ROYAL INSURANCE
Executive Offices: 9300 Arrowpoint Blvd.
Charlotte, NC 28217
DIRECTORS AND OFFICERS LIABILITY AND
COMPANY REIMBURSEMENT COVERAGE
NOTICE: THIS IS A CLAIMS MADE INDEMNITY POLICY WHICH APPLIES
ONLY TO CLAIMS FIRST MADE, AND REPORTED TO ROYAL
DURING THE POLICY PERIOD (AGAINST THE INSURED
PERSONS FOR A WRONGFUL ACT).
NOTICE: THE LIMIT OF LIABILITY IS DEPLETED BY AMOUNTS
INCURRED FOR DEFENSE FEES AND EXPENSES. AMOUNTS
INCURRED FOR DEFENSE EXPENSES SHALL BE APPLIED
FIRST AGAINST THE RETENTION AMOUNT.
NOTICE: INSURER HAS NO DUTY TO PROVIDE A DEFENSE FOR ANY
INSURED PERSON OR THE INSURED ORGANIZATION.
PLEASE READ CAREFULLY
CLAIM NOTICE
Please notify Royal Specialty Underwriting, Inc.
of all claims.
Royal Specialty Underwritings, Inc.
945 East Paces Ferry Road
Suite 1890
Atlanta, GA 30326
Attention: Claims Department
RSUIFP-RI-00001 (Ed. 4/93)
In consideration of the payment of premium and in reliance upon all statements
made and information furnished to the Royal Indemnity Company, (a stock
insurance company, hereinafter called the Insurer) including the statements
made in the Application attached hereto and made a part hereof, and subject to
the terms, conditions, definitions, exclusions and limitations hereinafter
provided, the Insurer agrees:
SECTION 1. INSURING CLAUSE
(A) with the Insured Persons of the Insured Organization that if during
the Policy Period, any Claim or Claims are first made against the
Insured Persons and reported in accordance with Section 4,
Condition (G) of this policy, jointly or severally, for a Wrongful
Act, the Insurer will pay on behalf of such Insured Persons all
Loss which such Insured Persons shall become legally obligated to
pay.
(B) with the Insured Organization that if during the Policy Period,
any Claim or Claims are first made against the Insured Persons
and reported in accordance with Section 4. Condition (G) of this
policy, jointly or severally, for a Wrongful Act, the Insurer will
pay on behalf of the Insured Organization, all Loss for which the
Insured Organization is required or permitted to indemnify the
Insured Persons pursuant to law, common or statutory, or the
Charter or By-laws of the Insured Organization duly effective
under such laws which determines and defines such rights to
indemnify.
SECTION 2. DEFINITIONS
(A) "Application" means the Application attached to and forming part
of this policy, including any materials submitted as part of the
Application process which are on file with the Insurer and which
form part of the policy, whether physically attached or not.
(B) "Claim" means written or oral demand for money or services received
by an Insured Person that any person or entity intends to hold any
Insured Person responsible for a Wrongful Act.
(C) "Defense Expenses" means reasonable legal fees and expenses
incurred, with the written consent of the Insurer, by an Insured
Person in defense of a Claim, including appeal, except that
Defense Expenses shall not include: (1) remuneration, overhead
or benefit expenses associated with any Insured Person; and
(2) any amounts incurred in defense of any Claim including appeal
for which any other insurer has a duty to defend, regardless of
whether or not such other insurer undertakes such duty; and
(3) any obligation to apply for, procure or provide security
for any appellate or similar bond.
(D) "Insured Organization" means the organization named in Item 1
of the Declarations and any Subsidiary existing prior to or at
the inception date of this policy and listed on the Named Insured
Endorsement attached to this policy. In addition, Insured
Organization shall mean any Subsidiary created or acquired after
the inception date of the policy subject to Section 4. Condition
(H) Merger, Consolidation or Acquisition.
(E) "Insured Person" means any past, present or future director or
officer, and in the event of the death, incapacity or bankruptcy
of an Insured Person, the estate, heirs, legal representatives
or assigns of such individual.
(F) "Loss" means any amount for settlement, damages or judgment,
including Defense Expenses, in excess of the applicable retention
and not exceeding the limit of liability, as listed on the
Declarations Page, which an Insured Person is legally obligated
to pay as a result of a Claim. Loss does not include sanctions,
punitive or exemplary damages, the multiplied portion of any
multiplied damage award, matters which are uninsurable under the
law pursuant to which this policy shall be construed, fines,
taxes or penalties.
(G) "Policy Period" means the period from the inception date to the
expiration date in Item 2 of the Declarations Page or to any
earlier cancellation or termination date. Any extension of
coverage under Section 4. Condition (E) will be part of and not
in addition to the Policy Period.
(H) "Subsidiary" means a corporation of which the Insured Organization
owns more than fifty percent (50%) of the voting stock.
(I) "Wrongful Act" means any actual or alleged error, omission,
misstatement, misleading statement, neglect or breach of duty by
an Insured Person solely in their capacity as an Insured Person
acting on behalf of the Insured Organization.
SECTION 3. EXCLUSIONS
(A) Except for Loss for which the Insured Organization is required
to indemnify the Insured Persons, or for which the Insured
Organization has, to the extent permitted by law, indemnified the
Insured Persons, the Insurer shall not be liable to make any
payment for Loss in connection with any Claim made against the
Insured Persons:
(1) based upon or attributable to any Insured Person gaining in
fact of any personal profit or advantage to which such Insured
Person was not legally entitled;
(2) for return by the Insured Persons of any remuneration paid
to the Insured Persons without the previous approval of the
governing bodies of the Insured Organization, which payment,
without such previous approval, shall be held by the Courts
to be in violation of law;
(3) based upon, arising out of or attributable to profits in fact
made from the purchase and sale or sale and purchase by the
Insured Persons of securities of the Insured Organization
within the meaning of Section 16(b) of the Securities Exchange
Act of 1934 and amendments thereto or similar provisions of
any state statutory law or common law;
(4) brought about or contributed to by the dishonesty of the
Insured Persons. However, notwithstanding the foregoing, the
Insured Persons shall be protected under the terms of this
policy as to any Claims upon which suit may be brought against
them, by reason of any alleged dishonesty on the part of the
Insured Persons unless a judgment or other final adjudication
thereof adverse to the Insured Persons shall establish that
acts of active and deliberate dishonesty committed by the
Insured Persons with actual dishonest purpose and intent were
material to the cause of action so adjudicated.
NOTE: The Wrongful Act of any Insured Person shall not be imputed
to any other Insured Person for the purpose of determining
the applicability of the exclusions enumerated in Section
3. Exclusions (A).
(B) The Insurer shall not be liable to make any payment for Loss in
connection with any Claim made against the Insured Persons:
(1) for any actual or alleged (a) bodily injury, sickness,
disease, or death of any person, assault, battery, mental
anguish, or emotional distress; or (b) damage to or
destruction of any tangible property including loss of use
thereof; or (c) invasion of privacy, wrongful entry, eviction,
false arrest, false imprisonment or malicious prosecution;
(2) for libel, slander or defamation in any form;
(3) for any actual or alleged violations of the Employee
Retirement Income Security Act of 1974 or any regulations
promulgated thereunder, or of any similar provisions of any
federal, state or local law or regulation;
(4) alleging, arising out of, based upon, attributable to, or in
any way involving, directly or indirectly:
(a) the actual, alleged or threatened discharge, dispersal,
release or escape of pollutants, or
(b) any direction or request to test for, monitor, clean up,
remove, contain, treat, detoxify or neutralize
pollutants,
Including but not limited to Claims alleging damage to the
Insured Organization;
Pollutants includes (but is not limited to) any solid, liquid,
gaseous or thermal irritant or contaminant, including smoke,
vapor, soot, fumes, acids, alkalis, chemicals and waste.
Waste includes (but is not limited to) materials to be
recycled, reconditioned or reclaimed;
(5) by an Insured Person or Insured Organization, as defined in
this policy, except:
(a) for stockholder's derivative actions brought by a
shareholder of the Insured Organization other than an
Insured Person;
(b) a Claim brought by an officer who is not a Director for
their alleged wrongful termination;
(6) based upon or attributable to, or arising out of, or in any
way involving:
(a) payments, commissions, gratuities, benefits or any other
favors to or for the benefit of any full or part-time
domestic or foreign governmental or armed services
officials, agents, representatives, employees or any
members of their family or any entity with which they
are affiliated; or
(b) payments, commissions, gratuities, benefits or any other
favors to or for the benefit of any full or part-time
officials, directors, agents, partners, representatives,
principal shareholders, or owners or employees, or
affiliates (as that term is defined in the Securities
Exchange Act of 1934, including any of their officers,
directors, agents, owners, partners, representatives,
principal shareholders or employees) of any customers
of the Insured Organization or any members of their
family or any entity with which they are affiliated; or
(c) Political Contributions, whether domestic or foreign;
(7) based upon or attributable to any failure or omission on the
part of the Insured Person to effect and maintain adequate
insurance;
(8) based upon or attributable to the essential fact underlying
or alleged in any matter which prior to the inception date
of this policy has been the subject of notice to any Insurer
of a Claim, or a threat of Claim, or an occurrence which might
give rise to a Claim under any policy of which this insurance
is a renewal or replacement or which it may succeed in time;
(9) based upon, arising out of directly or indirectly resulting
from, in consequence of, or in any way involving service by
an Insured Person as a director or officer of any entity other
than the Insured Organization even if such service is directed
or requested by the Insured Organization;
(10) alleging, arising out of, based upon or attributable to the
ownership, management, maintenance and/or control by the
Insured Organization of any captive insurance company or
entity including but not limited to Claims alleging the
insolvency or bankruptcy of the Insured Organization named
in Item 1 of the Declarations as a result of such ownership,
operation, management and control;
(11) based upon or in any way involving any offer to purchase, or
purchase of, securities of the Insured Organization at a
premium over their then current market value; made by the
Insured Organization or by any of the Insured Persons, except
where such offer or purchase extends to all security holders
of the Insured Organization;
(12) based upon or any way involving actual or alleged:
(1) attempts whether successful or unsuccessful, by any
person or entity to acquire securities of the Insured
Organization, in opposition to the Board of Directors of the
Insured Organization, or (2) efforts, whether successful or
unsuccessful, by the Insured Organization or any of its
Insured Persons to resist such attempts;
SECTION 4. CONDITIONS
(A) INDEMNITY PAYMENT FOR DEFENSE EXPENSES; INSURER HAS NO DUTY TO
PROVIDE DEFENSE
(1) It is the duty of the Insured Person and not the duty of the
Insurer to provide for a defense of Claims against them. The
Insurer shall indemnify the Insured Person or Insured
Organization for Defense Expenses after final disposition of
a covered Claim. No Defense Expenses shall be incurred and no
settlement of any Claim shall be made without the Insurer's
written consent; such consent not to be unreasonably withheld.
Any Defense Expenses incurred or settlements made without the
written consent of the Insurer will not be covered under this
policy.
(2) Under Section 1. Insuring Clause (A), (B), the Insurer may,
upon written request by an Insured Person, pay on a current
basis Defense Expenses which are otherwise payable under this
policy except to the extent that the Insured Organization is
required or permitted to indemnify the Insured Person for such
Defense Expenses.
(3) Under Section 1. Insuring Clause (B), The Insurer may, upon
written request by the Insured Organization, reimburse on a
current basis Defense Expenses which are otherwise payable
under this policy.
(4) Any Insured Person or the Insured Organization requesting that
the Insurer pay on a current basis Defense Expenses for a
claim hereunder must agree in writing, prior to any payment
of Defense Expenses by the Insurer, that upon demand the
Insured Person or the Insured Organization or both will repay
the Insurer all Defense Expenses paid to or on behalf of such
Insured Person in connection with such Claim if the Insurer
determines that there is no coverage under Insuring Clause
(A) or (B).
(5) The Insured Organization and the Insured Persons shall give
the Insurer the right to associate itself in the defense and
settlement of any Claim that appears reasonably likely to
involve the Insurer.
(B) OTHER INSURANCE; OTHER INDEMNIFICATION
In the event that:
(1) there is any other insurance, whether prior or subsequent
to this policy, directly or indirectly covering or insuring
any Wrongful Act by an Insured Person otherwise covered by
this policy, or
(2) there is indemnification to which an Insured Person is
entitled from any entity other than the Insured Organization,
then all other insurance or indemnification shall apply first to
the noticed Claim and this policy shall not be considered
contributing but will indemnify only the difference between all
amounts recoverable under all other insurance or indemnification
and the amounts of any Loss otherwise covered under this policy,
not exceeding the limit of liability shown on the Declarations
Page and subject to all policy provisions. In the event there is
other insurance or indemnity available to the Insured Person or
Insured Organization, then this insurance shall provide specific
excess coverage only and shall not be subject to the terms of any
other insurance or indemnity.
(C) LIMIT OF LIABILITY; RETENTION; PAYMENT OF LOSS
(1) The amount stated in Item 3 of the Declaration is the maximum
aggregate limit of liability under the policy and the total
amount the Insurer shall be obligated to indemnify under the
policy whether under Section 1. Insuring Agreements (A) or
(B) or both, regardless of the time of payment by the Insurer.
Defense Expenses shall be part of and not in addition to the
limit of liability, and payment of Defense Expenses by the
Insurer will deplete the limit of liability.
(2) All Claims based on, arising out of, directly or indirectly
resulting from, in consequence of, or in any way involving
the same or related facts, circumstances, situations,
transactions or events, or the same or related series of
facts, circumstances, situations, transactions or events,
shall be deemed to be a single Claim.
(3) If Loss from a Claim is covered under more than one Insuring
Clause, the application retention stated in Item 4 of the
Declarations Page shall be applied separately to that part of
the Loss covered by each Insuring Clause, and the sum of such
retentions shall be the retention applicable to such Claim.
However, the total retention shall not exceed the largest
retention stated in Item 4 of the Declarations Page.
(4) The company reimbursement RETENTION and SECTION 1 INSURING
CLAUSE (B) shall be applicable to all Claims whenever
indemnification by the Insured Organization is legally
permissible or statutorily required, whether or not the
Insured Organization has agreed to indemnify its Insured
Persons or not, except where actual indemnification cannot
be made by the Insured Organization to its Insured Persons
solely by reason of the Insured Organization's financial
insolvency.
(5) Except for the payment of Defense Expenses as provided in
Section 4. Conditions (A), (2) and (3), the Insurer shall
indemnify for Loss only upon the final disposition of any
Claim.
(D) COOPERATION; SUBROGATION
In the event of a Claim or notice of circumstances under Section
4. Conditions (G), (1), (2), the Insured Person will provide the
Insurer with all information, assistance and cooperation that the
Insurer reasonably requests, and will take no action that may
prejudice the Insured Persons or Insurer's position or potential
or actual rights or defense under the policy without the Insurer's
consent. In the event of payment by the Insurer, it shall be
subrogated to all of the rights of recovery of the Insured Persons,
who shall execute all papers and take all necessary actions to
secure such rights, including the execution of any documents
necessary to enable the Insurer effectively to bring suit in the
Insured Persons name.
Any amount so recovered shall be apportioned for the repayment
of; first, the Insurer's subrogation expenses, legal fees and
costs; second, payments by the Insured Person or Insured
Organization in excess of the retention and applicable insurance;
third, payments by an excess insurer; fourth, payments by the
Insurer; and last, reimbursement of the retention.
(E) DISCOVERY PERIOD
If the Insurer shall cancel or refuse to renew this policy the
Insured Organization shall have the right, upon payment of an
additional premium of fifty percent (50%) of the Full Annual
Premium, to a period of ninety (90) days following the effective
date of such cancellation or nonrenewal (herein referred to as the
Discovery Period) in which to give written notice to the Insurer
of claims first made against the Insured Persons during said
ninety (90) day period for any Wrongful Act occurring prior to the
end of the Policy Period and otherwise covered by this policy.
As used herein, Full Annual Premium means the premium level in
effect immediately prior to the end of the Policy Period.
The rights contained in this clause shall terminate unless written
notice of such election, together with the additional premium,
is received by Royal Specialty Underwriting, Inc. at the address
shown on the Declarations Page within ten (10) days of the
effective date of cancellation or nonrenewal. The full additional
premium for the Discovery Period shall be fully earned at the
inception of the Discovery Period. The Discovery Period is not
cancellable. This clause and the rights contained herein shall
not apply to any cancellation resulting from non-payment of
premium.
(F) RENEWAL PROVISION
The offer by the Insurer of renewal terms, conditions, limits of
liability and/or premiums varying from those of the expiring policy
shall not constitute a refusal to renew.
(G) NOTICE OF CLAIM OR CIRCUMSTANCE
(1) If during the Policy Period any Claim is first made, as a
condition precedent to indemnity, the Insured Organization
must give written notice to Royal Specialty Underwriting, Inc.
on behalf of the Insurer by certified mail and properly
addressed to the address shown on the Declarations Page, of
such Claim as soon as practicable after such Claim is first
made and in no event later than the expiration date or any
earlier cancellation date of this policy.
(2) If during the Policy Period, an Insured Person or the Insured
Organization first becomes aware of any circumstance which may
reasonably be expected to give rise to a Claim against any
Insured Person and, as soon as practicable thereafter, before
the expiration date or any earlier cancellation date of the
policy, gives to Royal Specialty Underwriting, Inc. on behalf
of the Insurer written notice via certified mail at the
address shown on the Declarations Page of such circumstance
along with full particulars of the specific alleged Wrongful
Act, then any Claim subsequently made against an Insured
Person arising out of such circumstance will be deemed first
made during the Policy Period.
(H) MERGER, CONSOLIDATION OR ACQUISITION
(1) If after the inception date, the Insured Organization creates
or acquires a Subsidiary, that Subsidiary will be deemed to
qualify as an Insured Organization but only for a Wrongful
Act on or after the effective date of such creation or
acquisition, for the first ninety (90) days after the date of
the creation or acquisition. After this ninety (90) day
period the created or acquired Subsidiary will no longer be
deemed an Insured Organization unless:
(a) written notice of the creation of acquisition is given
to the Insurer by the Insured Organization within sixty
(60) days of the date of the creation or acquisition.
Such written notice shall include: (i) a copy of the
most recent audited Financial Statements of the
Subsidiary; (ii) a copy of the creation or acquisition
documents; and (iii) a new completed Royal Directors
and Officers application giving full particulars of the
new subsidiary, which is acceptable to the Insurer;
(b) the Insured Organization provides the Insurer with any
additional information the Insurer may request;
(c) the Insured Organization agrees to the terms, conditions,
exclusions and additional premium charge as may be
required by the Insurer; and
(d) the Insurer, at its sole discretion, agrees in writing to
extend the coverage of the policy to the created or
acquired Subsidiary. If the information in (H) 1(a),
(b), and (c) is received within the sixty (60) day period
and the Insurer does not expressly accept or decline to
extend coverage within the initial ninety (90) day
period, then such ninety (90) day period will be extended
until the Insurer expressly accepts or declines such
extension of coverage.
(2) If after the inception date, the Insured Organization is
acquired by, merged with or consolidated into any entity such
that the Insured Organization is not the surviving entity,
then coverage under this policy shall cease immediately upon
the date of such acquisition, merger or consolidation. For
the purpose of Section 3. Definitions (G), the date of such
acquisition, merger or consolidation shall be deemed the
expiration date.
(I) SALE OR DISSOLUTION OF SUBSIDIARY
If, after the inception date, any Subsidiary is sold or dissolved,
this policy, subject to its terms, shall apply only to persons who
were Insured Persons prior to the sale or dissolution and only with
respect to Claims first made during the Policy Period or Discovery
Period for Wrongful Acts alleged to have been committed prior to
the date of sale or dissolution. No coverage will be afforded for
any person who becomes an Insured Person after the date of sale
or dissolution.
(J) REPRESENTATIONS
The Insured Organization, through its authorized representative,
represents that as of the inception date of this policy the
particulars and statements contained in the Application are
complete, true and correct and agree that (1) those particulars
and statements are the basis of this policy and are to be
considered as incorporated into and constituting a part of this
policy; (2) those particulars and statements are material to the
acceptance of the risk assumed by the Insurer; and (3) this policy
is issued in reliance upon the truthfulness and completeness of
such representations. Except for material facts or circumstances
known to the person or persons who signed the Application, no
statement in the Application or knowledge or information possessed
by an Insured Person will be imputed to any other Insured Person
for the purpose of determining the availability of coverage.
(K) NO ACTION AGAINST THE INSURER
(1) No action may be taken against the Insurer unless, as a
condition precedent thereto, there has been full compliance
with all of the terms of this policy and until the amount
of the Insured Person's obligation to pay Loss has been
finally determined either by judgment against the Insured
Persons after adjudicatory proceedings, or by written
agreement of the Insured Persons, the claimant and the
Insurer.
(2) No Insured Person or Insured Organization has any right
under this policy to join the Insurer as a party to any
Claim against an Insured Person to determine the liability
of such Insured Persons; nor shall the Insurer be impleaded
by an Insured Person or his, her or its legal representative
in any such Claim.
(L) AUTHORIZATION AND NOTICES
The Insured Persons agree that the Insured Organization acts on
their behalf with respect to giving and receiving all notices and
return of premium from the Insurer.
(M) CHANGES
Notice to any agent or knowledge possessed by any agent or
representations by persons acting on behalf of the Insurer does
not effect a waiver or change in any part of this policy or estop
the Insurer from asserting any right under the terms, conditions
and limititations of this policy. The terms, conditions and
limitations of this policy can only be waivered or changed by
written endorsement.
(N) ASSIGNMENT
Assignment of interest under this policy does not bind the Insurer
without its written consent.
(O) CANCELLATION
This policy may be canceled by the Insured Organization at any time
by written notice or by surrender of this policy at any time to
Royal Specialty Underwriting, Inc. at the address shown in the
Declarations Page.
The policy may also be canceled at any time by Royal Specialty
Underwriting, Inc. on behalf of the Insurer by delivery to the
Insured Organization or by mailing to the Insured Organization
by registered, certified or other first class mail, to the address
shown in this policy, written notice stating when, not less than
sixty (60) days thereafter, the cancellation will become effective.
The mailing of such notice will be sufficient proof of notice and
this policy will terminate at the date and hour specified in the
notice.
If this policy is canceled by the Insured Organization, the Insurer
will retain the customary short rate proportion of the premium
hereon.
If this policy is canceled by the Insurer, the Insurer will retain
the pro rata proportion of the premium hereon. Payment or tender
of any unearned premium by the Insurer is not a condition precedent
to the effectiveness of cancellation but such payment will be made
a soon as practicable after the cancellation date is effective.
If the period of limitation relating to the giving of notice is
prohibited or made void by any law controlling the construction
thereof, such period will be deemed to be amended so as to be
equal to the minimum period of limitation permitted by such law.
If the Insured Organization fails to pay any premium when due, the
Insurer may cancel the policy upon ten (10) days written notice.
The Insurer shall not be required to renew this policy upon its
expiration.
(P) EXHAUSTION
When the limit of liability is exhausted by the indemnification
for Loss, including Defense Expenses, all obligations of the
Insurer under this policy will be fulfilled and extinguished, and
the Insurer will have no further obligations of any kind or nature
whatsoever under this policy.
(Q) ACCEPTANCE
The Insured Organization and Insured Persons agree that this
policy, including the Application and any endorsements, constitute
the entire agreement between them and the Insurer relating to this
insurance policy.
(R) HEADINGS
The description in the headings and sub-headings of the policy
are solely for convenience, and form no part of the terms and
conditions of coverage.
(S) GOVERNING LAW CLAUSE
This policy shall, to the extent permitted by applicable law, be
construed in accordance with the laws of the state or jurisdiction
of incorporation or organization of the Insured Organization or in
the case of matters pertaining to a Subsidiary, the laws of the
state or jurisdiction of incorporation or organization thereof.
In Witness Whereof, the Insurer has caused this policy to be executed and
attested, but this policy shall not be valid unless countersigned on the
Declarations Page by a duly authorized agent of the Insurer.
Joyce W. Wheeler William E. Buckley
Corporate Secretary President
DIRECTORS AND OFFICERS
LIABILITY AND COMPANY
REIMBURSEMENT DECLARATIONS
Company Policy Symbol & Number Royal Insurance
Symbol Executive Offices
9300 Arrowpoint Blvd.
R HP 606008 Charlotte, NC 28217
Renewal of
Number RHP 605193
THIS POLICY IS ISSUED BY THE COMPANY NAMED BELOW:
COMPANY NAME: ROYAL INDEMNITY COMPANY
PRODUCER'S NAME AND ADDRESS
ROYAL SPECIALTY UNDERWRITING, INC.
Resurgens Plaza, Suite 1890
945 East Paces Ferry Road
Atlanta, GA 30326
Tel: 404-231-2366
ITEM 1. INSURED'S NAME AND MAILING ADDRESS
ARROW AUTOMOTIVE INDUSTRIES, INC.
3 SPEEN STREET
FRAMINGHAM, MA 01701
ITEM 2. POLICY PERIOD:
FROM June 1, 1997 TO June 1, 1998
(12:01 AM Standard Time at the address of the Insured)
ITEM 3. LIMIT OF LIABILITY:
$ 5,000,000 aggregate limit of liability each policy year.
ITEM 4. RETENTION:
$ 0 each Director or Officer each loss but in no event
exceeding
$ 0 in the aggregate subject to
$ 75,000 company reimbursement.
ITEM 5. PREMIUM:
$ 53,000 1 Year Prepaid Premium
ITEM 6. POLICY FORM NUMBER AND ENDORSEMENTS ATTACHED AT ISSUANCE
RSUIFP-RI-00001, (SEE ATTACHED SCHEDULE OF ENDORSEMENTS)
These Declarations along with the completed and signed Application and the
Directors and Officers Liability Insurance Policy, shall constitute the
contract between the Directors and Officers, the Company and Royal Indemnity
Company.
Countersigned: September 4, 1997 JAC James A. Dixon
Date Authorized Representative
RSUI-DOP-0500 (07/92)
Insureds Copy
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
SCHEDULE OF ENDORSEMENTS
1. NUCLEAR ENERGY LIABILITY EXCLUSION 00041
2. COVERAGE EXTENSION TO SUBSIDIARIES
3. PRIOR/PENDING LITIGATION EXCLUSION - BACKDATED 00120
4. DELETED EXCLUSIONS 6,7,11 and 12
5. INSURED ORGANIZATION TO INCLUDE SUBSIDIARIES
6. DISCOVERY ENDORSEMENT-BILATERAL
7. ALLOCATION ENDORSEMENT
8. MARITAL ESTATE EXTENSION
9. EMPLOYMENT PRACTICE LIABILITY EPL-NAP
10. NINETY DAY(90)NOTICE OF CANCELLATION
The above Schedule of Endorsements is for illustrative and convenience purposes
only and forms no part of the terms and conditions of coverage.
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
DIRECTORS AND OFFICERS LIABILITY POLICY
NUCLEAR ENERGY LIABILITY EXCLUSION
It is agreed that the policy does not apply:
I. Under any Liability Coverage, to injury, disease, death or
destruction
(a) with respect to which an insured under the policy is also an
insured under a nuclear energy liability policy issued by
Nuclear Energy Liability Insurance Association, Mutual
Atomic Energy Liability Underwriters or Nuclear Insurance
Association of Canada, or would be an insured under any such
policy but for its termination upon exhaustion of its limit
of liability;
or
(b) resulting from the hazardous properties of nuclear material
and with respect to which (1) any person or organization is
required to maintain financial protection pursuant to the
Atomic Energy Act of 1954, or any law amendatory thereof,
or (2) the insured is, or had this policy not been issued
would be, entitled to indemnity from the United States of
America, or any agency thereof, with any person or
organization.
II. Under any Medical Payments Coverage, or under any Supplementary
Payments provision relating to immediate medical or surgical
relief, to expenses incurred with respect to bodily injury,
sickness, disease or death resulting from the hazardous properties
of nuclear facility by any person or organization.
III. Under any Liability Coverage, to injury, sickness, disease,
death or destruction resulting from the hazardous properties
of nuclear material, if
(a) the nuclear material (1) is at any nuclear facility owned
by, or operated by on behalf of, an insured or (2) has been
discharged or dispersed therefrom;
(b) the nuclear material is contained in spent fuel or waste at
any time possessed, handled, used, processed, stored,
transported or disposed of by or on behalf of an insured; or
(c) the injury, sickness, disease, death or destruction arises
out of the furnishing by an insured or services, materials,
parts or equipment in connection with the planning,
construction, maintenance, operation or use of any nuclear
facility, but if such facility is located within the United
States of America, its territories or possessions or Canada,
this exclusion (c) applies only to injury to or destruction
of property at such nuclear facility.
IV. As used in this endorsement
"hazardous properties" include radioactive, toxic or explosive
properties; "nuclear material" means source material, special
material or byproduct material;
"source material", "special nuclear material", and "byproduct
material" have the meanings given them in the Atomic Energy Act
of 1954 or in any law amendatory thereof;
"spent fuel" means any fuel element or fuel component, solid or
liquid, which has been used or exposed to radiation in a nuclear
reactor;
"waste" means any waste material (1) containing byproduct
material
and (2) resulting from the operation by any person or organization
of any nuclear facility included within the definition of nuclear
facility under paragraph (a) or (b) thereof;
"nuclear facility" means
(a) any nuclear reactor
(b) any equipment or device designed or used for (1) separating
the isotopes of uranium or plutonium, (2) processing or
utilizing spent fuel, or (3) handling, processing or packaging
waste,
(c) any equipment or device used for the processing, fabricating
or alloying of special nuclear material if any time the total
amount of such material in the custody of the insured at the
premises where such equipment or device is located consists of
or contains more than 25 grams of plutonium or uranium 233 or
any combination thereof, or more than 250 grams of uranium
235,
(d) any structure, basin, excavation, premises or place prepared
or used for the storage or disposal of waste,
and includes the site on which any of the foregoing is located, all
operations conducted on such site and all premises used for such
operations;
"nuclear reactor" means any apparatus designed or used to sustain
nuclear fission in a self-supporting chain reaction or to contain
a critical mass of fissionable material;
With respect to injury to or destruction of property, the word
"injury" or "destruction" includes all forms of radioactive
contamination of property.
Nothing herein contained shall be held to vary, alter, waive or
extend any of the terms, conditions, provisions, agreements or
limitations of the above mentioned Policy other than as above
stated.
All other terms, conditions and warranties remaining unchanged.
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
Attached to and forming part of the Policy No.
Issued to
If this endorsement is listed in the policy declarations, it is in effect from
the time coverage under this policy commences. Otherwise, the effective date
of this endorsement is as shown below at the same time or hour of the day as
the policy became effective.
Effective Date: Endorsement No. 1
Countersigned By:
Authorized Respresentative Date
RSUI-00041
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
In consideration of the premium charged, it is understood and agreed that the
coverage afforded by this policy is extended to include the following
subsidiaries:
Carbco, Inc.
Icepac, Inc.
It is further understood and agreed that this policy provides coverage (as
herein defined) for loss from claims by reason of Wrongful Acts occurring
subsequest to the date of acquisition.
It is further understood and agreed that the above addition shall not serve to
increase the Limit of Liability as set forth in Item 3 of the Policy
Declaration.
Nothing herein contained shall be held to vary, alter, waive or extend any of
the terms, conditions, provisions, agreements or limitations of the above
mentioned Policy other than as above stated.
All other terms, conditions and warranties remaining unchanged.
Attached to and forming part of the Policy No.
Issued to
If this endorsement is listed in the policy declarations, it is in effect from
the time coverage under this policy commences. Otherwise, the effective date
of this endorsement is as shown below at the same time or hour of the day as
the policy became effective.
Effective Date: Endorsement No. 2
Countersigned By:
Authorized Representative Dated
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
DIRECTORS AND OFFICERS LIABILITY POLICY
PRIOR AND/OR PENDING LITIGATION EXCLUSION BACKDATED
IN CONSIDERATION of the premium charged, it is hereby understood and agreed
that the Insurer shall not be liable to make any payment for Loss in connection
with any Claim made against the Insured Persons based upon or attributable to
litigation prior to or pending at the inception date of this policy involving
the Insured Organization and/or Insured Persons or arising out of the facts or
circumstances underlying or alleged in any such prior or pending litigation.
It is further agreed that the above shall apply to prior and/or pending
litigation prior to October 18, 1984.
Nothing herein contained shall be held to vary, alter, waive or extend any of
the terms, conditions, provisions, agreements or limitations of the above
mentioned policy other than as above stated.
All other terms, conditions and warranties remaining unchanged.
Attached to and forming part of the Policy No.
Issued to
If this endorsement is listed in the policy declarations, it is in effect from
the time coverage under this policy commences. Otherwise, the effective date
of this endorsement is as shown below at the same time or hour of the day as
the policy became effective.
Effective Date: Endorsement No. 3
Countersigned By:
Authorized Representative Dated
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
In consideration of the premium charged, it is hereby understood and agreed
that Section 3 (B) Exclusions (6), (7), (11) and (12) are deleted in their
entirety from this policy.
Nothing herein contained shall be held to vary, alter, waive or extend any of
the terms, conditions, provisions, agreements or limitations of the above
mentioned policy other than as above stated.
All other terms, conditions and warranties remaining unchanged.
Attached to and forming part of the Policy No.
Issued to
If this endorsement is listed in the policy declarations, it is in effect from
the time coverage under this policy commences. Otherwise, the effective date
of this endorsement is as shown below at the same time or hour of the day as
the policy became effective.
Effective Date: Endorsement No. 4
Countersigned By:
Authorized Representative Dated
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
DIRECTORS AND OFFICERS LIABILITY POLICY
INSURED ORGANIZATION EXCLUSION
In consideratin of the premium charged, it is hereby understood and agreed that
Section 2. Definition (D) "Insured Organization" is deleted in its entirety and
replaced with the following:
(D) "Insured Organization" means the organization named in Item 1 of the
Declarations and any Subsidiary exsisting prior to or at the inception date o
fthis policy and listed on the application attached to this policy. In
addition, Insured Organization shall mean any Subsidiary created or acquired
after the inception date of the policy subject to Section 4. Condition (H)
Merger, Consolidation or Acquisition.
Nothing herein contained shall be held to vary, alter, waive or extend any of
the terms, conditions, provisions, agreements or limitations of the below
mentioned policy other than as above stated.
All other terms, conditions and warranties remain unchanged.
Attached to and forming part of the Policy No.______________________
Issued to __________________________________________________________
If this endorsement is listed in the policy declarations, it is in effect from
the time coverage under this policy commences. Oterwise, the effective date of
this endorsement is as shown at the same time or hour of the day as the policy
became effective.
Effective Date:_______________ Endorsement No. 5___
Countersigned By:
_______________________________ _________________
Authorized Representative Date
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
BILATERAL DISCOVERY ENDORSEMENT
In consideration of the premium charged, it is hereby understood and agreed
that Section 4, Conditions (E) Discovery Period: is deleted and replaced by the
following:
If the INSURER OR INSURED shall cancel or refuse to renew this policy the
INSURED ORGANIZATION shall have the right, upon payment of SEVENTY-FIVE PERCENT
of the FULL ANNUALL PREMIUM, to a period 365 DAYS following the effective date
of such cancellation of nonrenewal (herein referred to as the DISCOVERY PERIOD)
in which to give written notice to the INSURER of claims first made against the
INSURED PERSON during said 365 DAY period for any WRONDFUL ACT occuring prior
to the end of the POLICY PERIOD and otherwise covered by this policy. As used
herein, FULL ANNUAL PREMIUM means the premium level in effect immediately prior
to the end of the Policy Period.
The rights contained in this clause shall terminate, however, unless written
notice of such election together with the additional premium due is received by
Royal Specialty Underwriting, Inc. at the address shown on the Declarations
Page within ten(10) days of the effective date of cancellation or nonrenewal.
The full additional premium for the DISCOVERY PERIOD shall be fully earned at
the inception of the DISCOVERY PERIOD.The DISCOVERY PERIOD is not cancellable.
This clause and the rights contained herein shall not apply to any cancellation
resulting from non-payment of premium.
Attached to and forming part of Policy No.___________________________
Issued to ___________________________________________________________
_____________________________________________________________________
If this endorsement is listed in the policy declarations, it is in effect from
the time coverage under this policy commences. Otherwise, the effective data of
this endorsement is as shown below at the same time or hour of the day as the
policy became effective.
Effective Date:_______________________ Endorsement No. 6
Countersigned By:
___________________________________ ____________________
Authorized Representative Date
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ALLOCATION ENDORSEMENT
In consideration of the premium charged, it is hereby understood and agreed
that:
1) With respect to any Claim under this Policy made against a
Director or Officer which is also made against the Company,
including but not limited to Claims for Securities Activity
Wrongful Acts (as defined below), the Company, the Directors
and Officers and the Underwriter agree to use their best efforts
to determine a fair and proper allocation, as between the Company
and the Directors and Officers, of all amounts, including Defense
Expenses, that the Directors and Officers and/or the Company
become obligated to pay in connection with such Claim. In
making such determination, the parties shall take into account
the relative legal and financial exposures of, and relative
benefits obtained in connection with the defense and/or settlement
of the Claim by, the Directors and Officers and the Company.
In the event that an allocation cannot be agreed to, then the
Underwriter shall be obligated to make an Interim payment of the
amount of Loss, including Defense Expenses, which the parties
agree is not in dispute (which, with respect to any Claim for
Securities Activity Wrongful Acts, will be no less than the
Minimum Securities Allocation Amount, as defined below) until a
final amount is agreed upon or determined pursuant to the
provisions of this Policy and applicable law.
2) Notwithstanding anything to the contrary contained in paragraph
(1) above, with respect soley to Claims for Securities Activity
Wrongful Acts, the portion of Loss allocated to Directors and
Officers under this Policy shall in no event be less than 80%
(eighty percent) (the "Minimum Securities Allocation Amount").
3) "Securities Activity Wrongful Acts" means any actual or alleged
act, error, omission, statement, misstatement, misleading
statement or breach of duty by a Director or Officer in his or
her capacity as a Director or Officer of the Company, or any
matter asserted against a Director or Officer soley by reason of
his or her status as a Director or Officer of the Company, but
only in connection with a purchase or sale, or an offer to
purchase or sell, securities issued at any time by the Company.
Nothing herein contained shall be held to vary, alter, waive or extend any of
the terms, conditions, provisions, agreements or limitations of the below
mentioned policy other than as above stated.
Attached to and forming part of the Policy No.
Issued to
If this endorsement is listed in the policy declarations, it is in effect from
the time coverage under this policy commences. Otherwise, the effective date
of this endorsement is as shown below at the same time or hour of the day as
the policy became effective.
Effective Date: Endorsement No. 7
Countersigned By:
Authorized Representative Dated
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
MARITAL ESTATE EXTENSION
In consideration of the premium charged, it is hereby understood and agreed
that subject otherwise to the terms hereof, this policy may cover Loss arising
from any claims made against the lawful spouse (where such status is derived by
reason of statutory law or common law) of a Director or Officer for claims
arising solely out of his or her status as the spouse of a Director or Officer;
including such claims that seek damages recoverable from marital community
property, property jointly held by the Director or Officer and the spouse, or
property transferred from the Director or Officer to the spouse; provided,
however, that this extension shall not afford any coverage for any claim for
any actual or alleged Wrongful Act of the spouse and that this policy shall
apply only to actual or alleged Wrongful Acts of a Director of Officer subject
to the full policy's terms and conditions.
Nothing herein contained shall be held to vary, alter, waive or extend any of
the terms, conditions, provisions, agreements or limitations of the below
mentioned policy other than as above stated.
All other terms, conditions and warranties remaining unchanged.
Attached to and forming part of the Policy No.
Issued to
If this endorsement is listed in the policy declarations, it is in effect from
the time coverage under this policy commences. Otherwise, the effective date
of this endorsement is as shown below at the same time or hour of the day as
the policy became effective.
Effective Date: Endorsement No. 8
Countersigned By:
Authorized Representative Dated
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
EMPLOYMENT PRACTICE LIABILITY
In consideration of the premium charged it is hereby understood and agreed that
coverage afforded by this policy is extended to cover Loss from Employment
Practices Claims against an Insured Person subject to all terms of this
endorsement and all other terms, conditions and exclusions of the policy.
DEFINITIONS
It is futher understood and agreed that for the purpose of this endorsement
only the following definitions shall apply:
1) "Employment Practices Claims" shall mean any Claim relating to a
past, present or prospective employee of the Insured Organization
for or arising out of any actual, constructive or alleged wrongful
dismissal, discharge or termination of employment; wrongful failure
to employ or promote; wrongful disciplinary action; wrongful
employee evaluation; any manner of sexual or workplace harassment;
any manner of unlawful discrimination or wrongful failure to provide
adequate employee policies and procedures.
Employment Practices Claims shall include Claims brought under
local, state or federal law (whether common or statutory) and
includes but are not limited to allegations of violations of the
following federal laws (as amended) including all regulations
promulgated thereunder.
1. Family and Medical Leave Act of 1993.
2. Americans with Disabilities Act of 1992 (ADA).
3. Civil Rights Act of 1991.
4. Age Discrimination in Employment Act of 1967 (ADEA), including
the Older Workers Benefit Protection Act of 1990.
5. Title VII of the Civil Rights Law of 1964, as amended (1983)
including Pregnancy Discrimination Act of 1978.
6. Civil Rights Act of 1866, Section 1981 and
7. Fifth and Fourteenth Amendments of the U.S. Constitution.
2) "Insured Person" shall include, for the purposes of Employment
Practices Claims only, any Director, Officer or Employee of the
Company whether such individual is in a supervisory, co-worker or
subordinate position to the claimant(s) or otherwise. Coverage
shall apply to all new Directors, Officers or Employees elected,
appointed or hired after the inception date of the policy.
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
It is further understood and agreed that exclusions 3(B)(1), 3(B)(5)(b) are
amended as they relate to Employment Practices Claims only as follows:
A) Exclusion 3(B)(1) is deleted in its entirety and replaced as
follows:
3 (B) The Insurer shall not be liable to make any payment for
Loss in connection with any Claim made against the
Insured Persons:
(1) for any actual or alleged (a) bodily injury, sickness,
disease or death of any person, assualt, battery or
(b) damage to or destruction of any tangible property
including loss of use thereof; or (c) invasion of
privacy, wrongful entry, eviction, false arrest, false
imprisonment or malicious prosecution.
B) Exclusion 3(B)(5)(b) is deleted in its entirety and replaced as
follows:
3 (B) The Insurer shall not be liable to make any payment for Loss
in connection with any Claim made against the Insured
Persons:
(5) by an Insured Person or Insured Organization, as
defined in this policy, except:
(b) a Claim brought by an Insured Person other than
an Insured Person who is or was a Director of the
Company for their alleged Employment Practices
Claims.
Nothing herein contained shall be held to vary, alter, waive or extend any of
the terms, conditions, provisions, agreements or limitations of the below
mentioned policy other than as above stated.
All other terms, conditions and warranties remaining unchanged.
Attached to and forming part of the Policy No.
Issued to
If this endorsement is listed in the policy declarations, it is in effect from
the time coverage under this policy commences. Otherwise, the effective date
of this endorsement is as shown below at the same time or hour of the day as
the policy became effective.
Effective Date: Endorsement No. 9
Countersigned By:
Authorized Representative Dated
Royal Insurance
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
NINETY DAY NOTICE OF CANCELLAION
In consideration of the premium charged, it is hereby understood and agreed
that Section 4. Condition (O) Cancellation Clause is amended in part to read
"ninety (90) days"
Nothing herein contained shall be held to vary, alter, waive or extend any of
the terms, conditions, provisions, agreements or limitations of the below
mentioned policy other than as above stated.
Attached to and forming part of the Policy No.__________________________
Issued to ______________________________________________________________
________________________________________________________________________
If this endorsement is listed in the policy declaration, it is in effect from
the time coverage under this policy commences. Otherwise, the effective date of
this endorsement is as shown below at the same time or hour of the day as the
policy became effective.
Effective Date:______________________ Endorsement No. __10______
Countersigned By:
______________________________ ___________________________
Authorized Representaive Date
Royal Insurance
DIRECTORS AND OFFICERS LIABILITY
AND COMPANY REIMBURSEMENT APPLICATION
THIS FORM IS FOR PROFIT CORPORATIONS (RENEWAL ONLY)
1. (a) Name of Company
Arrow Automotive Industries, Inc.
(b) Address (City, State, Zip Code)
3 Speen Street
Framingham, MA 01701
2. The Officer of the Entity designated to receive notice from the
Insurer concerning this Insurance is:
James F. Fagan Executive Vice President
Name Title
3. Date since which the Company has continuously carried on business:
1929
4. Nature of operations (if Sales or Manufacturing, please detail
accordingly):
Remanufacture of automotive parts
5. Stock Ownership
(a) Number of common shares outstanding
2,873,083
(b) Number of common stock shareholders
305
(c) Number of shares of the Company's common stock owned directly
or beneficially by its Directors and Officers:
1,731,113
(d) Does any shareholder own directly or beneficially 10 percent
or more of the common shares?
X Yes No (If "Yes", please give details): Lawrence M.
Levinson 48.31%; Mary S. Holzwasser, Joseph Segal and Lawrence
Levinson as Trustees of the Trust u/w/o Albert S. Holzwasser 18.68%.
(e) Are the common shares publicly traded?
X Yes No (If "Yes", please specify the exchange(s) listing
the Applicant's stock and the stock symbol.) AI
American Stock Exchange
(f) Provide the price range per share for the applicant's Common
Stock for each of the last three (3) years
Year 52 Week High 52 Week Low
1996 7 3/8 4 3/4
1995 8 3/8 5 1/2
1994 10 6
6. List the names, titles and affiliations of all Directors and
Officers of the Entity and its Subsidiary companies:
See attached.
7. Complete list of subsidiary companies:
Name Type of Operation Percentage Date Domestic
of Ownership Acquired or Foreign
N/A
8. Have any plans for merger, acquisition or consolidation been
approved by the Board of Directors?
Yes X No (If "Yes", please give details):
9. Has the corporation or any subsidiary filled or contemplated filing
any new public offering of securities either pursuant to the
Securities Act of 1933 or exempt from registration under regulation
A within the past 18 months or within the next 12 months?
Yes X No (If "Yes", attach a statement of full details
including the prospectus.)
10. Please indicate various Limit(s) of Liability and Retentions for
which quotations are desired:
LIMIT RETENTION
$1,000,000 each loss $2,500 each person
$1,000,000 each loss $5,000 all persons
$10,000 organization
The undersigned authorized Officer of the Company, on behalf of the Directors
and Officers and the Company, warrant that to the best of his/her knowledge and
belief the statements set forth herein are true and he/she agrees that this
Renewal Application is a supplement to the application completed for the
issuance of the first policy, and that application together with this Renewal
Application and information furnished pursuant hereto shall be the basis of the
contract should a policy be issued and such applications will be attached and
become part of the policy. The Insurer is hereby authorized to make any
investigation and inquiry it deems necessary in connection with this
application.
NOTICE TO NEW YORK APPLICANTS
Your state insurance department requires applicants to be informed that any
person who knowingly and with intent to defraud any insurance company or other
person files an application for insurance containing any false information, or
conceals for the purpose of misleading, information concerning any fact
material thereto, commits a fraudulent insurance act, which is a crime.
NOTE: This application must be signed by the Chairman of the Board or the
President and dated within 30 days of binding should an order be given.
Signature Harry A. Holzwasser Title Chairman of the Board
(Chairman of the Board or President)
Date Company Arrow Automtive Industries, Inc.
RSUFPR-00007 (Ed. 6/92)
One copy of each of the following documents is attached and made a part of this
proposal:
(a) AUDITED ANNUAL REPORT (complete financial statements for the most
recent three (3) years)
(b) LATEST INTERIM FINANCIAL STATEMENT
(c) MOST RECENT FORM 10K FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION SUBSEQUENT TO THE FILING THE ANNUAL 10K (if the Entity
is publicly traded)
(d) LATEST PROXY STATEMENT
(e) COPY OF CURRENT SCHEDULE OF INSURANCE
Submitted By Johnson & Higgins, Boston Date 5/11/94
Producer
NOTE: This Application and all exhibits shall be treated in the
strictest confidence.
85431 (e.d. 10/83)
CNA FINANCIAL INSURANCE GROUP
One Continental Drive, Cranbury, New Jersey 08570
CNA
For All the Commitments You Make
CNA INSURANCE COMPANIES DECLARATIONS
CNA PLAZA EXCESS INSURANCE POLICY
CHICAGO, IL 60685
NOTICE
THIS IS A "CLAIMS MADE" POLICY AND, SUBJECT TO ITS PROVISIONS, APPLIES ONLY TO
ANY CLAIM FIRST MADE AGAINST THE INSUREDS DURING THE POLICY PERIOD. NO
COVERAGE EXISTS FOR ANY CLAIM FIRST MADE AFTER THE END OF THE POLICY PERIOD
UNLESS, AND TO THE EXTENT, THE EXTENDED REPORTING PERIOD APPLIES. THE LIMIT OF
LIABILITY SHALL BE REDUCED BY AMOUNTS INCURRED AS DEFENSE COSTS.
ACCOUNT NUMBER COVERAGE PROVIDED BY
201028
POLICY NUMBER Continental Casualty Company AGENCY
DOX 132022777 910 792169
NAMES ENTITY AND PRINCIPAL ADDRESS AGENT
Item Arrow Automotive Industries, Inc. Johnson & Higgins Of
Massachusetts, Inc.
1. 3 Speen Street Ms. Barbara Gubitose
Framingham, MA 01701 One Financial Center
Boston, MA 02111
Attn: Ms. Kathaleen Carroll-Coelho
Item Policy Period:
2. 06/01/97 To 06/01/98
12:01 A.M. Standard Time at the Principal Address stated in
Item 1.
Item Limited of Liability (inclusive of Defense Costs):
3.
$ 5,000,000 Maximum aggregate
Limit of Liability each
Policy Period.
Item Schedule of Underlying Insurance:
4. A. Primary Policy
Name of Carrier Policy No. Limits Deductible/
Retention Amount
Royal Indemnity Company HP 606008 $5,000,000 0/0/$75,000
B. Underlying Excess Policy(ies):
Name of Carrier Policy No. Limits Deductible/
N/A Retention Amount
Item Policy Premium
5.
$ 28,000
Item Forms and Endorsements forming a part of this policy at
inception:
6. FIG-1006-A, FIG-1009-A
These Declarations along with the completed and signed Application and the
Excess Insurance Policy, shall constitute the contract between the Insureds,
the Named Entity, and the Insurer.
Date
Chairman of the Board Secretary Authorized Representative
Johnson & Higgins of
Massachusetts, Inc.
G-17728-A
(ED 04/92)
EXCESS INSURANCE POLICY
In consideration of the payment of the premium and in reliance on all
statements made and information furnished to Continental Casualty Company
(hereinafter called the "Insurer"), and/or to the Insurers of the Underlying
Insurance, including the statements made in the Application made a part hereof
and subject to all of the provisions of this Policy, the Insurer and the
Insureds agree as follows:
I. INSURING AGREEMENT
The Insurer shall provide the Insureds with excess coverage over the Underlying
Insurance as set forth in Item 4 of the Declarations during the policy Period
set forth in Item 2 of Declarations. Coverage hereunder shall attach only
after all such Underlying Insurance has been exhausted by payments for losses
and shall then apply in conformance with the same provisions of the Primary
Policy at its inception, except for premium, limit of liability and as
otherwise specifically set forth in the provisions of this Policy.
II. POLICY DEFINITIONS
Application shall mean the written application for this Policy, including any
materials submitted therewith, which together shall be on file with the Insurer
and deemed a part of and attached hereto as if physically attached to this
Policy.
Named Entity means the organization named in Item 1 of the Declarations.
Insureds means those persons or organization(s) insured under the Primary
Policy, at its inception.
Policy Period means the period from the effective date and hour of this Policy
as set forth in Item 2 of the Declarations, to the Policy expiration date and
hour set forth in Item 2 of the Declarations, or its earlier cancellation date
or termination date, if any.
Primary Policy means the Policy scheduled in Item 4 (a) of the Declarations.
Underlying Insurance means all those Policies scheduled in Item 4 of the
Declarations and any Policies replacing them.
III. MAINTENANCE OF UNDERLYING INSURANCE
All of the Underlying Insurance scheduled in Item 4 of the Declarations shall
be maintained during the Policy Period in full effect, except for any reduction
of the aggregate limit(s) of liability available under the Underlying Insurance
solely by reason of payment of losses thereunder. Failure to comply with the
foregoing shall not invalidate this Policy but the Insurer shall not be liable
to a greater extent than if this condition had been complied with. To the
extent that any Underlying Insurance is not maintained in full effect during
the currency of this
Policy Period, then the Insureds shall be deemed to have retained any loss for
the amount of the limit of liability of any Underlying Insurance which is not
maintained as set forth above.
In the event of any actual or alledged (a) failure by the Insureds to give
notice or to exercise any extensions under any Underlying Insurance or (b)
misrepresentation or breach of warranties by any of the Insured with respect to
any Underlying Insurance, the Insurer shall not be liable hereunder to a
greater extent than it would have been in the absence of such actual or alleged
failure, misrepresentation or breach.
It is further a condition of this Policy that the Insurer shall be notified in
writing, as soon as practicable of cancellation and/or alteration of any
provisions of any of the policies of Underlying Insurance.
IV. LIMIT OF LIABILITY
The amount set forth in Item 3 of the Declarations shall be the maximum
aggregate Limit of Liability of the Insurer for the Policy Period.
Costs of defense shall be part of and not in addition to the Limit of Liability
in Item 3 of the Declarations, and such costs of defense shall reduce the Limit
of Liability stated in Item 3 of the Declarations.
V. DEPLETION OF UNDERLYING LIMIT(S)
In the event of the depletion of the limit(s) of liability of the Underlying
Insurance solely as the result of the actual payment of losses thereunder by
the applicable insurers, this Policy shall, subject to the Insurer's Limit of
Liability and to the other terms of this Policy, continue to apply to losses as
Excess Insurance over the amount of Insurance remaining under such Underlying
Insurance. In the event of the exhaustion of all of the limit(s) of liability
of such Underlying Insurance solely as a result of payment of losses
thereunder, the remaining limits available under this Policy shall, subject to
the Insurer's Limit of Liability and to the other provisions of this Policy,
continue for subsequent losses as primary insurance and any retention specified
in the Primary Policy shall be imposed under this Policy as to each claim made;
otherwise no retention shall be imposed under this policy.
This Policy only provides coverage excess of the Underlying Insurance. This
Policy does not provide coverage for any loss not covered by the Underlying
Insurance except and to the extent that such loss is not paid under the
Underlying Insurance solely by reason of the reduction or exhaustion of the
available Underlying Insurance through payments of loss thereunder. In the
event the insurer of one or more of the Underlying Insurance polices fails to
pay loss in connection with any claim covered under the Underlying Insurance as
a result of the insolvency, bankruptcy, or liquidation of said insurer, then
the Insureds hereunder shall be deemed to have retained any loss for the amount
of limit of liability of said Insurer which is not paid as the result of such
insolvency, bankruptcy or liquidation.
If any Underlying Insurance bears an effective date which is prior to the
effective date of this Policy and if any such insurance becomes exhuasted or
impaired by payment of loss with respect to any claim which, shall be deemed to
be made prior to the effective date of this Policy, then with respect to any
claim made after the the effective date of this Policy, the Insureds shall be
deemed to have retained any loss for the amount of any such Underlying
Insurance which is exhausted or impaired by payment of loss with respect to
such claim made prior to the effective date of this Policy.
VI. CLAIM PARTICIPATION
The Insured shall not admit liability, consent to any judgment against them, or
agree to any settlement which is reasonably likely to involve the Limit of
Liability of this Policy without the Insurer's consent, such consent not to be
unreasonably withheld.
The Insurer may, at its sole discretion, elect to participate in the
investigation, settlement or defense of any claim against any of the Insureds
for matters covered by this Policy even if the Underlying Insurance has not
been exhausted.
All provisions of the Underlying Insurance are considered as part of this
Policy except that it shall be the duty of the Insureds and not the duty of the
Insurer to defend any claims against any of the Insureds.
VII. SUBROGATION - RECOVERIES
In that this Policy is "Excess Coverage", the Insureds and the Insurer's right
of recovery against any person or other entity may not be exclusively
subrogated. Despite the foregoing, in the event of any payment under this
Policy, the Insurer shall be subrogated to all the Insured's rights of recovery
against any person or organization, and the Insureds shall execute and deliver
instruments and papers and do whatever else is necessary to secure such rights.
Any amounts recovered after payment of loss hereunder shall be apportioned in
the inverse order of payment to the extent of actual payment. The expenses of
all such recovery proceedings shall be apportioned in the ratio of respective
recoveries.
VIII. NOTICE
The Insurer shall be given notice in writing as soon as is practicable in the
event (a) the cancellation of any Underlying Insurance and (b) any additional
or return premiums charged or allowed in connection with any Underlying
Insurance. Notice regarding (a) and (b) above shall be given to Manager,
Directors and Officers Liability Underwriting, CNA Insurance Companies, CNA
Plaza, Chicago, Illinois 60685.
The Insurer shall be given notice as soon as practicable of any notice of claim
or any situation that could give rise to a claim under any Underlying
Insurance. Notice of any claim to the Insurer shall be given in writing to
Manager, Professional Liability Claims, CNA Insurance Companies, CNA Plaza,
Chicago, Illinois 60685.
IX. COMPANY AUTHORIZATION CLAUSE
By acceptance of this Policy, the Named Entity named in Item 1 of the
Declarations agrees to act on behalf of all the Insureds with respect to the
giving and receiving of notice of claim or cancellations, the payment of
premiums and the receiving of any return premiums that may become due under
this Policy; and the Insureds agree that the Named Entity shall in all cases be
authorized to act on their behalf.
X. ALTERATION
No change in or modification of this Policy shall be effective except when made
by endorsement signed by an authorized employee of the Insurer or any of its
agents relating to this Policy.
XI. POLICY CANCELLATION
This Policy may be cancelled by the Named Entity at any time by written notice
or by surrender of this Policy to the Insurer. This Policy may also be
cancelled by or on behalf of the Insurer by delivery to the Named Entity or by
mailing to the Named Entity, by registered, certified or other first class
mail, at the address shown in Item 1 of the Declarations, written notice
stating when, not less than thirty (30) days thereafter, the cancellation shall
become effective. The mailing of such notice as aforesaid shall be sufficient
proof of notice and this Policy shall cancel at the date and hour specified in
such notice.
If the period of limitation relating to the giving of notice is prohibited or
made void by any law controlling the construction thereof, such period shall be
deemed to be amended so as to be equal to the minimum period of limitation
permitted by such law.
The Insurer shall refund the unearned premium computed at less than pro-rata if
the Policy is canceled in its entirety by the Named Entity. Under any other
circumstances the refund shall be computed pro-rata.
XII. EXCLUSIONS
Nothwithstnading any provisions of the Underlying Insurance, the Insurer shall
not be liable to make payment for loss in connection with any claim based upon,
arising out of, relating to, directly or indirectly resulting from, or in
consequence of, or in any way involving:
1. nuclear reaction, radiation, or contamination regardless of
causes;
2. pollutants, including but not limited to loss arising out of any:
a. request, demand or order that any of the Insureds or others
test for, monitor, clean up, remove, contain, treat, detoxify
or neutralize, or in any way respond to, or assess the
effects of pollutants, or
b. claim by or on behalf of a governmental authority for damages
because of testing for, monitoring, cleaning up, removing,
containing, treating, detoxifying or neutralizing or in any
way responding to or assessing the effects of pollutants.
Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant,
including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.
Waste includes materials to be recycled, reconditioned or reclaimed.
XIII. CONDITIONS
No action shall be taken against the Insurer unless, as a condition precedent,
there shall have been full compliance with all the provisions of this Policy,
nor until the amount of the Insureds obligation to pay shall have been finally
determined either by final and nonappealable judgment against the Insureds
after trial, or by written agreement of the Insureds, the claimant and the
Insurer.
Secretary Chairman of the Board
Prior or Pending Litigation Exclusion
In consideration of the premium paid for this policy, it is agreed that Section
XII. is amended with the addition of the following:
3 Any fact, circumstance, situation, transaction or event
underlying or alleged in any prior and/or pending litigation
as of 06/01/96, regardless of the legal theory upon which such
litigation is predicated.
All other provisions of the policy remain unchanged.
This endorsement, which forms a part of and is for attachment to the following
described Policy issued by the designated Insurers takes effect on the
effective date of said Policy, unless another effective date is shown below, at
the hour stated in said Policy and expires concurrently with said Policy.
Must be Completed Complete Only When This Endorsement is
Not Prepared with the Policy or is
Not to be Effective with the Policy
ENDT.No. POLICY NO. ISSUED TO EFFECTIVE DATE OF
THIS ENDORSEMENT
,132022777 Arrow Automotive
Industries, Inc.
Countersigned by Johnson & Higgins of
Massachusetts, Inc.
Authorized Representative
CNA Insurance Companies
FIG-1006-A
(ED. 07/94)
AMEND CANCELLATION CLAUSE
In consideration of the premium paid for this policy, it is agreed that Section
XI. POLICY CANCELLATION is amended as follows:
The phrase "not less than thirty (30) days thereafter' is deleted and replaced
by "not less than ninety (90) days thereafter".
All other provisions of the policy remain unchanged.
This endorsement, which forms a part of and is for attachment to the following
described Policy issued by the designated Insurance takes effect on the
effective date of said Policy, unless another effective date is shown below, at
the hour stated in said Policy and expires concurrently with said policy.
Must be Completed
ENDT. NO. Policy NO. Complete Only When This Endorsement
is not prepared with the Policy or is not to be Effective
with the Policy
ISSUED TO EFFECTIVE DATE OF THIS
ENDORSEMENT
Effective Date: Endorsement No. 12
Countersigned By:
Authorized Representative Date
RENEWAL APPLICATION FOR
DIRECTORS AND OFFICERS LIABILITY INSURANCE
NOTICE
THIS IS AN APPLICATION FOR A CLAIMS-MADE POLICY WHICH, SUBJECT TO ITS
PROVISIONS, APPLIES ONLY TO ANY CLAIM FIRST MADE AGAINST THE DIRECTORS AND
OFFICERS DURING THE POLICY PERIOD. NO COVERAGE EXISTS FOR CLAIMS FIRST MADE
AFTER THE END OF THE POLICY PERIOD UNLESS, AND TO THE EXTENT, THE EXTENDED
REPORTING PERIOD APPLIES. THE LIMIT OF LIABILITY SHALL BE REDUCED BY AMOUNTS
INCURRED AS DEFENSE COSTS. DEFENSE COSTS SHALL BE SUBJECT TO THE RETENTION
AMOUNTS. PLEASE REVIEW THE POLICY CAREFULLY AND DISCUSS THE COVERAGE WITH YOUR
INSURANCE AGENT OR BROKER.
Instructions For Completing This Application
Please read the instructions carefully, and complete and submit all requested
information and required attachments. Please note that terms appearing in bold
face in the above Notice and in any Application Question below are defined in
the Policy and shall have the same meaning in this Application as in the
Policy. This Application and all materials submitted or required shall be held
in confidence. Questions 3 and 4 need not be answered if the information
requested is contained-in any required attachments.
Required Attachments:
1. All proxy statements and Notices of Annual Meeting to
Stockholders within the last twelve months
2. Audited financial statements for the most recent three
fiscal years
3. The latest interim financial statements
4. The indemnification provisions of the charter and bylaws
5. Any filings made to the SEC within the last 12 months
Please submit this Application to:
CNA Insurance Companies
Financial Insurance Division - 20 South
CNA Plaza
Chicago, Illinois 60685
(800) 221-8201
ANY PERSON WHO, WITH INTENT TO DEFRAUD OR KNOWING THAT (S)HE IS
FACILITATING A FRAUD AGAINST AN INSURER, SUBMITS AN APPLICATION OR
FILES A CLAIM CONTAINING A FALSE OR DECEPTIVE STATEMENT MAY BE
GUILTY OF INSURANCE FRAUD.
1. Named Entity: Arrow Automotive Industries, Inc.
Street Address: 3 Speen Street
City: Framingham State: MA Zip Code: 01701
Telephone: (508) 872-3711
2. The Officer designated by the Entity to receive notices from the
Insurer concerning this insurance is:
Kathaleen M. Carroll-Coelho Vice President and Controller
Name of Officer Title
Questions 3 and 4 Need Not Be Answered if the Information Requested is
Contained in the Required Attachments
3. Has there been any material change in the nature of the
operations within the last 12 months? Yes No X
If yes, provide details:
4. Stock Ownership of Named Entity
a. Total number of common shares outstanding: 2,873,083
b. Total number of common shareholders: 305
c. Total number of common shares owned directly
or beneficially by Directors: 1,731,113
d. Total number of common shares owned directly
or beneficially by Officers who are not Directors
e. Does any shareholder own directly or beneficially
five percent or more of the common shares? Yes X No
If "Yes", designate name and percentage of holdings: Lawrence M.
Levinson, 48.31%; Mary S. Holzwasser, Joseph Segal and Larry Levinson as
Trustees of the Trust U/W/O Albert Holzwasser 18.33%, M S Holzwasser 18.68%,
Dimensional Fund Advisor 5.97%, H A Holzwasser 6.0%
Include by attachment the information above (items a-e) for any
additional classes of voting stock.
f. Are there any other securities convertible to
voting stock? Yes No X
If "Yes", provide details:
5. Have there been any changes in senior management
(Board Chairman, President, Executive Vice
President, etc.) in the last 12 months? Yes X No
If "Yes", provide details:
Termination of Vice President of Marketing - William Ledbetter
6. By attachment to this Application, provide the
following information for any Subsidiary acquired
or created after the effective date of the current
Policy: Not applicable
a. Name d. Nature of business
b. Date of acquisition e. Domestic or foreign
c. Percent of ownership f. Name of parent entity
7. During the last 12 months, has the Entity been involved
in, or is it presently considering, any merger,
consolidation, acquisition, tender offer, or divestment
or sale of its stock in excess of 10% of the total
stock outstanding? Yes No X
If "Yes", provide details:
8. Has the Entity filed, or contemplated filing, a
registration statement with the Securities and
Exchange Commission:
a. within the past 12 months? Yes No X
b. within the next 12 months? Yes No X
If "Yes", to either of the above, provide details and
furnish a copy of such registration statement if
available. N/A
9. a. Within the last 12 months has the Named Entity
or any Subsidiary made or joined in a Schedule
13-D filing with the Securities and Exchange
Commission with respect to ownership to the
securities of another corporation? Yes No
If "Yes", provide details. N/A
b. Within the last 12 months, has the Named Entity
or any Subsidiary become aware that any person,
corporation or other entity has made a Schedule
13-D filing with respect to the ownership of the
securities of the Named Entity or any Subsidiary? Yes No X
If "Yes", provide details.
10. Please provide the following insurance information:
a. Pension/Fiduciary Liability Limit: 1,000,000
Carrier: Federal (Chubb) Expir Date: 6/1/98
b. Commercial Crime/Fidelity Limit: 500,000
Carrier: Travelers Expir Date: 6/1/98
c. General Liability Limit: 1,000,000
Carrier: Travelers Expir Date: 6/1/98
11. During the last 12 months has the Entity or any of the
Directors and Officers been involved in any of the
following:
a. any anti-trust, copyright or patent litigation? Yes No X
b. any civil or criminal action or administrative
proceeding charging a violation of any federal
or state security law or regulation? Yes No X
c. any representative actions, class actions or
derivative suits? Yes No X
d. other material litigation? Yes No X
If "Yes", to any of the above, please attach full details.
12. The undersigned declares that to the best of his/her knowledge
the statements set forth herein are true and correct and that
reasonable efforts have been made to obtain sufficient
information from all of the Directors and Officers to facilitate
the proper and accurate completion of this Application for the
proposed Policy. Signing of this Application does not bind
the undersigned to complete the insurance, but it is agreed that
this Application shall be the basis of the contract should a
Policy be issued, and this Application will be attached to and
become part of such Policy. The undersigned agrees that if after
the date of this Application and prior to the effective date
of the Policy, any occurrence, event or other circumstance should
render any of the information contained in this Application
inaccurate or incomplete, then the undersigned shall notify the
Insurer of such occurrence, event or circumstance and shall
provide the Insurer with information that would complete, update
or correct the information contained in this Application. Any
outstanding quotations may be modified or withdrawn at the sole
discretion of the Insurer.
13. It is agreed that this Renewal Application and all Application(s)
for all policies issued by the Insurer of which the proposed
Policy would be a direct or indirect renewal or replacement,
copies of which will be attached to the proposed Policy, and any
materials submitted or required (which shall be maintained on
file by the Insurer and be deemed attached as if physically
attached to the proposed Policy), are true and are the basis of
the proposed Policy and are to be considered as incorporated into
and constituting a part of the proposed Policy.
14. The information requested in this Application is for underwriting
purposes only and does not constitute notice to the Insurer under
any Policy of a Claim or potential claim. All such notices must
be submitted to the Insurer pursuant to Section VII of the
Policy.
The undersigned acknowledges that he or she is aware that Defense Costs reduce
and may exhaust the Limit of Liability. The Insurer is not liable for any Loss
(which includes Defense Costs) in excess of the Limit of Liability.
This Application must be signed by the Chairman of the Board or President.
Signed Harry A. Holzwasser
Title Chairman of the Board
Corporation Arrow Automotive Industries Inc.
Date
A POLICY CANNOT BE ISSUED UNLESS THE APPLICATION IS PROPERLY SIGNED AND DATED
FOR NEW YORK RESIDENTS ONLY:
This Application must be signed by the Chairman of the Board or President:
WARNING
ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR
OTHER PERSON FILES AN APPLICATION FOR INSURANCE CONTAINING ANY FALSE
INFORMATION, OR CONCEALS, FOR THE PURPOSE OF MISLEADING, INFORMATION CONCERNING
ANY FACT THERETO, COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME.
Signed
Title
Corporation
Date
A POLICY CANNOT BE ISSUED UNLESS THE APPLICATION IS PROPERLY SIGNED AND DATED
G-19906-A
(ED. 07/93)