SCHEDULE 14A
Information Required in Proxy Statement
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 249,14a-12
Acceptance Insurance Companies Inc.
(Name of Registrant as Specified In Its Charter)
Acceptance Insurance Companies Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $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:(1)
____________________________________________________________
4) Proposed maximum aggregate value of transaction:
____________________________________________________________
(1) Set forth the amount on which the filing fee is calculated
and state how it was determined.
[ ] 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>
CONSENT
ACCEPTANCE INSURANCE COMPANIES INC.
IN LIEU OF SPECIAL MEETING OF SHAREHOLDERS
The undersigned, a shareholder of Acceptance Insurance
Companies Inc. (the "Company"), acting pursuant to Section 228 of
the Delaware General Corporation Law, as amended, hereby votes,
as designated below, all shares of the Common Stock of the
Company which the undersigned is entitled to vote:
_________________________________________________________________
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
FOR ______ AGAINST ______ ABSTAIN ______
THIS CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS AND, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO
DIRECTION IS MADE, THIS CONSENT WILL BE VOTED FOR THE AMENDMENT
TO THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION, AND THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION.
Please sign exactly as your name appears below and mail
promptly.
When shares are held by joint tenants, both should
sign. 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 an authorized person.
Dated: _____________________ ___________________________________
Signature
___________________________________
Title
___________________________________
Signature of Joint Owner, if any
PLEASE MARK, SIGN, DATE AND RETURN THIS CONSENT CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
222 South 15th Street
Suite 600 North
Omaha, NE 68102
(402) 344-8800
NOTICE OF CONSENT IN LIEU OF SPECIAL MEETING OF SHAREHOLDERS
To Shareholders:
Please take notice that approval by shareholders of an Amendment
to the company's Restated Certificate of Incorporation is being
sought by written consent ("Consent") in lieu of a special
meeting of shareholders.
Only shareholders of record at the close of business on March 14,
1995 will be entitled to vote. A list of shareholders entitled
to notice of and to vote by way of consent will be available for
inspection at the offices of the Company during the ten days
preceding the Voting Date (as defined herein).
By Order of the Board of Directors,
Donn E. Davis
Secretary
Omaha, Nebraska
________________, 1995
YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE
ENCLOSED CONSENT PROMPTLY, IN THE ENCLOSED ENVELOPE.
The current directors and executive officers of the
Company have advised the Company that they intend to vote or
cause their affiliates to vote an aggregate of 3,624,497 shares
of Common Stock, or approximately 24% of the total outstanding
shares, in favor of the Amendment to the Restated Certificate of
Incorporation.
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
222 South 15th Street
Suite 600 North
Omaha, NE 68102
_________________________________________________________________
INFORMATION STATEMENT
_________________________________________________________________
Mailing Date: , 1995
WRITTEN CONSENT IN LIEU OF SPECIAL MEETING OF SHAREHOLDERS
_________________________________________________________________
INTRODUCTION
This Information Statement is furnished to the
shareholders of Acceptance Insurance Companies Inc., a Delaware
Corporation (the "Company"), in connection with the solicitation
of shareholder consent ("Consent") to an amendment (the
"Amendment") to the Company's Restated Certificate of
Incorporation in order to increase the Company's authorized
common stock, $0.40 par value ("Common Stock"), from 20 million
shares to 40 million shares. Consent to such corporate action is
being requested without a meeting of shareholders, and is being
solicited by the Company on behalf of the Board of Directors.
This Information Statement and the accompanying Consent are being
mailed to shareholders on or about , 1995.
Only holders of record of the Company's Common Stock at
the close of business on March 14, 1995 (the "Record Date"), are
entitled to receive this Information Statement and to vote on the
proposed Amendment. Shareholders of record on the Record Date
are entitled to one vote per share. As of the Record Date, there
were ________________ shares of Common Stock, $.40 par value,
outstanding and entitled to vote. To be effective, Consents must
be delivered to the Secretary of the Company, in care of Keycorp
Shareholder Services, Inc., 127 Public Square, 15th Floor,
Cleveland, OH 44114, by April 7, 1995 (the "Voting Date"). The
envelope enclosed herewith should be utilized for that purpose.
The Company may, at is sole discretion, extend the Voting Date
for up to ten additional days, or until April 17, 1995. The vote
of holders of a majority of the outstanding shares of Common
Stock is necessary to approve the Amendment.
Following the original mailing of this Information
Statement and accompanying soliciting materials, directors and
officers and other employees of the Company may solicit, without
additional compensation, or may engage others to solicit,
Consents by any appropriate means, including personal interview,
mail, telephone and telegraph. Arrangements also will be made
with brokerage houses and other custodians, nominees and
fiduciaries, which are holders of record of the Company's Common
Stock, to forward Consent soliciting material to the beneficial
owners of such shares, and the Company will reimburse such
holders of record for their reasonable expenses incurred in
connection therewith. The cost of soliciting Consents will be
borne by the Company.
Any Consent given pursuant to this solicitation may be
revoked by the person giving it at any time before the Voting
Date. Consents may be revoked by (i) filing with the Secretary
of the Company, at or before the Voting Date, a written notice of
revocation bearing a date later than the Consent, or (ii) duly
executing a Consent relating to the same shares, bearing a later
date, and delivering it to the Secretary of the Company at or
before the Voting Date.
<PAGE>
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
The Amendment
Shareholders are being asked by this Information
Statement to approve an Amendment to the Company's Restated
Certificate of Incorporation to increase the number of authorized
shares of Common Stock which may be issued by the Company from 20
million shares to 40 million shares. The proposed Amendment has
been approved by the unanimous vote of the Board of Directors.
The change will be effected by an Amendment to the first sentence
of Article IV of the Company's Restated Certification of
Incorporation to read as follows:
"The total number of shares of all classes of
stock which the Corporation shall have the
authority to issue is forty-five million
(45,000,000) shares, consisting of five
million (5,000,000) shares of preferred stock
without par value (hereinafter "Preferred
Stock"), and forty million (40,000,000)
shares of common stock, par value forty cents
($.40) per share (hereinafter "Common
Stock")."
In its Resolution adopting the foregoing Amendment, the Board of
Directors, by unanimous vote, recommended that shareholders vote
FOR the proposed Amendment. The Board of Directors has also
approved this solicitation of written Consent by shareholders to
the Amendment in lieu of calling a special meeting of
shareholders for the sole purpose of seeking approval of the
Amendment.
The existing provisions of the Company's Restated
Certificate of Incorporation authorize 20 million shares of
Common Stock, $0.40 par value, and 5 million shares of Preferred
Stock, without par value. The Amendment does not alter the
Company's ability to issue up to 5 million shares of Preferred
Stock in such series with such special rights, preferences,
restrictions, qualifications and limitations as the Board of
Directors may designate.
Vote Required
In order to be adopted, the Amendment requires the
written Consent of the holders of at least a majority of the
issued and outstanding shares of Common Stock entitled to vote
thereon. At the Record Date, there were a total of 15,129,227
shares of Common Stock outstanding and entitled to vote on the
Amendment. Shareholders are entitled to one vote per share.
Directors and certain executive officers of the Company and their
affiliates own 3,624,497 shares of Common Stock, approximately
24% of the total outstanding such shares, and have advised the
Company that they intend to vote for the proposed Amendment.
Reasons for the Amendment
The Board of Directors believes that it is in the best
interests of the Company and its shareholders to increase the
number of authorized shares of Common Stock at this time. Of the
4,870,773 shares of authorized but unissued Common Stock, 271,232
are reserved for the issuance pursuant to exercise of certain
outstanding warrants and options which are vested, and 36,500
shares are reserved for issuance under the Company's Employee
Stock Purchase Plan. In addition, options which have not yet
vested have been granted to directors, officers and key employees
to purchase an additional 188,500 shares of Common Stock. The
Company's Incentive Stock Option Plan and Employee Stock Purchase
Plan, previously approved by shareholders, authorize the grant of
additional options and rights to purchase shares of Common Stock.
The Board of Directors believes that grants of options
under the Incentive Stock Option Plan and purchase rights under
the Employee Stock Purchase Plan are an important part of
incentive compensation for management. In addition, the Board of
Directors recognizes the Company's current and ongoing needs for
additional capital to fund its insurance operations. The
property and casualty insurance business requires significant
amounts of capital to support the writing of insurance business,
particularly in times of premium growth. The Company's history
is one of continuing premium growth as a result both of
acquisitions (several of which have resulted in the issuance of
additional shares of Common Stock) and other equity investments
and of internal growth, and it intends to continue to pursue
additional opportunities in the insurance business. The Company
must maintain minimum levels of surplus in its insurance
subsidiaries in order to continue to write business and at the
same time meet the standards established by state insurance
regulatory authorities and insurance rating bureaus. Continued
growth in the Company's director written premiums has placed
greater leverage on the Company's balance sheet as the Company's
assets increased by 35.6% during the first nine months of 1994
while shareholders' equity increased only 7% for the same period.
If the Company is to continue to grow, it will have continuing
needs for additional capital.
On August 29, 1994, after the review of the Company's
six-month financial statements, A.M. Best Company, Inc. ("A.M.
Best"), the principal rating bureau for insurance companies,
placed the current A- ("Excellent") rating of three of the
Company's insurance subsidiaries under review with negative
implications, citing as the reason the Company's growth in gross
written premiums without a corresponding growth in surplus. The
A- rating from A.M. Best is important to the Company as many of
the Company's insureds will only place their insurance with an
insurance company rated A- or better.
On December 1, 1994, following a Notice of Redemption
issued by the Company to holders of certain warrants (the
"Warrants") to purchase shares of Common Stock at a purchase
price of $11.00 per share, approximately 4.85 million of such
Warrants were exercised (and approximately 4.85 million shares of
Common Stock issued), resulting in net proceeds to Company of
approximately $53.4 million. The Company increased the statutory
surplus of two of its insurance company subsidiaries by an
aggregate of $38 million with proceeds from the exercise of the
Warrants. A.M. Best then affirmed the A- ("Excellent") ratings
of the three insurance company subsidiaries.
The Company believes that it is likely that additional
capital will be required to fund the amount of its premium
writings in the future, particularly as its business continues to
grow. The Company continually monitors its capital needs and
explores alternative plans for meeting such needs. It is the
Company's belief that the volume of business it expects to write
in 1995 and 1996 will likely require additional capital in order
to maintain levels of capital appropriate for its premium
writings and to meet regulatory requirements established by
insurance regulatory authorities and insurance rating bureaus.
The Company is considering an increase in its Revolving Credit
Facility (presently permitting borrowings up to $35 million) with
its bank lenders as well as raising additional capital through
the issuance of additional Common Stock. On February 23, 1995,
the Company filed a registration with the Securities and Exchange
Commission relating to a proposed public offering of $60 million
of convertible subordinated debt. The principal uses of any
additional funds which may be available from any increase in the
Revolving Credit Facility which may be agreed to by the bank
lenders, and from such public offering, if it occurs, will be to
fund the Company's insurance operations.
In the event that the Company and the proposed
Underwriters enter into an Underwriting Agreement, and proceed
with the convertible debt offering, after reserving the shares of
Common Stock for issuance in connection with the conversion of
the debt, the Company believes the number of shares of Common
Stock remaining authorized but unissued which are not already
committed to honor exercise of Warrants and options would
restrict the Company in achieving its objectives. The Board of
Directors believes it is important that additional shares of
Common Stock be authorized at this time in order to be utilized
for the grant of additional option and stock purchase rights
under compensation plans previously approved by shareholders,
future capital needs and other corporate purposes.
The additional shares of Common Stock which would be
authorized by the Amendment would be available for use in
connection with stock dividends and stock splits, acquisitions,
and public offerings and private placements to secure additional
capital funds. Unreserved and unissued shares of Common Stock
may be issued at such times, for such purposes and for such
consideration as the Board of Directors may determine to be in
the best interests of the Company and its shareholders, and
except as otherwise required by applicable statute, without
further authority from the Company's shareholders. Holders of
the Company's stock have no preemptive rights to acquire unissued
or treasury shares of the Company.
MISCELLANEOUS
Shareholders are urged to complete, sign and date the
enclosed Consent and return it as promptly as possible in the
envelope enclosed for that purpose. Properly executed Consents
will be voted in accordance with shareholder's directions. If no
directions are given, Consents will be voted "FOR" the Amendment.
BY ORDER OF THE BOARD OF DIRECTORS
Donn E. Davis
Secretary
_______________________, 1995
