions
to the contrary, the persons named in the proxy intend to vote the proxies for
the election as directors of the persons nominated below. Although the Board of
Directors has no reason to believe that any of the nominees set forth below will
not serve, in the event that vacancies occur, the proxies will be voted for the
election of the nominees, if any, which the Board of Directors or a duly
authorized committee of it may designate.
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<TABLE>
<CAPTION>
NOMINEES Number of shares of
TERM EXPIRES 2001 Common Stock owned
beneficially,
Names, Position with the directly or
Corporation and Age (as of Principal Occupation for past Director indirectly, on Percent
January 31, 2000) five years/other Directorships Since January 31, 2000, of Class
(except as otherwise
noted) (1)
------------------------------ --------------------------------- ----------------- ----------------------- ----------
<S> <C> <C> <C> <C>
David T. Chase President and Director of Chase 1985 4,348,648 (5) 47.9%
Director, 70 Enterprises, Inc.,
(2) Hartford, CT.
Raymond H. Deck Chairman of the Board of the 1990 348,787 3.8%
Director, 77 Corporation since October, 1998.
(2) (3) (4) President of Chase Insurance
Enterprises, Inc., Hartford, CT.
Richard Desich President of Mid-Ohio Securities 1997 41,350 *
Director, 60 Corp., Elyria, OH
(2) (3) (4)
Gregory Grusse Vice President of JPR Resources, 1999 0 *
Director, 38 Inc.
(3)
Richard A. Lawrence Former CFO of The Horace Bushnell _
Vice President, Treasurer Memorial Hall Corp. until 10,500 *
and Chief Financial Officer, October, 1999 and former Vice
50 President and Treasurer of
Chartwell Reinsurance Company
until February, 1997.
Gerald H. Pastor President and Chief Executive 1999 0 (6)
President, Chief Officer of the Corporation since
Executive Officer November 16, 1999. Prior thereto
and Director, 48 he was President and Chief
(2) Executive Officer of Allegiance
Insurance Managers, Ltd.,
Simsbury, CT
John P. Redding Senior Vice President, 1997 7,000 *
Director, 41 David T. Chase Enterprises,
(2) (4) Inc., Hartford, CT
</TABLE>
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<TABLE>
<CAPTION>
Number of shares of Percent
Common Stock Of
Names, Position with the Principal Occupation for past Director owned beneficially, Class
Corporation and Age (as of five years/other Directorships Since directly or
January 31, 2000) indirectly, on January
31, 2000, (except as
otherwise noted) (1)
------------------------------ ----------------------------------- --------------- ------------------------ ----------
<S> <C> <C> <C> <C>
Thomas J. Renwick Senior Vice President of the
Senior Vice President and Corporation since November 16, 1999 218,738 2.4%
Director, 51 1999. Prior thereto he was Senior
Vice President, Chief Operations
Officer and Head of Claims for
Allegiance Insurance Managers,
Ltd., Simsbury, CT
Robert N. Worgaftik President of MW Financial 2000 116,999 1.3%
Director, 49 Group, Ltd.
All Directors and Officers as a group (9 persons) 5,092,022 56.1%
</TABLE>
(1) On January 31, 2000, there were 9,084,004 shares of ACCEL's common stock
issued and outstanding. Except as noted, includes shares owned by spouse,
minor children or certain other family members, or held as custodian or
trustee for the benefit of spouse or children, or owned by corporations of
which such person is an officer or principal stockholder, over which shares
such directors have sole or shared voting or investment power. With respect
to the Directors, includes an aggregate of 305,000 shares which are subject
to immediately exercisable options. Of the 305,000 shares subject to
options, the following Directors have options to purchase the number of
shares indicated after their names: Mr. Chase, 13,000; Mr. Deck, 113,000;
Mr. Desich, 7,000; and Mr. Redding, 7,000.
(2) Member of Executive Committee (Mr. Deck, Chairman).
(3) Member of Audit Committee (Mr. Grusse, Chairman).
(4) Member of Compensation Committee (Mr. Desich, Chairman).
(5) See footnotes (2) and (5) at pages 26 and 27 herein.
(6) In consideration for the acquisition by the Corporation of Allegiance
Insurance Managers, Ltd., on January 14, 2000, ACCEL will issue an
additional 997,038 shares to Pastor upon, and subject to receipt of,
clearance by the Ohio Department of Insurance. Should the foregoing
clearance not be received, ACCEL will issue to Pastor such other
consideration as may be mutually agreed upon by ACCEL and Pastor, which may
include a lesser number of shares of ACCEL common stock (subject to the
foregoing clearance) and/or other securities.
* Less than 1% of outstanding Common Stock.
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COMPENSATION OF DIRECTORS
During 1999, we continued to pay our non-employee directors at the reduced
compensation levels initiated in 1993. Accordingly our non-employee directors
received an annual retainer of $5,000 plus a fee of $500 per meeting for
attending any regular or special meetings of the Board of Directors. The members
of each committee of the Board of Directors, other than officers of ACCEL,
received a fee of $500 for each meeting attended. Chairmen of committees
received a fee of $750 for each meeting attended.
On October 1, 1999 Mr. Deck, an outside director, was appointed Chairman of
the Board. Mr. Deck's compensation as executive chairman was established at
$100,000 annually and continued at that rate during 2000.
The 1996 Stock Incentive Plan of ACCEL International Corporation provides
for options to be granted every year to our non-employee directors for a
predetermined number of shares of common stock. This plan, as amended by the
stockholders in 1998, provides that newly appointed or elected non-employee
directors are granted options for 10,000 shares in the year they are appointed
or elected, and thereafter will receive annual automatic grants of options to
purchase 10,000 shares. The exercise price is equal to the fair market value of
a share of stock on the date the option is granted. Options become exercisable
as to 50% of the shares subject to the option on completion of each full year
prior to termination of the director's status as director after the date the
option was granted. The options lapse on the earliest of the date 10 years after
the option was granted, or the date 180 days after the termination of the
director's status as director. The options shall fully vest and become
completely exercisable upon the death or voluntary retirement of a director.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
Your Board of Directors met two times during 1999. No director was absent
from any of the meetings or committees on which he served. The Board of
Directors has established an Executive Committee, an Audit Committee and a
Compensation Committee. It does not have a Nominating Committee.
The Executive Committee, which exercises the powers of the Board of
Directors between regular meetings of the Board, did not meet during 1999. The
membership of the Executive Committee consists of Messrs. Chase, Deck, Desich,
Pastor and Redding.
The Audit Committee did not meet during 1999. The membership of the Audit
Committee consists of Messrs. Deck, Desich and Grusse.
The Compensation Committee did not meet during 1999 for the purposes of
reviewing employee compensation and benefit arrangements. The membership of the
Compensation Committee consists of Messrs. Deck, Desich and Redding.
During 1999, the Board of Directors acted on Executive Compensation.
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PROPOSAL NO. 2 - AMENDMENTS TO CERTIFICATE OF INCORPORATION AND BYLAWS
GENERAL
The Board of Directors has approved and recommends that you approve and
adopt the amended and restated Certificate of Incorporation of ACCEL attached as
Appendix A to this proxy statement and the amendments to ACCEL's bylaws attached
as Appendix B to this proxy statement. The changes to the Certificate of
Incorporation and Bylaws will:
- increase the number of authorized shares of common stock from 15
million shares to 30 million shares;
- eliminate the prohibition against stockholder action without a
meeting;
- eliminate some anti-takeover and supermajority vote provisions;
- reduce the minimum number of directors of the Corporation from nine to
seven;
- permit the bylaws to be made, repealed, altered, amended or rescinded
by the vote of our stockholders holding a majority of our outstanding
shares entitled to elect directors, rather than by stockholders
holding 80% or more of the shares as currently required;
- decrease the stockholder vote necessary to approve an amendment to our
Certificate of Incorporation that would contravene any bylaw, from the
vote of stockholders holding 80% or more of our outstanding shares
entitled to elect directors, to the vote of the holders of only a
majority of the shares; and
- permit the Board of Directors to designate the date, time and place of
all meetings of stockholders.
We have discussed these changes in further detail below. Copies of our
Certificate of Incorporation and Bylaws as now in effect and marked as proposed
to be amended are also included in Appendices A and B. The affirmative vote of
the holders of 80% or more of the outstanding shares of ACCEL is required to
approve the proposed amended and restated Certificate of Incorporation and
amendments to the Bylaws. If stockholders approve the proposal, we intend to
file an amendment to our Certificate of Incorporation shortly after the meeting.
The amendment to the Certificate of Incorporation will be effective immediately
when the Secretary of State of Delaware accepts the filing. The amendments to
the Bylaws will be effective when the stockholders approve it.
INCREASE IN NUMBER OF AUTHORIZED SHARES
The proposed amended and restated Certificate of Incorporation will
increase the number of authorized shares of common stock of ACCEL from 15
million shares to 30 million shares. The additional shares of common stock to be
authorized will have rights identical to the currently outstanding shares of
common stock of ACCEL.
The Board of Directors believes the proposed increase in the number of
authorized shares of common stock is necessary to provide ACCEL with the
flexibility to act in the future with respect to financing programs,
acquisitions, mergers, stock splits and other corporate purposes without the
delay and expense associated with obtaining stockholder approval each time an
opportunity requiring the issuance of shares may arise. After the proposed
amended and restated Certificate of Incorporation becomes effective, the Board
of Directors will be free to issue the additional authorized shares of common
stock without further action on the part of stockholders. Stockholders will not
have any preemptive rights to purchase the additional shares.
The availability of authorized but unissued shares of common stock might be
deemed to have the effect of preventing or discouraging an attempt by another
person to obtain control of ACCEL, because the additional shares could be issued
by the Board of Directors, which could dilute the stock ownership of that
person. We have
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no plans for issuances for that purpose and this proposal is not being proposed
in response to a known effort to acquire control of ACCEL.
The authorization of additional shares of common stock pursuant to this
proposal will itself have no dilutive effect upon the proportionate voting power
of the present stockholders of ACCEL. However, to the extent that ACCEL
subsequently issues shares to persons other than the present stockholders, the
issuance could have a substantial dilutive effect on present stockholders.
AMENDMENT PERMITTING ACTION BY WRITTEN CONSENT
Under the applicable provisions of the Delaware General Corporation Law, in
the absence of a prohibition against stockholder action without a meeting,
stockholders may take any action which may be taken at a meeting of stockholders
without a meeting, without prior notice and without a vote, if:
- the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take the
action at a meeting at which all shares entitled to vote thereon were
present and voted, sign consents in writing, setting forth the action;
and
- deliver the consents to the corporation.
Consequently, the amendment will make it easier to gain stockholder approval at
any time approval is required without the delay and expense associated with
calling a special meeting of our stockholders. David T. Chase and related
persons currently have the power to vote a majority of the outstanding shares.
The amendment will give them the power, acting together, to take stockholder
action without a meeting. See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS"
on page 26.
AMENDMENT ELIMINATING ANTI-TAKEOVER AND SUPERMAJORITY PROVISIONS
GENERAL DESCRIPTION. The proposed amended and restated Certificate of
Incorporation will result in the deletion, in their entirety, of Articles Sixth,
Tenth, Twelfth and Thirteenth of our existing Certificate of Incorporation and
the deletion of the second sentence of Article Fourteenth of our Certificate of
Incorporation. The proposed amendments to the Bylaws will amend Article IX.
As noted above, the proposed amendment will eliminate Article Twelfth of
the existing Certificate of Incorporation in its entirety. Article Twelfth
requires that some transactions with a Related Corporation (as defined in
Article Twelfth) and the dissolution of ACCEL be approved by resolution of the
Board of Directors prior to the Related Corporation acquiring the beneficial
ownership of more than 5% of the outstanding common stock of ACCEL. If this
approval is not received, then the transaction must be approved by the holders
of at least 80% of the outstanding shares of ACCEL entitled to elect directors,
even if the approval of holders of only a simply majority of outstanding shares
or of the shares voted or represented at the meeting might otherwise be legally
required.
It is important to understand that many of the terms defined in Article
Twelfth differ from similar concepts established under the Delaware General
Corporation Law. Article Twelfth defines a "Related Corporation" as any other
corporation or its affiliate if the other corporation and its affiliates singly
or in the aggregate are directly or indirectly the beneficial owners of more
than 5% of the outstanding shares of common stock of the Corporation. The
transactions covered by Article Twelfth include:
- the merger of ACCEL with any Related Corporation;
- the sale, lease or exchange of all or substantially all of
ACCEL's assets or business to or with a Related Corporation; and
- the issuance or delivery by ACCEL of any stock or other securities
in exchange or payment for any properties or assets of any Related
Corporation or securities issued by any Related Corporation or in a
merger of any affiliate of ACCEL with or into
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any Related Corporation.
The proposed amendment will also eliminate provisions in our existing
Certificate of Incorporation that require approval by holders of 80% or more of
the outstanding shares of ACCEL to amend, repeal or adopt:
- any provision of our Bylaws;
- an amendment to our Certificate of Incorporation that would
contravene any bylaw; and
- the following Articles of our Certificate of Incorporation:
- Article Thirteenth (governing some amendments to the
Certificate of Incorporation requiring an 80% supermajority
vote);
- Article Sixth (dealing with alteration of the bylaws by the
stockholders);
- Article Seventh (dealing with the number and selection of
directors);
- Article Tenth (dealing with the prohibition against
stockholder action without a meeting); and
- Article Twelfth (which is described above).
The proposed amendment will also amend Article IX of our Bylaws, which
currently provides that the bylaws may be made, repealed, altered, amended or
rescinded by the Board of Directors or by the holders of not less than 80% of
the outstanding shares of ACCEL entitled to elect directors. Article IX also
provides that an 80% supermajority vote is required for any amendment to our
Certificate of Incorporation that would contravene any Bylaw in existence on the
record date of the applicable stockholder meeting. The proposed amendment will
change all of the foregoing 80% supermajority vote requirements to the vote of
the holders of a majority of the outstanding shares of ACCEL.
If stockholders eliminate the supermajority vote requirements, then the
holders of a majority of the outstanding shares of common stock could change our
Certificate of Incorporation, including changes to the size of the Board of
Directors beyond what is currently permitted by Article Seventh of the
Certificate of Incorporation. Also, the affirmative vote of a majority of either
the outstanding shares of common stock or the members of the Board of Directors
could change the bylaws.
HISTORICAL BACKGROUND. Article Twelfth and the supermajority provisions are
intended to make it more difficult for a takeover to occur without the approval
of the Board of Directors. Our stockholders adopted Article Twelfth and the
supermajority voting provisions of the Certificate of Incorporation and the
Bylaws that this proposal would eliminate at a time when unsolicited attempts to
take control of or acquire companies were common.
REASONS FOR THE PROPOSAL. The Board of Directors believes that the
provisions of Article Twelfth and the supermajority voting provisions contained
in our Certificate of Incorporation and Bylaws are no longer meaningful, but
have become unnecessary and potentially cumbersome. The Board of Directors
believes that elimination of Article Twelfth and the supermajority provisions
would provide greater flexibility in connection with the management of ACCEL and
transactions of the type subject to Article Twelfth and the 80% supermajority
voting provisions, and that this flexibility would be beneficial to ACCEL and
its stockholders.
The Board of Directors believes that Article Twelfth is unnecessary because
we are subject to other safeguards that assure the fairness of transactions
involving interested directors or stockholders. For example, Section 144 of the
Delaware General Corporation Law requires that transactions with related parties
either be:
- approved by a majority of the disinterested directors, as
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determined pursuant to the Delaware General Corporation Law;
- approved by the holders of a majority of the common stock
entitled to vote thereon; or
- fair to ACCEL as of the time the Board of Directors or the holders of
the common stock approved the transactions.
In addition, it is our policy that any transaction with related parties be
on terms no less favorable to us than could be obtained in an arms-length
transaction with unrelated parties. In approving any related party transaction,
decisions by members of the Board of Directors are subject to the fiduciary duty
requirements of the Delaware General Corporation Law and related case law.
Under the Delaware General Corporation Law, approval of mergers,
consolidations and similar extraordinary transactions that may be subject to
Article Twelfth generally would require the vote of the holders of a majority of
the outstanding shares of capital stock of ACCEL. Other transactions currently
covered by Article Twelfth may not require any stockholder vote under the
Delaware General Corporation Law. In addition, Section 203 of the Delaware
General Corporation Law, which became effective in 1987, restricts the ability
of stockholders who beneficially own 15% or more of the outstanding shares of a
corporation and have not held the shares for at least three years from engaging
in some business combination transactions involving the corporation.
The Board of Directors believes that the supermajority voting provisions
are no longer meaningful or necessary due to our current ownership structure,
and may actually hinder our ability to raise capital or enter into business
combinations the Board of Directors believes are in our best interest.
Furthermore, the Board of Directors believes that the types of transactions
subject to Article Twelfth and the 80% supermajority voting provisions should
not be blocked by holders of a small minority of 20% of the common stock
outstanding.
EFFECTS OF ADOPTION OF THE PROPOSAL. The elimination of Article Twelfth
would permit us and any Related Corporation to engage in transactions of the
type restricted by Article Twelfth with:
- approval of the holders of a majority of our outstanding common stock,
pursuant to Sections 251 and 252 of the Delaware General Corporation
Law; or
- in the case of some transactions with some Related Corporations, with
the approval of a majority of the disinterested directors as
determined in accordance with Section 144 of the Delaware General
Corporation Law.
Elimination of Article Twelfth would have the effect of rendering less
difficult the accomplishment of business combinations, changes in control of
ACCEL, unsolicited tender offers or mergers, and the assumption of control by
the holder of a large block of shares.
The elimination of the 80% supermajority voting provisions would make it
easier for holders of a majority of the stock and current management to effect
changes to our Certificate of Incorporation and bylaws which they favor, but
would make it more difficult for them to preclude changes they opposed or to
retain control if a hostile takeover was attempted.
It is unlikely that a hostile takeover attempt, Certificate of
Incorporation or Bylaw amendment or other stockholder initiative would be
successful unless supported by the Chase family. Members of the Chase family, in
conjunction with the senior management of ACCEL, if they vote together as a
block, presently are able to vote more than 50% of the common stock outstanding.
See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS" on page 26. The
elimination of Article Twelfth and the supermajority voting provisions would
make it easier for the Chase family along with the senior management of ACCEL to
obtain approval of a reorganization transaction with a Related Corporation,
Certificate of Incorporation or Bylaw amendment or other extraordinary item that
they support, and also would make it more difficult for
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anyone else to block or veto a reorganization transaction with a Related
Corporation, Certificate of Incorporation or Bylaw amendment or other
extraordinary item that such person opposes.
AMENDMENT REDUCING MINIMUM NUMBER OF DIRECTORS
The proposed amended and restated Certificate of Incorporation will reduce
the minimum number of directors to seven. The Certificate of Incorporation
presently requires at least nine directors.
The Board of Directors believes that at times fewer than nine directors may
be appropriate for ACCEL. Also reducing the minimum will avoid potential
problems if nine qualified people are not willing to serve as directors.
Delaware law only requires that ACCEL have three directors. Although the Board
of Directors has no plans to reduce the present number of directors, it believes
that it is desirable to have the flexibility to have a smaller Board if that
becomes necessary or desirable in the future.
AMENDMENT TO PERMIT DIRECTORS TO ESTABLISH PLACE, DATE, AND TIME FOR
STOCKHOLDERS' MEETINGS
The proposed amendment to the Bylaws will allow the Board of Directors to
designate the date, time and place for all meetings of stockholders.
The current Bylaws state that all meetings of stockholders shall be held in
the State of Ohio, unless otherwise provided by a vote of the majority of the
directors. The Corporation's principal office is now in Connecticut and it is
unlikely that any meetings of stockholders will take place in the State of Ohio.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL AND ADOPTION OF THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION AND THE BYLAWS AMENDMENTS.
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PROPOSAL NO. 3 - APPROVAL OF THE ADOPTION OF AMENDMENTS TO THE
1996 STOCK INCENTIVE PLAN
GENERAL
- The Board of Directors has approved amendments (the "Plan
Amendment") to the Corporation's 1996 Stock Incentive Plan (the
"Plan") to increase the maximum number of shares of common stock,
$.10 par value, of ACCEL ("Common Stock") with respect to which
awards may be granted under the Plan. Currently, the maximum
number of shares of Common Stock with respect to which awards may
be granted under the Plan is 1,500,000. The Plan Amendment
increases the maximum number of shares under the Plan to
2,500,000, and Directors stock options from 500,000 to 750,000.
- In addition, the Board of Directors by unanimous vote may grant
up to 150,000 stock options with an option price not less than
$2.00 to an outside director who, in the opinion of the Board,
performs services for the Corporation or its subsidiaries not
contemplated by Director fees or other grants in the Plan. This
action may only be taken independently by the Board excluding the
Director receiving the special grant. Director stock options
granted are provided at an option price of not less than $2.00.
In order for the Plan amendment to become effective, stockholders must
approve it at the 2000 Annual Meeting of Stockholders.
THE PLAN
The purpose of the Plan is to advance the long-term interests of the
Corporation by (i) motivating executive officers, other personnel and
independent agents of the Corporation by means of long-term incentive
compensation; (ii) furthering the identity of interests of participants with
those of the stockholders of the Corporation, through the ownership and
performance of the Common Stock; and (iii) permitting the Corporation to attract
and retain directors and executive personnel upon whose judgment the successful
conduct of the business of the Corporation largely depends.
SUMMARY OF THE PROVISIONS OF THE PLAN
Overview. The Plan permits the granting of (1) options to purchase shares
of Common Stock which are either (a) non-statutory stock options ("Non-statutory
Stock Options") not intended to qualify for special tax treatment under the
Internal Revenue Code of 1986, as amended (the "Code"), or (b) options which are
intended to qualify as incentive stock options under the Code ("Incentive Stock
Options"), (2) stock appreciation rights in conjunction with stock options, (3)
restricted stock awards, (4) phantom stock awards and (5) performance shares.
All employees of the Corporation and its subsidiaries who hold a position with
responsibility in an executive, managerial, administrative or professional
capacity or independent agents who market and sell insurance written by a
subsidiary of the Corporation, and whose performance, as determined by the
Committee (as defined below under the caption "Administration") in the exercise
of the Committee's sole and absolute discretion, can have an effect on the
growth, profitability and success of the Corporation, are eligible to be
participants in the Plan. In addition, the Plan provides for the grant of stock
options to Directors of the Corporation who are not employees of the Corporation
or any of its subsidiaries (the "Outside Directors"). The Plan is not subject to
the provisions of the Employee Retirement Income Security Act of 1974, as
amended, and is not qualified under Section 401(a) of the Code.
Common Stock Available. The total number of shares of Common Stock
currently available under the Plan is 1,500,000 shares. The proposed Plan
Amendment increases the maximum number of shares under the Plan to 2,500,000
shares. Of this maximum number, up to 750,000 shares may be issued pursuant to
the exercise of Outside Directors' stock options. Notwithstanding the foregoing,
at no time shall the number of shares of Common Stock deemed available for grant
in any fiscal year exceed 10% of the total number of issued and outstanding
shares of Common Stock. The number of shares of Common Stock available for grant
to any individual participant in any
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calendar year shall not exceed 250,000. The number of shares of Common Stock
which remain available for grant pursuant to the Plan and Common Stock subject
to outstanding awards will be appropriately and proportionately adjusted to
reflect changes in the Corporation's capitalization, including stock splits,
stock dividends, mergers, reorganizations, consolidations and recapitalizations.
The purchase price per share under outstanding options will also be
appropriately adjusted to reflect capitalization changes.
Administration. The Plan may be administered by the Board of Directors or
such other committee designated by the Board to administer the Plan under
Section 3 of the Plan (the "Committee"). The Committee shall be composed of at
least three directors and shall serve at the pleasure of the Board of Directors.
Each member of the Committee must be a director who is a "disinterested person"
under Rule 16b-3 under the Exchange Act and an "outside director" under Section
162(m) of the Code and the regulations thereunder. The Committee has the
authority to select the employees and/or independent agents to be participants,
to determine the type and number of awards to be granted, and to establish rules
and regulations for the administration of the Plan.
Stock Options. For stock options granted to employees or independent agents
under the Plan, the option price per share will be not less than 100% of the
fair market value of Common Stock on the date of the grant. Payment of the
option price upon exercise of an option may be made in cash, Common Stock, or a
combination thereof, as set forth in the option agreement. The term of each
option will be fixed by the Committee, except that Incentive Stock Options will
not be exercisable after 10 years from the grant date. The grant and terms of
Incentive Stock Options will be limited to the extent required by the Code.
Independent agents shall not be eligible to receive grants of Incentive Stock
Options. In the absence of any provision in an option to the contrary (i)
options will become exercisable as to 25% of the shares of Common Stock subject
to the option upon the completion of the first full year of employment or
retention and as to 25% of such shares upon the completion of each full year
thereafter prior to termination of the participant's relationship with the
Corporation, and (ii) options will lapse upon the earlier of (w) 180 days after
the termination of the participant's relationship with the Corporation if the
termination is due to death or disability or if the participant dies within 90
days of such termination, (x) 90 days after termination of the participant's
relationship with the Corporation for any other reason other than death,
disability or gross misconduct or neglect, (y) upon termination of the
participant's relationship with the Corporation if the termination is the result
of the participant's gross misconduct or neglect as determined by the Committee,
and (z) 10 years after the option was granted. Each stock option will be
evidenced by an option agreement conforming to the provisions of the Plan, in
such form as is approved by the Committee from time to time. The option
agreement will set forth the number of shares of Common Stock that are subject
to the option, the type of option granted, the option price to be paid upon
exercise, the manner in which the option is to be exercised, the option period,
and such other terms as may be approved by the Committee.
Stock Appreciation Rights. Stock appreciation rights may be granted
pursuant to the Plan either separately or in conjunction with other awards.
Stock appreciation rights related to stock options may be granted when the
option is granted, and with respect to non-statutory options, also may be
granted at any time before exercise or expiration of the option. Upon exercise
of a stock appreciation right, the holder will receive payment from the
Corporation in an amount equal to the excess of the then fair market value of
the Common Stock covered by the stock appreciation right over the option or
grant price of the stock appreciation right. The Committee may impose such
conditions or restrictions on the exercise of any stock appreciation right it
deems appropriate.
Restricted Stock Awards. Restricted stock awards may be granted pursuant to
the Plan. Shares of Common Stock covered by restricted stock awards may not be
sold or otherwise transferred by the recipient until termination of the
restrictions applicable to the awards, which restrictions will be established by
the Committee and need not be the same for all such awards. Restricted stock
awards shall be subject to such terms, conditions, restrictions, or limitations
as the Committee deems appropriate. During the period in which any shares of
Common Stock are
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subject to restrictions, the Committee may, in its discretion, grant to
recipients all or any of the rights of stockholders with respect to such Common
Stock.
Phantom Stock Awards. Awards of phantom stock may be granted under the Plan
either separately or in conjunction with other awards. Phantom stock awards
entitle the recipient to receive the market value or appreciation in value of a
stated number of shares of Common Stock on a settlement date determined by the
Committee. The Committee has complete authority to determine the terms,
conditions, restrictions and limitations of such awards.
Performance Shares. Performance shares may be granted under the Plan.
Performance shares are convertible into Common Stock or cash, or a combination
thereof, upon the obtainment of predetermined performance targets during an
established performance period. The Committee shall establish the performance
targets, the performance period and the other terms, conditions, restrictions or
limitations on any award of performance shares.
Outside Director Stock Options. The Plan provides for the grant to Outside
Directors of options to purchase Common Stock ("Outside Director Stock
Options"). See "Compensation of Directors". Each Outside Director who is elected
or appointed to serve as a Director of the Corporation after the effective date
of the Plan and who is not a Director on the effective date of the Plan, shall,
upon his initial appointment or election, automatically be granted an option to
purchase 10,000 shares of Common Stock.
At each year's annual meeting of the stockholders of the Corporation there shall
be granted automatically to each Outside Director (other than any Outside
Director who first became a Director at any time during the period following the
immediately preceding annual meeting of stockholders), the option to purchase
10,000 shares of Common Stock. All Outside Director Stock Options will be
Non-statutory Stock Options with a 10-year term , and the purchase price per
share will be 100% of the fair market value of Common Stock on the date of
grant. Payment of the Option price may be made in cash, Common Stock, or a
combination thereof, as set forth in the option agreement. In the absence of any
provision in an option to the contrary, options will become exercisable as to
50% of the shares of Common Stock subject to the option upon the completion of
each full year thereafter prior to termination. Outside Director Stock Options
not otherwise exercisable at the time of the termination of the Director's
status as a Director may be exercised for 180 days following the date of such
termination, as long as such period is within the original 10-year option term.
Outside Director Options not otherwise exercisable at the time of the death or
voluntary retirement of a Director may be exercised for a period of 180 days
subject to the original term of the option.
Tax Effects. For federal income tax purposes, under existing statutes,
regulations and authorities, an optionee does not realize taxable income at the
time of the grant of an Incentive Stock Option, a Non-statutory Stock Option,
phantom stock award or a stock appreciation right. Upon the exercise of a
Non-statutory Stock Option, the Corporation is entitled to a compensation
expense deduction in the amount by which the fair market value of the subject
Common Stock exceeds the option price and the optionee realizes ordinary income
in such amount. Upon the exercise of a stock appreciation right, the Corporation
is entitled to a deduction and the optionee realizes ordinary income in the
amount of the cash or fair market value of the Common Stock received. On the
subsequent sale of Common Stock received upon the exercise of a Non-statutory
Stock Option, the difference between the fair market value of the Common Stock
on the date of receipt and the amount realized on the sale will be treated as
capital gain or loss, which will be short or long term depending on the period
for which the Common Stock is held prior to the sale. An optionee will have no
taxable income upon the exercise of an Incentive Stock Option (except that the
alternative minimum tax may apply) and generally does not realize taxable income
until the sale of the Common Stock received upon exercise of the option. If a
sale does not take place until at least two years after grant and one year after
exercise of the option, any gain or loss realized will be treated as long term
capital gain or loss. Under such circumstances, the Corporation will not be
entitled to a deduction in connection with the grant or the exercise of the
option. If a disposition occurs prior to two years after grant or one year after
exercise, then the difference between the option price and the fair market value
of the Common Stock on the date of exercise (or in
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certain cases, the amount realized on sale, if less than the market value on the
date of exercise) is taxable as ordinary income to the optionee and is
deductible by the Corporation for federal income tax purposes.
With respect to awards of phantom stock, a participant will realize
ordinary income equal to the fair market value of the Common Stock or
appreciation in value of the Common Stock, as applicable, on the settlement date
and the Corporation will be entitled to a deduction in the same amount. With
respect to restricted stock awards, a participant generally will realize
ordinary income equal to the fair market value of the Common Stock received as
of the first day that such shares of Common Stock become transferable or are not
subject to substantial risk of forfeiture, whichever occurs earlier. The
Corporation will be entitled to a deduction at that time in the same amount.
Assignment of Interest. Except as expressly provided in the Plan with
respect to transfers by will or the laws of descent and distribution, no option,
phantom stock awards, stock appreciation right or restricted stock award may be
assigned or transferred by any participant.
Limitations on Resale of Securities. Participants who are officers or
directors of the Corporation, including those who may be deemed "affiliates" of
the Corporation, as such term is defined under the Securities Act, have certain
limitations on their ability to resell Common Stock acquired pursuant to the
Plan. Any sale of Common Stock by an employee or Outside Director also must be
made in compliance with the Corporation's policies on trading in securities of
the Corporation.
Amendment or Termination of the Plan. No awards may be granted under the
Plan after June 11, 2006. The Plan gives the Committee the power to suspend,
reinstate and terminate the Plan or any portion thereof at any time. In
addition, the Committee may amend the Plan, except that, without any required
stockholder approval, no such amendment may (1) materially increase the benefits
to participants in the Plan, (2) materially increase the total number of shares
of Common Stock that could be issued or (3) materially modify the requirements
as to eligibility for participation in the Plan. The provisions of the Plan
relating to the eligibility for, and the amount, price and timing of, awards to
Outside Directors may not be amended, nor shall the operation of such provisions
be suspended or reinstated, more than once every six months.
PROPOSED AMENDMENTS TO THE PLAN
SECTION 5: SHARES AVAILABLE
The Board of Directors has approved, subject to the approval of the
stockholders, amendments to the Plan which would increase the total number of
shares of Common Stock with respect to which awards may be granted from
1,500,000 to 2,500,000, and Directors stock options from 500,000 to 750,000. The
Board believes that the Plan is an important way to attract, retain and motivate
key employees, and that it is appropriate to increase the number of shares
available for awards under the Plan. Approval of the proposed Plan Amendments
will ensure that enough shares are available under the Plan to encourage stock
ownership by executive officers and key employees and to help the Corporation
attract and retain individuals who will contribute to the Corporation's success.
SECTION 13: DIRECTORS' STOCK OPTIONS.
In addition, the Board of Directors by unanimous vote may grant up to
150,000 stock options with an option price not less than $2.00 to an outside
director who, in the opinion of the Board, performs services for the Corporation
or its subsidiaries not contemplated by Director fees or other grants in the
Plan. This action may only be taken independently by the Board excluding the
Director receiving the special grant. Director stock options granted are
provided at an option price of not less than $2.00.
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No other changes to the Plan are proposed. The text of the proposed
amendment to the Plan is included in this Proxy Statement as Appendix C.
Approval of the proposed amendments to the Plan requires the affirmative
vote of the holders of a majority of the shares voting in person or by proxy at
the Annual Meeting of Stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL AND ADOPTION OF THE
AMENDMENTS TO THE 1996 STOCK INCENTIVE PLAN.
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FORWARD LOOKING STATEMENTS
Matters discussed throughout this proxy statement include some statements
that may be "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements in this proxy
statement, other than statements of historical facts, that address activities,
events or developments that we expect, believe or anticipate will or may occur
in the future are forward-looking statements. Although we believe the
expectations expressed in these forward-looking statements are based on
reasonable assumptions within the bounds of our knowledge of our business, these
statements are not guaranteed of future performance and actual results or
developments may differ materially from those in the forward-looking statements.
Forward-looking statements involve risks and uncertainties including, but not
limited to, general economic trends, continued acceptance of our products in the
marketplace, competitive factors, insurance regulations, adverse changes in
interest rates, unforeseen losses with respect to loss and settlement expense
reserves for unreported and reported claims, catastrophic events, and other
risks detailed from time to time in our periodic reports filed with the
Commission. We undertake no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
We have provided in the following table some information as of January 31,
2000 (except as otherwise noted) with respect to stockholders known to us to be
the beneficial owners of more than 5% of any class of our voting securities.
<TABLE>
<CAPTION>
Name and Address Amount of Percent
Title of Class of Beneficial Owner Beneficial Ownership (1) of Class
-------------- ------------------- ------------------------ --------
<S> <C> <C> <C>
Common Stock David T. Chase 4,348,648 Shares (2) 47.9%
D. T. Chase Enterprises, Inc.
One Commercial Plaza
Hartford CT 06103
Arnold L. Chase 1,167,824 Shares (3) 12.9%
D. T. Chase Enterprises, Inc.
One Commercial Plaza
Hartford CT 06103
The Darland Trust 1,167,824 Shares (4) 12.9%
P. O. Box 472
St. Peter's House, Le Bordage
St. Peter Port
Guernsey GYI6AX
Channel Islands
Rhoda L. Chase 2,000,000 Shares (5) 22.0%
c/o Chase Enterprises, Inc.
One Commercial Plaza
Hartford CT 06103
Spitzer Profit Sharing and 750,250 Shares (6) 8.3%
Savings Plan
150 E. Bridge Street
Elyria OH 44035
</TABLE>
(1) Except as otherwise noted, the Corporation has no reason to believe that
any beneficial owner listed above does not have sole voting and investment
power with respect to these shares.
(2) Includes 13,000 shares of common stock subject to immediately exercisable
options. According to a Schedule 13D filed with the Securities and
Exchange Commission (the "Commission"), Mr. David T. Chase has, to the
extent temporarily transferred to him, sole power to vote and dispose of
880,000 shares of common stock loaned to him by his
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<PAGE> 28
wife, Rhoda L. Chase (the "Rhoda Chase Borrowed Shares") and shares the
power to dispose or to direct the disposition of (i) 1,120,000 shares
beneficially owned by Rhoda L. Chase (ii) 1,167,824 shares beneficially
owned by his son, Arnold L. Chase, and (iii) 1,167,824 shares beneficially
owned by The Darland Trust (the "Trust"), a trust whose beneficiaries are
his daughter, Cheryl A. Chase, and her children.
(3) According to a Schedule 13D filed with the Commission, Mr. Arnold L. Chase
shares the power to dispose or to direct the disposition of the 1,167,824
shares owned by him with Mr. David T. Chase and has the sole power to vote
or direct the vote of such shares. Such shares are also included in the
above table in Mr. David T. Chase's shares.
(4) According to a Schedule 13D filed with the Commission, the Trust shares
the power to dispose or to direct the disposition of the 1,167,824 shares
owned by it with Mr. David T. Chase and has the sole power to vote or
direct the vote of such shares. Such shares are also included in the above
table in Mr. David T. Chase's shares.
(5) According to a Schedule 13D filed with the Commission, Rhoda L. Chase has
the sole power to vote or to direct the vote of all such shares, except to
the extent that she may be deemed to have temporarily transferred the sole
power to vote or to direct the vote of the 880,000 Rhoda Chase Borrowed
Shares to David T. Chase. Rhoda L. Chase shares the power to dispose or to
direct the disposition of 1,120,000 of the shares of common stock owned by
her with David T. Chase. Rhoda L. Chase has the sole power to dispose or
to direct the disposition of the Rhoda Chase Borrowed Shares, except to
the extent that she may be deemed to have temporarily transferred such
power to David T. Chase. The shares of common stock owned by Rhoda L.
Chase are also included in the above table in David T. Chase's shares.
(6) Spitzer Profit Sharing and Savings Plan under agreement dated December 31,
1973, is an employee Benefit Plan, Pension Fund subject to the provisions
of the Employee Retirement Income Security Act of 1974.
MARKET PRICE AND DIVIDEND INFORMATION
Our common stock is traded over-the-counter as one of The Nasdaq Stock
Market Bulletin Board issues, under the NASDAQ symbol ACLE.
The following table sets forth the quarterly range of over-the-counter
prices for our common stock during the quarters indicated. These prices have
been adjusted for common stock dividends, if any, and do not include retail
mark-up, mark-down, or commissions and do not always necessarily represent
actual transactions.
<TABLE>
<CAPTION>
1997 High Low
-------------------------------------------------------
<S> <C> <C>
1st Quarter 3.250 2.813
2nd Quarter 3.125 2.875
3rd Quarter 4.125 3.500
4th Quarter 3.813 3.375
1998
-------------------------------------------------------
1st Quarter 3.500 3.063
2nd Quarter 3.500 2.875
3rd Quarter 3.375 2.188
4th Quarter 3.375 2.125
1999
-------------------------------------------------------
1st Quarter 3.000 2.500
2nd Quarter 2.625 1.8125
3rd Quarter 1.875 1.0625
4th Quarter 1.188 0.563
2000
-------------------------------------------------------
1st Quarter 1.125 0.750
2nd Quarter .844 .625
</TABLE>
The approximate number of holders of record of our common stock as of June
1, 2000 is 546. Since June 1992, your Board of Directors has suspended payment
of cash dividends on our common stock until we return to a level of
profitability that will sustain dividend payments.
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<PAGE> 29
EXECUTIVE COMPENSATION
EXECUTIVE OFFICERS
We have listed in the following table the name, age and principal position
of each of our executive officers.
<TABLE>
<CAPTION>
Name Age Principal Position
--------------------------------------------------------------------------------
<S> <C> <C>
Raymond H. Deck 78 Chairman
Richard A. Lawrence 51 Vice President, Treasurer and Chief
Financial Officer
Gerald H. Pastor 48 President and Chief Executive Officer
Thomas J. Renwick 52 Senior Vice President
Kathleen J. Wilson 49 Vice President and Corporate Secretary
</TABLE>
The executive officers, their respective ages and business experience are as
follows:
Raymond H. Deck (78), Chairman of the Board; Gerald H. Pastor
(48), President and Chief Executive Officer; Thomas J. Renwick
(52), Senior Vice President; Richard A. Lawrence (51), Vice
President, Treasurer and Chief Financial Officer; Kathleen J.
Wilson (49), Vice President and Secretary.
Mr. Deck was named Chairman of the Board effective October 1,
1998. He has been an outside Director of the Corporation since
1990. He also serves as President of Chase Insurance Enterprises,
Inc., Hartford, Connecticut.
Mr. Pastor joined the Corporation on October 5, 1999, when he was
appointed a member of the Board of Directors, and President and
Chief Executive Officer of the Corporation's subsidiary,
Acceleration National Insurance Corporation. On November 16, 1999,
he was elected President and Chief Executive Officer of the
Corporation. He also serves as President and Chief Executive
Officer for Allegiance Insurance Managers, Ltd.
Mr. Renwick joined the Corporation on October 5, 1999, when he was
appointed a member of the Board of Directors of Acceleration
National Insurance Company ("ANIC"). On October 6, 1999, Mr.
Renwick was appointed Senior Vice President of ANIC. On November
16, 1999, Mr. Renwick was elected Senior Vice President of ACCEL.
Prior to his election, Mr. Renwick was Senior Vice President, COO
and Head of Claims for Allegiance Insurance Managers, Ltd.
Mr. Lawrence joined Allegiance as a financial and accounting
consultant to guide Acceleration National Insurance Company's
wind-down of operations in Texas and subsequent move to
Connecticut. Mr. Lawrence joined the Corporation on October 5,
1999, when he was appointed a member of the Board of Directors of
Acceleration National Insurance Company. On November 16, 1999, he
was elected Vice President, Treasurer and Chief Financial Officer
of ACCEL.
Ms. Wilson joined the Corporation on October 5, 1999, when she was
appointed a member of the Board of Directors and Corporate
Secretary of Acceleration National Insurance Company. On October
6, 1999, Ms. Wilson was appointed Vice President of ANIC. On
November 16, 1999 she was elected Vice President and Corporate
Secretary of ACCEL. Prior to her election, Ms. Wilson was Vice
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<PAGE> 30
President, Systems, Administration and Controller for Allegiance
Insurance Managers, Ltd.
SUMMARY COMPENSATION TABLE
We have summarized in the following table some information concerning the
compensation awarded or paid to, or earned by, our current Chief Executive
Officer and each of our other most highly compensated executive officers whose
total annual salary and bonus for the fiscal year ended December 31, 1999
exceeded $100,000 (the "named executives") during each of the last three fiscal
years:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term Compensation
------------------------------------------------------------------------------------------------------------------------
Securities All Other
Year Name, Age, and Principal Position Salary Bonus Underlying Compensation
($) ($) Options/SAR's (#) ($) (1)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1999 Gerald H. Pastor, 48 (2) 57,692 -- -- --
President and Chief Executive Officer
------------------------------------------------------------------------------------------------------------------------
1998 -- -- -- --
------------------------------------------------------------------------------------------------------------------------
1997 -- -- -- --
------------------------------------------------------------------------------------------------------------------------
1999 Douglas J. Coats, 66 (3) 216,947 -- -- 9,516
President and Chief Executive Officer
------------------------------------------------------------------------------------------------------------------------
1998 162,728 -- 30,000 6,318
------------------------------------------------------------------------------------------------------------------------
1997 137,500 -- 30,000 12,980
------------------------------------------------------------------------------------------------------------------------
1999 Walter J. Kozuch, 46 (4) 95,892 20,000 -- 5,280
Vice President and Chief Program
Manager
------------------------------------------------------------------------------------------------------------------------
1998 80,801 -- 10,000 1,996
------------------------------------------------------------------------------------------------------------------------
1997 -- -- -- --
------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Acceleration Retirement Savings and Stock Ownership Plan.
(2) Mr. Pastor was appointed President and Chief Executive Officer of
Acceleration National Insurance Company on October 5, 1999, and was elected
President and Chief Executive Officer of ACCEL International Corporation on
November 16, 1999.
(3) Mr. Coats served as President and Chief Executive Officer of the Company
for the period October 1, 1998 trough November 15, 1999. He continues to
serve as Director for the Company and as Chairman of the Board of
Acceleration National Insurance Company.
(4) Mr. Kozuch joined Acceleration National Insurance Company in February, 1998
as Assistant Vice President, Actuarial Services. He was promoted to Vice
President, Actuarial Services in December, 1998. He currently serves both
on the Board of Directors of ANIC and as Vice President and Chief Program
Manager.
OPTIONS GRANTED IN LAST FISCAL YEAR
No option grants were made to any employees of the Corporation in 1999.
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<PAGE> 31
We have provided in the following table some information regarding
individual exercises of stock options during 1999 by each of the named
executives:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
----------------------------------------------------------------------------------------------------------------------
Shares Value
Acquired Realized Number of Securities Value of Unexercised
Name on (Mkt. Price Underlying Unexercised In-The-Money Options at
Exercise at Exercise Options at Fiscal year End (1)
(#) Less Fiscal Year End(#)
Exercise
Price) Exercisable Unexercisable Exercisable Unexercisable
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gerald H. Pastor 0 N/A N/A N/A N/A N/A
----------------------------------------------------------------------------------------------------------------------
Walter J. Kozuch 0 N/A 5,000 5,000 N/A N/A
----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) On December 31, 1999 none of the options outstanding for any of the named
executives exceeded the market price of the Corporation's common stock.
BENEFICIAL OWNERSHIP OF MANAGEMENT
We have provided in the following table some information regarding the
named executive's beneficial ownership of our common stock as of December 31,
1999:
<TABLE>
<CAPTION>
Shares of Common Stock of
Corporation Beneficially Owned
--------------------------------------
Title of Class Name of Officer Number (1) Percent of Class
------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Walter J. Kozuch 10,000 *
</TABLE>
---------
(1) The amount shown represent the total shares owned outright by the named
individual together with shares which are issuable upon the exercise of all
stock options which are currently exercisable. Specifically, the following
individual has the right to acquire the shares indicated after his name,
upon the exercise of the stock option: Mr. Kozuch 10,000.
* Less than 1% of outstanding common stock.
REPORT OF THE COMPENSATION COMMITTEE
During 1999 the Board of Directors acted on executive compensation. Mr.
Coats' compensation, which had been increased to $200,000 when he became
President and CEO on October 1, 1998, was continued on that level while he was
in charge of restructuring the Corporation. All employees were terminated as of
December 31, 1999, and the Corporation office was moved to Simsbury, Connecticut
into the quarters of Allegiance Insurance Managers. Gerald H. Pastor, President
of Allegiance, was appointed President of Acceleration National Insurance
Company on October 5, 1999 in anticipation of the move and was then appointed
President and CEO of ACCEL on November 16, 1999. His salary was established at
$250,000.
Raymond H. Deck, Chairman of the Board
Page 30
<PAGE> 32
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on our
common stock from December 31, 1994, until December 31, 1999, with the
cumulative total return of (a) the Russell 2000 Index and (b) the NASDAQ
Insurance Index. The graph assumes the investment of $100 in our common stock,
the Russell 2000 Index and the NASDAQ Insurance Index.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
AMONG ACCEL INTERNATIONAL CORPORATION, THE RUSSELL 2000 INDEX
AND THE NASDAQ INSURANCE INDEX
See Performance Graph and Related Stock Information on the following page.
Page 31
<PAGE> 33
[NOTE: Graphical line chart representing the figures listed in the table below
is omitted from the EDGAR ASCII submission.]
Page 32
<PAGE> 34
* $100 INVESTED ON 12/31/94 IN STOCK OR INDEX
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
<TABLE>
<CAPTION>
12/94 12/95 12/96 12/97 2/98 12/99
<S> <C> <C> <C> <C> <C> <C>
ACCEL 100.00 157.14 157.14 207.14 164.29 57.14
Russell 2000 100.00 127.49 154.73 203.91 190.75 187.92
NASDAQ Insurance 100.00 142.05 161.92 237.52 211.58 164.29
</TABLE>
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<PAGE> 35
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act of 1934 (the "Exchange Act") requires our
officers and directors, and persons who own more than 10% of the common stock,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Officers, directors and greater than 10% stockholders are
required by Securities and Exchange Commission regulations to furnish us with
copies of all Section 16(a) forms they file.
Based solely on our review of the copies of the forms received by us or
written representations from some reporting persons that no Forms 5 were
required of them, we believe that during the fiscal year ended December 31,
1999, all filing requirements applicable to our officers, directors and greater
than 10% stockholders were complied with.
RELATIONSHIP WITH INDEPENDENT AUDITORS
KPMG, LLP has served as our independent auditor for each of the years in
the three-year period ended December 31, 1999. In recent years, it has been the
practice of the Board of Directors to annually review and select independent
auditors of ACCEL. The Audit Committee of the Board of Directors has selected to
retain for the current fiscal year KPMG, LLP as the independent auditors for the
corporation. Representatives of KPMG, LLP will be present at the meeting, will
have an opportunity to make a statement, if desired, and will be available to
respond to appropriate questions, if any, of our stockholders.
STOCKHOLDER PROPOSALS
Stockholders wishing to submit proposals to our 2001 proxy statement may do
so prior to April 4, 2001 by letter addressed to us in care of our Corporate
Secretary.
On May 21, 1998, the Securities and Exchange Commission adopted an
amendment to Rule 14a-4, as promulgated under the Exchange Act. The amendment to
14a-4 (c)(1) governs our use of discretionary proxy voting authority with
respect to a stockholder proposal which the stockholder has not sought to
include in our proxy statement. The new amendment provides that if a proponent
of a proposal fails to notify us at least 45 days prior to the month and day of
mailing of the prior year's proxy statement, then the management proxies will be
allowed to use their discretionary voting authority when the proposal is raised
at that meeting, without any discussion of the matter in the proxy statement.
With respect to our 2001 meeting of stockholders, if we are not provided
notice of a stockholder proposal that the stockholder has not previously sought
to include in our proxy statement by April 4, 2001, the management proxies will
be allowed to use their discretionary authority as outlined above.
OTHER MATTERS
As of the date of this proxy statement, we do not expect any matters other
than these described in this proxy statement will be brought before the meeting.
If any other business properly comes before the meeting, or any adjournment of
the meeting, the proxy holders will vote in regard to the other business
according to their discretion insofar as the proxies are not limited to the
contrary.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. This proxy statement is
our proxy statement for the meeting.
You may read and copy any reports, statements or other information we file
at the Securities and Exchange Commission's Public Reference Rooms at the
following locations:
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<PAGE> 36
<TABLE>
<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, DC 20549 New York, NY 10048 Suite 400
Chicago, IL 60661-2511
</TABLE>
Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information on the operation of the public reference rooms. Our
Securities and Exchange Commission filings are also available to the public from
commercial document retrieval services and at the web site maintained by the
Securities and Exchange Commission at http://www.sec.gov.
In addition, our filings can be inspected at the offices of NASDAQ, 9801
Washingtonian Blvd., 5th Floor, Gaithersburg, Maryland 20878, (202) 496-2500.
The Securities and Exchange Commission allows us to "incorporate by
reference" information into this proxy statement, which means that we can
disclose important information to you by referring you to other information we
have filed with the Securities and Exchange Commission. The information
incorporated by reference is deemed to be part of this proxy statement, except
for any information superseded by information in this proxy statement.
This proxy statement incorporates by reference the documents set forth
below that ACCEL has previously filed with the Securities and Exchange
Commission. These documents contain important information about us.
SEC Filings (file No. 0-8162) Period or Date Filed
------------------------------------------------------------------------------
Annual Report on Form 10-K Year ended: - December 31, 1999
Current report on Form 8-K January 20, 2000 - February 4, 2000
Quarterly Report on Form 10-Q Quarter ended: - March 31, 2000
We are also incorporating by reference additional documents that we file
with the Securities and Exchange Commission between the date of this proxy
statement and the date of the annual meeting. These documents include periodic
reports, such as annual reports on Form 10-K, quarterly reports on Form l0-Q and
current reports on Form 8-K, as well as proxy statements.
You can request a free copy of all or any of these documents, other than
the exhibits to these documents unless those exhibits are specifically
incorporated by reference into these documents, by writing to or calling:
Kathleen J. Wilson, Vice President and Corporate Secretary
ACCEL International Corporation
75 West Street Simsbury, Connecticut 06070
(860)843-7600
If you would like to request these documents from us, please do so by
August 15, 2000 to receive them before the meeting.
You should rely on the information contained or incorporated by reference
in this proxy statement to decide how to vote on the matters to be considered at
the annual meeting. We have not authorized anyone to provide you with
information that is different from or in addition to what is contained in this
proxy statement. Therefore, if anyone does give you information of this sort,
you should not rely on it. The information contained in this proxy statement
speaks only as of its date unless the information specifically indicates that
another date applies.
By Order of the Board of Directors
Gerald H. Pastor
President and Chief Executive Officer
Page 35
<PAGE> 37
APPENDIX A
PROPOSED AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
ACCEL INTERNATIONAL CORPORATION
Incorporated Pursuant to an Original Certificate of Incorporation filed
with the Secretary of State of the State of Delaware on June 6, 1978
ACCEL INTERNATIONAL CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (the "Corporation"), does hereby certify
as follows:
A. The Corporation was originally incorporated under the name Acceleration
Corporation and filed its original Certificate of Incorporation with the
Secretary of State of the State of Delaware on June 6, 1978.
B. The Corporation duly filed a Restated Certificate of Incorporation with
the Secretary of State of the State of Delaware on June 9, 1989 and a
Certificate of Amendment of Restated Certificate of Incorporation with the
Secretary of State of the State of Delaware on June 13, 1996.
C. The Board of Directors of the Corporation at a meeting held on June
28, 2000 duly adopted resolutions setting forth the Amended and Restated
Certificate of Incorporation herein contained (the "Amended and Restated
Certificate of Incorporation"), declaring its advisability and directing that
such Amended and Restated Certificate of Incorporation be submitted to the
holders of the Corporation's issued and outstanding capital stock, for approval
in accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware and the Corporation's Certificate of
Incorporation, as currently in effect. The Amended and Restated Certificate of
Incorporation was duly adopted by vote of the holders of not less than eighty
percent (80%) of the outstanding shares of Common Stock of the Corporation at
the annual meeting of stockholders held on September 7, 2000 all in accordance
with the provisions of Sections 242 and 245 of the General Corporation Law of
the State of Delaware and the Corporation's Certificate of Incorporation, as
currently in effect.
D. The text of the Amended and Restated Certificate of Incorporation
shall read in its entirety as follows:]
FIRST: The name of the Corporation is:
ACCEL INTERNATIONAL CORPORATION
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1209 Orange Street in the City of Wilmington, County of New
Castle, and the name of its registered agent at that address is The Corporation
Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: The Corporation shall be authorized to issue two classes of shares
of stock to be designated, respectively, "Preferred Stock" and "Common Stock";
the total number of shares which the Corporation shall have authority to issue
is thirty-one million (31,000,000)); the total number of shares of Preferred
Stock shall be one million (1,000,000) and each such share shall have a par
value of one dollar ($1.00); and the total number of shares of Common Stock
shall be thirty million (30,000,000) and each such share shall have a par value
of ten cents ($.l0).
Shares of Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is hereby authorized to fix the voting rights,
Page 36
<PAGE> 38
redemption rights, conversion rights, sinking fund provisions, designations,
powers, preferences and the relative, participating, optional or other rights,
if any, and the qualifications, limitations or restrictions thereof, of any
wholly unissued series of Preferred Stock; and to fix the number of shares
constituting such series, and to increase or decrease the number of shares of
any such series (but not below the number of shares thereof then outstanding).
FIFTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, repeal, alter,
amend and rescind the bylaws of the Corporation.
SIXTH: The number of Directors of the Corporation shall be fixed in the
manner provided in the bylaws, but such number shall not be less than seven nor
more than 24.
SEVENTH: During any period when the holders of any Preferred Stock or any
one or more series thereof, voting as a class, shall be entitled to elect a
specified number of directors, by reason of dividend arrearages or other
provisions giving them the right to do so, then and during such time as such
right continues (1) the then otherwise authorized number of directors shall be
increased by such specified number of directors, and the holders of such
Preferred Stock or such series thereof, voting as a class, shall be entitled to
elect the additional directors so provided for, pursuant to the provisions of
such Preferred Stock or series; (2) each such additional director shall serve
for such term, and have such voting powers, as shall be stated in the provisions
pertaining to such Preferred Stock or series; and (3) whenever the holders of
any such Preferred Stock or series thereof are divested of such rights to elect
a specified number of directors, voting as a class, pursuant to the provisions
of such Preferred Stock or series, the terms of office of all directors elected
by the holders of such Preferred Stock or series, voting as a class pursuant to
such provisions, or elected to fill any vacancies resulting from the death,
resignation or removal of directors so elected by the holders of such Preferred
Stock or series, shall forthwith terminate and the authorized number of
directors shall be reduced accordingly.
EIGHTH: Elections of directors at an annual or special meeting of
stockholders need not be by written ballot unless the bylaws of the Corporation
shall so provide.
NINTH: Special meetings of the stockholders of the Corporation for any
purpose or purposes may be called at any time by the Board of Directors, or by a
majority of the members of the Board of Directors, or by a committee of the
Board of Directors which has been duly designated by the Board of Directors and
whose powers and authority, as provided in a resolution of the Board of
Directors or in the bylaws of the Corporation, include the power to call such
meetings, but such special meetings may not be called by any other person or
persons; provided, however, that if and to the extent that any special meeting
of stockholders may be called by any other person or persons specified in any
provision of this Amended and Restated Certificate of Incorporation or any
amendment thereto or any certificate filed under Section 151(g) of the Delaware
General Corporation Law (or its successor statute as in effect from time to time
hereafter), then such special meeting may also be called by the person or
persons, in the manner, at the times and for the purposes so specified.
TENTH: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred on stockholders herein are granted subject to this reservation.
ELEVENTH: No director or former director of the Corporation shall be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, provided that this provision shall
not eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of the law, (iii) under Section 174 of the Delaware General
Corporation Law, which deals with the paying of a dividend or the approving of a
stock repurchase or
Page 37
<PAGE> 39
redemption which is illegal under Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an improper personal benefit.
IN WITNESS WHEREOF, ACCEL International Corporation has caused this Amended
and Restated Certificate of Incorporation to be signed by Gerald H. Pastor ,
President and Chief Executive Officer, as of the _____ day of ___________, 2000.
ACCEL INTERNATIONAL CORPORATION
By:
________________________________
Gerald H. Pastor President & CEO
Page 38
<PAGE> 40
Note - We have provided below a copy of ACCEL's existing Certificate of
Incorporation that we have marked to show the changes that will be effected if
the stockholders of ACCEL approve Proposal 2. Added language appears in bold
type and is surrounded by [ ]. Deleted language is encompassed by { }.
[AMENDED AND] RESTATED CERTIFICATE OF INCORPORATION
OF
ACCEL INTERNATIONAL CORPORATION
[INCORPORATED PURSUANT TO AN ORIGINAL CERTIFICATE OF INCORPORATION] {ACCEL
International Corporation was originally incorporated under the name
Acceleration Corporation and its original certificate of incorporation was}
filed with the Secretary of State [OF THE STATE] of Delaware on June 6, 1978{.
This restated certificate was duly adopted June 8, 1989, by the board of
directors of ACCEL International Corporation without a vote of shareholders in
accordance with the provisions of Section 245 of the General Corporation Law of
the State of Delaware.}
[ACCEL INTERNATIONAL CORPORATION, A CORPORATION DULY ORGANIZED AND EXISTING
UNDER THE LAWS OF THE STATE OF DELAWARE {.This certificate only restates and
integrates and does not further amend the provisions of the corporation's
certificate of incorporation as heretofore amended or supplemented, and there is
no discrepancy between those provisions and the provisions of this restated
certificate. The adopted Restated Certificate is} [(THE "CORPORATION"), DOES
HEREBY CERTIFY] follows:
[A. THE CORPORATION WAS ORIGINALLY INCORPORATED UNDER THE NAME ACCELERATION
CORPORATION AND FILED ITS ORIGINAL CERTIFICATE OF INCORPORATION WITH THE
SECRETARY OF STATE OF THE STATE OF DELAWARE ON JUNE 6, 1978.
B. THE CORPORATION DULY FILED A RESTATED CERTIFICATE OF INCORPORATION WITH
THE SECRETARY OF STATE OF THE STATE OF DELAWARE ON JUNE 9, 1989 AND A
CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION WITH THE
SECRETARY OF STATE OF THE STATE OF DELAWARE ON JUNE 13, 1996.
C. THE BOARD OF DIRECTORS OF THE CORPORATION AT A MEETING HELD ON JUNE 28,
2000 DULY ADOPTED RESOLUTIONS SETTING FORTH THE AMENDED AND RESTATED CERTIFICATE
OF INCORPORATION HEREIN CONTAINED (THE "AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION"), DECLARING ITS ADVISABILITY AND DIRECTING THAT SUCH AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION BE SUBMITTED TO THE HOLDERS OF THE
CORPORATION'S ISSUED AND OUTSTANDING CAPITAL STOCK, FOR APPROVAL IN ACCORDANCE
WITH THE PROVISIONS OF SECTIONS 242 AND 245 OF THE GENERAL CORPORATION LAW OF
THE STATE OF DELAWARE AND THE CORPORATION'S CERTIFICATE OF INCORPORATION, AS
CURRENTLY IN EFFECT. THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION WAS
DULY ADOPTED BY VOTE OF THE HOLDERS OF NOT LESS THAN EIGHTY PERCENT (80%) OF THE
OUTSTANDING SHARES OF COMMON STOCK OF THE CORPORATION AT THE ANNUAL MEETING OF
STOCKHOLDERS HELD ON NOVEMBER 16, 1999, ALL IN ACCORDANCE WITH THE PROVISIONS OF
SECTIONS 242 AND 245 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE AND
THE CORPORATION'S CERTIFICATE OF INCORPORATION, AS CURRENTLY IN EFFECT.
D. THE TEXT OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION SHALL
READ IN ITS ENTIRETY AS FOLLOWS:]
FIRST: The name of the Corporation is:
ACCEL INTERNATIONAL CORPORATION
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1209 Orange Street in the City of Wilmington, County of New
Castle, and the name of its registered agent at that address is The Corporation
Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
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FOURTH: The Corporation shall be authorized to issue two classes of shares
of stock to be designated, respectively, "Preferred Stock" and "Common Stock";
the total number of shares which the Corporation shall have authority to issue
is {sixteen} [thirty-one] million (16,000,000)} [(31,000,000)]; the total number
of shares of Preferred Stock shall be one million (1,000,000) and each such
share shall have a par value of one dollar ($1.00); and the total number of
shares of Common Stock shall be {fifteen} [thirty] million {(15,000,000)}
[(30,000,000)] and each such share shall have a par value of ten cents ($.10).
Shares of Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is hereby authorized to fix the voting rights,
redemption rights, conversion rights, sinking fund provisions, designations,
powers, preferences and the relative, participating, optional or other rights,
if any, and the qualifications, limitations or restrictions thereof, of any
wholly unissued series of Preferred Stock; and to fix the number of shares
constituting such series, and to increase or decrease the number of shares of
any such series (but not below the number of shares thereof then outstanding).
FIFTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, repeal, alter,
amend and rescind the bylaws of the Corporation.
SIXTH{: The bylaw shall not be made, repealed, altered, amended, or
rescinded by the stockholders of the Corporation except by the vote of the
holders of not less than 80 percent of the outstanding shares of the Corporation
entitled to elect directors. Any amendment to the Certificate of Incorporation
which shall contravene any bylaw in existence on the record date of the
stockholder meeting at which such amendment is to be voted upon by the
stockholders shall require the vote of the holders of not less than 80 percent
of the outstanding shares of the Corporation entitled to elect directors.
SEVENTH}: The number of Directors of the Corporation shall be fixed in the
manner provided in the bylaws, but such number shall not be less than [seven]
{nine} nor more than 24.
{EIGHTH} [SEVENTH]: During any period when the holders of any Preferred
Stock or any one or more series thereof, voting as a class, shall be entitled to
elect a specified number of directors, by reason of dividend arrearages or other
provisions giving them the right to do so, then and during such time as such
right continues (1) the then otherwise authorized number of directors shall be
increased by such specified number of directors, and the holders of such
Preferred Stock or such series thereof, voting as a class, shall be entitled to
elect the additional directors so provided for, pursuant to the provisions of
such Preferred Stock or series; (2) each such additional director shall serve
for such term, and have such voting powers, as shall be stated in the provisions
pertaining to such Preferred Stock or series; and (3) whenever the holders of
any such Preferred Stock or series thereof are divested of such rights to elect
a specified number of directors, voting as a class, pursuant to the provisions
of such Preferred Stock or series, the terms of office of all directors elected
by the holders of such Preferred Stock or series, voting as a class pursuant to
such provisions, or elected to fill any vacancies resulting from the death,
resignation or removal of directors so elected by the holders of such Preferred
Stock or series, shall forthwith terminate and the authorized number of
directors shall be reduced accordingly.
{(NINTH} [EIGHTH]: Elections of directors at an annual or special meeting
of stockholders need not be by written ballot unless the bylaws of the
Corporation shall so provide.
{TENTH: No action shall be taken by the stockholders except at an annual or
special meeting of stockholders. ELEVENTH)} [NINTH]: Special meetings of the
stockholders of the Corporation for any purpose or purposes may be called at any
time by the Board of Directors, or by a majority of the members of the Board of
Directors, or by a committee of the Board of Directors which has been duly
designated by the Board of Directors and whose powers and authority, as provided
in a resolution of the Board of Directors or in the bylaws of the Corporation,
include the power to call such meetings, but such special meetings may not be
called by any
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other person or persons; provided, however, that if and to the extent that any
special meeting of stockholders may be called by any other person or persons
specified in any provision of [this Amended and Restated]{the} Certificate of
Incorporation or any amendment thereto or any certificate filed under Section
151(g) of the Delaware General Corporation Law (or its successor statute as in
effect from time to time hereafter), then such special meeting may also be
called by the person or persons, in the manner, at the times and for the
purposes so specified.
{TWELFTH: The affirmative vote of the holders of not less than 80 percent
of the outstanding shares of the Corporation entitled to elect directors shall
be required for the approval of any proposal that (1) the Corporation merge or
consolidate with any other corporation or any affiliate of such other
corporation if such other corporation and its affiliates singly or in the
aggregate are directly or indirectly the beneficial owners of more than five
percent of the outstanding shares of Common Stock of the Corporation (such other
corporation and any affiliate thereof being herein referred to as a "Related
Corporation") or (2) the Corporation sell, lease or exchange all or
substantially all of its assets or business to or with such Related Corporation,
or (3) the Corporation issue or deliver any stock or other securities of its
issue in exchange or payment for any properties or assets of any such Related
Corporation or securities issued by any such Related corporation or in a merger
of any affiliate of the Corporation with or into any such Related Corporation,
or (4) the Corporation dissolve, and to effect such transaction the approval of
stockholders of the Corporation is required by law or by any agreement between
the Corporation and any national or regional securities exchange; provided,
however, that the foregoing shall not apply to any such merger, consolidation,
sale, lease, or exchange, or issuance or delivery of assets, stock or other
securities which was approved by resolution of the Board of Directors of the
Corporation prior to the acquisition of the beneficial ownership of more than
five percent of the outstanding Common Stock by the Related Corporation, nor
shall it apply to and such transaction solely between the Corporation and
another corporation 50 percent or more of the voting power of which is owned by
the Corporation provided that the Certificate of Incorporation of the surviving
corporation contains provisions substantially similar to those provided in
Articles SIXTH, TENTH, TWELFTH, THIRTEENTH. For the purposes hereof, an
"affiliate" is any person (including a corporation, partnership, association,
trust, business entity, estate or individual) who directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the person specified; "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of voting
securities, by contract, or otherwise; and in computing the percentage of
outstanding Common Stock beneficially owned by any person, the shares
outstanding and the shares owned shall be determined as of the record date fixed
to determine the stockholders entitled to "vote or express consent with respect
to such proposal. The stockholder "vote, if any, required for mergers,
consolidations, sales, leases, or exchanges of assets or issuances of stock or
other securities not expressly provided for in this Article, shall be such as
may be required by applicable law.}
{THIRTEENTH: The provisions set forth in this Article THIRTEENTH and in
Articles SIXTH (dealing with the alteration of Bylaws by stockholders), SEVENTH
(dealing with the number and selection of directors), TENTH (dealing "with the
prohibition against stockholder action " without meetings) and TWELFTH (dealing
with the 80 percent "vote of stockholders required for certain reorganizations)
may not be repealed or amended in any respect unless such repeal or amendment is
approved by the affirmative "vote of the holders of not less than 80 percent of
the outstanding shares of the Corporation entitled to elect directors.
FOURTEENTH:}
[TENTH:] The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this [Amended and Restated] Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred on stockholders herein are granted subject to this reservation.
{Notwithstanding the foregoing, the provisions set forth in Articles SIXTH,
SEVENTH, TENTH, TWELFTH, and THIRTEENTH may not be repealed or amended in any
respect unless such repeal or amendment is approved as specified in Article
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THIRTEENTH of this Certificate of Incorporation. FIFTEENTH,} [ELEVENTH:] No
director or former director of {this} [the] Corporation shall be personally
liable to this Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that this provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of the law, (iii) under Section 174 of the Delaware General
Corporation Law, which deals with the paying {'of'} [of] a dividend or the
approving of a stock repurchase or redemption which is illegal under Delaware
General Corporation Law, or (iv) for any transaction from which the director
derived an improper personal benefit.
IN WITNESS WHEREOF, {said} ACCEL International Corporation has caused this
[Amended and Restated] Certificate [of Incorporation] to be signed by {Nicholas
Z. Alexander, it's Senior Vice President and Secretary} [Gerald H. Pastor,
President and Chief Executive Officer,], {this 12th} [as of the] ____ [day] of
{June} __________, {1996}[2000].
___________________________________________________________________
ACCEL INTERNATIONAL CORPORATION
By: ______________________________________
[Gerald H. Pastor]
[President and Chief Executive Officer]
By: ______________________________________
{Nicholas Z. Alexander}
{Vice President and Secretary}
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APPENDIX B
PROPOSED AMENDMENTS TO THE BYLAWS
ARTICLE I
AMENDMENT
Section 1.03 Place of Meetings. All meetings of stockholders shall be
held on such date, at such time and at such place as may be designated by the
Board of Directors.
ARTICLE IX
AMENDMENTS
Except for ARTICLE VIII, the bylaws may be made, repealed, altered, amended
or rescinded by the act of the Board of Directors. The Bylaws shall not be made,
repealed, altered, amended, or rescinded by the stockholders of the Corporation
except by the vote of the holders of not less than a majority of the outstanding
shares of the Corporation entitled to elect directors. Any amendment to the
Certificate of Incorporation which shall contravene any bylaw in existence on
the record date of the stockholder meeting at which such amendment is to be
voted upon by the stockholders shall require the vote of the holders of not less
than a majority of the outstanding shares of the Corporation entitled to elect
directors.
Note - We have provided below a copy of Section 1.03 and Article IX of
ACCEL's existing Bylaws that we have marked to show the changes that will be
effected if the stockholders of ACCEL approve Proposal 2.
Section 1.03 Place of Meetings. All meetings of stockholders shall be held {at
the principal office of the Corporation in the State of Ohio, unless otherwise
provided by a vote of the majority of the directors} [on such date, at such time
and at such place as may be designated by the Board of Directors].
ARTICLE IX
AMENDMENTS
Except for ARTICLE VIII, the bylaws may be made, repealed, altered,
amended or rescinded by the act of the Board of Directors. The Bylaws shall not
be made, repealed, altered, amended, or rescinded by the stockholders of the
Corporation except by the vote of the holders of not less than {80 percent} [a
majority] of the outstanding shares of the Corporation entitled to elect
directors. Any amendment to the Certificate of Incorporation which shall
contravene any bylaw in existence on the record date of the stockholder meeting
at which such amendment is to be voted upon by the stockholders shall require
the vote of the holders of not less than {80 percent} [a majority] of the
outstanding shares of the Corporation entitled to elect directors.
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APPENDIX C
PROPOSED AMENDMENTS TO 1996 STOCK INCENTIVE PLAN
Section 5. Shares Available
(a) Shares of Common Stock available for issuance under the Plan may be
authorized and unissued shares or treasury shares. Subject to the adjustments
provided for in Sections 17 and 18 hereof, the maximum number of shares of
Common Stock available for grant of Awards under the Plan is 2,500,000 shares.
Of this total number, up to 750,000 shares may be issued pursuant to the
exercise of Directors' Stock Options. Notwithstanding the foregoing, at no time
shall the number of shares of Common Stock deemed to be available for grant in
any fiscal year exceed ten percent of the total number of issued and outstanding
shares of Common Stock of the Company. The number of shares of Common Stock
available for grant to any individual Participant in any calendar year shall not
exceed 250,000 shares.
Section 13. Directors' Stock Options
(a) GRANTS. Awards may be granted to non-employee Directors only in the form of
stock options satisfying the requirements of this Section 13. Each person who is
elected or appointed to serve as a Director of the Company after the effective
date of the First Amendment to the Plan, upon his initial appointment or
election as a Director, automatically be granted an option for 10,000 shares of
Common Stock, with an option price of not less than $2.00. At each year's annual
meeting of the stockholders of the Company commencing on the effective date of
the First Amendment to the Plan, there shall be granted automatically to each
non-employee Director (other than any non-employee Director who first became a
Director at any time during the period following the immediately preceding
annual meeting of the stockholders of the Company), the option to purchase
10,000 shares of Common Stock, with an option price of not less than $2.00.
In addition, the Board of Directors by unanimous vote may grant up to 150,000
stock options with an option price not less than $ 2.00 to an outside director
who, in the opinion of the Board, performs services for the company or its
subsidiaries not contemplated by Director fees or other grants. This action may
only be taken independently by the Board excluding the Director receiving the
special grant. Director stock options granted are provided at an option price of
not less than $2.00.
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ACCEL INTERNATIONAL CORPORATION PROXY
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Gerald H. Pastor and Kathleen J. Wilson, or
either of them acting singly, as Proxies, with power of substitution, for and in
the name of the undersigned to vote, as designated below, all the shares of
common stock of ACCEL International Corporation, a Delaware corporation (the
"Company"), held of record by the undersigned as of July 14, 2000 at the annual
meeting of stockholders to be held on September 7, 2000 or any adjournment
thereof.
1. Election of Directors.
[ ] FOR all nominees listed below (except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
David T. Chase, Raymond H. Deck, Richard Desich, Gregory B. Grusse, Richard A.
Lawrence, Gerald H. Pastor, John P. Redding, Thomas J. Renwick, and Robert N.
Worgaftik.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
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2. AMENDMENTS TO CERTIFICATE OF INCORPORATION AND BYLAWS. Proposal to approve
and adopt the amended and restated certificate of incorporation and
amendments to the bylaws attached as Appendices A and B to the accompanying
Proxy Statement.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. AMENDMENTS TO 1996 STOCK INCENTIVE PLAN. Proposal to approve the amendments
to the 1996 Stock Incentive Plan attached as Appendix C to the accompanying
Proxy Statement.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
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4. OTHER BUSINESS. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting or any
adjournment thereof.
(Please See Reverse Side)
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This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2 AND 3.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated August 4, 2000.
Sign exactly as name appears hereon. When shares are held by joint tenants, both
should sign.
Date:
-----------------------------------,
2000
-------------------------------
(Signature)
-------------------------------
(Signature)
(When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.)
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PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
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