SCHEDULE 14A INFORMATION
------------------------
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
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 Section 240.14a-11(c) or
Section 240.14a-12
Warner Insurance Services, Inc.
----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
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:
---------------------------------------------------------------
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(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:
--------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------
3) Filing Party:
--------------------------------------------------------
4) Date Filed:
--------------------------------------------------------
<PAGE>
WARNER INSURANCE SERVICES, INC.
ALFRED J. MOCCIA
President and Chief Executive Officer
May 6, 1996
To All Warner Stockholders:
I invite you to attend the Annual Meeting of Stockholders which will
be held at the Stony Hill Inn, 231 Polifly Road, Hackensack, New Jersey on
Thursday, June 20, 1996 at 9:30 a.m., local time.
The annual election of directors will take place at the Meeting.
Personal information about each nominee for the Board of Directors as well
as information about the functions of the Board and its committees are
contained in the Proxy Statement.
At the Meeting, you will be asked to consider and vote upon two other
proposals. First, you will be asked to approve the adoption of an
amendment to Warner's Certificate of Incorporation to change the corporate
name from Warner Insurance Services, Inc. to Cover-All Technologies Inc.
As a result of the recent restructuring transaction and the exit by the
Company from the insurance processing business, your Board of Directors
believes that the name change will reflect the Company's current business.
Second, you will be asked to approve the adoption of an amendment to
Warner's Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 20,000,000 to 30,000,000. As a result of
recent transactions, between the issued shares and shares reserved for
options and warrants we have used approximately 18,500,000 of the
authorized Common Stock and your Board of Directors believes we need to
increase the number of authorized shares of Common Stock so that we will
have sufficient shares available for further financings and/or
acquisitions, although there are no special plans for either area at this
time.
It is important that your shares be represented at the Meeting. Even
if you plan to attend the Annual Meeting, please sign, date and mail
promptly the enclosed proxy in the postage-paid envelope. The vote of each
stockholder is important, and it should be recognized that a failure to
return a properly executed and dated proxy card in a timely fashion or vote
in person at the Meeting in effect constitutes a vote against each of the
proposals.
Please read the formal notice of the Annual Meeting and the Proxy
Statement carefully. For those of you who cannot be present at the
Meeting, I urge you to participate by completing, signing and returning
your Proxy in the enclosed envelope. Your vote is important, and the
management of Warner appreciates the cooperation of stockholders in
directing proxies to vote at the Meeting.
Sincerely,
ALFRED J. MOCCIA,
President and Chief Executive Officer
<PAGE>
WARNER INSURANCE SERVICES, INC.
____________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
____________________
TO THE STOCKHOLDERS OF WARNER INSURANCE SERVICES, INC.:
The Annual Meeting of Stockholders (the "Meeting") of Warner Insurance
Services, Inc., a Delaware corporation (the "Company"), will be held on
June 20, 1996 at 9:30 a.m., local time, at the Stony Hill Inn, 231 Polifly
Road, Hackensack, New Jersey 07601 to consider and act upon the following:
1. To elect a class consisting of two directors to serve for a
term of three years and until their successors shall have been
duly elected and qualified ("Proposal No. 1").
2. To approve an amendment to the Company's Certificate of
Incorporation to change the corporate name from Warner Insurance
Services, Inc. to Cover-All Technologies Inc. ("Proposal No. 2").
3. To approve an amendment to the Company's Certificate of
Incorporation to increase the authorized Common Stock of the Company
from 20,000,000 to 30,000,000 shares ("Proposal No. 3").
4. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
Stockholders of record at the close of business on May 2, 1996, which
is the record date for the Meeting, are entitled to receive notice of and
to vote at the Meeting and at any adjournment thereof. A Proxy and a Proxy
Statement for the Meeting are enclosed.
All stockholders are cordially invited to attend the Meeting in
person. Whether or not you plan to attend the Meeting, please complete,
sign, date and return the enclosed Proxy, which is solicited by the Board
of Directors of the Company, to ensure that your shares are represented at
the Meeting. Stockholders who attend the Meeting may revoke their proxies
and vote their shares in person.
By Order of the Board of Directors
THEODORE I. BOTTER
Secretary
Date: May 6, 1996
---------------------------------------------------------------------------
IF YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE MARK, DATE AND SIGN THE
ENCLOSED FORM OF PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN
ENVELOPE.
---------------------------------------------------------------------------
<PAGE>
WARNER INSURANCE SERVICES, INC.
____________________
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JUNE 20, 1996
____________________
GENERAL
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Warner Insurance Services, Inc., a
Delaware corporation (the "Company"), to be voted at the Annual Meeting of
Stockholders of the Company (the "Meeting") which will be held at the Stony
Hill Inn, 231 Polifly Road, Hackensack, New Jersey 07601 on June 20, 1996
at 9:30 a.m., local time, and at any adjournment thereof, for the purposes
set forth in the accompanying Notice of Annual Meeting of Stockholders and
in this Proxy Statement.
The principal executive offices of the Company are located at 18-01
Pollitt Drive, Fair Lawn, New Jersey 07410. The approximate date on which
this Proxy Statement and accompanying Proxy will first be sent or given to
stockholders is May 6, 1996.
VOTING SECURITIES AND VOTE REQUIRED
Stockholders of record as of the close of business on May 2, 1996 (the
"Record Date") will be entitled to notice of, and to vote at, the Meeting
or any adjournment or adjournments thereof. As of the Record Date, there
is only one class of voting securities of the Company outstanding, that
being Common Stock. Each holder of Common Stock on the Record Date is
entitled to one vote for each share held by such holder. The presence, in
person or by proxy, of the holders of a majority of the outstanding shares
of Common Stock is necessary to constitute a quorum at the Meeting.
Assuming a quorum is present, the affirmative vote of the holders of a
majority of the shares of Common Stock voting at the Meeting will be
---------------------
required to approve Proposal No. 1 regarding the election of directors.
The affirmative vote of the holders of a majority of the outstanding shares
-----------
of Common Stock will be required to approve Proposal Nos. 2 and 3,
regarding the amendment to the Company's Certificate of Incorporation
changing the corporate name to Cover-All Technologies Inc. and the
amendment to the Company's Certificate of Incorporation increasing the
authorized Common Stock of the Company from 20,000,000 to 30,000,000
shares.
With regard to the election of directors, votes may be cast in favor
or withheld; votes that are withheld will be excluded entirely from the
vote and will have no effect except that votes withheld will be counted
------
toward determining the presence of a quorum for the transaction of
business.
Abstentions and broker "non-votes" will be counted toward determining
the presence of a quorum for the transaction of business. Abstentions may
be specified on all proposals except the election of directors. With
------
respect to all proposals other than the election of directors, abstentions
will have the effect of a negative vote. A broker "non-vote" will have the
effect of a negative vote with respect to the amendment to the Certificate
of Incorporation changing the corporate name to Cover-All Technologies Inc.
and with respect to the amendment to the Certificate of Incorporation
increasing the number of authorized shares but will have no effect on the
outcome of any of the other proposals. The treatment of abstentions and
broker "non-votes" is consistent with applicable Delaware law and the
Company's By-Laws.
As of May 2, 1996, 15,761,725 shares of the Company's Common Stock
were issued and outstanding.
VOTING OF PROXIES
Proxies are solicited by the Board of Directors of the Company in
order to provide every stockholder with an opportunity to vote on all
matters that properly come before the Meeting, whether or not the
stockholder attends in person. When the enclosed form of proxy is properly
signed, dated and returned, the shares represented will be voted by the
persons named as proxies in accordance with the stockholder's direction.
If no direction is indicated, the shares will be voted as recommended by
the Board of Directors. The enclosed proxy confers discretionary authority
to vote with respect to the transaction of such other business of a
procedural nature or incidental to the Meeting as may properly come before
the Meeting. As of the date of this Proxy Statement, the Board of
Directors of the Company does not know of any other matter to be brought
before the Meeting. However, if any other matters not mentioned in the
Proxy Statement are properly brought before the Meeting or any adjournment
thereof, the persons named in the enclosed Proxy or their substitutes will
have discretionary authority to vote proxies given in said form, or
otherwise act, in respect of such matters in accordance with their best
judgment. Any stockholder executing a form of proxy may revoke that proxy
or may submit a revised form of proxy at any time before it is voted. A
stockholder may also vote by ballot at the Annual Meeting, thereby
canceling any proxy previously returned.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS, DIRECTORS AND EXECUTIVE OFFICERS
The following table contains information as of May 2, 1996 as to the
number of shares of Common Stock beneficially owned by (i) each person
known by the Company to own beneficially more than 5% of the Company's
Common Stock, (ii) each person who is a director of the Company, (iii) the
executive officers for whom information is included in the Summary
Compensation Table, and (iv) all persons as a group who are directors and
executive officers of the Company, and as to the percentage of outstanding
shares held by them on that date.
Amount Percent
Beneficially of
Name and Address Status of Beneficial Owner Owned(1) Class(2)
---------------- -------------------------- ------------ --------
Harvey Krieger Chairman of the Board 1,714,525(3) 10.9%
18-01 Pollitt Drive and beneficial owner
Fair Lawn, NJ 07410 of more than 5% of the
Company's Common Stock
Leonard Gubar Director 13,547(4) *
40 West 57th Street
New York, NY 10019
Peter R. Lasusa Director 16,250(4) *
287 Thornton Road
Englewood, NJ 07631
Pamela J. Newman Director 11,562(4) *
Two World Trade Center
New York, NY 10048
Alfred J. Moccia President, Chief Executive 11,393(4) *
23 Dante Street Officer
Larchmont, NY 10538 and Director
James R. Stallard Director 0 *
1601 Chestnut Street
- TLP 44
Two Liberty Place
Philadelphia, PA 19192
Mark D. Johnston Director 0 *
P.O. Box 839
St. Helier, Jersey
Channel Islands,
JE4 9NZ
Henry E. Kates Former President and 100,000(5) *
5 Bagy Wrinkle Cove Chief Executive Officer
Warren, RI 02885
Theodore I. Botter Secretary and 69,325(6) *
18-01 Pollitt Drive General Counsel
Fair Lawn, NJ 07410
Bradley J. Hughes Vice President - Finance 10,481(7) *
18-01 Pollitt Drive and Administration and
Fair Lawn, NJ 07410 Chief Financial Officer
Software Investments Beneficial Owner of more 3,040,859 19.3%
Limited than 5% of the Company's
c/o Moore Common Stock
Stephens International
Services (BVI) Limited
Abbot Building
P.O. Box 3186
Main Street
Road Town
Tortola,
British Virgin Islands
Care Corporation Beneficial Owner of more 2,500,000 15.9%
Limited than 5% of the Company's
c/o Moore Stephens Common Stock
International Services
(BVI) Limited
Abbot Building
P.O. Box 3186
Main Street
Road Town
Tortola,
British Virgin Islands
Atlantic Employers Beneficial Owner of more 1,238,273 7.9%
Insurance Company than 5% of the Company's
1601 Chestnut Street Common Stock
Two Liberty Place
Philadelphia, PA 19192
All directors and 1,947,033(4) 12.4%
executive officers (5)(6)(7)
as a group
(consisting of 10
persons)
_______________
* Less than one percent.
(1) Includes options exercisable within sixty (60) days of the date as of
which beneficial ownership is determined, pursuant to Rule 13d-3
under the Securities Exchange Act of 1934, as amended.
(2) Based upon 15,761,725 total outstanding shares of Common Stock on
May 2, 1996.
(3) Includes 22,989 shares owned by Mr. Krieger's wife and minor
children, as to which Mr. Krieger disclaims beneficial ownership.
Also includes options to purchase 61,250 shares at an exercise price
of $3.53 per share pursuant to the Company's 1991 Key Employee Stock
Option Plan.
(4) Includes options to purchase 10,000 shares at an exercise price of
$3.13 per share pursuant to the Company's 1994 Stock Option Plan for
Independent Directors.
(5) On July 12, 1995, Mr. Kates resigned from his position as President
and Chief Executive Officer. Represents an option to purchase 100,000
shares at an exercise price of $1.125 per share pursuant to the
Company's 1991 Key Employee Stock Option Plan.
(6) Includes options to purchase 7,500 shares at an exercise price of
$3.53 per share, options to purchase 8,000 shares at an exercise
price of $2.63 per share and options to purchase 30,000 shares at an
exercise price of $1.625 per share pursuant to the Company's 1991 Key
Employee Stock Option Plan.
(7) Includes options to purchase 8,750 shares at an exercise price of
$10.00 per share pursuant to the Company's 1991 Key Employee Stock
Option Plan.
PROPOSAL NO. I - ELECTION OF DIRECTORS
There are seven members of the Board of Directors of the Company
classified into three classes, with the three-year term of office of each
class expiring at the Annual Meeting of Stockholders in successive years,
upon the election and qualification of successor classes. The term of
office of two directors will expire at the Meeting. Directors of the class
subject to election will be elected to serve for a term of three years and
until their successors have been elected and qualified.
The nominees for the class of directors to be elected at the Meeting
are: Alfred J. Moccia and Mark D. Johnston. Mr. Moccia was re-elected as
a director of the Company in March 1993. Mr. Johnston was elected as a
director on April 16, 1996. Proxies may not be voted for a greater number
of persons than the number of nominees named.
Unless otherwise indicated, all proxies received will be voted in
favor of the election to the indicated class of directors of the two
nominees of the Board of Directors named above. Should a nominee not
remain a candidate for election at the date of the Meeting (which
contingency is not now contemplated or foreseen by the Board of Directors),
proxies solicited hereby will be voted in favor of the nominee who does
remain a candidate and may be voted for a substitute nominee selected by
the Board of Directors. Directors shall be elected by a majority of the
votes cast at the Meeting.
The following table lists the names of the directors and nominees,
their ages, their current positions with the Company and the expiration
date of their term as director of the Company.
Term as
Director
Name Age Position Expires
---- --- -------- --------
Harvey Krieger . . . . . . . 61 Chairman of the 1997
Board of Directors
Leonard Gubar . . . . . . . . 59 Director 1998
Peter R. Lasusa . . . . . . . 71 Director 1997
Alfred J. Moccia . . . . . . 78 President, Chief Executive 1996*
Officer and Director
Pamela J. Newman . . . . . . 48 Director 1998
James R. Stallard . . . . . . 43 Director 1998
Mark D. Johnston . . . . . . 38 Director 1996*
_______________
* Term of class expires at the Meeting. Director indicated is a nominee
for re-election.
Harvey Krieger is one of the founders of the Company and served as
Chairman, President and Chief Executive Officer until June 6, 1995 when he
became a non-executive Chairman of the Board. He has served as a director
since 1971.
Leonard Gubar has served as a director of the Company since its
inception in 1971. From 1969 until August 1992, Mr. Gubar was a member of
the law firm of Spengler Carlson Gubar Brodsky & Frischling, New York, New
York, which acted as counsel to the Company for over 15 years. In August
1992, Spengler Carlson Gubar Brodsky & Frischling combined its practice
with Reid & Priest LLP, a 60-year old firm with offices in New York and
Washington D.C. Mr. Gubar is also a director of Career Horizons, Inc., a
national provider of temporary personnel to businesses and government
agencies. See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."
Peter R. Lasusa was elected a director of the Company in June 1988.
Since July 1987, Mr. Lasusa has been a private investor and financial
consultant. From 1963 until his retirement in June 1987, he was a
partner in the accounting firm of Arthur Andersen & Co., New York, New
York.
Pamela J. Newman was elected a director of the Company in August 1988.
Since January 1993, Ms. Newman has served as Executive Vice President of
Rollins Hudig Hall of New York, Inc., a subsidiary of AON Corporation, a
provider of insurance brokerage services worldwide. From 1982 to January
1993, Ms. Newman was a Managing Director of Marsh & McLennan, Incorporated
and served as an executive officer of its Risk Management and Insurance
Brokerage Services Division. See "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS."
Alfred J. Moccia was elected a director of the Company in September
1989. Mr. Moccia has served as President and Chief Executive Officer of
the Company since July 1995. From January 1974 to June 1990, Mr. Moccia
was a director of Bekaert Corporation, New York, New York, a manufacturer
of steel cord and wire products, and from January 1988 to June 1990, Mr.
Moccia also served as Vice Chairman of such corporation. He is also a
retired Vice Chairman, director and Chief Financial Officer of Sperry
Corporation, a manufacturer and marketer of computers and hydraulic and
farm equipment.
James R. Stallard was elected a director of the Company in 1996. Mr.
Stallard joined CIGNA in August 1994 and was named a Senior Vice President
of CIGNA's Property and Casualty Management Facility in March 1996. Mr.
Stallard has held a variety of management positions in underwriting,
administration and systems in the property and casualty insurance industry
for nearly 23 years, and for 21 years was employed by Transamerica
Insurance Company (now known as TIG). Mr. Stallard was elected to the
Board of Directors of the Company pursuant to a Restructuring Agreement
dated as of March 1, 1996 among the Company and several customers and
several parties to two lawsuits. Under the Restructuring Agreement, the
Company agreed to elect to its Board of Directors one designee selected by
a majority in amount of the settlement shares issued pursuant to the
agreement. Mr. Stallard, as designee, was elected as a director in the
Class of 1998 and will be subject to reelection at the Company's 1998
Annual Meeting of Stockholders. Beginning with the 1998 Annual Meeting,
the Company will include Mr. Stallard, or any successor designee selected
by a majority in amount of the settlement shares issued pursuant to the
Restructuring Agreement, as a nominee in management's slate of directors
for such annual meeting and the Company shall recommend to its stockholders
the election of such designee or successor, as a director at the 1998
Annual Meeting. In the event that such designee is not elected as a
director at the 1998 Annual Meeting, the Company shall, following said
meeting, elect the designee to its Board of Directors and amend its By-Laws
to create any vacancy, if required, to serve for a period equal to the
remainder of the three-year period. The Company further agreed that if the
designee dies or resigns, his successor will be designated a director. See
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."
Mark D. Johnston was elected a director of the Company in 1996. Mr.
Johnston is an executive director of Software Investments Limited ("SIL")
and Care Corporation Limited ("Care"), both of which are British Virgin
Islands companies. For the past 5 years his responsibilities have been
centered on treasury operations including currency management and
management of investments in international bonds, equities and derivatives.
Mr. Johnston has also been involved in the development of educational
software for use on multimedia personal computers for the past five years
and has gained considerable experience in the rapid changes occurring in
the computer industry. Mr. Johnston is also a director of International
Insurance Technologies, Inc., a software consulting company in Tampa,
Florida. Mr. Johnston was elected to the Board of Directors pursuant
to the terms of a Stock Purchase Agreement dated as of March 31, 1996
among the Company, SIL and Care. Under the Stock Purchase Agreement,
the Company agreed to elect Mr. Johnston as a director in the Class
of 1996 as the designee of SIL and Care to the Company's Board of
Directors. The Company further agreed that a designee, which may be Mr.
Johnston or a successor designated by SIL and Care, shall be included as
one of the management nominees for director of the Company at each meeting
of stockholders, beginning with the 1996 Annual Meeting, and that if the
designee is not elected at the 1996 Annual Meeting or any subsequent annual
meeting called for the purpose of reelecting or electing such class of
directors, the Company shall, following such meeting, elect the designee to
its Board of Directors and amend its By-Laws to create any vacancy, if
required, to serve for a period equal to the remainder of the term of such
class of directors. The Stock Purchase Agreement further stipulates that
if, at any time, any designee shall decline or be unable to serve as a
director of the Company, another designee shall be elected as a director to
fill the vacancy thus created. Each designee shall have all voting and
other rights provided to directors of the Company generally. The Company
shall be required to comply with the Stock Purchase Agreement for as long
as SIL and Care collectively hold an aggregate of 20% or more of the issued
and outstanding shares of the Company's Common Stock. See "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS."
In addition to the President and Chief Executive Officer of the Company
who is a director of the Company listed above, Raul F. Calvo is Vice
President of the Company and Theodore I. Botter is Secretary and General
Counsel of the Company.
Raul F. Calvo (age 67) has served as the Company's Vice President since
March 1996. From 1989 until February 1996, Mr. Calvo served as the
Director of Operations and Vice President for the JUA/MTF program, the
automobile insurance assigned risk pool of the State of New Jersey. In
1994, Mr. Calvo was appointed Chief Financial Officer and Treasurer of
COVER-ALL Systems, Inc., a subsidiary of the Company, and in August 1995
he was appointed Chief Accounting Officer for the Company. Mr. Calvo
maintains both positions presently.
Theodore I. Botter (age 71) has served as the Company's Secretary and
General Counsel since July 1990. From October 1987 to July 1990, Mr.
Botter was of counsel to Sills Cummis Zuckerman Radin Tischman Epstein &
Gross, P.A., Newark, New Jersey, and from November 1984 to October 1987, he
was of counsel to Meyner & Landis, Newark, New Jersey. Prior to 1984, he
served as an appellate division judge in the State of New Jersey.
BOARD OF DIRECTORS AND COMMITTEES
There were 13 meetings of the Board of Directors of the Company held
during the last fiscal year. All current directors attended at least 75%
of the total number of meetings of the Board and all committee meetings of
the Board on which the director served. The Board acted by unanimous
written consent on one occasion.
The Board of Directors has standing Compensation and Audit Committees.
It also has a 1991 Key Employee Stock Option Plan Committee ("KESO Plan
Committee") and a 1995 Employee Stock Option Plan Committee ("Employee Plan
Committee"). It does not have a standing nominating committee.
The present members of the Compensation Committee are Messrs. Gubar,
Lasusa and Moccia. The principal functions of the Compensation Committee
are to review current and proposed employment arrangements with existing
and prospective senior employees. During the fiscal year ended December
31, 1995, the Compensation Committee met on one occasion.
The present members of the Audit Committee are Messrs. Gubar, Lasusa
and Moccia. The Audit Committee's principal functions are to consider
matters relating to the administration and audit of the Company's accounts
and its financial affairs; to supervise the Company's relationship with its
independent auditors; to recommend the appointment of independent auditors;
and to meet with Company personnel as it deems appropriate to carry out its
functions. During the fiscal year ended December 31, 1995, the Audit
Committee met on two occasions.
The present members of the KESO Plan Committee are Messrs. Gubar,
Lasusa and Moccia. The principal function of the KESO Plan Committee is to
administer the Company's 1991 Key Employee Stock Option Plan, including
selecting the key employees to whom options will be granted, determining
the number of shares of Common Stock issuable pursuant to each option, when
options are to be granted, any conditions to be attached to options and
establishing rules and regulations for the administration of the 1991 Key
Employee Stock Option Plan. During the fiscal year ended December 31,
1995, the KESO Plan Committee acted by unanimous written consent on three
occasions.
The present members of the Employee Plan Committee are Messrs. Gubar,
Lasusa and Moccia. The principal function of the Employee Plan Committee
is to administer the Company's 1995 Employee Stock Option Plan, including
selecting the employees to whom options will be granted, determining the
member options to be granted to any such employee, when options are to be
granted, the terms of the options and any conditions to be attached to the
options and establishing rules and regulations for the administration of
the 1995 Employee Stock Option Plan. During the fiscal year ended December
31, 1995, the Employee Plan Committee acted by unanimous written consent
on three occasions.
PROPOSAL NO. 2 - PROPOSED AMENDMENT TO
CERTIFICATE OF INCORPORATION TO CHANGE
THE CORPORATE NAME
GENERAL
The Board of Directors of the Company has adopted a resolution
unanimously approving and recommending to the Company's stockholders for
their approval, an amendment to Article First of the Company's Certificate
of Incorporation to change the corporate name from Warner Insurance
Services, Inc. to Cover-All Technologies Inc. The text of the proposed
amendment is annexed to this Proxy Statement as Annex A.
The Board of Directors believes that the change in corporate name to
Cover-All Technologies Inc. would allow the Company to become more closely
identified with its COVER-ALL business and the Company's increased activity
in the technology field. The Board of Directors believes that since the
Company has exited the insurance processing field that a name change at
this time would be appropriate. The Board of Directors believes the change
in corporate name is in the best interests of the Company and its
stockholders and believes it advisable to change the corporate name to
Cover-All Technologies Inc.
VOTE REQUIRED
In accordance with applicable Delaware law and the Company's
Certificate of Incorporation, approval of Proposal No. 2 to amend Article
First of the Company's Certificate of Incorporation requires the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock entitled to vote thereon.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS APPROVE THE
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO CHANGE THE
CORPORATE NAME AND ACCORDINGLY RECOMMENDS THAT YOU VOTE FOR PROPOSAL NO. 2.
PROPOSAL NO. 3 - PROPOSED AMENDMENT TO
CERTIFICATE OF INCORPORATION TO INCREASE
NUMBER OF AUTHORIZED SHARES
GENERAL
The Board of Directors of the Company has adopted a resolution
unanimously approving and recommending to the Company's stockholders for
their approval, an amendment to Article Fourth of the Company's Certificate
of Incorporation to increase the number of authorized shares of Common
Stock, par value of one cent ($.01) each, from 20,000,000 to 30,000,000
shares. The text of the proposed amendment is annexed to this Proxy
Statement as Annex B.
The proposed amendment provides for authorization of 10,000,000
additional shares of Common Stock. The Board of Directors deems it in the
best interest of the Company to have an additional amount of Common Stock
of the Company authorized and available for issuance without further action
by the Shareholders, unless such action is required by applicable law or
the rules of any exchange on which the Company's securities may be listed.
The Board of Directors believes that the additional authorized shares of
Common Stock are needed to enable the Company to raise additional capital
funds expeditiously and economically for its ongoing, operations, for
issuance under the Company's stock option plans and for other corporate
purposes, including acquisitions. The Board of Directors believes it
advisable to authorize additional shares of Common Stock now, so that if an
issuance is determined to be appropriate in the future, it could be
accomplished without the delay and expense involved in obtaining
shareholder approval.
Shareholders will have no pre-emptive rights with respect to the
additional shares of Common Stock. The Shares would be issued on such
terms, at such times and on such conditions as the Board of Directors may
determine.
The Board of Directors believes that the increase in the number of
authorized shares of Common Stock to 30,000,000 is in the best interests of
the Company and its stockholders and believes it advisable to authorize
such increase in the number of shares authorized for issuance by the
Company.
VOTE REQUIRED
In accordance with applicable Delaware law and the Company's
Certificate of Incorporation, approval of Proposal No. 3 to amend Article
Fourth of the Company's Certificate of Incorporation requires the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock entitled to vote thereon.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS APPROVE THE
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES AND ACCORDINGLY RECOMMENDS THAT YOU VOTE FOR
PROPOSAL NO. 3.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On March 1, 1996, the Company entered into a series of agreements
relating to its Insurance Services Division ("ISD") resulting in the
release of the Company from continuing obligations under certain contracts
for the provision of insurance services to ISD customers and the settlement
and dismissal of lawsuits with The Robert Plan Corporation and certain of
its affiliates. The Company had been suffering losses and had operated
under considerable uncertainty as a result of the pendency of such
lawsuits.
In exchange for terminating the contracts and executing the mutual
releases and settling the lawsuits, the Company issued to certain of the
ISD customers and certain parties to the litigation a total of 3,256,201
shares of Common Stock as well as five-year warrants to purchase up to an
additional aggregate of 1,553,125 shares of the Company's Common Stock at
$2.00 per share. The Company retained the option, exercisable for a period
of six months, to (i) purchase one-half of the 3,256,201 shares at a cash
price equal to the greater of $3.00 or 50% of the then market price of a
share of the Company's Common Stock and (ii) acquire 50% of the 1,553,125
warrants at a cash price equal to $1.00 per warrant. The Company also paid
an aggregate of $887,500 to certain of the ISD customers and certain
parties to the litigation and agreed to pay certain currently due expenses
of ISD which, as of March 1, 1996 were approximately $1,750,000. As part
of the transactions, the Company transferred certain assets, employees,
contracts and leased premises relating to the ISD to a subsidiary of The
Robert Plan Corporation, which replaced the Company as the provider of
insurance services to certain of the ISD customers. On March 31, 1996,
the Company settled with one customer which did not participate in the
restructuring by making a cash payment of $1.6 million.
Atlantic Employers Insurance Company ("AEIC"), a CIGNA Property and
Casualty company and ISD customer, acquired 2,476,547 shares of the
Company's Common Stock, warrants to purchase 1,181,250 shares and $675,000
in cash as part of the restructuring transaction. This resulted in AEIC
becoming a beneficial holder of more than 5% of the Company's outstanding
Common Stock. James R. Stallard, Vice President of CIGNA Property and
Casualty, was designated as a director of the Company pursuant to the terms
of the Restructuring Agreement.
Software Investments Limited ("SIL") and Care Corporation Limited
("Care") entered into a Stock Purchase Agreement with the Company as of
March 31, 1996. SIL acquired 1,412,758 shares of Common Stock of the
Company for $2.00 per share and five-year warrants, at $1.00 per warrant,
to purchase an aggregate of 196,875 shares of Common Stock at $2.00 per
share. This constitutes a total initial investment of $3,022,391. In
addition, the Company assigned to SIL the rights the Company retained in
its restructuring transaction to repurchase (i), for a period of six months
from March 1, 1996, 1,628,101 shares, which represents one-half of the
Company's Common Stock issued as part of the restructuring, at a cash
purchase price equal to the greater of $3.00 or 50% of the then market
price per share of the Company's Common Stock and (ii) five-year warrants
to acquire 776,562 shares of Common Stock, which represents one-half of the
warrants issued as part of the restructuring, at $2.00 per share at a
purchase price of $1.00 per warrant. SIL exercised such repurchase
rights in full on April 30, 1996 and will exercise such warrants on
May 6, 1996, which, upon exercise and payment, will result in the
Company receiving an additional $1,553,124.
In addition to the Stock Purchase Agreement, Care granted the Company
an exclusive license for the Care software system for use in the workers'
compensation and group health claims administration markets in Canada,
Mexico and Central and South America in exchange for 2,500,000 shares of
the Company's Common Stock. If the license results in $5,000,000 or more
in revenue to the Company during the three years following the closing date
of the agreement, then the shares will be fully earned. Otherwise,
depending on the level of revenue reached, the Company will have the right
to repurchase portions of the shares at $.01 per share based upon revenues
actually achieved. If the Company realizes aggregate net sales in excess
of $10,000,000 from a maximum of two separate sales during such three year
period, the Company may be required to grant to Care five-year warrants to
buy an additional 1,000,000 shares of Common Stock at $2.00 per share.
Care, through its Care Systems Corporation subsidiary, has entered into
a joint marketing venture with the Company to market the Care software
system and the Company's software system for use in the workers'
compensation administration market in the United States. The Company will
receive any revenues generated by the licensing of the policy and premiums
service and Care will receive any revenues generated by the licensing of
the claims service. This joint marketing venture is in the early stages of
development and has not yet produced any revenues.
SIL is controlled by The Software Trust, a Jersey, Channel Islands
Discretionary Settlement, which owns all of the issued capital of SIL as
its sole asset. The Care Trust, a Jersey, Channel Islands Discretionary
Settlement, owns a majority interest in the issued capital of Care as its
sole asset. The beneficiaries of both The Software Trust and The Care
Trust are the family interests of Donald Johnston, father of Mark D.
Johnston. Mr. Mark D. Johnston is an executive director of each of SIL and
Care, but does not have a direct interest in either The Software Trust or
The Care Trust.
Reid & Priest LLP performed legal services for the Company during the
fiscal year ended December 31, 1995. The Company expects that such law
firm will render legal services to the Company in the future. Leonard
Gubar, a director of the Company, is a partner of Reid & Priest LLP.
Rollins Hudig Hall of New York, Inc. is the insurance broker of record
for the Company, recommending coverage and placing all insurance policies
with carriers. Pamela J. Newman, a director of the Company, serves as
Executive Vice President of Rollins Hudig Hall of New York, Inc. The total
amount of premiums paid by the Company to such firm during the 1995 fiscal
year was $441,299.
The Company had made advances from time to time to Harvey Krieger,
President and Chairman of the Board of the Company, commencing in February
1992, to assist in his meeting margin calls and to pay interest on past
loans made by the Company to satisfy margin loan requirements. Each
advance was evidenced by a 90-day note bearing interest at the rate equal
to the prime rate announced from time to time by Chase Manhattan Bank plus
1%. In December 1992, Mr. Krieger repaid the Company $30,000 in
satisfaction of certain of these advances. As of January 6, 1995, the
aggregate amount of all outstanding loans to Mr. Krieger was $635,757 which
amount includes all accrued interest thereon. On January 6, 1995, the
Board of Directors approved an arrangement whereby Mr. Krieger satisfied
all outstanding indebtedness to the Company by transferring 268,111 shares
of the Company's Common Stock, which number equals $635,757 divided by
$2.37, which was 3/8ths below the closing bid price of the Company's Common
Stock on The New York Stock Exchange on such date. The Board of Directors
also directed that no further loans be made to Mr. Krieger.
The Company had made an advance of $300,000 to Michael G. Repoli,
former President and Chief Executive Officer of COVER-ALL Systems, Inc., as
part of his employment agreement in March 1994. Mr. Repoli's employment
was terminated on January 26, 1995. The Company agreed with Mr. Repoli, in
lieu of any and all other benefits under the employment agreement, as
amended, to, among other things, forgive the repayment of the loan and to
pay all tax liabilities of Mr. Repoli resulting from forgiveness of the
loan. The aggregate amount of the loan and tax liabilities was $425,230 as
of January 26, 1995, the date on which the loan was forgiven.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors, executive officers and holders of more
than 10% of the Company's Common Stock to file initial reports of ownership
and reports of changes in ownership with the Securities and Exchange
Commission. The Company believes that, during the fiscal year ended
December 31, 1995, its executive officers, directors and holders of more
than 10% of the Company's Common Stock complied with all Section 16(a)
filing requirements. In making these statements, the Company has relied
upon a review of reports on Forms 3, 4 and 5 furnished to the Company
during, or with respect to, its last fiscal year.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
COMPENSATION OF EXECUTIVE OFFICERS
The following Summary Compensation Table shows the compensation paid
during the fiscal years ended December 31, 1995, December 31, 1994 and
October 31, 1993 to (i) the Company's Chairman of the Board and former
President, (ii) its former President and Chief Executive Officer, (iii)
its President and Chief Executive Officer and (iv) its two most highly
compensated executive officers, other than the President and Chief
Executive Officer, who were serving as executive officers at December 31,
1995.
ANNUAL COMPENSATION(1)
----------------------
OTHER
ANNUAL
NAME AND COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS SATION
------------------ ---- ------ ----- -------
Alfred J. Moccia 1995 $ 45,385 $ - $ -
President and 1994 - - -
Chief Executive 1993 - - -
Officer
Harvey Krieger 1995 350,987 - -
Chairman of 1994 385,400 - -
the Board and 1993 385,400 - -
Former President
Henry E. Kates 1995 8,846 - -
Former President 1994 - - -
and Chief Executive 1993 - - -
Officer
Theodore I. Botter 1995 162,032 - -
Secretary and 1994 189,038 - -
General Counsel 1993 192,500 - -
Bradley J. Hughes 1995 156,442 - -
Vice President - 1994 168,500 - -
Finance and 1993 168,500 - -
Administration and
Chief Financial
Officer
LONG TERM COMPENSATION(1)
-------------------------
AWARDS PAYOUTS
----------------------------------
ALL
RESTRICTED SECURITIES OTHER
NAME AND STOCK UNDERLYING LTIP COMPEN-
PRINCIPAL POSITION AWARDS OPTIONS PAYOUTS SATION(2)
------------------ ---------- ---------- ------- ---------
Alfred J. Moccia - - - $ -
President and - - - -
Chief Executive - - - -
Officer
Harvey Krieger - - - 9,725
Chairman of - - - 7,413
the Board and - - - 10,530
Former President
Henry E. Kates - 100,000 - 0
Former President - - - 0
and Chief Executive - - - 0
Officer
Theodore I. Botter - 50,000 - 468
Secretary and - - - 5,685
General Counsel - - - 12,927
Bradley J. Hughes - - - 709
Vice President - - - - 2,004
Finance and - 8,750 - 1,890
Administration and
Chief Financial
Officer
_______________
(1) Compensation reported excludes remuneration paid during the two month
transition period commencing November 1, 1993 and ending December 31,
1993 resulting from the Company's change in fiscal year from October
31 to December 31.
(2) All amounts represent insurance premiums paid by the Company during
the fiscal years specified with respect to group term life insurance
for the benefit of the named executive officers.
Grants and Exercises of Stock Options
The following table sets forth certain information with respect to
stock options granted during the 1995 fiscal year to the executive officers
of the Company listed in the Summary Compensation Table. The table also
discloses the gain or "spread" that would be realized if the options
granted were exercised on the expiration date assuming the Company's stock
price had appreciated by the percentage levels indicated annually from the
market price on the date of grant.
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation
Individual Grants for Option Term
--------------------------------- ---------------
% of
Total
Options
Granted
Number of to
Securities Employees
Underlying in Expira-
Options Fiscal Exercise ation
Name Granted Year Price Date 5% 10%
---- ------- ---- ----- ---- -- ---
Alfred J. Moccia -- -- -- -- -- --
Harvey Krieger -- -- -- -- -- --
Henry E. Kates 100,000 21.6% $1.125 6/7/98 $18,000 $38,000
Theodore I. Botter 50,000 10.8% $1.625 3/15/00 $22,500 $50,000
Bradley J. Hughes -- -- -- -- -- --
No individual stock options were exercised during the last fiscal year
by the executive officers of the Company listed in the Summary Compensation
Table. None of the outstanding options of the Company were "in-the-money"
at December 31, 1995. The following table sets forth outstanding stock
options held by such executive officers at December 31, 1995.
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Number of Fiscal Year-End Fiscal Year-End(1)
Shares (#) ($)
Acquired Value - - - - - - - - - - - - - - -
on Realized Exercisable/ Exercisable/
Name Exercise ($) Unexercisable Unexercisable
---- -------- -------- ------------- -------------
Alfred J. Moccia - - 10,000/0 $ /$
Harvey Krieger - - 61,250/30,625 /
Henry E. Kates - - 100,000/0 0/37,500
Theodore I. Botter - - 55,500/32,750 /
Bradley J. Hughes - - 8,750/0 /
_______________
(1) Based upon the fair market value, $1.50, of the Company's Common Stock
on December 29, 1995 on The New York Stock Exchange, only the options
held by Mr. Kates included in the table above were "in the money."
Employment Agreements of Executive Officers and Severance Benefits
In November 1989, the Company entered into a severance agreement with
Mr. Krieger. In August 1990, the Company entered into severance agreements
with two additional officers of the Company, Messrs. Botter and Hughes.
The severance agreements provide for the payment of certain severance
benefits (the "Severance Benefits"), as described below.
The Severance Benefits would be payable to the subject employees only
in the event of a change of control of the Company and the subsequent
termination of the subject individual's employment with the Company. A
"change of control" of the Company would occur when (i) a person, with
certain exceptions, acquires beneficial ownership of securities
representing 20% or more of the voting power of the Company's then
outstanding securities, without the approval of the Company's Board of
Directors; (ii) individuals who on the date of the agreement are directors
(or who are nominated or approved by such persons or their successors,
approved in accordance with the provision) cease to constitute a majority
of the Board; or (iii) the Company's stockholders approve a merger or
consolidation with any other corporation, other than a merger or
consolidation that would result in the Company's voting securities
outstanding immediately prior to the transaction representing at least 80%
of the voting power thereafter. The purpose of the Severance Benefits is
to provide additional incentive to, and security for, certain key employees
of the Company and to allow such employees to be able to pursue objectively
the best interests of the Company without immediate concern for the
personal impact of such change of control. The severance agreements
provide that if a participant's employment is terminated by the Company
within one year following the effective date of a change of control, then
such participant shall be entitled to receive (i) the participant's full
base salary through the date of termination at the rate set forth in his
severance agreement plus all other amounts to which the participant is
entitled under any compensation plan of the Company in effect on such date;
(ii) in lieu of any further salary payments for periods subsequent to the
date of termination, except in certain circumstances, a lump sum payment
equal to 300% of the average annual amount actually paid by the Company or
any parent or subsidiary of the Company to the participant in each of the
five prior calendar years, less $100; (iii) a cash payment, in the amounts
set forth in his severance agreement, in consideration of the surrender of
that participant's outstanding options to purchase stock of the Company;
and (iv) all legal fees incurred by the participant in connection with his
termination.
The Company has employment contracts with Harvey Krieger, Theodore I.
Botter and Bradley J. Hughes pursuant to which their annual salaries for
fiscal 1996 will be $327,590, $162,500 and $140,000, respectively. Mr.
Krieger's employment contract has a term expiring May 31, 1996 and is
automatically renewable on a year-to-year basis thereafter unless
terminated according to its terms. The employment contracts with Messrs.
Botter and Hughes are each automatically renewable on July 31 of each year
unless terminated according to their terms. The Company has given notice
to Messrs. Krieger, Botter and Hughes that their employment contracts will
not be renewed. As a consequence, the Severance Benefits described above
are no longer applicable and are of no force or effect.
Upon the expiration of Mr. Krieger's employment contract, the Board of
Directors has approved a one-year agreement commencing June 1, 1996,
pursuant to which the Company will pay Mr. Krieger an annual consulting fee
of $150,000. The Board of Directors has also approved a one-year service
agreement with Mr. Botter commencing August 1, 1996, pursuant to which the
Company will pay Mr. Botter an annual compensation of $50,000.
On March 1, 1996, the Company and COVER-ALL entered into an employment
agreement with Peter C. Lynch, President and Chief Operating Officer of
COVER-ALL. The employment agreement has a two-year term expiring on
February 28, 1998 and provides for compensation at the annual rate of
$165,000 for the first year and $189,750 for the second year of employment
as well as for each successive year of employment thereafter, if the
renewal option is exercised. The employment agreement may be renewed for
successive one year terms jointly by the Company and Mr. Lynch by providing
written notice of renewal to each other at least 90 days prior to the
expiration of the then current term. The agreement provides that if
Mr. Lynch's employment is terminated during the employment term for any
reason, other than for cause, death or disability, the Company will pay Mr.
Lynch an amount equal to the remaining salary to which he would have been
entitled if his employment had not been terminated before the end of the
employment term plus six month's salary. If Mr. Lynch's employment is
terminated by the Company after the employment term for any reason,
including expiration of the employment term without renewal thereof by the
Company, and other than for cause, death or disability, the Company will
pay Mr. Lynch six month's salary.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 1995 the Compensation Committee consisted of Alfred
J. Moccia, Leonard Gubar and Peter R. Lasusa. Mr. Moccia also served as
President and Chief Executive Officer of the Company. Mr. Gubar is a
partner of Reid & Priest LLP, which performed legal services for the
Company during the fiscal year ended December 31, 1995. The Company
expects that such law firm will render legal services to the Company in the
future.
COMPENSATION OF DIRECTORS
The Company's outside directors each receive $12,000 annually for
their services as a director of the Company which amount is paid by the
Company to such directors in equal quarterly installments. The directors
also receive $300 for each Board meeting and committee meeting they attend.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation program developed by the Compensation Committee has
required management to set goals at the beginning of each fiscal year for
increasing income before taxes from the previous year in order to evaluate
management's performance. Salary increases for each fiscal year have been
based upon the Company attaining the earnings performance targets for the
preceding fiscal year, unusual achievements, and cost of living. Bonuses
are divided among the executive group after evaluation of each individual's
performance, in consultation with senior management. Option grants are
similarly based. The President and Chief Executive Officer of the Company
is separately evaluated by the Committee which takes into consideration
overall Company performance in attaining established targets for income
before taxes and developing and achieving short term and long term goals
for the Company's business. For fiscal 1995, no bonuses were paid with
respect to 1995 performance due to the Company's continuing financial
difficulties. The Company also decided not to renew the employment
agreements with Messrs. Krieger, Botter and Hughes. The Company entered
into a two-year employment agreement with Peter C. Lynch, President and
Chief Operating Officer of Cover-All, on March 1, 1996, whereby Mr. Lynch's
salary was increased from $150,000 per year to $165,000 during the first
year of employment under the contract and $189,750 during the second year.
Payments of base salary and stock option awards for the 1995 fiscal
year do not exceed $1 million for any named executive officer included in
the Summary Compensation Table.
This report was furnished by Messrs. Gubar, Lasusa and Moccia, all of
the members of the Compensation Committee.
WARNER INSURANCE SERVICES, INC.
COMPARISON OF 62 MONTH CUMULATIVE TOTAL RETURN*
AMONG WARNER INSURANCE SERVICES, INC.,
THE RUSSELL 2000 INDEX AND A PEER GROUP
CUMULATIVE TOTAL RETURN
-------------------------------------------------------------
10/31 10/31 10/31 10/31 12/31 12/31 12/31
/90 /91 /92 /93 /93 /94 /95
WARNER
INSURANCE
SERVICES,
INC. 100 224 308 205 182 87 55
PEER GROUP 100 134 159 198 194 177 232
RUSSELL
2000 100 158 174 230 230 226 290
* ASSUMES $100 INVESTMENT ON OCTOBER 31, 1990 IN WARNER INSURANCE
SERVICES, INC. COMMON STOCK, RUSSELL 2000 (AN INDEX OF 2,000
COMPANIES WITH MARKET CAPITALIZATION BETWEEN $25 MILLION AND $370
MILLION) AND PEER GROUP (A GROUP OF 9 COMPANIES SELECTED FROM THE
SAME STANDARD INDUSTRIAL CODE AS WARNER INSURANCE SERVICES, INC.
AND WITH MARKET CAPITALIZATION OF BETWEEN $25 MILLION AND $370
MILLION). THE COMPANIES IN THE PEER GROUP ARE AS FOLLOWS: ACMAT
CORP., BALDWIN & LYONS, INC., CIS TECHNOLOGIES, ARTHUR J. GALLAGHER
& CO., HILB ROGAL & HAMILTON CO., MARKEL CORP., NATIONAL INSURANCE
GROUP, UNICO AMERICAN CORP. AND US FACILITIES CORP.
AUDITORS
The Company's independent public auditors are Ernst & Young LLP,
Hackensack, New Jersey. A representative of Ernst & Young LLP will be
present at the Meeting and available to respond to appropriate questions
and, in addition, such a representative will be given an opportunity to
make a statement at the Meeting if the representative desires.
ANNUAL REPORT
All stockholders of record as of May 2, 1996 have or are currently
being sent a copy of the Company's Annual Report for the fiscal year ended
December 31, 1995 (the "Annual Report") which contains audited financial
statements of the Company and complies with all of the disclosure
requirements of the Company's 1995 Annual Report on Form 10-K as filed with
the Securities and Exchange Commission ("SEC"). The Annual Report is
deemed to be part of the material for the solicitation of proxies.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH BENEFICIAL HOLDER OF
ITS COMMON STOCK ON MAY 2, 1996 WHO DID NOT RECEIVE A COPY OF THE COMPANY'S
ANNUAL REPORT, ON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31,
1995 AS FILED WITH THE SEC. ANY SUCH REQUEST SHOULD BE MADE IN WRITING TO
THE SECRETARY, WARNER INSURANCE SERVICES, INC., 18-01 POLLITT DRIVE, FAIR
LAWN, NEW JERSEY 07410.
STOCKHOLDER PROPOSALS
Stockholder proposals must be received by January 1, 1997 in order to
be considered for inclusion in proxy materials distributed in connection
with the next annual meeting of stockholders. All such proposals should be
in compliance with applicable SEC regulations.
MISCELLANEOUS
All of the costs and expenses in connection with the solicitation of
proxies with respect to the matters described herein will be borne by the
Company. In addition to solicitation of proxies by use of the mails,
directors, officers and employees (who will receive no compensation
therefor in addition to their regular remuneration) of the Company may
solicit the return of proxies by telephone, telegram or personal interview.
It is important that proxies be returned promptly. Stockholders are,
therefore, urged to fill in, date, sign and return the Proxy immediately.
No postage need be affixed if mailed in the enclosed envelope in the United
States.
By Order of the Board of Directors
THEODORE I. BOTTER
Secretary
Date: May 6, 1996
<PAGE>
ANNEX A
PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION
TO CHANGE THE CORPORATE NAME
________________
"FIRST: The name of the Corporation shall be Cover-All Technologies
Inc. (hereinafter referred to as the "Corporation")."
<PAGE>
ANNEX B
PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE NUMBER OF AUTHORIZED SHARES
________________
"FOURTH: Capital Stock. The aggregate number of shares which the
-------------
Corporation shall have authority to issue shall be thirty million
(30,000,000) shares of the par value of one cent ($.01) each, all of which
shall be Common Stock."
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
WARNER INSURANCE SERVICES, INC.
The undersigned, a stockholder of WARNER INSURANCE SERVICES, INC., a
Delaware corporation (the "Company"), does hereby appoint Peter R. Lasusa
and Leonard Gubar and each of them as Proxies with full power of
substitution in each of them, in the name, place and stead of the
undersigned, to vote at the Annual Meeting of Stockholders of the Company
to be held at the Stony Hill Inn, 231 Polifly Road, Hackensack, New Jersey
07601, on June 20, 1996 at 9:30 a.m., local time, and at any adjournment or
adjournments thereof, all of the shares of the Company's Common Stock that
the undersigned would be entitled to vote if personally present.
The undersigned hereby instructs said proxies or their substitutes:
1. TO ELECT A CLASS CONSISTING OF TWO DIRECTORS TO SERVE FOR A TERM OF
THREE YEARS AND UNTIL THEIR SUCCESSORS SHALL HAVE BEEN DULY ELECTED
AND QUALIFIED:
[ ] Vote FOR all nominees listed [ ] WITHHOLD AUTHORITY to
below (except as indicated to vote for the nominee(s)
the contrary below) listed below
NOMINEES: Alfred J. Moccia and Mark D. Johnston
INSTRUCTION: To withhold authority to vote for any individual
nominees, write such nominee's name in the space provided below.
----------------------------------------------------------------
2. TO APPROVE AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION OF THE
COMPANY TO CHANGE THE CORPORATE NAME FROM WARNER INSURANCE SERVICES,
INC. TO COVER-ALL TECHNOLOGIES INC.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. TO APPROVE AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION OF THE
COMPANY TO INCREASE THE AUTHORIZED COMMON STOCK OF THE COMPANY FROM
20,000,000 TO 30,000,000 SHARES.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. DISCRETIONARY AUTHORITY: To vote with discretionary authority with
respect to all other matters which may properly come before the Annual
Meeting or any adjournment thereof.
(continued, and to be signed on reverse side)
<PAGE>
(continued from other side)
THIS PROXY WILL BE VOTED AS SPECIFIED EXCEPT THAT IF NO INSTRUCTIONS
ARE INDICATED, IT WILL BE VOTED FOR PROPOSALS 1, 2 and 3.
Please sign exactly as your name appears
hereon. If stock is held jointly, signature
should include both names. Administrators,
Trustees, Guardians and others signing in a
representative capacity, please give your
full titles.
Dated: , 1996
---------------------------------
(L.S.)
---------------------------------------
(L.S.)
---------------------------------------
Signature(s)
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.
