Exhibit 10(z)(3)
CNA INSURANCE COMPANIES
CNA Plaza
Chicago, IL 60685
NOTICE
DECLARATIONS
EXCESS INSURANCE POLICY
THIS 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: 45386
POLICY NUMBER: DOX 600028634
COVERAGE PROVIDED BY: Continental Casualty Company
AGENCY: 910 701862
AGENT: Mesirow Insurance Services, Inc.
Robina Fisher
0610 Central Ave.
Suite 200
Highland Park, IL, 6003 5
Item
1. NAMED, ENTITY AND PRINCIPAL: Richardson Electronics Ltd
140W267 Keslinger Road
Lafox, IL, 60147
Attn. William J. Garry
Item
2. Policy Period: 5/31/98 To 5/31/99
12:01 A.M. Standard Time at the Principal Address stated in
item
Item
3. Limit of Liability (Inclusive of Defense Costs):
$5,000,000 Maximum aggregate Limit of Liability each Policy
Period.
Item
4. Schedule of Underlying Insurance:
A. Primary Policy
Name of Carrier Policy No.Limits Ded/Ret. Amount
Federal Insurance Co. 8125-64-60F $15,000,000 0/0/$250,000
B. Underlying Excess Policy(ies):
SEE ATTACHED SCHEDULE
Item
5. Policy Premium
$ 15,300
Item
6. Forms and Endorsements forming a part of this policy at
inception:
G-11713-A12, FIG-1005-A, FIG-1006-A, FIG-1014-A, FIG-0787-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.
Authorized Representative: Lisa Fenell
Date: 10/20/98
D.H. Chookaszian D. W. Lowry
Chairman of the Board Secretary
UNDERLYING EXCESS POLICY SCHEDULE
Name of Carrier
St. Paul Mercury insurance Company
Policy No.
0512CM0014
Limits
$15,000,000
Ded/Ret. Amount
$0/$0/$0
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 the
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
the Policy expiration date and hour set forth in Item 2 of the
Declarations, or its earliest cancellation 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 alleged (a) failure by the Insureds
to give Underlying Insurance or (b) misrepresentation or breach
of warranties by any of the Insureds 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 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, land such costs
of defense shall reduce the Limit 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 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 policies fails
to pay loss in connection with any claim covered under the
Underlying Insurance as a result of insolvency, bankruptcy, or as
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 a 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 exhausted 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
effective date of this policy the Insureds shall be deemed to have
retained any loss for the amount of 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 reasonable
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 Insured's 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 of (a) the cancellation of any
Underlying and (b) any additional or return premiums charged or
allowed in connection 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 employee of the
Insurer or any of its agents relating to this Policy.
XI. POLICY CANCELLATION
This Policy may be canceled by the Named Entity at any time by
written notice or by surrender of this Policy to the Insurer.
This Policy may also be canceled 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 of 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 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
Notwithstanding 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 judgement against the Insureds
after trial, or by written agreement of the Insureds, the
claimant and the Insurer.
D.H. Chookaszian D. W. Lowry
Chairman of the Board Secretary
STATE PROVISIONS - ILLINOIS
Any cancellation or non-renewal provisions contained in the
policy to which this endorsement is attached are deleted and
replaced by the following:
1. Cancellation
A. This policy can be canceled by either the first
named insured or the insurer.
1. The named insured can cancel this policy at any
time by mailing advanced written notice to the
insurer stating when the cancellation is to be
effective.
2. The insurer can cancel this policy by giving
written notice to the named insured at least:
a. 10 days, if cancellation is for non-payment
of premium. However, the named insured may
continue the coverage by payment in full at
any time prior to the effective date of
cancellation;
b. 30 days, if cancellation is for any other
reason provided that the policy has been in
effect for 60 days or less; or
c. 60 days, if the policy, has been in effect
for more than 60 days and cancellation is
for any other reason as set forth below;
before the effective date of cancellation.
B. The insurer will mail notice to the named insured at the
last mailing and a copy shall also be mailed to the named
insured's agent.
C. Notice of cancellation will state the effective date of
cancellation. The policy will end on that date. The
specific reason for such cancellation shall also be
stated.
D. Proof of mailing will be sufficient proof of notice.
E. If this policy is canceled, the insurer will send the
first named insured any premium refund due. If the
insurer cancels, the refund will be pro-rata. If the
named insured cancels, the refund may be less than pro-
rata.
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:
ENDT. NO.: I
POLICY NO.: 600028634
Complete Only When This Endorsement Is Not Prepared with the
Policy or is Not to be Effective with the Policy
ISSUED TO: Richardson Electronics Ltd
EFFECTIVE DATE OF THIS ENDORSEMENT: 06/01/1998
Countersigned by: Lisa Fenell, Authorized Representative
The cancellation will be effective even if the insurer has not
made or offered a refund.
If this policy has been in effect for more than 60 days, the
insurer shall not terminate this policy except for one or more of
the following conditions:
1. non-payment of premium;
2. material misrepresentation;
3. a material increase in the hazard insured against;
4. violation of any terms or conditions of the policy by the
named insured;
5. substantial loss of reinsurance by the insurer affecting
this particular type if insurance, certified to the
insurance regulatory authority;
6. a determination by the insurance regulatory authority that
continuation of the policy will place the insurer in
violation of the insurance laws of the state.
II. Non-Renewal
If the insurer decides not to renew this policy, 60 days advance
written notice shall be mailed to the named insured as the last
known address.
The notice shall include the specific reason for such non-
renewal.
If the insurer offers to renew this policy at terms which involve
an increase in premium of 30% or more or changes in deductibles
or coverage that materially alter the policy, such terms will
take effect on the renewal date if the insurer has notified the
named insured of the terms at least 60 days prior to the
expiration date of this policy.
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.
Must be completed:
ENDT. NO.: I
POLICY NO.: 600028634
Complete Only When This Endorsement Is Not Prepared with the
Policy or is Not to be Effective with the Policy
ISSUED TO: Richardson Electronics Ltd
EFFECTIVE DATE OF THIS ENDORSEMENT 06/01/1998
Countersigned by: Lisa Fennell, Authorized Representative
This notice is to advise the named insured that should any
complaints arise regarding this insurance, the named insured may
contact the following:
CNA Insurance Companies
Attn: Consumer Affairs Department 13S
CNA Plaza
Chicago, IL 60685
and/or
Illinois Department at of Insurance
Consumer Division or Public Service Section
Springfield, IL 62767
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:
ENDT. NO.: 1
POLICY NO.: 600028634
Complete Only When This Endorsement Is Not Prepared with the
Policy or is Not to be Effective with the Policy:
ISSUED TO: Richardson Electronics Ltd
EFFECTIVE DATE OF THIS ENDORSEMENT: 06/01/1998
Countersigned by: Lisa Fenell, Authorized Representative
PRIOR NOTICE EXCLUSION
In consideration of the premium paid for this policy, it is
agreed that Section XII. EXCLUSIONS, is amended with the addition
of the following:
Any fact, circumstance, situation, transaction or event which
constitutes the basis of notice of claim to the Insurer or any
insurance carriers designated in Item 4 of the Declarations,
prior to the inception date of this policy.
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:
ENDT. NO.: 2
POLICY NO.: 600028634
Complete Only When This Endorsement Is Not Prepared with the
Policy or is Not to be Effective with the Policy:
ISSUED TO: Richardson Electronics Ltd
EFFECTIVE DATE OF THIS ENDORSEMENT: 06/01/1998
Countersigned by: Lisa Fenell, Authorized Representative
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:
Any fact, circumstance, situation, transaction or event
underlying or alleged in any prior and/or pending litigation as
of 5/31/91, 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 to the designated Insurers
takes effect on the effective date of said Policy, unless another
effective date said Policy and expires concurrently with said
Policy.
Must be Completed:
ENDT. NO.: 3
POLICY NO.: 600028634
Complete Only When This Endorsement Is Not Prepared with the
Policy or is Not to be Effective with the Policy
ISSUED TO: Richardson Electronics Ltd
EFFECTIVE DATE OF THIS ENDORSEMENT: 06/01/1998
Countersigned by: Lisa Fenell, Authorized Representative
INAPPLICABILITY OF PRIMARY POLICY ENDORSEMENT
In consideration of the premium paid for this policy, it is
agreed that for the coverage afforded under this policy
endorsement number 8 to the Primary Policy shall not apply to
this Policy.
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:
ENDT. NO.: 4
POLICY NO.: 600028634
Complete Only When This Endorsement Is Not Prepared with the
Policy or is Not to be Effective with the Policy
ISSUED TO: Richardson Electronics Ltd
EFFECTIVE DATE OF THIS ENDORSEMENT: 06/01/1998
Countersigned by: Lisa Fenell, Authorized Representative
AMENDMENT OF PRIMARY POLICY DEFINITION TO FOLLOW
CHUBB D&O COVERAGE
In consideration of the premium paid for this Policy, it is
agreed that:
1. Item 4.A. of the Declarations is deleted and the following
is substituted:
A. Primary Policy
Name of Carrier: Federal Insurance Company
Policy No.8125-64-60F
Applicable Coverage Section:
Executive Liability and Indemnification Coverage
Section (Form 14-02-0943) and any applicable
endorsements and General Terms and Conditions (Form 14-
02-0941) pertaining thereto Limit of Liability of
Primary Policy Applicable to Executive Liability and
Indemnification Coverage Section
(a) each Loss: $15,000,000
(b) each Policy Period: $15,000,000
Deductible of Primary Policy Applicable to Executive
Liability and Idemnification Coverage Section:
$100,000,
2. II. POLICY DEFINITIONS is amended by deleting "Primary
Policy means the Policy scheduled in Item 4.A of
the Declarations" and substituting the following:
"Primary Policy" means only the Executive Liability and
Indemnification Coverage Section (Form 14-02-0943), and
any applicable endorsements and General Terms and
Conditions (Form 14-02-0941)pertaining thereto of the
Executive Protection Policy issued by Federal Insurance
Company, as such policy is identified in Item 4.A. of
the Declarations, and shall not include any other
coverage section contained in such policy."
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 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.: 5
POLICY NO.: 600028634
Complete Only When This Endorsement Is Not Prepared with the
Policy or is Not to be Effective with the Policy:
ISSUED TO: Richardson Electronics Ltd
EFFECTIVE DATE OF THIS ENDORSEMENT 06/01/1998
Countersigned by: Lisa Fenell, Authorized Representative