EXHIBIT 3
STOCK OPTION AGREEMENT
(1996 Stock Incentive Plan, as amended June 16, 1998)
THIS STOCK OPTION AGREEMENT (the "Agreement") is made and entered into
as of June 16, 1998 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, as amended (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 10,000 shares of Common Stock, $.10 par value, of the
Company (the "Shares"), at an exercise price of $3.21875 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 ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, 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 Option 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 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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------- --------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chairman of the Board, President
And Chief Executive Officer
EXHIBIT B
NOTICE OF EXERCISE OF OPTION
ACCEL INTERNATIONAL CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Senior Vice President and Secretary
Dear Sir:
On June 16, 1998, I was granted an option under the 1996 Stock
Incentive Plan, as amended, of ACCEL INTERNATIONAL CORPORATION (the
"Company") under which I may buy a total of 10,000 shares of Common Stock,
$.10 par value of the Company ("Shares"), at a price of $3.21875 per Share.
This letter is to notify you that I wish to buy the following Shares under
the option:
___________________ Shares @ $3.21875 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.: _________________________________________