Exhibit (99.1)
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Directors and Officers Liability Policy
DIRECTORS AND OFFICERS LIABILITY INSURANCE POLICY
Issued By
CODA
CORPORATE OFFICERS & DIRECTORS ASSURANCE LTD.
In Hamilton, Bermuda
THIS IS A CLAIMS FIRST MADE POLICY. DEFENSE AND OTHER COSTS
ARE INCLUDED IN THE LIMIT OF LIABILITY.
THIS IS A THREE-YEAR POLICY WITH AN AUTOMATIC
EXTENSION PROVISION.
PLEASE READ THIS POLICY CAREFULLY.
Words and phrases that appear below in all capital letters have
the special meanings set forth in Clause 2 (Definitions).
DECLARATIONS
Policy No. PG-106C
Item I COMPANY: The Procter & Gamble Company
The Procter & Gamble Fund
Principal Address: One Procter & Gamble Plaza
Cincinnati, OH 45202
Item II POLICY PERIOD: From Mar 15, 1987 to June 30, 1996
12:01 a.m. Standard Time at the address
of the Company stated above.
Item III LIMIT OF LIABILITY:
$25,000,000 Aggregate LIMIT OF LIABILITY for all
LOSS paid on behalf of all INSUREDS
arising from all CLAIMS first made
during each POLICY YEAR.
Item IV PREMIUM:
At inception of first POLICY YEAR: $850,000
(prepaid total for three years)
6/30/93-94 Year - $325,000
6/30/94-95 Year - $340,000
6/30/95-96 Year - $345,000
At each anniversary
thereafter: Subject to adjustment on each
anniversary date in accordance with
Clause 7 (Automatic Extension) of this
POLICY.
Item V Any notice to the COMPANY or, except in accordance with
Clause 17 (Representation) of this POLICY, to the
INSUREDS, shall be given or made to the individual listed
below, if any, or otherwise to the individual designated
in the APPLICATION, if any, or otherwise to the signer of
the APPLICATION, and shall be given or made in accordance
with Clause 16 (Notice) of this POLICY.
___________________________________________________________
__________________________________________________________
_________________________________________________________
Item VI Any notice to be given or payment to be made to the INSURER
under this POLICY shall be given or made to Corporate
Officers & Directors Assurance Ltd., The ACE Building, 30
Woodbourne Avenue, Hamilton HM 08, Bermuda, Fax 809-295-
5221, Telex 3543 ACEILBA, and shall be given or made in
accordance with Clause 16 (Notice) of this POLICY.
This POLICY shall constitute the entire contract between the INSUREDS, the
COMPANY, and the INSURER.
Endorsements 1 to 7 are made part of this POLICY at POLICY issuance.
Countersigned at Hamilton, Bermuda
on August 16, 1993
by /s/CHARLES D. SMITH
Signature of Authorized Representative
TABLE OF CONTENTS
Clause Page
1. Insuring Clause
2. Definitions
3. Exclusions
4. Appeals
5. Arbitration
6. Assistance and Cooperation
7. Automatic Extension
8. Cancellation
9. Changes and Assignments
10. Payment of LOSS
11. Currency
12. Headings
13. INSUREDS' Reporting Duties
14. LOSS Provisions
15. Other Insurance
16. Notice
17. Representation
18. Severability
19. Special POLICY Revisions
20. Subrogation
21. Acquisition, Creation or Disposition of a Subsidiary
DIRECTORS AND OFFICERS LIABILITY INSURANCE
In consideration of the payment of the premium and in reliance on all
statements made and information furnished by the COMPANY to the INSURER in
the APPLICATION, which is hereby made a part hereof, and subject to the
foregoing Declarations and to all other terms of this POLICY, the COMPANY,
the INSUREDS, and the INSURER agree as follows:
1. INSURING CLAUSE
The INSURER shall pay on behalf of the INSUREDS or any of them, any
and all LOSS that the INSUREDS shall become legally obligated to pay
by reason of any CLAIM or CLAIMS first made against the INSUREDS or
any of them during the POLICY PERIOD, for any WRONGFUL ACTS that are
actually or allegedly caused, committed, or attempted prior to the end
of the POLICY PERIOD by the INSUREDS, not exceeding the LIMIT OF
LIABILITY.
2. DEFINITIONS
(a) "APPLICATION" shall mean the signed, written application for this
POLICY, the schedules thereto and all supplementary information
submitted in connection therewith, and all underwriting data
submitted in connection with the automatic extension of this
POLICY, all of which materials shall be deemed attached hereto,
as if physically attached hereto, and incorporated herein.
(b) "CLAIM" shall mean:
(1) any demand or any judicial or administrative suit or
proceeding against any INSURED which seeks monetary,
equitable or other relief, including any appeal therefrom;
or
(2) written notice to the INSURER by the INSUREDS and/or the
COMPANY during the POLICY PERIOD describing circumstances
that are likely to give rise to a CLAIM being made against
the INSUREDS.
Multiple demands, suits or proceedings arising out of the same
WRONGFUL ACT shall be deemed to be a single CLAIM, which shall be
treated as a CLAIM first made during the POLICY YEAR in which the
first of such multiple demands, suits or proceedings is made
against any INSURED or in which notice of circumstances relating
thereto is first given in accordance with subpart (b) of Clause
14 (LOSS Provisions) below, whichever occurs first.
(c) "COMPANY" shall mean the company shown in Item I of the
Declarations, any company that was a predecessor company to the
company shown in Item I of the Declarations, any SUBSIDIARY of
either such company and, if covered in accordance with subpart
(a) of Clause 21 (Acquisition, Creation or Disposition of a
Subsidiary) below, any other subsidiary.
(d) "INSUREDS" shall mean one or more of the following:
(1) all persons who were, now are, or shall be duly elected or
appointed directors or officers of the COMPANY; or
(2) the estates, heirs, legal representatives or assigns of
deceased INSUREDS and the legal representatives or assigns
of INSUREDS in the event of their incompetency, insolvency
or bankruptcy.
(e) "INSURER" shall mean Corporate Officers & Directors Assurance,
Ltd., Hamilton, Bermuda.
(f) "LIMIT OF LIABILITY" shall mean the amount described in Item III
of the Declarations. Regardless of the time of payment of LOSS
by the INSURER, the LIMIT OF LIABILITY as stated in Item III of
the Declarations shall be the maximum liability of the INSURER
for all LOSS arising from all CLAIMS first made during each
POLICY YEAR. Reasonable and necessary attorneys fees incurred in
investigating and defending a CLAIM shall be part of and not in
addition to the LIMIT OF LIABILITY as stated in Item III of the
Declarations, and payment by the INSURER of such attorneys fees
shall reduce the LIMIT OF LIABILITY.
(g) "LOSS" shall mean any and all amounts that the INSUREDS are
legally obligated to pay by reason of a CLAIM made against the
INSUREDS for any WRONGFUL ACT, and shall include but not be
limited to compensatory, exemplary, punitive and multiple
damages, judgments, settlements and reasonable and necessary
costs of investigation and defense of CLAIMS and appeals
therefrom (including but not limited to attorneys fees but
excluding all salaries and office expenses of the COMPANY,
amounts paid to counsel as general retainer fees, and all other
expenses that cannot be directly allocated to a specific CLAIM),
and cost of attachment or similar bonds, providing always,
however, LOSS shall not include taxes, fines or penalties imposed
by law, or matters that may be deemed uninsurable under the law
pursuant to which this POLICY shall be construed. ("Fines or
penalties" do not include punitive, exemplary, or multiple
damages).
(h) "POLICY" shall mean this insurance policy, including the
APPLICATION, the Declarations, and any endorsements hereto issued
by the INSURER.
(i) "POLICY PERIOD" shall mean the period of time stated in Item II
of the Declarations, as may be automatically extended in
accordance with Clause 7 (Automatic Extension) below. If this
POLICY is cancelled in accordance with subpart (c) or (d) of
Clause 8 (Cancellation) below, the POLICY PERIOD shall end upon
the effective date of such cancellation.
(j) "POLICY YEAR" shall mean a period of one year, within the POLICY
PERIOD, commencing each year on the day and hour first named in
Item II of the Declarations, or if the time between the inception
date, or any anniversary date and the termination date of this
POLICY is less than one year, then such lesser period.
(k) "SUBSIDIARY" shall mean any corporation in which more than 50% of
the outstanding securities representing the present right to vote
for election of directors is owned, directly or indirectly, in
any combination, by the COMPANY and/or by one or more of its
SUBSIDIARIES, at the starting date of the POLICY PERIOD.
(l) "WRONGFUL ACT" shall mean any actual or alleged error,
misstatement, misleading statement or act, omission, neglect, or
breach of duty by the INSUREDS while acting in their individual
or collective capacities as directors or officers of the COMPANY,
or any other matter claimed against them by reason of their being
directors or officers of the COMPANY.
All such errors, misstatements, misleading statements or acts,
omissions, neglects, or breaches of duty actually or allegedly caused,
committed, or attempted by or claimed against one or more of the
INSUREDS arising out of or relating to the same or series of related
facts, circumstances, situations, transactions or events shall be
deemed to be a single WRONGFUL ACT.
3. EXCLUSIONS
The INSURER shall not be liable to make any payment for LOSS in
connection with that portion of any CLAIM made against the INSUREDS:
(a) for which the COMPANY actually pays or indemnifies or is required
or permitted to pay on behalf of or to indemnify the INSUREDS
pursuant to the charter or other similar formative document or by-
laws or written agreements of the COMPANY duly effective under
applicable law, that determines and defines such rights of
indemnity; provided, however, this exclusion shall not apply if:
(1) the COMPANY refuses to indemnify or advance defense or other
costs as required or permitted, or if the COMPANY is
financially unable to indemnify; and
(2) the INSUREDS comply with Clause 20 (Subrogation) below;
(b) based upon or attributable to the INSUREDS having gained any
personal profit to which they were not legally entitled if a
judgment or other final adjudication adverse to the INSUREDS or
any arbitration proceeding pursuant to Clause 5 (Arbitration)
below establishes that the INSUREDS in fact gained any such
personal profit;
(c) for the return by the INSUREDS of any improper or illegal
remuneration paid in fact to the INSUREDS if it shall be
determined by a judgment or other final adjudication adverse to
the INSUREDS that such remuneration is improper or illegal or if
such remuneration is to be repaid to the COMPANY under a
settlement agreement;
(d) for an accounting of profits in fact made from the purchase or
sale by the INSUREDS of securities of the COMPANY 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;
(e) brought about or contributed to by the dishonesty of the INSUREDS
if a judgment or other final adjudication adverse to the INSUREDS
or any arbitration proceeding pursuant to Clause 5 (Arbitration)
below establishes that acts of active and deliberate dishonesty
committed by the INSUREDS with actual dishonest purpose and
intent were material to the CLAIM;
(f) which is insured by any other existing valid policy or policies
under which payment of the LOSS is actually made except in
respect of any excess beyond the amounts of payments under such
other policy or policies;
(g) for which the INSUREDS are indemnified by reason of having given
notice of a CLAIM or of any circumstance which might give rise to
a CLAIM under any policy or policies of which this POLICY is a
renewal or replacement or which it may succeed in time;
(h) for personal injury, advertising injury, bodily injury, sickness,
disease, or death of any person, or for damage to or destruction
of any tangible property, including the loss of use thereof;
however, this exclusion shall not apply to any derivative action
brought against any INSURED;
(i) by, on behalf of, at the behest of, or in the right of the
COMPANY, if initiated by the management of the COMPANY; however,
this exclusion shall not apply if, between the starting date of
the POLICY PERIOD and the date of the CLAIM, the COMPANY shall
have undergone any of the events listed in subpart (a) or (b) of
Clause 8 (Cancellation) below, and the CLAIM is initiated by the
management of the COMPANY after the date of such event; or
(j) for any actual or alleged error, misstatement, misleading
statement or act, omission, neglect or breach of duty by the
INSUREDS while acting in their capacities as directors, officers,
trustees, governors, partners, employees or agents of any entity
other than the COMPANY or by reason of their being directors,
officers, trustees, governors, partners, employees or agents of
such other entity.
It is agreed that any fact pertaining to any INSURED shall not be
imputed to any other INSURED for the purpose of determining the
application of the Exclusions.
4. APPEALS
In the event the INSUREDS elect not to appeal a judgment, the INSURER
may elect to make such appeal at its own expense, and shall be liable
for any increased award, taxable costs and disbursements and any
additional interest incidental to such appeal, to the extent such
payments are not covered by other valid and collectible insurance.
5. ARBITRATION
(a) Any dispute arising in connection with this POLICY shall be fully
determined in Bermuda under the provisions of the Bermuda
Arbitration Act of 1986, as amended and supplemented, by a Board
of Arbitration composed of three arbitrators who shall all be
disinterested, active or retired business executives having
knowledge relevant to the matters in dispute, and who shall be
selected for each controversy as follows:
Either party to the dispute may, once a CLAIM or demand on his
part has been denied or remains unsatisfied for a period of
twenty (20) calendar days by the other party, notify the other of
its desire to arbitrate the matter in dispute and at the time of
such notification the party desiring arbitration shall notify the
other party of the name of the arbitrator selected by it. The
other party who has been so notified shall within ten (10)
calendar days thereafter select an arbitrator and notify the
party desiring arbitration of the name of such second arbitrator.
If the party notified of a desire for arbitration shall fail or
refuse to nominate the second arbitrator within ten (10) calendar
days following the receipt of such notification, the party who
first served notice of a desire to arbitrate will, within an
additional period of ten (10) calendar days, apply to the Supreme
Court of Bermuda for the appointment of a second arbitrator and
in such a case the arbitrator appointed by such a judge shall be
deemed to have been nominated by the party who failed to select
the second arbitrator. The two arbitrators, chosen as above
provided, shall within ten (10) calendar days after the
appointment of the second arbitrator choose a third arbitrator.
In the event of the failure of the first two arbitrators to agree
on a third arbitrator within the said ten (10) calendar day
period, either of the parties may within a period of ten (10)
calendar days thereafter, after notice to the other party, apply
to the Supreme Court of Bermuda for the appointment of a third
arbitrator and in such case the person so appointed shall be
deemed and shall act as a third arbitrator. Upon acceptance of
the appointment by said third arbitrator, the Board of
Arbitration for the controversy in question shall be deemed
fixed.
(b) The Board of Arbitration shall fix, by a notice in writing to the
parties involved, a reasonable time and place for the hearing and
may prescribe reasonable rules and regulations governing the
course and conduct of the arbitration proceeding, including
without limitation discovery by the parties.
(c) This POLICY shall be governed by and construed and enforced in
accordance with the internal laws of Bermuda, except insofar as
such laws may prohibit payment in respect of punitive damages
hereunder; provided, however, that the provisions, stipulations,
exclusions and conditions of this POLICY are to be construed in
an evenhanded fashion as between the parties; without limitation,
where the language of this POLICY is deemed to be ambiguous or
otherwise unclear, the issue shall be resolved in the manner most
consistent with the relevant provisions, stipulations, exclusions
and conditions (without regard to authorship of the language,
without any presumption or arbitrary interpretation or
construction in favor of either the INSUREDS or the INSURER) and
in accordance with the intent of the parties.
(d) The Board of Arbitration shall, within ninety (90) calendar days
following the conclusion of the hearing, render its decision on
the matter or matters in controversy in writing and shall cause a
copy thereof to be served on all the parties thereto. In case
the Board of Arbitration fails to reach a unanimous decision, the
decision of the majority of the members of said Board shall be
deemed to be the decision of the Board.
(e) Each party shall bear the expense of its own arbitrator. The
remaining costs of the arbitration shall be borne equally by the
parties to such arbitration.
(f) All decisions and awards by the Board of Arbitration shall be
final and binding upon the parties. The parties hereby agree to
exclude any right of appeal under Section 29 of the Bermuda
Arbitration Act of 1986 against any award rendered by the Board
of Arbitration and further agree to exclude any application under
Section 30(1) of the Bermuda Arbitration Act of 1986 for a
determination of any question of law by the Supreme Court of
Bermuda.
(g) All awards made by the Board of Arbitration may be enforced in
the same manner as a judgment or order from the Supreme Court of
Bermuda and judgment may be entered pursuant to the terms of the
award by leave from the Supreme Court of Bermuda.
(h) The INSURER and the INSUREDS agree that in the event that claims
for indemnity or contribution are asserted in any action or
proceeding against the INSURER by any of the INSUREDS' other
insurers in any jurisdiction or forum other than that set forth
in this Clause 5, the INSUREDS will in good faith take all
reasonable steps requested by the INSURER to assist the INSURER
in obtaining a dismissal of these claims (other than on the
merits) and will, without limitation, undertake to the court or
other tribunal to reduce any judgment or award against such other
insurers to the extent that the court or tribunal determines that
the INSURER would have been liable to such insurers for indemnity
or contribution pursuant to this POLICY. The INSUREDS shall be
entitled to assert claims against the INSURER for coverage under
this POLICY, including, without limitation, for amounts by which
the INSUREDS reduced its judgment against such other insurers in
respect of such claims for indemnity or contribution, in an
arbitration between the INSURER and the INSUREDS pursuant to this
Clause 5; provided, however, that the INSURER in such arbitration
in respect of such reduction of any judgment shall be entitled to
raise any defenses under this POLICY and any other defenses
(other than jurisdictional defenses) as it would have been
entitled to raise in the action or proceeding with such insurers.
6. ASSISTANCE AND COOPERATION
The INSURER has no duty to defend any CLAIM and shall not be called
upon to assume charge of the investigation, settlement or defense of
any CLAIM, but the INSURER shall have the right and shall be given the
opportunity to associate with the INSUREDS and the COMPANY in the
investigation, settlement, defense and control of any CLAIM relative
to any WRONGFUL ACT where the CLAIM is or may be covered in whole or
in part by this POLICY. At all times, the INSUREDS and the COMPANY
and the INSURER shall cooperate in the investigation, settlement and
defense of such CLAIM. The failure of the COMPANY to assist and
cooperate with the INSURER shall not impair the rights of the INSUREDS
under this POLICY. The INSUREDS shall not settle or admit any
liability with respect to any CLAIM which involves or appears
reasonably likely to involve this POLICY without the INSURER'S
consent, which shall not be unreasonably withheld.
7. AUTOMATIC EXTENSION
Except in the event this POLICY is cancelled in whole or in part in
accordance with Clause 8 (Cancellation) below, on each anniversary of
this POLICY, upon submission of the extension application and payment
of the charged premium, this POLICY shall automatically be continued
to a date one year beyond its previously stated expiration date,
unless written notice is given by the INSURER to the COMPANY, or by
the COMPANY to the INSURER, that such POLICY extension is not desired.
Such written notice may be given at any time prior to the anniversary
of the POLICY, except that such notice by the INSURER to the COMPANY
may be given only during the period commencing ninety (90) days and
ending ten (10) days prior to such anniversary, in which case the
POLICY shall automatically expire two years from such anniversary
date.
Such written notice shall be given by the INSURER to the COMPANY only
if it is determined to be appropriate by an affirmative vote of 2/3 of
the INSURER'S entire Executive Committee at a meeting of said
Committee prior to mailing of such notice. Any non-extension by the
INSURER shall be revoked as of the next meeting of the INSURER'S Board
of Directors if the Board at such meeting so determines by an
affirmative vote of a majority of the entire Board. If any such non-
extension is so revoked or if during the remainder of the POLICY
PERIOD the INSURER agrees to extend coverage, this POLICY shall be
continued or such agreed coverage may be extended, respectively, to
the expiration date which would otherwise be applicable if such notice
of non-extension had not been given, provided the COMPANY submits the
extension application and pays the charged premium.
If the COMPANY or the INSURER gives written notice that the POLICY
extension is not desired, the COMPANY shall pay on or before each of
the two remaining anniversary dates the charged premium for the next
succeeding POLICY YEAR respectively less a premium credit equal to the
premium paid at inception of the POLICY for Year 2 and Year 3 of the
POLICY, respectively. If any such premium credit exceeds the charged
premium, the INSURER shall refund to the COMPANY the difference within
ten days following such anniversary date.
The premium charged on each anniversary of this POLICY shall be
determined by the rating plan and by-laws of the INSURER in force at
such anniversary date.
8. CANCELLATION
This POLICY shall not be subject to cancellation except as follows:
(a) In the event during the POLICY PERIOD:
(1) the company named in Item I of the Declarations shall merge
into or consolidate with another organization in which the
company named in Item I of the Declarations is not the
surviving entity, or
(2) any person or entity or group of persons and/or entities
acting in concert shall acquire securities or voting rights
which results in ownership or voting control by such person
or entity or group of persons or entities of more than 50%
of the outstanding securities representing the present right
to vote for election of directors of the company named in
Item I of the Declarations,
this POLICY shall not apply to any WRONGFUL ACTS actually or
allegedly taking place after the effective date of said merger,
consolidation or acquisition; however, this POLICY shall remain
in force for the remainder of the POLICY PERIOD as to CLAIMS
based upon WRONGFUL ACTS alleged to have been committed prior to
such date. All premiums paid or due at the time of said merger,
consolidation or acquisition shall be fully earned and in no
respect refundable.
(b) In the event of the appointment by any state or federal official,
agency or court of any receiver, conservator, liquidator,
trustee, rehabilitator or similar official to take control of,
supervise, manage or liquidate any entity included within the
definition of the COMPANY, or in the event such entity becomes a
debtor in possession, this POLICY shall not apply to any WRONGFUL
ACTS by the directors and officers of such entity actually or
allegedly taking place after the date of such event. This POLICY
shall remain in force for the remainder of the POLICY PERIOD from
said date as to CLAIMS for (i) WRONGFUL ACTS by any other
INSUREDS, and (ii) WRONGFUL ACTS by the directors and officers of
such entity alleged to have been committed prior to the date of
such event. All premiums paid or due at the time of such event
shall be fully earned, and in no respect refundable. With
respect to CLAIMS first made after the date of such event for
WRONGFUL ACTS by the directors and officers of such entity, (i)
the LIMIT OF LIABILITY of this POLICY for the remainder of the
POLICY PERIOD shall be a continuation of the same limit, and not
a separate limit, as was in effect during the POLICY YEAR in
which such event occurred; and (ii) such CLAIMS shall be deemed
to have been first made during the POLICY YEAR in which such
event occurred for purposes of the LIMIT OF LIABILITY.
(c) This POLICY may be cancelled by mutual agreement and consent of
the INSURER, the COMPANY, and the INSUREDS, upon such terms and
conditions as respects return premium and/or future premium
adjustments and/or loss adjustments as the parties may agree upon
at the time of said cancellation.
(d) This POLICY may be cancelled by the INSURER upon granting of 365
days written notice, providing such cancellation is determined to
be appropriate by an affirmative vote of 3/4 of the INSURER'S
entire Board at a meeting of said Board prior to mailing of said
notice. Payment or tender of any unearned premium by the INSURER
shall not be a condition precedent to the effectiveness of
cancellation, but return of the pro rata unearned premium shall
be made as soon as practicable.
(e) In the event the charged premium for any POLICY YEAR is not paid
as provided in Clause 7 (Automatic Extension), above, this POLICY
shall not apply to any WRONGFUL ACTS actually or allegedly taking
place after the anniversary date on which the additional premium
was due; however, this POLICY shall remain in force for the
remainder of the POLICY PERIOD as to CLAIMS first made during the
POLICY PERIOD for WRONGFUL ACTS actually or allegedly caused,
committed or attempted prior to such anniversary date. With
respect to all CLAIMS first made after such anniversary date, one
LIMIT OF LIABILITY shall apply for the remainder of the POLICY
PERIOD. Such LIMIT OF LIABILITY shall be separate from the LIMIT
OF LIABILITY provided during the POLICY YEAR immediately
preceding such anniversary date. All premiums paid as of such
anniversary date shall be fully earned and in no respect
refundable.
9. CHANGES AND ASSIGNMENTS
The terms and conditions of this POLICY shall not be waived or
changed, nor shall an assignment of interest under this POLICY be
binding, except by an endorsement to this POLICY issued by the
INSURER.
10. PAYMENT OF LOSS
Except in those instances when the INSURER has denied liability for
the CLAIM because of the application of one or more exclusions, or
other coverage issues, if the COMPANY refuses or is financially unable
to advance LOSS costs, the INSURER shall, upon request and if proper
documentation accompanies the request, advance on behalf of the
INSUREDS, or any of them, LOSS costs that they have incurred in
connection with a CLAIM, prior to disposition of such CLAIM. In the
event that the INSURER so advances LOSS costs and it is finally
established that the INSURER has no liability hereunder, such INSUREDS
on whose behalf advances have been made and the COMPANY, to the full
extent legally permitted, agree to repay to the INSURER, upon demand,
all monies advanced.
11. CURRENCY
All premium, limits, retentions, LOSS and other amounts under this
POLICY are expressed and payable in the currency of the United States
of America.
12. HEADINGS
The descriptions in the headings and sub-headings of this POLICY are
inserted solely for convenience and do not constitute any part of the
terms or conditions hereof.
13. INSUREDS' REPORTING DUTIES
The INSUREDS and/or the COMPANY shall give written notice to the
INSURER as soon as practicable of any:
(a) CLAIM described in subpart (b)(1) of Clause 2 (Definitions)
above, which notice shall include the nature of the WRONGFUL ACT,
the alleged injury, the names of the claimants, and the manner in
which the INSUREDS or COMPANY first became aware of the CLAIM; or
(b) event described in subpart (a) or (b) of Clause 8 (Cancellation)
above,
and shall cooperate with the INSURER and give such additional
information as the INSURER may reasonably require.
14. LOSS PROVISIONS
(a) The time when a CLAIM shall be made for purposes of determining
the application of Clause 1 (Insuring Clause) above shall be the
date on which the CLAIM is first made against the INSURED.
(b) If during the POLICY PERIOD, the INSUREDS or the COMPANY shall
become aware of any circumstances that are likely to give rise to
a CLAIM being made against the INSUREDS and shall give written
notice to the INSURER of the circumstances and the reasons for
anticipating a CLAIM, with particulars as to dates and persons
involved, then any CLAIM that is subsequently made against the
INSUREDS arising out of such circumstances shall be treated as a
CLAIM made during the first POLICY YEAR in which the INSUREDS or
the COMPANY gave such notice.
(c) The COMPANY and the INSUREDS shall give the INSURER such
information and cooperation as it may reasonably require and as
shall be in the COMPANY'S and the INSUREDS' power.
15. OTHER INSURANCE
Subject to subparts (f) and (g) of Clause 3 (Exclusions) above, if
other valid and collectible insurance with any other insurer, whether
such insurance is issued before, concurrent with, or after inception
of this POLICY, is available to the INSUREDS covering a CLAIM also
covered by this POLICY, other than insurance that is issued
specifically as insurance in excess of the insurance afforded by this
POLICY, this POLICY shall be in excess of and shall not contribute
with such other insurance. Nothing herein shall be construed to make
this POLICY subject to the terms of other insurance.
16. NOTICE
All notices under any provision of this POLICY shall be in writing and
given by prepaid express courier or electronic service properly
addressed to the appropriate party at the respective addresses as
shown in Items V and VI of the Declarations. Notice so given shall be
deemed to be received and effective upon actual receipt thereof by the
party or one day following the date such notice is sent, whichever is
earlier.
17. REPRESENTATION
By acceptance of this POLICY, the company named in Item I of the
Declarations agrees to represent the INSUREDS with respect to all
matters under this POLICY, including, but not limited to, the giving
and receiving of notice of CLAIM or cancellation or desire not to
extend the POLICY, the payment of premiums, the receiving of LOSS
payments and any return premiums that may become due under this
POLICY, the requesting, receiving, and acceptance of any endorsement
to this POLICY, and the submission of a dispute to arbitration. The
INSUREDS agree that said company shall represent them but, for
purposes of the investigation, defense, settlement, or appeal of any
CLAIM, the INSUREDS who are named as defendants in the CLAIM may, upon
their unanimous agreement and upon notice to the INSURER, replace said
company with another agent to represent them with respect to the
CLAIM, including giving and receiving of notice of CLAIM and other
correspondence, the receiving of LOSS payments, and the submission of
a dispute to arbitration.
18. SEVERABILITY
(a) The APPLICATION for coverage shall be construed as a separate
APPLICATION for coverage by each INSURED. With respect to the
declarations and statements contained in such APPLICATION for
coverage, no statement in the APPLICATION or knowledge possessed
by any one INSURED shall be imputed to any other INSURED for the
purpose of determining the availability of coverage with respect
to CLAIMS made against any other INSURED.
The acts, omissions, knowledge, or warranties of any INSURED
shall not be imputed to any other INSURED with respect to the
coverages applicable under this POLICY.
(b) In the event that any provision of this POLICY shall be declared
or deemed to be invalid or unenforceable under any applicable
law, such invalidity or unenforceability shall not affect the
validity or enforceability of the remaining portion of this
POLICY.
19. SPECIAL POLICY REVISIONS
The INSURER may change this POLICY at any time by an affirmative vote
of a majority of the shareholders of the INSURER, in accordance with
the by-laws of the INSURER.
20. SUBROGATION
In the event of any payment under this POLICY, the INSURER shall be
subrogated to the extent of such payment to all the INSUREDS' rights
of recovery, and the INSUREDS shall execute all papers reasonably
required and shall take all reasonable actions that may be necessary
to secure such rights including the execution of such documents
necessary to enable the INSURER effectively to bring suit in the name
of the INSUREDS, including but not limited to an action against the
COMPANY for nonpayment of indemnity due and owing to the INSUREDS by
the COMPANY.
21. ACQUISITION, CREATION OR DISPOSITION OF A SUBSIDIARY
(a) Coverage shall apply to the directors and officers of any
subsidiary corporation in which more than 50% of the outstanding
securities representing the present right to vote for election of
directors is owned, directly or indirectly, in any combination,
by the COMPANY and/or one or more of its SUBSIDIARIES, and which
is acquired or created after the inception of this POLICY, if
written notice is given to the INSURER within 30 days after the
acquisition or creation, and any additional premium required by
the INSURER is paid within thirty days of the request therefor by
the INSURER. The INSURER waives the obligation to provide notice
and to pay any additional premium if the assets of such newly
created or acquired company are not more than 10% of the total
assets of the COMPANY or $250,000,000, whichever is less. The
coverage provided for the directors and officers of such new
subsidiary shall be limited to CLAIMS for WRONGFUL ACTS actually
or allegedly taking place subsequent to the date of acquisition
or creation of the subsidiary.
(b) Coverage shall not apply to directors and officers of any
subsidiary, including a SUBSIDIARY as defined in Clause 2
(Definitions) above, for CLAIMS for WRONGFUL ACTS actually or
allegedly taking place subsequent to the date that the COMPANY
and/or one or more of its SUBSIDIARIES, directly or indirectly,
in any combination, ceases to own more than 50% of the
outstanding securities representing the present right to vote for
election of directors in such subsidiary.
IN WITNESS WHEREOF, the INSURER has caused this POLICY to be signed by its
President and Secretary and countersigned on the Declarations Page by a
duly authorized agent of the INSURER.
/s/C. GRANT HALL /s/D. E. SNYDER
Secretary President
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 1 Effective Date of Endorsement June 30, 1993
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company
The Procter & Gamble Fund
It is understood and agreed that this POLICY is hereby amended as indicated
below. All other terms of this POLICY remain unchanged.
REVISED THREE-YEAR POLICY FORM ENDORSEMENT
__________________________________________
(Replacement Policy Form)
It is understood and agreed that pursuant to Clause 19 "Special Policy
Revisions" and with the consent of the company named in Item I of the
Declarations, this POLICY is changed as of the effective date set forth
above by cancelling the POLICY form (including endorsements) in effect as
of the effective date of this Endorsement and reissuing the revised POLICY
form (including revised endorsement forms) to which this Endorsement is
attached.
Coverage under this POLICY for all CLAIMS first made against the
INSUREDS prior to the effective date of this Endorsement shall be governed
by such prior POLICY form (including endorsements thereto). Coverage under
this POLICY for all CLAIMS first made against the INSUREDS on or after the
effective date of this Endorsement shall be governed by the POLICY form
(including endorsements) to which this Endorsement is attached.
Except as may be agreed to by the INSURER in writing, such change in
POLICY form shall not change the inception date, anniversary date, LIMIT OF
LIABILITY, or POLICY YEAR of this POLICY. The maximum liability of the
INSURER for all LOSS arising from all CLAIMS first made during the POLICY
YEAR in which this Endorsement becomes effective shall be the amount
described in Item III of the Declarations.
_______________________________ /s/CHARLES D. SMITH
Signature of Authorized Signature of Authorized
Representative of COMPANY Representative of INSURER
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 2 Effective Date of Endorsement March 15, 1990
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company
The Procter & Gamble Fund
It is understood and agreed that this POLICY is hereby amended as indicated
below. All other terms of this POLICY remain unchanged.
OUTSIDE POSITIONS ENDORSEMENT:
SUBLIMIT, NON-SPECIFIC INDIVIDUALS
(A) Subject to the sublimit of liability set forth in (C) below, the
definition of "INSUREDS" is hereby extended to include:
(1) all persons who were, are, or shall be serving as directors,
officers, trustees, governors, partners or the equivalent thereof
for any corporation, partnership, joint venture, eleemosynary
institution, non-profit organization, industry association, or
foundation, (any such enterprises referred to below as "Entity"),
if:
(a) such activity is part of their duties regularly assigned by
the COMPANY, or
(b) they are a member of a class of persons so directed to serve
by the COMPANY.
(2) the estates, heirs, legal representatives or assigns of deceased
persons who were INSUREDS, as defined in subpart (A)(1) above,
and the legal representatives or assigns of INSUREDS in the event
of their incompetency, insolvency or bankruptcy.
(B) It is further understood and agreed that this extension of coverage:
(1) is to be excess of any other insurance and excess of any director
or officer liability insurance and/or company reimbursement
insurance any conditions in such other insurance notwithstanding;
(2) shall not apply to any LOSS for which such Entity or the COMPANY
actually pays or indemnifies or is required or permitted to pay
on behalf of or to indemnify the INSUREDS pursuant to the charter
or other similar formative document or by-laws or written
agreements of such Entity or the COMPANY duly effective under
applicable law, that determines and defines such rights of
indemnity; provided, however, this subpart (2) shall not apply
if:
(a) such Entity and the COMPANY refuse to indemnify or advance
defense or other costs as required or permitted, or if such
Entity and the COMPANY are financially unable to indemnify;
and
(b) the INSUREDS comply with Clause 20 (Subrogation) of the
POLICY;
(3) shall not apply to any LOSS in connection with any CLAIM made
against the INSUREDS in their capacity as directors or officers
of Corporate Officers & Directors Assurance Ltd. or Corporate
Officers & Directors Assurance Holding, Ltd.; and
(4) is not to be construed to extend to the Entity nor to any other
director, officer, trustee, governor, partner or employee of such
Entity.
(C) In lieu of the LIMIT OF LIABILITY stated in Item III of the
Declarations, the limit of liability of the INSURER for this extension
of coverage shall be $25,000,000 in the aggregate for all LOSS which
is covered by reason of this extension of coverage and which is paid
on behalf of all INSUREDS arising from all CLAIMS first made during
each POLICY YEAR. It is understood that the amount stated in Item III
of the Declarations is the maximum amount payable by the INSURER under
this POLICY for all CLAIMS first made during each POLICY YEAR, and
that this Endorsement extends coverage with a sublimit which further
limits the INSURER'S liability and does not increase the INSURER'S
maximum liability beyond the LIMIT OF LIABILITY stated in Item III the
Declarations. It is further understood that such sublimit is separate
from and payment of LOSS pursuant to this Endorsement does not reduce
the sublimit or limit contained in any other Outside Positions
Endorsement to this POLICY.
(D) Solely for purposes of this extension of coverage, the definition of
"WRONGFUL ACT" is hereby modified to replace the word "COMPANY" with
the word "Entity" wherever the word "COMPANY" appears.
(E) Solely for purposes of applying subparts (i) and (j) of Clause 3
(Exclusions) of the POLICY to this extension of coverage, the
definition of "COMPANY" is hereby modified to include such Entity.
/s/CHARLES D. SMITH
Signature of Authorized
Representative
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 3 Effective Date of Endorsement March 15, 1987
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company
The Procter & Gamble Fund
It is understood and agreed that this POLICY is hereby amended as indicated
below. All other terms of this POLICY remain unchanged.
Divisional Managers Endorsement
_______________________________
Subpart (d) of Clause 2 (Definitions) of the POLICY is hereby deleted in
its entirety and replaced with the following:
(d) "INSUREDS" shall mean:
(1) all persons who were, now are, or shall be duly elected or
appointed directors, officers or divisional managers of the
Company; or
(2) the estates, heirs, legal representatives or assigns of
deceased INSUREDS who were directors, officers or divisional
managers of the COMPANY at the time of the WRONGFUL ACT upon
which such CLAIMS are based were committed, and the legal
representatives or assigns of INSUREDS in the event of their
incompetency, insolvency or bankruptcy.
By /s/CHARLES D. SMITH
Authorized Representative
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 4 Effective Date of Endorsement March 15, 1987
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company/The Procter & Gamble Fund
It is hereby understood and agreed exclusion 3(h) is amended to read as
follows:-
(h) for bodily injury, sickness, disease, or death of any person, or
for damage to or destruction of any tangible property, including
the loss of use thereof; however, this exclusion shall not apply
to any derivative action brought against any INSURED.
All other terms and conditions remain unchanged.
By /s/CHARLES D. SMITH
Authorized Representative
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 5 Effective Date of Endorsement March 15, 1991
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company/The Procter & Gamble Fund
IN CONSIDERATION OF THE PREMIUM CHARGED, IT IS HEREBY UNDERSTOOD AND AGREED
THAT ITEM 1 ON THE DECLARATIONS IS AMENDED TO INCLUDE:-
"OFFICERS OF OPERATING UNITS OF PROCTER AND GAMBLE COMPANY"
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
By /s/CHARLES D. SMITH
Authorized Representative
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 6 Effective Date of Endorsement March 15, 1992
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company/The Procter & Gamble Fund/
Officers of Operating Units of Procter & Gamble Company
IN CONSIDERATION OF THE ADDITIONAL PREMIUM OF $95,000 IT IS HEREBY
UNDERSTOOD AND AGREED THAT THE "POLICY PERIOD" OF THIS POLICY IS EXTENDED
TO JUNE 30, 1994.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
By /s/CHARLES D. SMITH
Authorized Representative
CODA
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 7 Effective Date of Endorsement June 30, 1993
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company/The Procter & Gamble Fund
Officers of Operating Units of Procter & Gamble Company
It is understood and agreed that this POLICY is hereby amended as indicated
below. All other terms of this POLICY remain unchanged.
THREE-YEAR POLICY REVISION
GRANDFATHER ENDORSEMENT
Clause 8(e) of the POLICY is deleted in its entirety and Clause 7 of the
POLICY is amended to read in its entirety as follows:
Except in the event this POLICY is canceled in whole or in part
in accordance with Clause 8 (Cancellation) below, on each
anniversary of this POLICY, upon submission of the extension
application and payment of the charged premium, this POLICY shall
automatically be continued to a date one year beyond its
previously stated expiration date, unless written notice is given
by the INSURER to the COMPANY, or by the COMPANY to the INSURER,
that such POLICY extension is not desired. Such written notice
may be given at any time prior to the anniversary of the POLICY,
except that such notice by the INSURER to the COMPANY may be
given only during the period commencing ninety (90) days and
ending ten (10) days prior to such anniversary, in which case the
POLICY shall automatically expire two years from such anniversary
date. Such written notice shall be given by the INSURER to the
COMPANY only if it is determined to be appropriate by an
affirmative vote of a majority of the INSURER's entire Board at a
meeting of said Board prior to mailing of such notice.
The premium charged on each anniversary of this POLICY shall be
determined by the rating plan and by-laws of the INSURER in force
at such anniversary date.
As of the second anniversary of the Effective Date of this Endorsement, (i)
the foregoing deletion of Clause 8(e) and amendment of Clause 7 shall
terminate, (ii) Clause 8(e) shall read in its entirety as set forth in the
POLICY form to which this Endorsement is attached, and (iii) Clause 7 shall
read in its entirety as follows:
Except in the event this POLICY is canceled in whole or in part
in accordance with Clause 8 (Cancellation) below, on each
anniversary of this POLICY, upon submission of the extension
application and payment of the charged premium, this POLICY shall
automatically be continued to a date one year beyond its
previously stated expiration date, unless written notice is given
by the INSURER to the COMPANY, or by the COMPANY to the INSURER,
that such POLICY extension is not desired. Such written notice
may be given at any time prior to the anniversary of the POLICY,
except that such notice by the INSURER to the COMPANY may be
given only during the period commencing ninety (90) days and
ending ten (10) days prior to such anniversary, in which case the
POLICY shall automatically expire two years from such anniversary
date.
Such written notice shall be given by the INSURER to the COMPANY
only if it is determined to be appropriate by an affirmative vote
of 2/3 of the INSURER'S entire Executive Committee at a meeting
of said Committee prior to mailing of such notice. Any non-
extension by the INSURER shall be revoked as of the next meeting
of the INSURER'S Board of Directors if the Board at such meeting
so determines by an affirmative vote of a majority of the entire
Board. If any such non-extension is so revoked or if during the
remainder of the POLICY PERIOD the INSURER agrees to extend
coverage, this POLICY shall be continued or such agreed coverage
may be extended, respectively, to the expiration date which would
otherwise be applicable if such notice of Non-extension had not
been given, provided the COMPANY submits the extension
application and pays the charged premium.
If the COMPANY or the INSURER gives written notice that the
POLICY extension is not desired, the COMPANY shall pay on or
before each of the two remaining anniversary dates the charged
premium for the next succeeding POLICY YEAR respectively less a
premium credit equal to the premium paid for the two respective
POLICY YEARS remaining in the POLICY PERIOD as of the effective
date of this Endorsement. If any such premium credit exceeds the
charged premium, the INSURER shall refund to the COMPANY the
difference within ten days following such anniversary date.
The premium charged on each anniversary of this POLICY shall be determined
by the rating plan and by-laws of the INSURER in force at such anniversary
date.
/s/CHARLES D. SMITH
Authorized Representative
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 8 Effective Date of Endorsement March 15, 1990
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company/The Procter & Gamble Fund
Officers of Operating Units of Procter & Gamble Company
In consideration of the premium charged it is hereby understood and agreed
that on the outside positions Endorsements Section A(1) is amended to read
after the word "foundation" as follows:-
Employee Stock Ownership Trust of the Procter & Gamble Profit Sharing Trust
and Employee Stock Ownership Plan.
All other terms and conditions remain unchanged.
By /s/CHARLES D. SMITH
Authorized Representative
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 9 Effective Date of Endorsement June 30, 1994
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company/The Procter & Gamble Fund
Officers of Operating Units of Procter & Gamble Company
It is understood and agreed that this POLICY is hereby amended as indicated
below. All other terms of this POLICY remain unchanged.
AUTOMATIC EXTENSION ENDORSEMENT
-------------------------------
(Extension Premium: $350,000)
In consideration of payment of the above-referenced premium, it is
understood and agreed that this POLICY shall be continued and the POLICY
PERIOD shall be extended to June 30, 1997, 12:01 A.M. Standard Time at the
address of the Company as stated in Item I of the Declarations.
It is further understood and agreed that the above-referenced premium
has been allocated and paid as follows:
Policy Year
Following Effective
Date of this Endorsement Premium
------------------------ -------
Year 94-95 340,000
Year 95-96 345,000
Year 96-97 350,000
-----------
$ 1,035,000
Less Prepaid Premium on hand $ 685,000
-----------
Additional Premium $ 350,000
-----------
-----------
By /s/PATRICK D. TANNOCK
Authorized Representative