EXHIBIT 12
STOCK OPTION AGREEMENT
(1996 STOCK INCENTIVE PLAN)
THIS STOCK OPTION AGREEMENT (the "Agreement") is made and entered into
as of May 20, 1997 by and between ACCEL International Corporation, a
Delaware corporation (the "Company"), and the undersigned Director of the
Company ("Participant").
RECITALS
1. Pursuant to the provisions of Section 13 of the Company's 1996
Stock Incentive Plan (the "Plan"), Participant, as a Director of the
Company who is not a corporate employee of the Company, has been granted
the option to purchase shares of Common Stock, $.10 par value, of the
Company ("Shares") on the terms and conditions set forth in this Agreement
and in the Plan.
2. In addition to capitalized terms defined herein, certain
capitalized terms used in this Agreement have the meanings set forth in the
Plan.
AGREEMENT:
The Company and Participant, intending to be bound hereby, agree as
follows:
SECTION 1. OPTIONS. Participant is hereby granted the option (the
"Option") to purchase 1,000 shares of Common Stock, $.10 par value, of the
Company (the "Shares"), at an exercise price of $3.25 per share (the
"Option Price"). The Option shall vest and first become exercisable as to
50% of the Shares subject to this Option on and after the first anniversary
of the date of this Agreement (which shall be deemed the date of grant of
the Option), and 100% on and after the second anniversary of the date of
grant.
SECTION 2. EXERCISE OF OPTION.
2.1. NOTICE. If Participant wishes to purchase Shares under this
Agreement, then Participant must give notice of exercise of the Option to
the Company at the Company's headquarters to the attention of Xxxxxxxx X.
Xxxxxxxxx, Senior vice President and Secretary. Participant must give such
notice in writing and must use the form attached as Exhibit B or its
substantial equivalent. The notice must have all of the blanks set forth on
Exhibit B appropriately and accurately completed and Participant must
include with the notice the full payment for the Shares being purchased.
2.2. PAYMENT.
2.2.1. GENERAL. Any notice of exercise shall be effective only
if Participant pays to the Company the Option Price for the portion of any
Option being exercised.
2.2.2 PAYMENT IN SHARES; CASHLESS EXERCISE. Subject to the
provisions of the Plan, Participant may, in his sole discretion, pay all or
a portion of the Option being exercised by surrender and delivery of
Shares. Any such Shares delivered in full or partial payment of the Option
Price shall be valued at the mean of the high and low closing price of the
Shares in the Applicable Market as of the date of receipt of the Shares by
the Company or, if the Shares are not then traded in an Applicable Market,
the fair market value of the Shares, as determined by the Committee, on
such date. In the sole discretion of the Committee, Participant may be
permitted to pay all or part of the Option being exercised through a
cashless exercise procedure involving a broker.
2.3. TRANSFER.
2.3.1. DELIVERY. The Company shall deliver certificates for the
Shares purchased under the Options as soon as possible after receiving
payment for the Shares and all documents required under the Plan and this
Agreement. The certificates will be made out in the name of Participant
or, if appropriate, in the name of Participant's executors, administrators,
or personal representatives.
2.3.2. COMPLIANCE WITH SECURITIES LAWS. The exercise of Options
and the issuance of Shares pursuant thereto shall be contingent upon the
prior registration of the Shares under the Securities Act of 1933 (the
"Act") and such state laws as may be applicable, or a determination by the
Company that the issuance of such Shares will be a transaction exempt from
such registration. Accordingly, the exercise of Options and the issuance
of Shares pursuant thereto may, at the election of the Company, be
contingent upon the execution and delivery by Participant of an investment
letter, in form and substance satisfactory to the Company, which sets forth
certain representations and covenants concerning Participant upon which the
Company and its legal counsel may rely in determining the availability of
any exemption from registration of the Shares under the Act and any
applicable securities laws. In the event the Shares are issued without
registration, the transferability of the Shares by Participant may be
restricted, in which event the certificate evidencing the Shares may
contain a legend stating that the Shares have not been registered and
setting forth or referring to any restrictions on the transferability and
sale of the Shares.
2.3.3. INTERPRETATION. This Agreement shall not be construed or
executed in any way which would prevent the options granted hereunder from
meeting the requirements for exemption of Section 16(b) of the Securities
and Exchange Act of 1933 or subsequent
comparable statutes (the "Act"), as set forth in Rule 16b-3 of the Act.
SECTION 3. TERMINATION. Each Option will lapse on the earliest of (i)
180 days after Termination of the Participant's status as a Director, or
(ii) ten years after the option was granted.
SECTION 4. TAX CONSEQUENCES. The Company makes no representation or
warranty regarding the tax consequences to Participant of receipt,
ownership or exercise of Options or of sales of Shares acquired upon
exercise of Options.
SECTION 5. PLAN TO GOVERN. This Agreement is made under the
provisions of the Plan and all of the provisions of the Plan are also
provisions of this Agreement. If there is a difference between the
provisions of this Agreement and the provisions of the Plan, then the
provisions of the Plan shall govern. By signing this Agreement,
Participant confirms that Participant has received and read a copy of the
Plan attached hereto as Exhibit A.
SECTION 6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
6.1. ADJUSTMENT FOR STOCK DIVIDEND OR STOCK SPLIT. In the event
that a stock dividend is hereafter paid on outstanding Shares in Shares, or
in the event that the number of outstanding Shares is hereafter increased
as a result of a stock split, and the Options are then unexercised, the
number of Shares subject to the Options shall thereupon be increased by
that number of Shares which would have been distributed with respect to the
Shares subject to the Options if the Shares subject to the Options had been
outstanding at the time of the stock dividend or stock split and the Option
Price shall be adjusted to reflect such increased number of Shares subject
to the Options.
6.2. ADJUSTMENT FOR REORGANIZATION OR MERGER. In the event that
outstanding Shares are hereafter changed into or exchanged for a different
number or kind of shares of stock or securities of another corporation or
corporations, whether as a result of a reorganization, recapitalization,
reclassification, merger, consolidation or otherwise, and the Options are
then unexercised, the Options and the Option Price shall thereupon be
adjusted to cover the number and kind of Shares or securities which would
have been received for the Shares subject to the Options if the Shares
subject to the Options had been outstanding at the time of such
reorganization, recapitalization, reclassification, merger, consolidation
or any other event.
6.3. ADDITIONAL ADJUSTMENTS. In the event that there is any
change in the outstanding Shares for which an adjustment is not provided by
Sections 6.1. or 6.2. of this Agreement, and the Options are then
unexercised, the Committee may, in its sole discretion, require an
adjustment in the number or kind of Shares or securities subject to the
Options and the Option Price and such adjustment shall be binding and
effective for all purposes hereof.
6.4. ELIMINATION OF FRACTIONAL SHARES. Any addition or
adjustment provided for in Sections 6.1, 6.2 and 6.3 hereof may be limited
to the extent necessary to prevent fractions of shares from becoming
available under the Options.
SECTION 7. MISCELLANEOUS.
7.1. ENTIRE AGREEMENT. This Agreement and the Plan contain all
of the understandings between the Company and Participant concerning the
Options and incorporate all earlier negotiations and understandings. The
Company and Participant have made no promises, agreements, conditions, or
understandings about the Options, either orally or in writing, that are not
included in this Agreement or the Plan.
7.2. CAPTIONS. The captions and section numbers appearing in this
Agreement are inserted only as a matter of convenience. They do not define,
limit, construe or describe the scope or intent of the provisions of this
Agreement.
7.3. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when executed by the Company and Participant
shall be deemed an original and all of which together shall be deemed the
same agreement.
7.4. NOTICE. Any notice or communication having to do with the
Options or this Agreement shall be given by personal delivery or by
certified mail, return receipt requested, addressed, if to the Company,
pursuant to the notice requirements of Section 2.1 and if to Participant,
at his last known address on the records of the Company.
7.5. AMENDMENT. This Agreement may be amended as provided by the
Plan.
7.7. SUCCESSION AND TRANSFER. The provisions of this Agreement
shall be binding upon and run to the benefit of the Company and Participant
and their respective heirs, personal representatives, successors, and
assigns. However, neither this Agreement nor any other right under the Plan
may be assigned, pledged, hypothecated, given or otherwise transferred by
Participant, except as permitted by the Plan.
NAME OF PARTICIPANT ACCEL INTERNATIONAL
CORPORATION
/S/ XXXXX X. XXXXX /S/ XXXXXX X. XXXXXXXXX
XXXXX X. XXXXX XXXXXX X. XXXXXXXXX
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
EXHIBIT B
NOTICE OF EXERCISE OF OPTION
ACCEL INTERNATIONAL CORPORATION
000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Attention: Xxxxxxxx X. Xxxxxxxxx, Senior Vice President and Secretary
Dear Sir:
On _________________________, 199__, I was granted an option under the 1996
Stock Incentive Plan of ACCEL INTERNATIONAL CORPORATION (the "Company") under
which I may buy a total of _______________ shares of Common Stock, $.10 par
value of the Company ("Shares"), at a price of $2.75 per Share. This letter is
to notify you that I wish to buy the following Shares under the option:
__________________ Shares @ $2.75 per Share: $__________________
Local, State and Federal Withholding Taxes
Payable to ACCEL International Corporation $__________________
Total (payable by certified or bank check only) $__________________
Payment in full of the amounts due as listed above is included with
this notice. Please deliver the stock certificates to me as indicated
below.
Yours truly,
___________________________________
(Participant)
Name (Please Print): ___________________________________
Address: ___________________________________
___________________________________
___________________________________
Area Code & Tel. No.: ___________________________________
Social Security No.: ___________________________________
