1
EXHIBIT 10.10
AETNA
THIS IS AN EXCESS CLAIMS MADE INDEMNITY POLICY WITH EXPENSES INCLUDED
IN THE LIMIT OF LIABILITY.
PLEASE READ THE ENTIRE POLICY CAREFULLY.
THE AETNA CASUALTY AND SURETY COMPANY
DIRECTORS AND OFFICERS LIABILITY AND REIMBURSEMENT EXCESS POLICY
DECLARATIONS
POLICY NUMBER
095 LB 100 844 655 BCA
NOTICE: THIS POLICY, SUBJECT TO ALL TERMS, CONDITIONS AND LIMITATIONS, APPLIES
ONLY TO ANY CLAIM FIRST MADE OR DEEMED MADE PURSUANT TO THE TERMS HEREOF
AGAINST THE INSUREDS DURING THE POLICY PERIOD. THE LIMIT OF LIABILITY
AVAILABLE TO PAY DAMAGES OR SETTLEMENTS SHALL BE REDUCED BY AMOUNTS INCURRED AS
DEFENSE EXPENSES. THIS POLICY DOES NOT PROVIDE FOR ANY DUTY BY THE UNDERWRITER
TO DEFEND ANY OF THE INSUREDS.
ITEM 1. PARENT ORGANIZATION NAME AND PRINCIPAL ADDRESS:
Bolt Beranek and Newman Inc.
150 Cambridge Park Drive
Cambridge, MA 02140
ITEM 2. POLICY PERIOD:
(a) From 12/1/1994 to 12/1/1995
at 12:01 a.m. Standard Time both dates at the Principal Address in
Item 1.
ITEM 3. LIMIT OF LIABILITY (inclusive of Defense Expenses):
$5,000,000.00 maximum aggregate Limit of Liability for the Policy
Period.
ITEM 4. SCHEDULE OF UNDERLYING POLICIES
a. Primary Policy
Underwriter Policy Number Limit Retention
Federal Insurance Company 8137-71-31-A $3,000,000 $0.00/$0.00/$1,000,000
b. Other Policy(ies), if any:
Underwriter(s) Policy Number(s) Limit(s) Retention(s)
See attached endorsement No. 2
ITEM 5. PREMIUM:
$50,000.00 one year prepaid premium.
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ITEM 6. NOTICE REQUIRED TO BE GIVEN TO THE UNDERWRITER SHALL BE ADDRESSED TO
Vice President of Claims
Executive Risk Management Associates
P.O. Box 2002
Simsbury, CT 06070
ITEM 7. ENDORSEMENTS ATTACHED AT ISSUANCE
X-301.0
X-604.0
These Declarations, the completed signed Application and the Policy with
Endorsements shall constitute the contract between the Insureds and the
Underwriter.
THE AETNA CASUALTY AND SURETY COMPANY By (Attorney-in-Fact)
05/02/1995
INSURED'S COPY
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PRIOR AND PENDING LITIGATION EXCLUSION
To be attached to and form part of Policy No. 095 LB 100 844 655 BCA,
issued to Bolt Beranek and Newman Inc.
In consideration of the premium charged, the Underwriter shall not be
liable to make any payment for loss in connection with any claim made against
any of the Insureds based on, arising out of, directly or indirectly resulting
from, in consequence of, or in any way involving:
(a) any prior and/or pending litigation as of 12/1/93; or
(b) any fact, circumstance or situation underlying or alleged
in any prior and/or pending litigation as of 12/1/93.
All other terms, conditions and limitations of this Policy shall remain
unchanged, including, but not limited to, the maximum aggregate Limit of
Liability set forth in Item 3 of the Declarations
Complete Only When This Endorsement Is Not Prepared With The Policy OR Is Not
To Be Effective With The Policy.
Effective Date Of This Endorsement:
THE AETNA CASUALTY AND SURETY COMPANY
By:
Attorney-In-Fact
Endorsement No. 1
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ENDORSEMENT
To be attached to and form part of Policy No. 095 LB 100 844 655 BCA,
issued to Bolt Beranek and Newman Inc.
In consideration of the premium charged, Item 4 of the Declarations is
amended to read as follows:
ITEM 4. SCHEDULE OF UNDERLYING POLICIES
a. Primary Policy:
Underwriter Policy Number Limit Retention
Federal Insurance Company 8137-71-31-A $3,000,000 $0.00/$0.00/$1,000,000
b. Other Policy(ies), if any:
Underwriter Policy Number(s) Limit(s) Retention(s)
St. Paul Mercury 900DX0103 $5,000,000
Insurance Company
Federal Insurance Company 81377132-A $2,000,000
Old Republic Company CUG 24032 $5,000,000
Lloyd's of London 757/FD940716 $5,000,000
All other terms, conditions and limitations of this Policy shall remain
unchanged, including, but not limited to, the maximum aggregate Limit of
Liability set forth in Item 3 of the Declarations
Complete Only When This Endorsement Is Not Prepared With The Policy OR Is Not
To Be Effective With The Policy.
Effective Date Of This Endorsement:
THE AETNA CASUALTY AND SURETY COMPANY
By:
Attorney-In-Fact
Endorsement No. 2
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ENDORSEMENT
To be attached to and form part of Policy No. 095 LB 100 844 655 BCA,
issued to Bolt Beranek and Newman Inc.
In consideration of the premium charged, the premium as set forth in Item
5 of the Declarations is amended to read as follows:
ITEM 5. Premium:
$62,088.00 one year prepaid premium.
All other terms, conditions and limitations of this Policy shall remain
unchanged, including, but not limited to, the maximum aggregate Limit of
Liability set forth in Item 3 of the Declarations
Complete Only When This Endorsement Is Not Prepared With The Policy OR Is Not
To Be Effective With The Policy.
Effective Date Of This Endorsement: 12/13/94
THE AETNA CASUALTY AND SURETY COMPANY
By:
Attorney-In-Fact
Endorsement No. 3
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that The Aetna Casualty and Surety Company (the
"Company") of Hartford, Connecticut does hereby appoint JOHN F. KEARNEY of
EXECUTIVE RISK MANAGEMENT ASSOCIATES its Attorney-in-Fact, with full power and
authority hereby conferred to execute, acknowledge and seal with the Company's
seal (1) any an all policies of insurance ("Policies") issued by Executive Risk
Management Associates on behalf of the Company in accordance with the terms and
provisions of the Amended and Restated Agency and Insurance Services Agreement
dated as of January 1, 1994, by and among the Company, Executive Risk Inc. and
Executive Risk Management Associates, as such agreement may be amended from
time to time; and (2) any and all binders, non- renewals, cancellations,
endorsements or notices with respect to such Policies.
IN WITNESS WHEREOF, The Aetna Casualty and Surety Company has caused this
instrument to be signed by its Vice President this 9th day of February, 1994.
THE AETNA CASUALTY AND SURETY COMPANY
By:
Richard K. Blankenbicker, Vice President
State of Connecticut
ss. Hartford
County of Hartford
On this 9th day of February, 1994, before me personally appeared Richard K.
Blankenbicker, to me known, who, being by me duly sworn, did repose and say that
he is Vice President of The Aetna Casualty and Surety Company, the corporation
described in and which executed the above instrument and that he executed the
instrument on behalf and in the name of such corporation.
Notary Public
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CHICAGO UNDERWRITING GROUP
Ms. Joan Goldberg
Johnson & Higgins of Massachusetts, Inc. COMPANY USE ONLY
Three Center Plaza ASSIGNED POLICY NUMBER: CUG24032
Boston, Massachusetts 02108 PREVIOUS POLICY NUMBER: CUG23731
POLICY PERIOD: 12/01/94 TO 12/01/95
REVISED INSURANCE BINDER
Chicago Underwriting Group, Inc. on behalf of the Old Republic Company
("Company") binds the insurance stipulated herein, subject to the terms,
conditions and limitations of the policy form(s) in use by the Company. This
binder is issued in reliance upon the application for insurance and the
submission furnished to the Company. This binder should be delivered to the
Insured as evidence of insurance until replaced by the policy.
NAME AND ADDRESS Bolt Beranek and Newman Inc.
OF INSURED: 150 Cambridge Park Drive
Cambridge, Massachusetts 02140
TYPE OF INSURANCE: Excess Directors and Officers Liability
BINDER PERIOD: 12/01/94 TO 2/01/95
POLICY FORM(S): ORUG-5, CHUG-67 and CHUG-71
LIMIT OF LIABILITY: $5,000,000. Annual Aggregate
EXCESS OF: $10,000,000. Annual Aggregate provided by:
(a) $3,000,000. with Chubb
(b) $5,000,000. excess $3,000,000. with St. Paul
(c) $2,000,000. excess $8,000,000. with Chubb
PREMIUM: $80,000.
SPECIAL CONDITIONS:
1. Subject to receipt and approval of:
a. Complete copy of primary policy and underlying excess policies.
b. Complete copy of primary binder and underlying excess binders.
2. Exclusions:
Prior and/or Pending Litigation as of 12/01/93 (CHUG-41)
3. Extended Reporting Period: 12 months at 75% additional premium
4. Sixty (60) Day Notice of Cancellation.
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This binder may be cancelled by the Insured by surrender of this binder or by
written notice to the Company stating when cancellation will be effective.
This binder may be cancelled by the Company by notice to the insured in
accordance with the policy conditions. This binder is cancelled when replaced
by policy. If this binder is not replaced by a policy, the Company is entitled
to charge a premium for the binder according to the rules an rates in use by
the Company.
DATE: December 6, 1994 BY:
Diane C. Vasti
Assistant Vice President
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OLD REPUBLIC COMPANIES
In consideration of an additional of $ 19,340., it is understood and agreed
coverage is amended to provide for a predetermined allocation for securities
claims in the amounts of 100% for Securities Defense Costs and 75% for other
than Securities Defense Costs (wording to follow form of Federal Insurance
Company's primary policy no. 81377131-A.
All other terms and conditions of this policy remain unchanged.
This endorsement is a part of the policy and takes effect on the effective date
of the policy,unless another effective date is shown below.
Complete Only When This Endorsement Is Not Prepared with the
Must Be Completed Policy Or Is Not to be Effective with the Policy
ENDT. No. POLICY NO. ISSUED TO EFFECTIVE DATE OF THIS ENDORSEMENT
A CUG 24032 Bolt Beranek & Newman, Inc. 12/13/94
Countersigned by
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OLD REPUBLIC COMPANIES
In consideration of the premium charged it is understood and agreed that the
insurance binder is amended, in part, to read:
BINDER PERIOD: 12/01/94 to 5/01/95
All other terms and conditions of this policy remain unchanged.
This endorsement is a part of the policy and takes effect on the effective date
of the policy,unless another effective date is shown below.
Complete Only When This Endorsement Is Not Prepared with the
Must Be Completed Policy Or Is Not to be Effective with the Policy
ENDT. No. POLICY NO. ISSUED TO EFFECTIVE DATE OF THIS ENDORSEMENT
B CUG 24032 Bolt Beranek & Newman, Inc. 2/01/95
Countersigned by
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OLD REPUBLIC COMPANIES
In consideration of the premium charged it is understood and agreed that the
insurance binder is amended, in part, to read:
BINDER PERIOD: 12/01/94 to 6/01/95
All other terms and conditions of this policy remain unchanged.
This endorsement is a part of the policy and takes effect on the effective date
of the policy,unless another effective date is shown below.
Complete Only When This Endorsement Is Not Prepared with the
Must Be Completed Policy Or Is Not to be Effective with the Policy
ENDT. No. POLICY NO. ISSUED TO EFFECTIVE DATE OF THIS ENDORSEMENT
C CUG 24032 Bolt Beranek & Newman, Inc. 5/01/95
Countersigned by
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EXECUTIVE PROTECTION POLICY
DECLARATIONS
FIDUCIARY LIABILITY
COVERAGE SECTION
Item 1. Parent Organization:
BOLT BERANEK & NEWMAN INC.
Item 2. Limits of Liability:
(A) Each Loss $20,000,000.
(B) Each Policy Periods $20,000,000.
Note that the limits of liability and any deductible or retention
are reduced or exhausted by DEFENSE COSTS.
Item 3. Deductible Amounts:
(A) Non-Indemnifiable Loss $ None
(B) Indemnifiable Loss $ None
Item 4. Sponsor Organization:
BOLT BERANEK & NEWMAN INC.
AND ITS SUBSIDIARIES
Item 5. Benefit Programs included as Insureds and any other additional
Insureds:
Bolt Beranek and Newman Inc Retirement Trust and any Benefit
Program, Employee Benefit Plan or Insured Plan located anywhere in
the world sponsored, operated, maintained or administered by the
Sponsor Organization.
Item 6. Extended Reporting Period:
(A) Additional Premium: $20,504.
(B) Additional Period: One Year
Item 7. Pending or Prior Date: DECEMBER 1, 1986
Item 8. Continuity Date: DECEMBER 1, 1986
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EXECUTIVE PROTECTION POLICY
Fiduciary In consideration of payment of the premium and
Liability subject to the Declarations, General Terms and
Coverage Section Conditions, and the limitations, conditions,
provisions and other terms of this coverage
section, the Company agrees as follows:
Insuring Clause 1. The Company shall pay on behalf of each of the
Insureds all Loss for which the Insured
becomes legally obligated to pay on account of
any Claim first made against the Insured
during the Policy Period or, if exercised, the
Extended Reporting Period, for a Wrongful Act
committed, attempted, or allegedly committed
or attempted before or during the Policy
Period by an Insured or by any person for
whose Wrongful Acts the Insured is legally
responsible.
Estates and Legal 2. Subject otherwise to the General Terms and
Representatives Conditions and the limitations, conditions,
provisions and other terms of this coverage
section, coverage shall extend to Claims for
the Wrongful Acts of Insured Persons made
against the estates, heirs, legal
representatives or assigns of Insured Persons
who are deceased or against the legal
representatives or assigns of Insured Persons
who are incompetent, insolvent or bankrupt.
Defense Provisions 3. The Company shall have the right and duty to
defend any Claim covered by this coverage
section. Coverage shall apply even if any of
the allegations are groundless, false or
fraudulent. The Company's duty to defend
shall cease upon exhaustion of the Company's
applicable Limit of Liability set forth in
Item 2 of the Declarations for this coverage
section.
Defense Costs incurred by the Company, or by
the Insured with the written consent of the
Company, are part of and not in addition to
the Company's applicable Limit of Liability
set forth in Item 2 of the Declarations for
this coverage section, and the payment by the
Company of Defense Costs reduces such
applicable Limit of Liability.
The Insureds agree to provide the Company with
all information, assistance and cooperation
which the Company reasonably requests and
agree that in the event of a Claim the
Insureds will do nothing that may prejudice
the Company's position or its potential or
actual rights of recovery.
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Defense Provisions The Insureds agree not to settle any Claim,
(Cont'd) incur any Defense Costs or otherwise assume
any contractual obligation or admit any
liability with respect to any Claim without
the Company's written consent, which shall not
be unreasonably withheld. The Company shall
not be liable for any settlement, Defense
Costs, assumed obligation or admission to
which it has not consented.
Extended Reporting 4. If the Company terminates or refuses to renew
Period this coverage section other than for
nonpayment of premium, the Insureds shall have
the right, upon payment of the additional
premium in Item 6(A) of the Declarations for
this coverage section, to an extension of the
coverage granted by this coverage section for
the period in Item 6(B) of the Declarations
for this coverage section (Extended Reporting
Period) following the effective date of
termination or nonrenewal, but only for any
Wrongful Act committed, attempted, or
allegedly committed or attempted, prior to the
effective date of termination or nonrenewal.
This right of extension shall lapse unless
written notice of such election, together with
payment of the additional premium due, is
received by the Company within 30 days
following the effective date of termination or
nonrenewal. Any Claim made during the
Extended Reporting Period shall be deemed to
have been made during the immediately
preceding Policy Period.
If the Insured terminates or declines to
accept renewal, the Company may, if requested,
at its sole option, grant an Extended
Reporting Period. The offer of renewal terms
and conditions or premiums different from
those in effect prior to renewal shall not
constitute refusal to renew.
Exclusions 5. The Company shall not be liable for Loss on
account of any Claim made against any Insured:
(a) based upon, arising from, or in
consequence of any circumstance if
written notice of such circumstance has
been given under any policy or coverage
section of which this coverage section is
a renewal or replacement and if such
prior policy or coverage section affords
coverage (or would afford such coverage
except for the exhaustion of its limits
of liability) for such Loss, in whole or
in part, as a result of such notice;
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Exclusions (b) based upon, arising from, or in
(Cont'd) consequence of any deliberately
fraudulent act or omission or any willful
violation of any statute or regulation by
such Insured, if a judgment or other
final adjudication adverse to the Insured
establishes such a deliberately
fraudulent act or omission or willful
violation;
(c) for libel or slander;
(d) for bodily injury, mental or emotional
distress, sickness, disease or death of
any person or damage to or destruction of
any tangible property including loss of
use thereof;
(e) based upon, arising from, or in
consequence of liability of others
assumed by the Insured under any contract
or agreement, either oral or written,
except to the extent that the Insured
would have been liable in the absence of
the contract or agreement or unless the
liability was assumed in accordance with
or under the agreement or declaration of
trust pursuant to which the Benefit
Program was established;
(f) based upon, arising from, or in
consequence of the failure of the Insured
to comply with any law governing worker's
compensation, unemployment, social
security or disability benefits or any
similar law, except the Consolidated
Omnibus Budget Reconciliation Act of 1985
and amendments thereto;
(g) based upon, arising from, or in
consequence of any demand, suit or other
proceeding pending, or order, decree or
judgment entered against any Insured, on
or prior to the Pending or Prior Date set
forth in Item 7 of the Declarations for
this coverage section, or the same or any
substantially similar fact, circumstance
or situation underlying or alleged
therein;
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Exclusions (h) based upon, arising from, or in
(Cont'd) consequence of (i) the actual, alleged or
threatened discharge, release, escape or
disposal of Pollutants into or on real or
personal property, water or the
atmosphere; or (ii) any direction or
request that the Insured test for,
monitor, clean up, remove, contain,
treat, detoxify or neutralize Pollutants,
or any voluntary decision to do so;
including but not limited to any Claim
for financial loss to the Sponsor
Organization, its security holders or
creditors or any Benefit Program based
upon, arising from, or in consequence of
the matters described in (i) or (ii) of
this exclusion.
6. The Company shall not be liable for that part
of Loss, other than Defense Costs:
(a) which constitutes fines or penalties or
the multiple portion of any multiplied
damage award, other than the five percent
or less, or the twenty percent or less,
civil penalties imposed upon an Insured
as a fiduciary under Section 502 (i) or
(1), respectively, of the Employee
Retirement Income Security Act of 1974,
as amended;
(b) which is based upon, arising from, or in
consequence of the failure to collect
from employers contributions owed to a
Benefit Program, unless the failure is
because of the negligence of an Insured;
(c) which constitutes the return or reversion
to any employer of any contribution or
asset of a Benefit Program; or
(d) which constitutes benefits due or to
become due under the terms of a Benefit
Program unless, and to the extent that,
(i) the Insured is a natural person and
the benefits are payable by such Insured
as a personal obligation, and (ii)
recovery for the benefits is based upon a
covered Wrongful Act.
Severability of 7. With respect to the Exclusions in Subsections
Exclusions 5 and 6 of this coverage section, no fact
pertaining to or knowledge possessed by any
Insured shall be imputed to any other Insured
to determine if coverage is available.
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Limit of 8. For the purpose of this coverage section, all
Liability and Loss arising out of the same Wrongful Act and
Deductible all Interrelated Wrongful Acts of any Insured
shall be deemed one Loss, and such Loss shall
be deemed to have originated in the earliest
Policy Period in which a Claim is first made
against any Insured alleging any such Wrongful
Act or Interrelated Wrongful Acts.
The Company's maximum liability for each Loss
shall be the Limit of Liability for each Loss
set forth in Item 2(A) of the Declarations for
this coverage section. The Company's maximum
aggregate liability for all Loss on account of
all Claims first made during the same Policy
Period shall be the Limit of Liability for
each Policy Period set forth in Item 2(B) of
the Declarations for this coverage section.
The Company's liability hereunder shall apply
only to that part of each Loss which is excess
of the Deductible Amounts set forth in Item 3
of the Declarations for this coverage section
and such Deductible Amounts shall be borne by
the Insureds uninsured and at their own risk.
The Deductible Amount for Non-Indemnifiable
Loss set forth in Item 3(A) of the
Declarations for this coverage section shall
apply to Loss incurred by any Insured other
than the Sponsor Organization or any Benefit
Program for which the Sponsor Organization is
not permitted or required to indemnify or is
permitted or required to indemnify but does
not do so by reason of Financial Impairment.
The Deductible Amount for Indemnifiable Loss
set forth in Item 3(B) of the Declarations for
this coverage section shall apply to all other
Loss.
If a part of a single Loss is subject to the
Deductible Amount for Non-Indemnifiable Loss
and part of the same Loss is subject to the
Deductible Amount for Indemnifiable Loss, the
maximum Deductible Amount applicable to the
Loss shall be the Deductible Amount for
Indemnifiable Loss.
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The Sponsor Organization shall be deemed
permitted or required to indemnify an Insured,
and the shareholder and board or director
resolutions of the Sponsor Organization shall
be deemed to provide indemnification to an
Insured, to the fullest extent authorized by
the Sponsor Organization's by-laws or
certificate of incorporation in effect at the
inception of this coverage section, or any
subsequently amended or superseding by-laws or
certificate of incorporation of the Sponsor
Organization to the extent such subsequent
document expands or broadens and does not
limit or restrict such indemnification
authorization.
Any Loss covered in whole or in part by this
coverage section and the Employment Practices
Liability coverage section of this policy (if
purchased) shall be subject to the limits of
liability, deductible and coinsurance percent
applicable to such other coverage section;
provided, however, if any limit of liability
applicable to such other coverage section is
exhausted with respect to such Loss, any
remaining portion of such Loss otherwise
covered by this coverage section shall be
subject to the limit of liability applicable
to this coverage section, as reduced by the
amount of such Loss otherwise covered by this
coverage section which is paid by the Company
pursuant to such other coverage section.
For purposes of this Subsection 8 only, the
Extended Reporting Period, if exercised, shall
be part of and not in addition to the
immediately preceding Policy Period.
Other Insurance 9. If any Loss arising from any Claim made
against any Insured is insured under any other
valid policy(ies), prior or current, then this
coverage section shall cover such Loss,
subject to its limitations, conditions,
provisions and other terms, only to the extent
that the amount of such Loss is in excess of
the amount of payment from such other
insurance whether such other insurance is
stated to be a primary, contributory, excess,
contingent or otherwise, unless such other
insurance is written only as specific excess
insurance over the Limits of Liability
provided in this coverage section.
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Changes in 10. If during the Policy Period the Sponsor
Exposure Organization creates or acquires a Subsidiary
Acquisition or or Benefit Program or otherwise become a
Creation of fiduciary of or responsible for the
Another Entity or Administration of any Benefit Program
Benefit Program ("Inception Event"), and if the Sponsor
Organization shall give written notice to the
Company of the Inception Event as soon as
practicable together with such information as
the Company may require and shall pay any
reasonable additional premium required by the
Company, coverage shall be afforded, subject
to the terms and conditions of this coverage
section, from the date of the Inception Event
for such Subsidiary, Benefit Program, and any
Insured Persons of such Benefit Program, but
only for Wrongful Acts committed, attempted,
or allegedly committed or attempted, after the
date of the Inception Event, unless the
Company agrees by endorsement to provide
coverage for Wrongful Acts committed,
attempted, or allegedly committed or
attempted, prior to such date. Any such
coverage shall be specifically excess of the
amount of payment from any other insurance
available to such Benefit Program, Insured
Persons or Sponsor Organization.
Notwithstanding the foregoing, no coverage
shall be afforded pursuant to this Subsection
10 with respect to any employee stock
ownership plan or any Insured Persons or
Sponsor Organization thereof unless the
Company, by specific endorsement hereto,
agrees to afford such coverage. Any such
coverage shall be at the terms and conditions
and for the premium set forth in such
endorsement.
Acquisition by 11. If (i) the Sponsor Organization merges into or
Another Entity consolidates with another organization, (ii)
another organization or person or group of
organizations and/or persons acting in concert
acquires securities or voting rights which
result in ownership or voting control by the
other organization(s) or person(s) of more
than 50% of the outstanding securities
representing the present right to vote for
election of directors of the Sponsor
Organization, of (iii) the responsibilities of
the Sponsor Organization for the
Administration of, or as a fiduciary of, any
Benefit Program is fully assumed by any other
person and/or entity. coverage under this
coverage section for such Sponsor
Organization, Benefit Program and the Insured
Persons thereof who were Insureds prior to
such acquisition, merger, consolidation or
assumption of responsibilities shall continue
until termination of this coverage section
subject to the following:
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Changes in (a) for the merged, consolidated or acquired
Exposure Sponsor Organization and any Benefit
Acquisition by Program thereof, and for any Benefit
Another Entity Program described in subparagraph (iii)
(Cont'd) above, coverage shall continue only with
respect to Claims for Wrongful Acts
committed, attempted, or allegedly
committed or attempted prior to such
merger, consolidation, acquisition, or
assumption of responsibilities;
(b) for Insured Persons of the merged,
consolidated, or acquired Sponsor
Organization or any Benefit Program
thereof, and for Insured Persons of any
Benefit Program thereof, and for Insured
Persons of any Benefit Plan described in
subparagraph (iii) above, coverage shall
continue with respect to Claims for
Wrongful Acts committed, attempted or
allegedly committed or attempted prior to
the date the Insured Person ceases to be a
trustee, director, officer and/or employee
of any Sponsor Organization not so merged,
consolidated or acquired.
The Sponsor Organization shall give written
notice to the Company of such merger,
consolidation, acquisition or assumption of
responsibilities as soon as practicable
together with such information as the Company
may require. Any such continuing coverage
shall be specifically excess of the amount of
payment from any other insurance available to
such Sponsor Organization, Benefit Program or
Insured Persons.
Termination of 12. If the Sponsor Organization terminates any
Benefit Program Benefit Program before or after the Inception
Date of this coverage section, coverage under
this coverage section with respect to such
terminated Benefit Program shall continue
until termination of this coverage section for
those who were Insureds at the time of such
Benefit Program termination, or who would have
been Insureds at the time of such termination
if this coverage section had been in effect,
with respect to Wrongful Acts committed,
attempted or allegedly committed or attempted
by such Insureds prior to or after the date of
such Benefit Program termination. The
Insureds shall give written notice to the
Company of such Benefit Program termination as
soon as is practicable together with such
information as the Company may require.
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Reporting and 13. The Insureds shall, as a condition precedent
Notice to exercising their rights under this coverage
section, give to the Company written notice as
soon as practicable of any Claim made against
any of them for a Wrongful Act.
If during the Policy Period or Extended
Reporting Period (if exercised) an Insured
becomes aware of circumstances which could
give rise to a Claim and gives written notice
of such circumstance(s) to the Company, then
any Claims subsequently arising from such
circumstances shall be considered to have been
made during the Policy Period or the Extended
Reporting Period in which the circumstances
were first reported to the Company.
The Insureds shall, as a condition precedent
to exercising their rights under this coverage
section, give to the Company such information
and cooperation as it may reasonably require,
including but not limited to a description of
the Claim or circumstances, the nature of the
alleged Wrongful Act, the nature of the
alleged or potential damage, the names of
actual or potential claimants, and the manner
in which the Insured first became aware of the
Claim or circumstances.
Representations 14. In granting coverage to any one of the
and Severability Insureds, the Company has relied upon the
declarations and statements in the written
application for this coverage section and upon
any declarations and statements in the
original written application submitted to
another insurer in respect of the prior
coverage inception as of the Continuity Date
set forth in Item 8 of the Declarations for
this coverage section. All such declarations
and statements are the basis of such coverage
and shall be considered as incorporated in and
constituting part of this coverage section.
Such written application(s) for coverage shall
be construed as a separate application for
coverage by each Insured. With respect to the
declarations and statements contained in such
written application(s) for coverage, no
statement in the application or knowledge
possessed by any Insured shall be imputed to
any other Insured for the purpose of
determining if coverage is available.
Definitions 15. When used in this coverage section:
Administration means giving advice to
employees or effecting enrollment, termination
or cancellation of employees under a Benefit
Program.
22
Definitions Benefit Program means:
(cont'd)
(a) any Sponsored Plan, or
(b) any Insured Plan.
Claim means:
(a) a civil proceeding commended by the
service of a complaint or similar
pleading,
(b) a criminal proceeding commenced by a
return of an indictment, or
(c) a formal administrative or regulatory
proceeding commenced by the filing of a
notice of charges, formal investigative
order or similar document,
against any Insured for a Wrongful Act,
including any appeal therefrom.
Defense Costs means that part of Loss
consisting of reasonable cost, charges, fees
(including but not limited to attorney's fees
and experts' fees) and expenses (other than
regular or overtime wages, salaries or fees of
the directors, officers or employees of the
Insured) incurred in defending or
investigating Claims and the premium for
appeal, attachment or similar bonds.
Employee Benefit Plan means any plan so
defined in the Employee Retirement Income
Security Act of 1974, as amended.
Financial Impairment means the status of the
Sponsor Organization resulting from (i) 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 the Sponsor Organization, or (ii)
the Sponsor Organization becoming a debtor in
possession.
Insureds, either in the singular or plural,
means any one or more:
(a) Sponsor Organization;
(b) Benefit Program;
(c) Insured Person, or
(d) any other person or organization
designated as an additional Insured by
endorsement to this coverage section.
Insured Persons, either in the singular or
plural, means any one or more:
23
Definitions (a) natural persons serving as a past,
(Cont'd) present or future trustee, director,
officer or employee of the Sponsor
Organization or of any Sponsored Plan,
and
(b) any other natural person acting as a
past, present or future fiduciary of a
Sponsored Plan and named in Item 5 of the
Declarations for this coverage section.
Insured Plan means any government-mandated
insurance program for workers' compensation,
unemployment, social security or disability
benefits for employees of the Sponsor
Organization.
Interrelated Wrongful Acts means all causally
connected Wrongful Acts.
Loss means the total amount which any Insured(s)
becomes legally obligated to pay on account of each
Claim and for all Claims in each Policy Period and
the Extended Reporting Period, if exercised, made
against them for Wrongful Acts for which coverage
applies, including, but not limited to, damages,
judgements, settlements, costs and Defense
Costs. Loss does not include matters
uninsurable under the law pursuant to which
this coverage section is construed.
Pension Benefit Plan means any plan so defined
in the Employee Retirement Income Security Act
of 1974, as amended.
Pollutants means any substance located
anywhere in the world exhibiting any hazardous
characteristics as defined by, or identified
on a list of hazardous substances issued by,
the United States Environmental Protection
Agency or a state, county, municipality or
locality counterpart thereof. Such substances
shall include, without limitation, solids,
liquids, gaseous or thermal irritants,
contaminants or smoke, vapor, soot, fumes,
acids, alkalis, chemicals or waste materials.
Pollutants shall also mean any other air
emissions, odor, water, oil or oil products,
infectious or medical waste, asbestos or
asbestos products and any noise.
Sponsor Organization means any organization
designated in Item 4 of the Declarations for
this coverage section.
Sponsored Plan means:
24
Definitions (a) an Employee Benefit Plan which is operated
(Cont'd) solely by the Sponsor Organization or
jointly by the Sponsor Organization and a
labor organization for the benefit of the
employees of the Sponsor Organization
located anywhere in the world an which
existed at the Inception Date of this
coverage section or of any policy or a
coverage section of which this coverage
section is a renewal or which is created
or acquired after the inception of this
coverage section, subject to the
provisions outlines in this coverage
section;
(b) any other plan, fund, or program
specifically included as a Sponsored Plan
and named in Item 5 of the Declarations
for this coverage section; provided,
however, Sponsored Plan shall not include
any multiemployer plan, as defined in the
Employee Retirement Income Security Act of
1974, as amended; or
(c) any other employee benefit plan or program
not subject to Title 1 of the Employee
Retirement Income Security Act of 1974, as
amended, sponsored solely by the Sponsor
Organization for the benefit of the
employees of the Sponsor Organization.
Subsidiary, either in the singular or plural,
means any organization in which more than 50%
of the outstanding securities or voting rights
representing the present right to vote for
election of directors is owned or controlled,
directly or indirectly, in any combination, by
one or more Insured Organization.
Wrongful Act means:
(a) with respect to a Sponsored Plan,
(i) any breach of the responsibilities,
obligations or duties imposed upon fiduciaries
of the Sponsored Plan by the Employee
Retirement Income Security Act of 1974, as
amended, or by the common or statutory law of
the United States, or any state or other
jurisdiction anywhere in the world;
(ii) any other matter claimed against the Sponsor
Organization or an Insured Person solely
because of the Sponsor Organization's or the
Insured Person's service as a fiduciary of any
Sponsored Plan; or
(iii) any negligent act, error or omission in the
Administration of any Sponsored Plan; and
(b) with respect to an Insured Plan,
25
Definitions (i) any negligent act, error or omission
(Cont'd) in the Administration of any Insured Plan.
26
EXECUTIVE PROTECTION POLICY
ENDORSEMENT
Coverage Section: FIDUCIARY LIABILITY Company: FEDERAL INSURANCE COMPANY
Effective date of Endorsement No. 1
this endorsement: DECEMBER 01, 1994
To be attached to and form part of
Policy No. 8134-46-02-B
Issued to: BOLT BERANEK & NEWMAN INC.
It is agreed that subsection 12, Termination of Benefit Program, is amended by
deleting the following sentence:
"The Insureds shall give written notice to the Company of such
Benefit Program termination as soon as is practicable together
with such information as the Company may require."
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
Authorized Representative
December 7, 1994
Date
27
EXECUTIVE PROTECTION POLICY
ENDORSEMENT
Coverage Section: FIDUCIARY LIABILITY Company: FEDERAL INSURANCE COMPANY
Effective date of Endorsement No. 2
this endorsement: DECEMBER 01, 1994
To be attached to and form part of
Policy No. 8134-46-02-B
Issued to: BOLT BERANEK & NEWMAN INC.
It is agreed that subsection 5, Exclusions, is amended by adding the following:
(j) based upon, arising from, or in consequence of Wrongful
Act(s) or Interrelated Wrongful Acts where all or any part of
such acts were committed, attempted, or allegedly committed
or attempted, prior to April 22, 1987 for Delta Graphics.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
Authorized Representative
December 7, 1994
Date
28
EXECUTIVE PROTECTION POLICY
ENDORSEMENT
Coverage Section: FIDUCIARY LIABILITY Company: FEDERAL INSURANCE COMPANY
Effective date of Endorsement No. 3
this endorsement: DECEMBER 01, 1994
To be attached to and form part of
Policy No. 8134-46-02-B
Issued to: BOLT BERANEK & NEWMAN INC.
It is understood and agreed that Subsection 15, Definitions shall be amended by
deleting the definition of Claim in its entirety and replacing it with the
following:
Claim means:
(a) a written demand for monetary damages,
(b) a civil proceeding commenced by the service of a complaint or
similar pleading,
(c) a criminal proceeding commenced by a return of an indictment, or
(d) a formal administrative or regulatory proceeding commenced by the
filing of a notice of charges, formal investigative order or
similar document,
against any Insured for a Wrongful Act, including any appeal therefrom.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
Authorized Representative
December 7, 1994
Date
29
EXECUTIVE PROTECTION POLICY
DECLARATIONS
EXECUTIVE LIABILITY AND
INDEMNIFICATION COVERAGE SECTION
Item 1. Parent Organization:
BOLT BERANEK & NEWMAN INC.
Item 2. Limits of Liability:
(A) Each Loss $3,000,000.
(B) Each Policy Periods $3,000,000.
Note that the limits of liability and any deductible or retention
are reduced or exhausted by DEFENSE COSTS.
Item 3. Coinsurance Percent: NONE
Item 4. Deductible Amount:
Insuring Clause 2 $1,000,000.
Item 5. INSURED ORGANIZATION:
BOLT BERANEK & NEWMAN INC.
AND ITS SUBSIDIARIES
Item 6. INSURED PERSONS:
Any person who has been, now is, or shall become a duly elected
director or a duly elected or appointed officer of the Insured
Organization.
Item 7. Extended Reporting Period:
(A) Additional Premium: $150,000.
(B) Additional Period: One Year
Item 8. Pending or Prior Date: DECEMBER 1, 1990
Item 9. Continuity Date: DECEMBER 1, 1990
30
EXECUTIVE PROTECTION POLICY
Executive Liability and In consideration of payment of the premium
Indemnification Coverage and subject to the Declarations, General
Section Terms and Conditions, and the limitations,
conditions, provisions and other terms of
this coverage section, the Company agrees
as follows:
Insuring Clauses
Executive 1. The Company shall pay on behalf of each of the
Liability Coverage Insured Persons all Loss for which the Insured
Insuring Clause 1 Person is not indemnified by the Insured
Organization and which the Insured Person
becomes legally obligated to pay on account of
any Claim first made against him, individually
or otherwise, during the Policy Period or, if
exercised, during the Extended Reporting
Period, for a Wrongful Act committed,
attempted, or allegedly committed or attempted
by such Insured Person before or during the
Policy Period.
Executive 2. The Company shall pay on behalf of the Insured
Indemnification Organization all Loss for which the Insured
Coverage Insuring Organization and which the Insured Person as
Clause 2 permitted or required by law, which the Insured
Person has becomes legally obligated to pay on
account of any Claim, first made against him,
individually or otherwise, during the Policy
Period or, if exercised, during the Extended
Reporting Period, for a Wrongful Act
committed, attempted, or allegedly committed
or attempted by such Insured Person before or
during the Policy Period.
Estates and Legal 3. Subject otherwise to the General Terms and
Representatives Conditions and limitations, conditions,
provisions and other terms of this coverage
section, coverage shall extend to Claims for
the Wrongful Acts of Insured Persons made
against the estates, heirs, legal
representatives or assigns of Insured Persons
who are deceased or against the legal
representatives or assigns of Insured Persons
who are incompetent, insolvent or bankrupt.
31
Extended Reporting 4. If the Company terminates or refuses to renew
Period this coverage section other than for
nonpayment of premium, the Parent Organization
and the Insured Persons shall have the right,
upon payment of the additional premium set
forth in Item 7(A) of the Declarations for
this coverage section, to an extension of the
coverage granted by this coverage section for
the period set forth in Item 7(B) of the
Declarations for this coverage section
(Extended Reporting Period) following the
effective date of termination or nonrenewal,
but only for any Wrongful Act committed,
attempted, or allegedly committed or
attempted, prior to the effective date of
termination or nonrenewal. This right of
extension shall lapse unless written notice of
such election, together with payment of the
additional premium due, is received by the
Company within 30 days following the effective
date of termination or nonrenewal. Any Claim
made during the Extended Reporting Period
shall be deemed to have been made during the
immediately preceding Policy Period.
If the Parent Organization terminates or
declines to accept renewal, the Company may,
if requested, at its sole option, grant an
Extended Reporting Period. The offer of
renewal terms and conditions or premiums
different from those in effect prior to
renewal shall not constitute refusal to renew.
Exclusions 5. The Company shall not be liable for Loss on
Applicable to account of any Claim made against any Insured
Insuring Clauses 1 Person:
and 2
(a) based upon, arising from, or in
consequence of any circumstance has been
given under any policy or coverage
section of which this coverage section is
a renewal or replacement and if such
prior policy or coverage section affords
coverage (or would afford such coverage
except for the exhaustion of its limits
of liability) for such Loss, in whole or
in part, as a result of such notice;
(b) based upon, arising from, or in
consequence of any demand, suit or other
proceeding pending, or order, decree or
judgement entered against any Insured on
or prior to the Pending or Prior Date set
forth in Item 8 of the Declarations for
this coverage section, or the same or any
substantially similar fact, circumstance
or situation underlying or alleged
therein;
32
(c) brought or maintained by or on behalf of
any Insured except:
(i) a Claim that is a derivative action
brought or maintained on behalf an
Insured Organization by one or more
persons who are not Insured Persons
and who bring and maintain the Claim
without the solicitation, assistance or
participation of any Insured.
(ii) a Claim brought or maintained by an
Insured Person for the actual or alleged
wrongful termination of the Insured
Person or
(iii) a Claim brought or maintained by an
Insured Person for contribution or
indemnity, if the Claim directly results
from another Claim covered under this
coverage section;
(d) for an actual or alleged violation of the
responsibilities, obligations or duties
imposed by the Employee Retirement Income
Security Act of 1974 and amendments
thereto or similar provisions of any
federal, state or local statutory law or
common law upon fiduciaries of any
pension, profit sharing, health and
welfare or other employee benefit plan or
trust established or maintained for the
purpose of providing benefits to
employees of an Insured Organization;
(e) for bodily injury, mental or emotional
distress, sickness, disease or death of
any person or damage to or destruction of
any tangible property including loss of
use thereof; or
(f) based upon, arising from, or in
consequence of (i) the actual, alleged or
threatened discharge, release, escape or
disposal of Pollutants into or on real or
personal property, water or the
atmosphere; or (ii) any direction or
request that the insured test for,
monitor, clean up, remove, contain,
treat, detoxify or neutralize Pollutants,
or any voluntary decision to do so;
including but not limited to any Claim
for financial loss to the Insured
Organization, its security holders or its
creditors based upon, arising from, or in
consequence of the matters described in
(i) or (ii) of this exclusion.
Exclusions
(cont'd)
Exclusions 6. The Company shall not be liable under Insuring
Applicable to Clause 1 for Loss on account of any Claim made
Insuring Clause 1 against any Insured Person:
Only
33
(a) for an accounting of profits made from
the purchase or sale by such Insured
Person 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 federal, state
or local statutory law or common law;
(b) based upon, arising from, or in
consequence of any deliberately
fraudulent act or omission or any willful
violation of any statute or regulation by
such Insured Person, if a judgement or
other final adjudication adverse to the
Insured Person establishes such a
deliberately fraudulent act or omission
or willful violation; or
(c) based upon, arising from, or in
consequence of such Insured Person having
gained in fact any personal profit,
remuneration or advantage to which such
Insured Person was not legally entitled.
Severability of 7. With respect to the Exclusions in Subsections
Exclusions 5 and 6 of this coverage section, no fact
pertaining to or knowledge possessed by any
Insured Person shall be imputed to any other
Insured Person to determine if coverage is
available.
Limit of 8. For the purpose of this coverage section, all
Liability, Loss arising out of the same Wrongful Act and
Deductible and all Interrelated Wrongful Acts of any Insured
Coinsurance Person shall be deemed one Loss, and such Loss
shall be deemed to have originated in the
earliest Policy Period in which a Claim is
first made against any Insured Person alleging
any such Wrongful Act or Interrelated Wrongful
Acts.
The Company's maximum liability for each Loss,
whether covered under Insuring Clause 1 or
Insuring Clause 2 or both, shall be the Limit
of Liability for each Loss set forth in Item
2(A) of the Declarations for this coverage
section. The Company's maximum aggregate
liability for all Loss on account of all
Claims first made during the same Policy
Period, whether covered under Insuring Clause
1 or Insuring Clause 2 or both, shall be the
Limit of Liability for each Policy Period set
forth in Item 2(B) of the Declarations for
this coverage section.
34
Limit of The Company's liability under Insuring Clause
Liability, 2 shall apply only to that part of each Loss
Deductible and which is excess of the Deductible Amount set
Coinsurance forth in Item 4 of the Declarations for this
(continued) coverage section and such Deductible Amount
shall be borne by the Insureds uninsured and
at their own risk.
If a single Loss is covered in part under
Insuring Clause 1 and in part under Insuring
Clause 2, the Deductible Amount applicable to
the Loss shall be the Insuring Clause 2
deductible set forth in Item 4 of the
Declarations for this coverage section.
With respect to all Loss (excess of the
applicable Deductible Amount) originating in
any one Policy Period, the Insureds shall bear
uninsured and at their own risk that percent
of all such Loss specified as the Coinsurance
Percent in Item 3 of the Declarations for this
coverage section, and the Company's liability
hereunder shall apply only to the remaining
percent of all such Loss.
Any Loss covered in whole or in part by this
coverage section and the Employment Practices
Liability coverage section of this policy (if
purchased) shall be subject to the limits of
liability, deductible and coinsurance percent
applicable to such other coverage section;
provided, however, if any limit of liability
applicable to such other coverage section is
exhausted with respect to such Loss, any
remaining portion of such Loss otherwise
covered by this coverage section shall be
subject to the Limits of Liability and
Coinsurance Percent applicable to this
coverage section, as reduced by the amount of
such Loss otherwise covered by this coverage
section which is paid by the Company pursuant
to such other coverage section.
For purposes of this Subsection 8 only, the
Extended Reporting Period, if exercised, shall
be part of and not in addition to the
immediately preceding Policy Period.
Presumptive 9. If the Insured Organization:
Indemnification
(a) fails or refuses, other than for reason
of Financial Impairment, to indemnify the
Insured Person for Loss; and
(b) is permitted or required to indemnify the
Insured Person for such Loss pursuant to:
35
Presumptive (i) the by-laws or certificate of incorporation
Indemnification of the Insured Organization in effect at
(continued) the inception of this coverage
section, or
(ii) any subsequently amended or superseding
by-laws or certificate of incorporation of the
Insured Organization provided, however, that
such amended or superseding by-laws or
certificate of incorporation expand or
broaden, and do not restrict or in any
way limit, the Insured Organization's ability
to indemnify the Insured Person;
then, notwithstanding any other conditions,
provisions or terms of this coverage section
to the contrary, any payment by the Company of
such Loss shall be subject to (i) the Insuring
Clause 2 Deductible Amount set forth in Item 4
of the Declarations for this coverage section,
and (ii) all of the Exclusions set forth in
Subsections 5 and 6 of this coverage section.
For purposes of this Subsection 9, the
shareholder and board of director resolutions
of the Insured Organization shall be deemed to
provide indemnification for such Loss to the
fullest extent permitted by such by-laws or
certificate of incorporation.
Reporting and 10. The Insureds shall, as a condition precedent
Notice to exercising their rights under this coverage
section, give to the Company written notice as
soon as practicable of any Claim made against
any of them for a Wrongful Act.
If during the Policy Period or Extended
Reporting Period (if exercised) an Insured
becomes aware of circumstances which could
give rise to a Claim and gives written notice
of such circumstance(s) to the Company, then
any Claims subsequently arising from such
circumstances shall be considered to have been
made during the Policy Period or the Extended
Reporting Period in which the circumstances
were first reported to the Company.
36
The Insureds shall, as a condition precedent
to exercising their rights under this coverage
section, give to the Company such information
and cooperation as it may reasonably require,
including but not limited to a description of
the Claim or circumstances, the nature of the
alleged Wrongful Act, the nature of the
alleged or potential damage, the names of
actual or potential claimants, and the manner
in which the Insured first became aware of the
Claim or circumstances.
Defense and 11. Subject to this Subsection, it shall be the
Settlement duty of the Insured Persons and not the duty
of the Company to defend Claims made against
the Insured Persons.
The Insureds agree not to settle any Claim,
incur any Defense Costs or otherwise assume
any contractual obligation or admit any
liability with respect to any Claim without
the Company's written consent, which shall not
be unreasonably withheld. The Company shall
not be liable for any settlement. Defense
Costs, assumed obligation or admission to
which it has not consented.
The Company shall have the right and shall be
given the opportunity to effectively associate
with the Insureds in the investigation,
defense and settlement, including but not
limited to the negotiation of a settlement, of
any Claim that appears reasonably likely to be
covered in whole or in part by this coverage
section.
The Insureds agree to provide the Company with
all information, assistance and cooperation
which the Company reasonably requests and
agree that in the event of a Claim the
Insureds will do nothing that may prejudice
the Company's position or its potential or
actual rights of recovery.
Defense Costs are part of and not in addition
to the Limits set forth in Item 2 of the
Declarations for this coverage section, and
the payment by the Company of Defense Costs
reduces such Limits of Liability.
37
Allocation 12. If both Loss covered by this coverage section
an loss not covered by this coverage section
are incurred, either because a Claim against
the Insured Persons includes both covered and
uncovered matters or because a Claim is made
against both an Insured Person and others,
including the Insured Organization, the
Insureds and the Company shall use their best
efforts to agree upon a fair and proper
allocation of such amount between covered Loss
and uncovered loss.
If the Insureds and the Company agree on an
allocation of Defense Costs, the Company shall
advance on a current basis Defense Costs
allocated to the covered Loss. If the
Insureds and the Company cannot agree on an
allocation.
(a) no presumption as to allocation shall
exist in any arbitration, suit or other
proceeding;
(b) the Company shall advance on a current
basis Defense Costs which the Company
believes to be covered under this
coverage section until a different
allocation is negotiated, arbitrated or
judicially determined; and
(c) the Company, if requested by the
Insureds, shall submit the dispute to
binding arbitration. The rules of the
American Arbitration Association shall
apply except with respect to the
selection of the arbitration panel, which
shall consist of one arbitrator selected
by the Insureds, one arbitrator selected
by the Company, and a third independent
arbitrator selected by the first two
arbitrators.
Any negotiated, arbitrated or judicially
determined allocation of Defense Costs on
account of a Claim shall be applied
retroactively to all Defense Costs on account
of such claim, notwithstanding any prior
advancement to the contrary. Any allocation
or advancement of Defense Costs on account of
a Claim shall not apply to or create any
presumption with respect to the allocation of
other Loss on account of such Claim.
38
Other Insurance 13. If any Loss arising from any Claim made
against any Insured Persons is insured under
any other valid policy(ies), prior or current,
then this coverage section shall cover such
Loss, subject to its limitations, conditions,
provisions and other terms, only to the extent
that the amount of such Loss is in excess of
the amount of payment from such other
insurance whether such other insurance is
stated to be a primary, contributory, excess,
contingent or otherwise, unless such other
insurance is written only as specific excess
insurance over the Limits of Liability
provided in this coverage section.
Changes in 14. If the Insured Organization (i) acquires
Exposure securities or voting rights in another
Acquisition or organization or creates another organization,
Creation of which as a result of such acquisition or
Another creation becomes a Subsidiary, or (ii)
Organization acquires any organization by merger into or
consolidation with an Insured Organization,
such organization and its Insured Persons
shall be Insureds under this coverage section
but only with respect to Wrongful Acts
committed, attempted, or allegedly committed
or attempted, after such acquisition or
creation unless the Company agrees, after
presentation of a complete application and all
appropriate information, to provide coverage
by endorsement for Wrongful Acts committed,
attempted, or allegedly committed or
attempted, by such Insured Persons prior to
such acquisition or creation.
If the fair value of all cash, securities,
assumed indebtedness and other consideration
paid by the Insured Organization for any such
acquisition or creation exceeds 10% of the
total assets of the Parent Organization as
reflected in the Parent Organization's most
recent audited consolidated financial
statements, the Parent Organization shall give
written notice of such acquisition or creation
to the Company as soon as practicable together
with such information as the Company may
require and shall pay any reasonable
additional premium required by the Company.
39
Acquisition of 15. If (i) the Parent Organization merges into or
Parent consolidates with another organization, or
Organization by (ii) another organization or person or group
Another or organizations and/or persons acting in
Organization concert acquires securities or voting rights
which result in ownership or voting control by
the other organization(s) or person(s) of more
than 50% of the outstanding securities
representing the present right to vote for the
election of directors of the Parent
Organization, coverage under this coverage
section shall continue until termination of
this coverage section, but only with respect
to Claims for Wrongful Acts committed,
attempted, or allegedly committed or attempted
by Insured Persons prior to such merger,
consolidation or acquisition. The Parent
Organization shall give written notice of such
merger, consolidation or acquisition to the
Company as soon as practicable together with
such information as the Company may require.
Cessation of 16. In the event an organization ceases to be a
Subsidiaries Subsidiary before or after the Inception Date
of this coverage section, coverage with
respect to such Subsidiary and its Insured
Persons shall continue until termination of
this coverage section but only with respect to
Claims for Wrongful Acts committed, attempted
or allegedly committed or attempted prior to
the date such organization ceased to be a
Subsidiary.
Representations 17. In granting coverage to any one of the
and Severability Insureds, the Company has relied upon the
declarations and statements in the written
application for this coverage section and upon
any declarations and statements in the
original written application submitted to
another insurer in respect of the prior
coverage inception as of the Continuity Date
set forth in item 9 of the Declarations for
this coverage section. All such declarations
and statements are the basis of such coverage
and shall be considered as incorporated in and
constituting part of this coverage section.
Such written application(s) for coverage shall
be construed as a separate application for
coverage by each of the Insured Persons. With
respect to the declarations and statements
contained in such written application(s) for
coverage, no statement in the application or
knowledge possessed by any Insured Person
shall be imputed to any other Insured Person
for the purpose of determining if coverage is
available.
40
Definitions 18. When used in this coverage section:
Claim means:
Definitions (i) a written demand for monetary damages,
(cont'd)
(ii) a civil proceeding commenced by the
service of a complaint or similar
pleading,
(iii) a criminal proceeding commenced by a
return of an indictment, or
(iv) a formal administrative or regulatory
proceeding commenced by the filing of a
notice of charges, formal investigative
order or similar document,
against any Insured Person for a Wrongful Act,
including any appeal therefrom.
Defense Costs means that part of Loss
consisting of reasonable costs, charges, fees
(including but not limited to attorney's fees
and experts' fees) and expenses (other than
regular or overtime wages, salaries or fees of
the directors, officers or employees of the
Insured Organization) incurred in defending or
investigating Claims and the premium for
appeal, attachment or similar bonds.
Financial Impairment means the status of the
Insured Organization resulting from (i) 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 the Insured Organization, or
(ii) the Insured Organization becoming debtor
in possession.
Insured, either in the singular or plural,
means the Insured Organization and any Insured
Person.
Insured Capacity means the position or
capacity designated in Item 6 of the
Declarations for this coverage section held by
any Insured Person but shall not include any
position or capacity in any organization other
than the Insured Organization, even if the
Insured Organization directed or requested the
Insured Person to serve in such other position
or capacity.
Insured Organization means, collectively,
those organizations designated in Item 5 of
the Declarations for this coverage section.
41
Insured Person, either in the singular or
plural, means anyone or more of those persons
designated in Item 6 of the Declarations for
this coverage section.
Definitions Interrelated Wrongful Acts means all causally
(cont'd) connected Wrongful Acts.
Loss means the total amount which any Insured
Person becomes legally obligated to pay on
account of each Claim and for all Claims in
each Policy Period and the Extended Reporting
Period, if exercised, made against them for
Wrongful Acts for which coverage applies,
including, but not limited to, damages,
judgements, settlements, costs and Defense
Costs. Loss does not include (i) any amount
not indemnified by the Insured Organization
for which the Insured Person is absolved
from payment by reason of any covenant
agreement or court order, (ii) any amount
incurred by the Insured Organization
(including its board of directors or any
committee of the board of directors) in
connection with the investigation or
evaluation of any Claim or potential Claim by
or on behalf of the Insured Organization,
(iii) fines or penalties imposed by law or the
multiple portion of any multiplied damage
award, or (iv) matters uninsurable under the
law pursuant to which this coverage section is
construed.
Pollutants means any substance located
anywhere in the world exhibiting any hazardous
characteristics as defined by, or identified
on a list of hazardous substances issued by,
the United States Environmental Protection
Agency or a state, county, municipality or
locality counterpart thereof. Such substances
shall include, without limitation, solids,
liquids, gaseous or thermal irritants,
contaminants or smoke, vapor, soot, fumes,
acids, alkalis, chemicals or waste materials.
Pollutants shall also mean any other air
emission, odor, waste water, oil or oil
products, infectious or medical waste,
asbestos or asbestos products and any noise.
Subsidiary, either in the singular or plural,
means any organization in which more than 50%
of the outstanding securities or voting rights
representing the present right to vote for
election of directors is owned or controlled,
directly or indirectly, in any combination, by
one or more Insured Organizations.
42
Wrongful Act means any error, misstatement,
misleading statement, act, omission, neglect,
or breach of duty committed, attempted, or
allegedly committed or attempted, by an
Insured Person, individually or otherwise, in
his Insured Capacity, or any matter claimed
against him solely by reason of his serving in
such Insured Capacity.
43
EXECUTIVE PROTECTION POLICY
ENDORSEMENT
Coverage Section: EXECUTIVE LIABILITY Company: FEDERAL INSURANCE COMPANY
Effective date of Endorsement No. 1
this endorsement: DECEMBER 01, 1994
To be attached to and form part of
Policy No. 8137-71-31-A
Issued to: BOLT BERANEK & NEWMAN INC.
It is agreed that subsection 5, Exclusions: Exclusions Applicable to Insuring
Clauses 1 and 2, is amended by deleting paragraph (b) in its entirety and
replacing it with the following:
(b) based upon, arising from, or in consequence of any demand,
suit or other proceeding pending, or order, decree or judgement
entered against any insured on or prior to the Pending or Prior
Date set forth in Item 8 of the Declarations for this coverage
section, or the same or substantially the same facts underlying
or alleged therein:
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
Authorized Representative
December 8, 1994
Date
44
EXECUTIVE PROTECTION POLICY
ENDORSEMENT
Coverage Section: EXECUTIVE LIABILITY Company: FEDERAL INSURANCE COMPANY
Effective date of Endorsement No. 2
this endorsement: DECEMBER 01, 1994
To be attached to and form part of
Policy No. 8137-71-31-A
Issued to: BOLT BERANEK & NEWMAN INC.
It is agreed that subsection 6, "Exclusions: Exclusions Applicable to Insuring
Clause 1 Only", is amended by adding the following:
(d) of any Subsidiary for any alleged Wrongful Act occurring at
any time when the Insured Organization did not own more than
50% of the issued and outstanding voting stock of such
subsidiary either directly or indirectly through one or more of
its subsidiaries.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
Authorized Representative
December 8, 1994
Date
45
EXECUTIVE PROTECTION POLICY
ENDORSEMENT
Coverage Section: EXECUTIVE LIABILITY Company: FEDERAL INSURANCE COMPANY
Effective date of Endorsement No. 3
this endorsement: DECEMBER 01, 1994
To be attached to and form part of
Policy No. 8137-71-31-A
Issued to: BOLT BERANEK & NEWMAN INC.
It is understood and agreed that under Exclusion 6, found on Page 4 and 10,
paragraph (d) is amended by deleting it in its entirety and replacing it with
the following:
(d) under Insuring Clause 1 of BBN Delta Graphics and Network
Switching Systems, for any alleged Wrongful Act occurring at
any time when the Insured Organization did not own more than
50% of the issued and outstanding voting stock of such
Subsidiary either directly or indirectly through one or more of
its Subsidiaries; however, this exclusion shall not apply to
Claims alleging Wrongful Acts occurring prior to when the
corporation became a Subsidiary if the Insured was a Director
or Officer of the Subsidiary for at least a ninety day period
during the time when the corporation was a Subsidiary.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
Authorized Representative
December 8, 1994
Date
46
EXECUTIVE PROTECTION POLICY
ENDORSEMENT
Coverage Section: EXECUTIVE LIABILITY Company: FEDERAL INSURANCE COMPANY
Effective date of Endorsement No. 4
this endorsement: DECEMBER 01, 1994
To be attached to and form part of
Policy No. 8137-71-31-A
Issued to: BOLT BERANEK & NEWMAN INC.
It is agreed that Item 6 of the Declarations, Insured Persons, is amended to
include the following:
Any person who was, is, or shall become a duly elected
director or a duly elected or appointed officer, including
divisional directors and officers performing their duties in
the following divisions:
Communications Division
Software Products Division
Systems & Technologies Division
International Division
Corporate Services Division
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
Authorized Representative
December 8, 1994
Date
47
EXECUTIVE PROTECTION POLICY
ENDORSEMENT
Coverage Section: EXECUTIVE LIABILITY Company: FEDERAL INSURANCE COMPANY
Effective date of Endorsement No. 5
this endorsement: DECEMBER 01, 1994
To be attached to and form part of
Policy No. 8137-71-31-A
Issued to: BOLT BERANEK & NEWMAN INC.
It is understood and agreed that both Insuring Clause I., Executive Liability
Coverage, and Insuring Clause II., Executive Indemnification Coverage, are
amended by adding the following:
In the event of a Claim, should a Loss be payable under Policy
Number 440-43-26 issued by the National Union Fire Insurance
Company of Pittsburgh, PA., the Company's obligation to pay
will be for amounts immediately in excess of Loss payable
under such other policy and this policy will not contribute
with such other insurance.
It is also understood and agreed that if the National Union Fire Insurance
Company of Pittsburgh, PA. wrongfully refuses to pay under its policy, the
Company will respond as if this policy was primary insurance; provided that the
Company is subrogated to all rights or recovery under such policy. The Insured
shall execute all papers reasonably required and take all reasonable actions
that may be necessary to secure the rights of the Company,
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
Authorized Representative
December 8, 1994
Date
48
EXECUTIVE PROTECTION POLICY
ENDORSEMENT
Coverage Section: EXECUTIVE LIABILITY Company: FEDERAL INSURANCE COMPANY
Effective date of Endorsement No. 6
this endorsement: DECEMBER 01, 1994
To be attached to and form part of
Policy No. 8137-71-31-A
Issued to: BOLT BERANEK & NEWMAN INC.
1. It is agreed that subsection 5, Exclusions: Exclusions Applicable to
Insuring Clauses 1 and 2, is amended by deleting paragraph (b) in its entirety
and replacing it with the following:
(b) based upon, arising from, or in consequence of any demand,
suit or other proceeding pending, or order, decree or judgment
entered against any Insured on or prior to the Pending or Prior
Date set forth in Item 8 of the Declarations for this coverage
section, or the same or substantially the same facts underlying
or alleged therein;
2. It is further agreed that subsection 8, Limits of Liability, Deductible
and Coinsurance, is amended by deleting the fourth paragraph in its entirety
and replacing it with the following:
If a single Loss is covered in part under Insuring Clause 1 and in
part under Insuring Clause 2, the maximum Deductible Amount
applicable to the Loss shall be the Insuring Clause 2 deductible set
forth in Item 4 of the Declarations for this coverage section.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
Authorized Representative
December 8, 1994
Date
49
EXECUTIVE PROTECTION POLICY
ENDORSEMENT
Coverage Section: EXECUTIVE LIABILITY Company: FEDERAL INSURANCE COMPANY
Effective date of Endorsement No. 7
this endorsement: DECEMBER 01, 1994
To be attached to and form part of
Policy No. 8137-71-31-A
Issued to: BOLT BERANEK & NEWMAN INC.
PREDETERMINED ALLOCATION FOR SECURITIES CLAIMS
In consideration of the premium paid, it is agreed as follows:
1. With respect to any Securities Loss for which Insuring Clause 2 applies,
subsection 12, Allocation, is deleted in its entirety and replaced by the
following:
12. If both Securities Loss covered and not covered by this coverage
section are incurred, either because a Securities Claim against
Insured Persons includes both covered and uncovered matters or
because a Securities Claim is made against both an Insured Person and
the Insured Organization, the Insureds and the Company shall allocate
such amount to Loss as follows:
a) 100% allocation of Securities Defense Costs, which shall be
advanced on a current basis by the Company; and
b) 75% allocation of Securities Loss other than Securities Defense
Costs.
These agreed allocations shall be final and binding on the Insureds
and the Company.
2. The following is added to subsection 18, Definitions:
Securities Claim means (i) a written demand for monetary damages,
(ii) a civil proceeding commenced by the service of a complaint or
similar pleading, (iii) a criminal proceeding commenced by a return
of an indictment, or (iv) a formal administrative or regulatory
proceeding commenced by the filing of a notice of charges, formal
investigative order or similar document, which, in whole or in part,
is based upon, arises from or is in consequence of the purchase or
sale of, or offer to purchase or sell, any securities issued by the
Insured Organization.
Securities Loss means the total amount which any Insured Person,
solely or jointly with the Insured Organization, becomes legally
obligated to pay on account of a Securities Claim, including, but
not limited to, damages, judgments, settlements, costs and
Securities Defense Costs. Securities Loss
50
does not include (i) any amount not indemnified by the Insured
Organization for which an Insured is absolved from payment by reason
of any convenant, agreement or court order, (ii) any amount incurred
by an Insured Organization (including its board of directors or any
committee of the board of directors) in connection with the
investigation or evaluation of any Securities Claim or potential
Securities Claim by or on behalf of the Insured Organization, (iii)
fines or penalties imposed by law or the multiple portion of any
multiplied damage award, or (iv) matters uninsurable under the law
pursuant to which this coverage section is construed.
Securities Defense Costs means that part of Securities Loss
consisting of reasonable costs, charges, fees (including but not
limited to attorneys' fees and experts' fees) and expenses (other
than regular or overtime wages, salaries or fees of the directors,
officers or employees of the Insured Organization) incurred in
defending or investigating Securities Claims and the premium for
appeal, attachment or similar bonds.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
Authorized Representative
Date
51
CHUBB GROUP OF INSURANCE COMPANIES
DECLARATIONS
DIRECTORS AND OFFICERS LIABILITY AND
REIMBURSEMENT EXCESS POLICY
Item 1. Parent Organization: Policy Number 81377132-A
BOLT BERANEK & NEWMAN INC.
AND ITS SUBSIDIARIES
Item 2. Principal Address: FEDERAL INSURANCE COMPANY
150 CAMBRIDGE PARK DRIVE Incorporated under the laws of New Jersey a
CAMBRIDGE, MA 02140 stock insurance company, herein called the
Company
Item 3. Limit of Liability:
Each Policy Year $2,000,000
Item 4. Underlying Policy(ies):
(A) Primary Policy: Federal Insurance Company
Policy #8137-71-31
December 1, 1994 to December 1, 1995
(B) Other Policy(ies): St. Paul Mercury Insurance Company
Policy #900DX0049
December 1, 1994 to December 1, 1995
Item 5. Policy Period: From December 01, 1994
To December 01, 1995
Item 6. Endorsement(s) Effective at Inception: Nos. 1 and 2
Item 7. Termination of Prior Policies: 8137-71-32
IN WITNESS WHEREOF, the Company issuing this policy has caused this policy to
be signed by its authorized officers, but it shall not be valid unless also
signed by a duly authorized representative of the Company.
FEDERAL INSURANCE COMPANY
bas-12/08/94.02
52
DIRECTORS AND OFFICERS LIABILITY AND REIMBURSEMENT EXCESS POLICY
In consideration of payment of required premium and subject to the
Declarations made a part hereof and the limitations, conditions, provisions and
other terms of this policy, the Company agrees with the Insureds as follows:
INSURING CLAUSE
The Company shall provide the Insureds with insurance during the Policy
Period excess of the Underlying Insurance. Coverage hereunder shall attach
only after all such Underlying Insurance has been exhausted and shall then
apply in conformance with the terms, conditions and endorsements of the Primary
Policy except as specifically set forth in the terms, and conditions and
endorsements of this policy.
MAINTENANCE OF UNDERLYING INSURANCE
All of the Underlying Policy(ies) scheduled in Item 4 of the Declarations
shall be maintained during the Policy Period in full effect and affording
coverage at least as broad as the Primary Policy, except for any reduction of
the aggregate limit(s) of liability available under the Underlying Insurance
solely be reason of payment of losses thereunder. Failure to comply with the
foregoing shall not invalidate this policy but the Company shall not be liable
to a greater extent than if this condition had been compiled with.
In the event of any actual or alleged (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 Insureds with respect
to any Underlying Insurance, the Company 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.
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 payment of losses thereunder, this
policy shall, subject to the Company's limit of liability and to the other
terms of the policy, continue to apply for subsequent 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 Company's limit of liability and to the other terms of this policy,
continue for subsequent losses as primary insurance and any retention specified
in the Primary Policy shall be imposed under this policy; otherwise no
retention shall be imposed under this policy.
LIMIT OF LIABILITY
The amount set forth in Item 3 of the Declarations is the limit of
liability of the Company and shall be the maximum of the Company in each Policy
Year.
53
CLAIM PARTICIPATION
The Company 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.
SUBROGATION - RECOVERIES
In the event of any payment under this policy, the Company shall be
subrogated to all the Insureds' rights of recovery against any person or
organization, as stated in the Primary Policy , 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 appointed
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.
NOTICE
The Company shall be given notice in writing as soon as is practicable (a)
in the event of the cancellation of any Underlying Insurance and (b) of any
notice given or additional or return premiums charged or paid in connection
with any Underlying Insurance.
Notice of any claim shall be given in writing to the Company at 51 John F.
Kennedy Parkway, Short Hills, New Jersey 07078.
COMPANY AUTHORIZATION CLAUSE
By acceptance of this policy, the Parent Corporation 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 Parent Corporation shall act on
their behalf.
ALTERATION
No change in or modification of this policy shall be effective except when
made by written endorsement signed by an authorized employee of Chubb & Son,
Inc.
POLICY TERMINATION
This policy may be cancelled by the Parent Corporation at any time by
written notice or by surrender of this policy to the Company. This policy may
also be cancelled by or on behalf of the Company by delivery to the Parent
Corporation or by mailing to the Parent Corporation, by registered, certified
or other first class mail, at the address shown in Item 2 of the Declarations,
written notice stating when, not less than thirty days thereafter, the
cancellation shall become effective. The mailing of such notice as aforesaid
shall be
54
sufficient proof of notice and this policy shall terminate 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 Company shall refund the unearned premium computed at customary short
rates if the policy is terminated in its entirety by the Parent Corporation.
Under any other circumstances the refund shall be computed pro rata.
TERMINATION OF PRIMARY POLICY
This policy shall terminate immediately upon the termination of the
Primary Policy, whether by the Insureds or the primary insurer. Notice of
cancellation or non-renewal of the Primary Policy duly given by the primary
insurer shall serve as notice of the cancellation or non-renewal of this policy
by the Company.
TERMINATION OF PRIOR POLICY(IES)
The taking effect of this policy shall terminate, if not already
terminated, the policy(ies) specified in Item 7 of the Declarations.
POLICY DEFINITIONS
Insureds means those persons or organizations Insured under the Primary Policy.
Primary Policy means the policy scheduled in Item 4 (A) of the Declarations or
any policy of the same insurer replacing or renewing such policy.
Policy Year means the one year period between the anniversaries of the Primary
Policy, provided that: (1) the first Policy Year of this policy shall be the
period between the inception of this policy and the next subsequent anniversary
of the Primary Policy, and (2) the last Policy Year of this policy shall be the
period between the termination of this policy and the anniversary of the
Primary Policy immediately preceding such termination. If any discovery period
extension is exercised such extension shall be treated as set forth in the
Primary Policy.
Underlying Insurance means all those policies scheduled in Item 4 of the
Declarations and any policies replacing them.
55
CHUBB GROUP OF INSURANCE COMPANIES
ENDORSEMENT
Company: Federal Insurance Company
Effective date of
this endorsement: December 1, 1994 Endorsement No. 1
To be attached to and form part of
Policy No. 81377132-A
Issued to: Bolt Beranek and Newman Inc.
It is hereby understood and agreed that the following is deleted in its
entirety:
Policy Termination
This policy may be cancelled by the Parent Corporation at any time by
written notice or by surrender of this policy to the Company. This policy
may also be cancelled by or on behalf of the Company by delivery to the
Parent Corporation or by mailing to the Parent Corporation, by registered,
certified or other first class mail, at the address shown in Item 2 of the
Declarations, written notice stating when, not less than thirty days
thereafter, the cancellation shall become effective. The mailing if such
notice as aforesaid shall be sufficient proof of notice and this policy
shall terminate 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 Company shall refund the
unearned premium computed at customary short rates if the policy is
terminated in its entirety by the Parent Corporation. Under any other
circumstances the refund shall be computed pro rata.
bas-12/08/94.03
56
CHUBB GROUP OF INSURANCE COMPANIES
ENDORSEMENT
Company: Federal Insurance Company
Effective date of
this endorsement: December 1, 1994 Endorsement No. 1 - Continued
To be attached to and form part of
Policy No. 81377132-A
Issued to: Bolt Beranek and Newman Inc.
and substituted in lieu thereof:
Policy Termination
This policy may be cancelled by the Parent Corporation at any time by
written notice or by surrender of this policy to the Company. This policy
may also be cancelled by or on behalf of the Company by delivery to the
Parent Corporation or by mailing to the Parent Corporation, by registered,
certified or other first class mail, at the address shown in Item 2 of the
Declarations, written notice stating when, not less than thirty days
thereafter, the cancellation shall become effective. The mailing if such
notice as aforesaid shall be sufficient proof of notice and this policy
shall terminate 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 Company shall refund the
unearned premium computed at customary short rates if the policy is
terminated in its entirety by the Parent Corporation. Under any other
circumstances the refund shall be computed pro rata.
ALL OTHER TERMS AN CONDITIONS REMAIN UNCHANGED
AUTHORIZED REPRESENTATIVE
bas-12/08/94.04
DATE
57
CHUBB GROUP OF INSURANCE COMPANIES
ENDORSEMENT
Company: Federal Insurance Company
Effective date of
this endorsement: December 1, 1994 Endorsement No. 2
To be attached to and form part of
Policy No. 81377132-A
Issued to: Bolt Beranek and Newman Inc.
It is agreed that:
In addition to the exclusions included and made a part of the "Primary Policy",
the following exclusion shall apply to this policy:
(-) 1. Arising from any litigation, claims, demands, causes of action,
legal or quasi-legal proceedings, decrees or judgements
against any "Insured(s)", occurring prior to, or pending as of
December 1, 1990, of which any "Insured(s)" had received notice
or otherwise had knowledge as of such date;
2. Arising from any subsequent litigation, claims, demands, causes
of action, legal or quasi-legal proceedings, decrees or
judgments against any "Insured(s)" arising from, or based on
substantially the same matters as alleged in the pleadings of
such prior or pending litigation claims, demands, causes of
action, legal or quasi-legal proceedings, decrees or judgments
against any "Insured(s)"; or
3. Arising from any act of any "Insured(s)" which gave rise to
such prior or pending litigation, claims, demands, causes of
action, legal or quasi-legal proceedings, decrees or judgments
against any "Insured(s)."
ALL OTHER TERMS AN CONDITIONS REMAIN UNCHANGED
AUTHORIZED REPRESENTATIVE
bas-12/08/94.05
DATE
58
EXECUTIVE PROTECTION POLICY
DECLARATIONS
EXECUTIVE PROTECTION POLICY
Policy Number 8137-71-31-A
Federal Insurance Company, a stock
insurance company, incorporated under
the laws of Indiana, herein called the
Company
Item 1. Parent Organization:
BOLT BERANEK & NEWMAN INC.
150 CAMBRIDGE PARK DRIVE
CAMBRIDGE, MASSACHUSETTS
02140
Item 2. Policy Period: From 12:01 A.M. on December 01, 1994
To 12:01 A.M. December 01, 1995
Local time at the address shown in Item 1.
Item 3. Coverage Summary
Description
GENERAL TERMS AND CONDITIONS
EXECUTIVE LIABILITY AND INDEMNIFICATION
OUTSIDE DIRECTORSHIP LIABILITY
Item 4. Termination of
Prior Policies: 8137-71-31
THE EXECUTIVE LIABILITY AND INDEMNIFICATION, FIDUCIARY LIABILITY, OUTSIDE
DIRECTORSHIP LIABILITY AND EMPLOYMENT PRACTICES LIABILITY COVERAGE SECTIONS
(WHICHEVER ARE APPLICABLE) ARE ALL WRITTEN ON A CLAIMS MADE BASIS. EXCEPT AS
OTHERWISE PROVIDED, THESE COVERAGE SECTIONS COVER ONLY CLAIMS FIRST MADE
AGAINST THE INSURED DURING THE POLICY PERIOD. PLEASE READ CAREFULLY.
In witness whereof, the Company issuing this policy has caused this policy to
be signed by its authorized officers, but it shall not be valid unless
also signed by a duly authorized representative of the Company.
FEDERAL INSURANCE COMPANY
59
EXECUTIVE PROTECTION POLICY
Effective date of
this endorsement: DECEMBER 01, 1994
Company: FEDERAL INSURANCE COMPANY
To be attached to and from part of
Policy No. 8137-71-31-A
Issued to: BOLT BERANEK & NEWMAN INC.
The following is a schedule of endorsements issued with the policy at inception:
GENERAL TERMS AND CONDITIONS
ENDORSEMENT NUMBER FORM NUMBER
1 14-02-0961
EXECUTIVE LIABILITY AND INDEMNIFICATION
ENDORSEMENT NUMBER FORM NUMBER
1 14-02-0961
2 14-02-0961
3 14-02-0961
4 14-02-0961
5 14-02-0961
6 14-02-0961
OUTSIDE DIRECTORSHIP LIABILITY
ENDORSEMENT NUMBER FORM NUMBER
1 14-02-0961
2 14-02-0961
60
CHUBB GROUP OF INSURANCE COMPANIES
PREMIUM BILL
Insured: BOLT BERANEK & NEWMAN Date: DECEMBER 6, 1994
Producer: JOHNSON & HIGGINS OF MASS INC
Company: FEDERAL INSURANCE COMPANY
THIS BILLING IS TO BE ATTACHED TO AND FORM A PART OF THE POLICY REFERENCED
BELOW.
NOTE: PLEASE RETURN THIS BILL WITH REMITTANCE AND NOTE HEREON ANY CHANGES.
BILL WILL BE RECEIPTED AND RETURNED TO YOU PROMPTLY UPON REQUEST.
PLEASE REMIT TO PRODUCER INDICATED ABOVE. PLEASE REFER TO EXECUTIVE
PROTECTION DEPT
POLICY OR
EFFECTIVE CERTIFICATE COVERAGE PREMIUM
DATE NUMBER
12/01/94 8137-71-31-A Executive Liability and $ 200,000.
to Indemnification Coverage
12/01/95
TOTAL $ 200,000.
WHEN REMITTING PLEASE INDICATE POLICY OR CERTIFICATE NUMBER
61
CHUBB GROUP OF INSURANCE COMPANIES
PREMIUM BILL
Insured: BOLT BERANEK & NEWMAN Date: DECEMBER 6, 1994
Producer: JOHNSON & HIGGINS OF MASS INC
Company: FEDERAL INSURANCE COMPANY
THIS BILLING IS TO BE ATTACHED TO AND FORM A PART OF THE POLICY REFERENCED
BELOW.
NOTE: PLEASE RETURN THIS BILL WITH REMITTANCE AND NOTE HEREON ANY CHANGES.
BILL WILL BE RECEIPTED AND RETURNED TO YOU PROMPTLY UPON REQUEST.
PLEASE REMIT TO PRODUCER INDICATED ABOVE. PLEASE REFER TO EXECUTIVE
PROTECTION DEPT
POLICY OR
EFFECTIVE CERTIFICATE COVERAGE PREMIUM
DATE NUMBER
12/01/94 8137-71-31-A Additional Premium For $ 48,350.
to Predetermined Allocation
12/01/95
TOTAL $ 48,350.
WHEN REMITTING PLEASE INDICATE POLICY OR CERTIFICATE NUMBER
62
EXECUTIVE PROTECTION POLICY
DECLARATIONS
EXECUTIVE PROTECTION POLICY
Policy Number 8134-46-02-B
Federal Insurance Company, a stock
insurance company, incorporated under
the laws of Indiana, herein called the
Company
Item 1. Parent Organization:
BOLT BERANEK & NEWMAN INC.
150 CAMBRIDGE PARK DRIVE
CAMBRIDGE, MASSACHUSETTS
02140
Item 2. Policy Period: From 12:01 A.M. on December 01, 1994
To 12:01 A.M. December 01, 1995
Local time at the address shown in Item 1.
Item 3. Coverage Summary
Description
GENERAL TERMS AND CONDITIONS
FIDUCIARY LIABILITY
CRIME INSURANCE
Item 4. Termination of
Prior Policies: 8134-46-02-A
THE EXECUTIVE LIABILITY AND INDEMNIFICATION, FIDUCIARY LIABILITY, OUTSIDE
DIRECTORSHIP LIABILITY AND EMPLOYMENT PRACTICES LIABILITY COVERAGE SECTIONS
(WHICHEVER ARE APPLICABLE) ARE ALL WRITTEN ON A CLAIMS MADE BASIS. EXCEPT AS
OTHERWISE PROVIDED, THESE COVERAGE SECTIONS COVER ONLY CLAIMS FIRST MADE
AGAINST THE INSURED DURING THE POLICY PERIOD. PLEASE READ CAREFULLY.
In witness whereof, the Company issuing this policy has caused this policy to
be signed by its authorized officers, but it shall not be valid unless
also signed by a duly authorized representative of the Company.
FEDERAL INSURANCE COMPANY
- ------------------------------------ ------------------------------------
Secretary President
December 13, 1994
- ------------------------------------ ------------------------------------
Date Authorized Representative
63
EXECUTIVE PROTECTION POLICY
Effective date of
this endorsement: DECEMBER 01, 1994
Company: FEDERAL INSURANCE COMPANY
To be attached to and from part of
Policy No. 8134-46-02-B
Issued to: BOLT BERANEK & NEWMAN INC.
The following is a schedule of endorsements issued with the policy at inception:
FIDUCIARY LIABILITY
ENDORSEMENT NUMBER FORM NUMBER
1 14-02-0961
2 14-02-0961
3 14-02-1423
CRIME INSURANCE
ENDORSEMENT NUMBER FORM NUMBER
1 14-02-0961
2 14-02-0961
3 14-02-0961
4 14-02-0961
5 14-02-1498
6 14-02-0976
7 14-02-0983
8 14-02-0998
64
CHUBB GROUP OF INSURANCE COMPANIES
PREMIUM BILL
Insured: BOLT BERANEK & NEWMAN Date: DECEMBER 7, 1994
Producer: JOHNSON & HIGGINS OF MASS INC
THREE CENTER PLAZA
BOSTON, MA 02108
Company: FEDERAL INSURANCE COMPANY
THIS BILLING IS TO BE ATTACHED TO AND FORM A PART OF THE POLICY REFERENCED
BELOW.
Policy Number: 8134-46-02-B
Policy Period: December 01, 1994 to December 01, 1995
NOTE: PLEASE RETURN THIS BILL WITH REMITTANCE AND NOTE HEREON ANY CHANGES.
BILL WILL BE RECEIPTED AND RETURNED TO YOU PROMPTLY UPON REQUEST.
PLEASE REMIT TO PRODUCER INDICATED ABOVE.
COVERAGE PREMIUM
Fiduciary Liability Coverage $ 27,338.
Crime Insurance Coverage $ 29,980.
TOTAL $ 57,318.
WHEN REMITTING PLEASE INDICATE POLICY OR CERTIFICATE NUMBER
65
CHUBB
EXECUTIVE PROTECTION POLICY
GENERAL TERMS
AND CONDITIONS
Territory 1. Coverage shall extend anywhere in the world.
Terms and Conditions 2. Except for the General Terms and Conditions or
unless stated to the contrary in any coverage
section, the terms and conditions of each
coverage section of this policy apply only
to that section and shall not be construed to
apply to any other coverage section of this
policy.
Limits of Liability and 3. Unless stated to the contrary in any coverage
Deductible Amounts section, the limits of liability and deductible
amounts shown for each coverage section of this
policy are separate limits of liability and
separate deductible amounts pertaining to the
coverage section for which they are shown; the
application of a deductible amount to a loss under
one coverage section of this policy shall not
reduce the deductible amount under any other
coverage section of this policy.
Notice 4. Notice to the Company under this policy shall be
given in writing addressed to:
Notice of Claim:
National Claims Department
Chubb Group of Insurance Companies
15 Mountain View Road
Warren, New Jersey 07059
All Other Notices:
Executive Protection Department
Chubb Group of Insurance Companies
15 Mountain View Road
Warren, New Jersey 07059
Such notice shall be effective on the date of
receipt by the Company at such address.
Investigation 5. The Company may make any investigation
and Settlement it deems necessary and may, with the written
consent of the Insured, make any settlement of a
claim it deems expedient. If the Insured
withholds consent to such settlement, the
Company's liability for all loss on account of
such
66
claim shall not exceed the amount for which the
Company could have settled such claim plus costs,
charges and expenses accrued as of the date such
settlement was proposed in writing by the Company
to the Insured.
Valuation and 6. All premiums, limits, retentions, loss and other
Foreign Currency amounts under this policy are expressed and
payable in the currency of the United States of
America. Except as otherwise provided in any
coverage section, if judgment is rendered,
settlement is denominated or another element of
loss under this policy is stated in a currency
other than United States of America dollars,
payment under this policy shall be made in United
States dollars at the rate of exchange published
in the WALL STREET JOURNAL on the date the final
judgment is reached, the amount of the settlement
is agreed upon or the other element of loss is
due, respectively.
Subrogation 7. In the event of any payment under this policy, the
Company shall be subrogated to the extent of such
payment to all the Insured' rights of recovery,
and the Insured shall execute all papers required
and shall do everything necessary to secure and
preserve such rights, including the execution of
such documents necessary to enable the Company
effectively to bring suit in the name of the
Insured.
Action Against 8. No action shall lie against the Company unless,
the Company as a condition precedent thereto, there shall have
been full compliance with all the terms of this
policy. No person or organization shall have any
right under this policy to join the Company as a
party to any action against the Insured to
determine the Insured's liability nor shall the
Company be impleaded by the Insured or his legal
representatives. Bankruptcy or insolvency of an
Insured or of the estate of an Insured shall not
relieve the Company of its obligations nor deprive
the Company of its rights under this policy.
Authorization Clause 9. By acceptance of this policy, the Parent
Organization agrees to act on behalf of all
Insureds with respect to the giving and receiving
of notice of claim or termination, the payment of
premiums and the receiving of any return premiums
that may become due under this policy, the
negotiation, agreement to and acceptance of
endorsements, and the giving or receiving of any
notice provided for in this policy (except the
giving of notice to apply for the Extended
Reporting Period), and the Insureds agree that
the Parent Organization shall act on their behalf.
Alteration 10. No change in, modification of , or assignment of
and Assignment interest under this policy shall be effective
except when made by a written endorsement to this
policy which is signed by an authorized
employee of Chubb & Son Inc.
67
Termination of 11. This policy or any coverage section shall
Policy or terminate at the earliest of the following times:
Coverage Section
(A) sixty days after the receipt by the Parent
Organization of a written notice of
termination from the Company,
(B) upon the receipt by the Company of written
notice of termination from the Parent
Organization,
(C) upon expiration of the Policy Period as set
forth in Item 2 of the Declarations of this
policy, or
(D) at such other time as may be agreed upon by
the Company and the Parent Organization.
The Company shall refund the unearned premium
computed at customary short rates if the policy or
any coverage section is terminated by the
Parent Organization. Under any other
circumstances the refund shall be computed pro
rata.
Termination of 12. Any bonds or policies issued by the Company or its
Prior Bonds affiliates and specified in Item 4 of the
of Policies Declarations of this policy shall terminate, if
not already terminated, as of the inception date
of this policy. Such prior bonds or policies
shall not cover any loss under the Crime or
Kidnap/Ransom & Extortion coverage sections not
discovered and notified to the Company prior to
the inception date of this policy.
Definitions 13. When used in this policy:
Parent Organization means the organization
designated in Item 1 of the Declarations of this
policy.
Policy Period means the period of time specified
in Item 2 of the Declarations of this policy,
subject to prior termination in accordance with
Subsection 11 above. If this period is less than
or greater than one year, then the Limits of
Liability specified in the Declarations for each
coverage section shall be the Company's maximum
limit of liability under such coverage section for
the entire period.
68
ENDORSEMENT
Coverage Section: GENERAL TERMS Company: FEDERAL INSURANCE COMPANY
Effective date of Endorsement No.: 1
this endorsement: DECEMBER 01, 1994
To be attached to and form part of
Policy No. 8137-71-31-A
Issued to: BOLT BERANEK AND NEWMAN INC.
It is agreed that subsection 5, Investigation and Settlement, is deleted in its
entirety and replaced with the following:
5. The Company may make any investigation it deems necessary and may,
with the written consent of the Insured, make any settlement of a
claim it deems expedient. With respect to any coverage section other
than the Executive Liability and Indemnification and Outside
Directorship Liability coverage sections, if the Insured withholds
consent to such settlement, the Company's liability for all loss on
account of such claim shall not exceed the amount for which the
Company could have settled such claim plus costs, charges and expense
accrued as of the date such settlement was proposed in writing by the
Company to the Insured.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
Authorized Representative
Date:
69
CHUBB
EXECUTIVE PROTECTION POLICY
DECLARATIONS
OUTSIDE DIRECTORSHIP LIABILITY
COVERAGE SECTION
Item 1. Parent Organization:
BOLT BERANEK AND NEWMAN INC.
Item 2. Limits of Liability:
(A) Each Loss $3,000,000.
(B) Each Policy Period $3,000,000.
Note that the limits of liability and any deductible or retention
are reduced or exhausted by Defense Costs.
Item 3. Coinsurance Percent: NONE
Item 4. Deductible Amount:
Insuring Clause 2 $1,000,000
Item 5. Insured Organization:
BOLT BERANEK AND NEWMAN INC.
AND ITS SUBSIDIARIES
Item 6. Insured Persons:
With regard to a Non-Profit Outside Entity, any person who has
been, now is or shall become a duly elected director, a duly
elected or appointed officer, or an employee of the Insured
Organization. With regard to any Scheduled Outside Entity, any
individual listed on a Scheduled Outside Entity Endorsement.
Item 7. Extended Reporting Period:
(A) Additional Premium: 75% OF THE ANNUAL PREMIUM
(B) Additional Period: ONE YEAR
Item 8. Pending or Prior Date: DECEMBER 1, 1990
Item 9. Continuity Date: DECEMBER 1, 1990
OUTSIDE DIRECTORSHIP In consideration of payment of the premium and subject
LIABILITY COVERAGE to the Declarations, General Terms and Conditions, and
the limitations,
70
SECTION conditions, provisions and other terms of this
coverage section, the Company agrees as follows:
INSURING CLAUSES
Outside Directorship 1. The Company shall pay on behalf of each of the
Liability Coverage Insured Persons who serve in an Outside
Insuring Clause 1 Directorship all Loss for which the Insured Person
is not indemnified by the Insured Organization or
the Outside Entity and which the Insured Person
becomes legally obligated to pay on account of any
Claim first made against him, individually or
otherwise, during the Policy Period or, if
exercised, during the Extended Reporting Period,
for a Wrongful Act committed, attempted, or
allegedly committed or attempted by such Insured
Person before or during the Policy Period.
Outside Directorship 2. The Company shall pay on behalf of the Insured
Indemnification Coverage Organization all Loss (i) for which the Insured
Insuring Clause 2 Organization grants indemnification, as permitted
or required by law, to each Insured Person who
serves in an Outside Directorship, (ii) for which
the Insured Person is not indemnified by the
Outside Entity, and (iii) which the Insured Person
has become legally obligated to pay on account of
any Claim first made against him, individually or
otherwise, during the Policy Period or, if
exercised, during the Extended Reporting Period
for a Wrongful Act committed, attempted, or
allegedly committed or attempted by such Insured
Person before or during the Policy Period.
ESTATES AND LEGAL 3. Subject otherwise to the General Terms and
REPRESENTATIVES Conditions and the limitations, conditions,
provisions and other terms of this coverage
section, coverage shall extend to Claims for the
Wrongful Acts of Insured Persons made against the
estates, heirs, legal representatives or
assigns of Insured Persons who are deceased or
against the legal representatives or assigns of
Insured Persons who are incompetent, insolvent or
bankrupt.
EXTENDED 4. If the Company terminates or refuses to renew this
REPORTING PERIOD coverage section other than for nonpayment of
premium, the Parent Organization and the Insured
Persons shall have the right, upon payment of the
additional premium set forth in Item 7(A) of the
Declarations for this coverage section, to an
extension of the coverage granted by this coverage
section for the period set forth in Item 7(B) of
the Declarations for this coverage section
(Extended Reporting Period) following the
effective date of termination or non renewal, but
only for any Wrongful Act committed, attempted, or
allegedly committed
71
or attempted, prior to the effective date of
termination or nonrenewal. This right of
extension shall lapse unless written notice of
such election, together with payment of the
additional premium due, is received by the Company
within 30 days following the effective date of
termination or nonrenewal. Any Claim made during
the Extended Reporting Period shall be deemed to
have been made during the immediately preceding
Policy Period.
If the Parent Organization terminates or declines
to accept renewal, the Company may, if requested,
at its sole option, grant an Extended Reporting
Period. The offer of renewal terms and
conditions or premiums different from those in
effect prior to renewal shall not constitute
refusal to renew.
EXCLUSIONS
Exclusions 5. The Company shall not be liable for Loss on
Applicable to account of any Claim made against any Insured
Insuring Clauses 1 and 2 Person:
(a) based upon, arising from, or in
consequence of any circumstance if written
notice of such circumstance has been given
under any policy or coverage section of which
this coverage section is a renewal or
replacement and if such prior policy or
coverage section affords coverage (or would
afford such coverage except for the
exhaustion of its limits of liability) for
such Loss, in whole or in part, as a result
of such notice.
(b) based upon, arising from, or in
consequence of any demand, suit or other
proceeding pending, or order, decree or
judgment entered against any Insured Person
on or prior to:
(i) the Pending or Prior Dated set
forth in Item 8 of the Declarations for
this coverage section with respect to
Outside Directorships in a Non-Profit
Outside Entity;
(ii) the Pending or Prior Date set forth
in the Scheduled Outside Entity
Endorsement hereto with respect to
Outside Directorships in a Scheduled
Outside Entity,
or the same or any substantially similar fact,
circumstance or situation underlying or
alleged therein;
72
(c) brought or maintained by or on behalf of
any Insured, the Outside Entity, or one or
more of the Outside entity's directors,
officers, trustees, governors or equivalent
executives, except:
(i) a Claim that is a derivative action
brought and maintained on behalf of an
Insured Organization by one or more
persons who are not Insured Persons and
who bring and maintain the Claim without
the solicitation, assistance or
participation of any Insured; or
(ii) a Claim that is a derivative action
brought and maintained on behalf of the
Outside Entity by one or more persons
who are not directors, officers,
trustees, governors or equivalent
executives of the Outside Entity and who
bring and maintain the Claim without the
solicitation, assistance or
participation or the Outside Entity or
any director, officer, trustee, governor
or equivalent executive thereof;
(d) for an actual or alleged violation of
the responsibilities, obligations or duties
imposed by the Employee Retirement Income
Security Act of 1974 and amendments thereto
or similar provisions of any federal, state
or local statutory law or common law upon
fiduciaries of any pension, profit sharing,
health and welfare or other employee benefit
plan or trust established or maintained for
the purpose or providing benefits to
employees of any Outside Entity;
(e) for bodily injury, mental or emotional
distress, sickness, disease or death of any
person or damage to or destruction of any
tangible property including loss of use
thereof;
(f) based upon, arising from, or in
consequence of (i) the actual, alleged or
threatened discharge, release, escape or
disposal of Pollutants into or on real or
personal property, water or the atmosphere;
or (ii) any direction or request that the
Insured or Outside Entity test for, monitor,
clean up, remove, contain, treat, detoxify or
neutralize Pollutants, or any voluntary
decision to do so; including but not limited
to any Claim for financial loss to the
Insured Organization, the Outside Entity, or
any security holders or creditors thereof
based upon,
73
arising from, or in consequence
of the matters described in (i) or (ii) of
this Exclusion; or
(g) for Wrongful Acts committed, attempted
or allegedly committed or attempted after the
date such Insured Person ceases to serve in
the Outside Directorship.
Exclusions 6. The Company shall not be liable under Insuring
Applicable to Clause 1 for Loss on account of any Claim made
Insuring Clause 1 Only against any Insured Person:
(a) for an accounting of profits made from
the purchase or sale by such Insured Person
of securities of the Insured Organization or
the Outside Entity within the meaning of
Section 16(b) of the Securities Exchange Act
of 1934 and amendments thereto or similar
provisions of any federal, state or local
statutory law or common law;
(b) based upon, arising from, or in
consequence of any deliberately fraudulent
act or omission or any willful violation of
any statute or regulation by such Insured
Person, if a judgment or other final
adjudication adverse to the Insured Person
establishes such a deliberately fraudulent
act or omission or willful violation; or
(c) based upon, arising from, or in
consequence of such Insured Person having
gained in fact any personal profit,
remuneration or advantage to which such
Insured Person was not legally entitled.
Severability 7. With respect to the Exclusions in Subsections 5
of Exclusions and 6 of this coverage section, no fact
pertaining to or knowledge possessed by any
Insured Person shall be imputed to any other
Insured Person to determine if coverage is
available.
LIMIT OF LIABILITY, 8. For the purposes of this coverage section, all
DEDUCTIBLE AND Loss arising out of the same Wrongful Act and all
COINSURANCE Interrelated Wrongful Acts of any Insured Person
shall be deemed one Loss, and such Loss shall be
deemed to have originated in the earliest Policy
Period in which a Claim is first made against
any Insured Person alleging any such Wrongful Acts
or Interrelated Wrongful Acts.
The Company's maximum liability for each
Loss, whether covered under Insuring Clause 1 or
Insuring Clause 2 or both, shall be the Limit of
Liability for Each Loss set forth in Item
74
2(A) of the Declarations for this coverage
section. The Company's maximum aggregate
liability for all Loss on account of all Claims
first made during the same Policy Period, whether
covered under Insuring Clause 1 or Insuring
Clause 2 or both, shall be the Limit of Liability
for each Policy Period set forth in Item 2(B) of
the Declarations for this coverage section.
The Company's liability under Insuring Clause 2
shall apply only to that part of each Loss which
is excess of the Deductible Amount set forth in
Item 4 of the Declarations for this coverage
section and such Deductible Amount shall be borne
by the Insureds uninsured and at their own risk.
If a single Loss is covered in part under
Insuring Clause 1 and in part under Insuring
Clause 2, the Deductible Amount applicable to such
Loss shall be the Insuring Clause 2 deductible set
forth in Item 4 of the Declarations for this
coverage section.
With respect to all Loss (excess of the
applicable Deductible Amount) originating in any
one Policy Period, the Insureds shall bear
uninsured and at their own risk that percent of
all such Loss specified as the Coinsurance Percent
in Item 3 of the Declarations for this coverage
section and the Company's liability hereunder
shall apply only to the remaining percent of all
such Loss.
For purposes of this Subsection 8 only, the
Extended Reporting Period, if exercised, shall be
part of and not in addition to the immediately
preceding Policy Period.
If the Company or any of its subsidiaries or
affiliated companies makes payment under another
policy or another coverage section of this policy
on account of any Claim also covered under this
coverage section, the Limit of Liability for this
coverage section with respect to such Claim shall
be reduced by the amount of such payment.
Presumptive 9. If the Insured Organization
Indemnification
(a) fails or refuses, other than for reason of
Financial Impairment, to indemnify the
Insured Person for Loss; and
75
(b) is permitted or required to indemnify
the Insured Person for such Loss to the
fullest extent permitted or required by law,
then, notwithstanding any other conditions,
provisions or terms of this coverage section to
the contrary, any payment by the Company of such
Loss shall be subject to (i) the Insuring Clause 2
Deductible Amount set forth in Item 4 of the
Declarations for this coverage section and (ii)
all of the Exclusions set forth in Subsections 5
and 6 of this coverage section.
For purposes of this Subsection 9, the shareholder
and board of director resolutions of the Insured
Organization shall be deemed to provide
indemnification for such Loss to the fullest
extent permitted or required by law.
Reporting 10. The Insureds shall, as a condition precedent to
and Notice exercising their rights under this coverage
section, give to the Company written notice as
soon as practicable of any Claim made against any
of them for a Wrongful Act.
If during the Policy Period or Extended Reporting
Period (if exercised) an Insured becomes aware of
circumstances which could give rise to a Claim and
gives written notice of such circumstance(s) to
the Company, then any Claims subsequently
arising from such circumstances shall be
considered to have been reported during the Policy
Period or the Extended Reporting Period in which
the circumstances were first reported to the
Company.
The Insureds shall, as a condition precedent to
exercising their rights under this coverage
section, give to the Company such information and
cooperation as it may reasonably require,
including but not limited to a description of the
Claim or circumstances, the nature of the alleged
potential damage, the names of actual or potential
claimants, and the manner in which the Insured
first became aware of the Claims or circumstances.
Defense and 11. Subject to this Subsection, it shall be the duty
and Settlement of the Insured Persons and not the duty of the
Company to defend Claims made against the Insured
Persons.
The Insureds agree not to settle any Claim,
incur any Defense Costs or otherwise assume any
contractual obligation or admit any liability with
respect to any Claim without the Company's
76
consent, which shall not be unreasonably withheld.
The Company shall not be liable for any
settlement, Defense Costs, assumed obligation or
admission to which it has not consented.
The Company shall have the right and shall be
given the opportunity to effectively associate
with the Insureds in the investigation, defense
and settlement, including but not limited to the
negotiation of a settlement, of any Claim that
appears reasonably likely to be covered in whole
or in part by this coverage section.
The Insureds agree to provide the Company with all
information, assistance and cooperation which the
Company reasonably requests and agree that in the
event of a Claim the Insureds will do nothing
that may prejudice the Company's position or its
potential or actual rights of recovery.
Defense Costs shall be part of and not in addition
to the Limits of Liability set forth in Item 2
of the Declarations for this coverage section, and
the payment by the Company of Defense Costs
reduces such Limits of Liability.
Allocation 12. If both Loss covered by this coverage section
and loss not covered by this coverage section are
incurred, either because a Claim against the
Insured Persons includes both covered and
uncovered matters or because a claim is made
against both an Insured Person and others,
including the Insured Organization, and/or the
Outside Entity, the Insureds and the Company shall
use their best efforts to agree upon a fair and
proper allocation of such amount between covered
Loss and uncovered loss.
If the Insureds and the Company agree on an
allocation of Defense costs, the Company shall
advance on a current basis Defense Costs allocated
to covered Loss. If the Insureds and the Company
cannot agree on an allocation:
(a) no presumption as to allocation shall
exist in any arbitration, suit or other
proceeding;
(b) the Company shall advance on a current
basis Defense Costs which the Company
believes to be covered under this coverage
section until a different allocation is
negotiated, arbitrated or judicially
determined; and
77
(c) the Company, if requested by the
Insureds, shall submit the dispute to binding
arbitration. The rules of the American
Arbitration Association shall apply except
with respect to the selection of the
arbitration panel, which shall consist of one
arbitrator selected by the Insureds, one
arbitrator selected by the Company, and a
third independent arbitrator selected by the
first two arbitrators.
Any negotiated, arbitrated or judicially
determined allocation of Defense Costs on account
of a Claim shall be applied retroactively to all
Defense Costs on account of such Claim,
notwithstanding any prior advancement to the
contrary. Any allocation or advancement of
Defense Costs on account of a Claim shall not
apply to or create any presumption with respect to
the allocation of other Loss on account of such
Claim.
Other Insurance 13. If the Outside Entity maintains one or more
and Indemnity insurance policies during the period a Claim
otherwise covered by this coverage section is
first made against an Insured Person, then
with respect to such Claim this coverage section
shall be specifically excess of the amount of
payment from such other insurance.
If any Loss arising from any Claim made against
any Insured Persons is insured under any other
valid policy(ies), prior or current, or is
indemnified by the Outside Entity or any other
organization other than the Insured Organization,
then this coverage section shall cover such Loss,
subject to its limitations, conditions, provisions
and other terms, only to the extent that the
amount of such Loss is in excess of the amount of
payment from such indemnity or other insurance
whether such other insurance is stated to be
primary, contributory, excess, contingent or
otherwise, unless such other insurance is written
only as specific excess insurance over the limits
provided in this coverage section.
The Insureds agree that they will use their best
efforts to promptly enforce any rights of the
Insured Persons to indemnification by the Outside
Entity or any other organization.
CHANGES IN
EXPOSURE
Acquisition or 14. If the Insured Organization (i) acquires
Creation of securities or voting rights in another
organization or creates another organization,
78
Another Organization which as a result of such acquisition or creation
becomes a Subsidiary, or (ii) acquires any
organization by merger into or consolidation with
an Insured Organization, such organization and its
Insured Persons shall be Insureds under this
coverage section but only with respect to Wrongful
Acts committed, attempted, or allegedly
committed or attempted, after such acquisition or
creation unless the Company agrees, after
presentation of a complete application and all
appropriate information, to provide coverage by
endorsement for Wrongful Acts committed or
attempted, or allegedly committed or attempted, by
such Insured Persons prior to such acquisition or
creation.
If the fair value of all cash, securities, assumed
indebtedness and other consideration paid by the
Insured Organization for any such acquisition or
creation exceeds 10% of the total assets of the
Parent Organization as reflected in the Parent
Organization's most recent audited consolidated
financial statements, the Parent Organization
shall give written notice of such acquisition to
the Company as soon as practicable together with
such information as the Company may require and
shall pay any reasonable additional premium
required by the Company.
Acquisition of 15. If (i) the Parent Organization merges into or
Parent Organization consolidates with another organization, or (ii)
by Another another organization or person or group of
Organization organizations and/or persons acting in concert
acquires securities or voting rights which result
in ownership or voting control by the other
organization(s) or person(s) of more than 50% of
the outstanding securities representing the
present right to vote for election of directors of
the parent Organization, coverage under this
coverage section shall continue until termination
of this coverage section, but only with respect to
Claims for Wrongful Acts committed, attempted, or
allegedly committed or attempted by Insured
Persons prior to such merger, consolidation or
acquisition. The Parent Organization shall give
written notice of such merger, consolidation or
acquisition as soon as practicable, together with
such information as the Company may require.
Cessation of 16. In the event an organization ceases to be a
Subsidiaries Subsidiary before or after the Inception Date of
this coverage section, coverage with respect to
such Subsidiary and its Insured Persons shall
continue until termination of this coverage
section, but only with respect to Claims for
Wrongful Acts committed, attempted or allegedly
committed or attempted prior to the date such
organization ceased to be a Subsidiary.
79
SCOPE OF COVERAGE 17. The coverage under this coverage section
shall not be construed under any circumstance to
extend to any Outside Entity or to any director,
officer, trustee, governor or other executive or
employee of any Outside Entity, other than the
Insured Person in his Outside Directorship.
REPRESENTATIONS 18. In granting coverage to any one of the Insureds,
AND SEVERABILITY the Company has relied upon the declarations and
statements in the written application for this
coverage section and upon any declarations and
statements in the original written application
submitted to another insurer in respect of the
prior coverage incepting as of the Continuity Date
set forth in Item 9 of the Declarations for this
coverage section. All such declarations and
statements are the basis of such coverage and
shall be considered as incorporated in and
constituting part of this coverage section.
Such written application(s) for coverage
shall be construed as a separate application for
coverage by each of the Insured Persons. With
respect to the declarations and statements
contained in such written application(s) for
coverage, no statement in the application or
knowledge possessed by any Insured Person shall be
imputed to any other Insured Person for the
purpose of determining if coverage is available.
DEFINITIONS 19. When used in this coverage section:
Claim means:
(i) a written demand for monetary damages,
(ii) a civil proceeding commenced by the service
of a complaint or similar pleading,
(iii) a criminal proceeding commenced by a
return of an indictment, or
(iv) a formal administrative or regulatory
proceeding commenced by the filing of a
notice of charges, formal investigative order
or similar document,
against any Insured Person for a Wrongful Act,
including any appeal therefrom.
Defense Costs means that part of Loss consisting
of reasonable costs, charges, fees (including but
not limited to attorney's
80
fees and experts' fees) and expenses (other than
regular or overtime wages, salaries or fees of
the directors, officers or employees of the
Insured Organization) incurred in defending
or investigating Claims, and the premium
for appeal, attachment or similar bonds.
Financial Impairment means the status of the
Insured Organization resulting from (i) 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 the Insured Organization, or (ii) the
Insured Organization becoming a debtor in
possession.
Insureds, either in the singular or plural, means
the Insured Organization and any Insured Persons.
Insured Organization means, collectively, those
organizations designated in Item 5 of the
Declarations for this coverage section.
Insured Persons, either in the singular or plural,
means any one or more of those persons designated
in Item 6 of the Declarations for this coverage
section.
Interrelated Wrongful Acts means all causally
connected Wrongful Acts.
Loss means the total amount which any Insured
Person becomes legally obligated to pay on account
of each Claim and for all Claims in each Policy
Period and the Extended Reporting Period, if
exercised, made against them for Wrongful Acts for
which coverage applies, including, but not limited
to, damages, judgments, settlements, costs and
Defense Costs.
Loss does not include (i) any amount not
indemnified by the Insured Organization for which
the Insured Person is absolved from payment by
reason of any covenant, agreement or court order,
(ii) fines or penalties imposed by law or the
multiple portion of any multiplied damage award,
or (iii) matters uninsurable under the law
pursuant to which this coverage section is
construed.
Non-Profit Outside Entity means any non-profit
corporation, community chest, fund or foundation
that is not included in the definition of Insured
Organization and that is exempt from
81
federal income tax as an organization described
in Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended.
Outside Directorship means the position of
director, officer, trustee, governor or equivalent
executive position held by any Insured Person in
an Outside Entity if service in such position was
with the knowledge and consent or at the request
of the Insured Organization.
Outside Entity means a Non-Profit Outside Entity
or a Scheduled Outside Entity.
Pollutants means any substance located anywhere in
the world exhibiting any hazardous characteristics
as defined by, or identified on a list of
hazardous substances issued by, the United States
Environmental Protection Agency or a state,
county, municipality or locality counterpart
thereof. Such substances shall include, without
limitation, solids, liquids, gaseous or thermal
irritants, contaminants or smoke, vapor, soot,
fumes, acids, alkalis, chemicals or waste
materials. Pollutants shall also mean any other
air emission, odor, waste water, oil or oil
products, infectious or medical waste, asbestos or
asbestos products and any noise.
Scheduled Outside Entity means any organization
listed in a Scheduled Outside Entity Endorsement
to this policy.
Subsidiary, either in the singular or plural,
means any organization in which more than 50% of
the outstanding securities or voting rights
representing the present right to vote for
election of directors is owned or controlled,
directly or indirectly, in any combination, by one
or more Insured Organizations.
Wrongful Act means any error, misstatement,
misleading statement, act, omission, neglect, or
breach of duty committed, attempted, or allegedly
committed or attempted, by an Insured Person,
individually or otherwise, in an Outside
Directorship, or any matter claimed against him
solely by reason of his serving in an Outside
Directorship.
82
EXECUTIVE PROTECTION POLICY
ENDORSEMENT
Coverage Section: OUTSIDE DIRECTORSHIP Company: FEDERAL INSURANCE COMPANY
Effective date of Endorsement No. 1
this endorsement: DECEMBER 01, 1994
To be attached to and form part of
Policy No. 8137-71-31-A
Issued to: BOLT BERANEK & NEWMAN INC.
- --------------------------------------------------------------------------------
It is agreed that Item 4 of the Declarations for this coverage section is
amended as set forth below:
OUTSIDE ENTITY Insuring Clause 2
Deductible
Non-Profit Outside Entities ............... $25,000.
If two or more deductibles of different amounts apply to a single Loss, the
highest of such deductible amounts shall apply to such Loss.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
Authorized Representative
Date
83
EXECUTIVE PROTECTION POLICY
ENDORSEMENT
Coverage Section: OUTSIDE DIRECTORSHIP Company: FEDERAL INSURANCE COMPANY
Effective date of Endorsement No. 2
this endorsement: DECEMBER 01, 1994
To be attached to and form part of
Policy No. 8137-71-31-A
Issued to: BOLT BERANEK & NEWMAN INC.
- --------------------------------------------------------------------------------
It is agreed that the following Insured Persons serving in the position of
director, officer, trustee, governor or equivalent executive position in the
following respective organizations shall be serving a Scheduled Outside
Entity:
Insured Outside Pending or Continuity
Person Entity Prior Date Date
Gerald Davidson Dantel Corporation 12/01/90 12/01/90
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
Authorized Representative
Date
84
LLOYD'S POLICY
We, Underwriting Members of the syndicates whose definitive numbers and
proportions are shown in the Table attached hereto (hereinafter referred to as
"the Underwriters"), hereby agree, in consideration of the payment to Us by or
on behalf of the Assured of the premium specified in the Schedule, to insure
against loss, including but not limited to associated expenses specified
herein, if any, to the extent and in the manner provided in this Policy.
The Underwriters hereby bind themselves severally and not jointly, each for his
own part and not one for another, and therefore each of the Underwriters (and
his heirs, Executors and Administrators ) shall be liable only for his own
share of his syndicate's proportion of any such loss and of any such
expenses. The identity of each of the Underwriters and the amount of his share
may be ascertained by the Assured or the Assured's representative on
application to Lloyd's Policy Signing Office, quoting the Lloyd's Policy
Signing Office number and date shown in the Table.
If the assured shall make any claim knowing the same to be false or fraudulent,
as regards amount or otherwise, this Policy shall become void and all claim
hereunder shall be forfeited.
In Witness whereof the General Manger of Lloyd's Policy Signing Office has
signed this Policy on behalf of each of us.
s/LLOYD'S POLICY SIGNING OFFICE
GENERAL MANAGER
85
EXCESS
DIRECTORS AND OFFICERS AND
COMPANY REIMBURSEMENT POLICY
86
DECLARATIONS
EXCESS DIRECTORS AND OFFICERS AND
COMPANY REIMBURSEMENT INDEMNITY POLICY
DOXS '89
NOTICE: THIS POLICY SUBJECT TO ITS TERMS APPLIES TO ANY CLAIM MADE AGAINST
THE DIRECTORS AND OFFICERS DURING THE POLICY PERIOD. THE LIMIT OF LIABILITY
AVAILABLE TO PAY DAMAGES OR SETTLEMENTS SHALL BE REDUCED AND MAY BE EXHAUSTED
BY AMOUNTS INCURRED AS REASONABLE AND NECESSARY LEGAL FEES AND EXPENSES IN
DEFENDING THE DIRECTORS AND OFFICERS. THIS POLICY DOES NOT PROVIDE FOR ANY
DUTY BY UNDERWRITERS TO DEFEND THOSE INSURED HEREUNDER.
These Declarations along with the completed signed Application, including
attachments, and the Policy with Endorsements shall constitute the contract
between those insured hereunder and Underwriters.
POLICY NO. 757/FD940716
Item A. Name Insured: BOLT BERANEK AND NEWMAN, INC.
Principal Address: 150 CambridgePark Drive
Cambridge
Massachusetts 02140
USA
Item B. Policy Period:
From 1st December 1994 to 1st December 1995 both days at
12:01 a.m. Local Standard Time At The Principal Address Stated
in Item A.
Item C. Limit of Liability: US $5,000,000 in the aggregate each
Policy year.
Item D. Premium: US $63,004.83 part of US $65,000.00
Item E. Notification to Underwriters pursuant to Clause V. shall be
given to Mr. K. Hanson, Hanson and Peters, 311 South Wacker
Drive, Suite 5500, Chicago, Illinois 60606.
87
Item F. Form numbers of endorsements attached at issuance:
NMA 1256 - Nuclear Incident Exclusion Clause
NMA 1477 - Radioactive Contamination Exclusion Clause
11.01 - Prior and Pending Litigation Exclusion
Item G. Primary Policy:
Primary Insurer: Chubb Group
Policy No: 8137-71-31
Limits of Liability: US $3,000,000
Retentions/Deductibles: Nil/Nil/US $1,000,000
Participation/Co-Insurance: None
Policy Period: From 1st December 1994
To 1st December 1995
Item H. Underlying Excess Policies:
First Underlying Excess Insurer: St Paul Fire and Marine Insurance
Company
Policy No: 900DX0103
Limits of Liability: US $5,000,000
Retentions/Deductibles: As Primary
Participation/Co-Insurance: None
Policy Period: From 1st December 1994
To 1st December 1995
Second Underlying Excess Insurer: Chubb Group Inc
Policy No: 8137-71-32
Limits of Liability: US $2,000,000
Retentions/Deductibles: As Primary
Participation/Co-Insurance: None
Policy Period: From 1st December 1994
To 1st December 1995
Third Underlying Excess Insurer: Chicago Underwriter Group Inc
Policy No: CUG24032
Limits of Liability: US $5,000,000
Retentions/Deductibles: As Primary
Participation/Co-Insurance: None
Policy Period: From 1st December 1994
To 1st December 1995
Dated in London:
88
EXCESS DIRECTORS AND OFFICERS AND
COMPANY REIMBURSEMENT INDEMNITY POLICY
In consideration of the payment of the premium, in reliance upon the statements
in the Application attached hereto and made a part hereof, subject to the
Declarations made a part hereof and subject to all of the terms of this Policy,
Underwriters agree as follows:-
I. CONFORMANCE WITH PRIMARY POLICY
Except as regards:
(1) the premium, and
(2) the amounts and limits of liability, and
(3) the subject matter of Clauses II, III, IV, V, VI, and VII
(4) as otherwise may be provided herein,
this Policy is subject to the same insuring clauses, definitions, terms,
conditions, exclusions and other provisions as those set forth in the Primary
Policy as described in the materials submitted to Underwriters in connection
with the application for this Policy. No changes to the Primary Policy as so
described shall be binding upon Underwriters under this Policy unless
specifically endorsed hereon.
II. DEFINITIONS
The following terms whenever used in this Policy shall have the meanings
indicated.
A. "Primary Policy" shall mean the policy identified in Item G. of the
Declarations.
B. "Underlying Policies" shall mean the policies identified in Items G.
and H. of the Declarations.
C. "Underlying Limit of Liability" shall mean the combined limits of
liability of the Underlying Policies as set forth in Item G. and H. of
the Declarations, less any reduction or exhaustion of said limits of
liability due to payment of loss under said policies.
III. MAINTENANCE OF UNDERLYING POLICIES
This Policy provides excess coverage only. It is a condition precedent to
the
89
coverage afforded under this Policy that those insured hereunder maintain
the Underlying Policies with retentions/deductibles, participation/co-
insurance and limits of liability (subject to reduction or exhaustion
as a result of loss payments), as set forth in items G. and H. of the
Declarations. This Policy does not provide coverage for any loss
not covered by the Underlying Policies except and to the extent that such
loss is not paid under the Underlying Policies solely by reason of the
reduction or exhaustion of the Underlying Limits of Liability through
payments of loss thereunder. In the event the insurer under one or more of
the Underlying Policies fails to pay loss in connection with any claim as a
result of the insolvency, bankruptcy or liquidation of said insurer, then
those insured hereunder shall be deemed self-insured for the amount of the
limit of liability of said insurer which is not paid as a result of such
insolvency, bankruptcy or liquidation.
IV. LIMIT OF LIABILITY
A. Subject to Clause IV.B., Underwriters shall be liable to pay loss
which is in excess of
(1) The Underlying Limit of Liability plus
(2) the applicable retention or deductible under the Primary Policy
up to the Limit of Liability as shown under Item C. of the
Declarations resulting from each claim made against the directors
and officers.
B. The amount shown in Item C. of the Declarations shall be the
maximum aggregate Limit of Liability of Underwriters for all loss
resulting from all claims made against the directors and officers
during the Policy Period, together with all claims made against
the directors and officers which, in accordance with Clause IV.E. or
Clause V.B., shall be deemed to have been made during the Policy
Period.
C. Underwriters shall be liable hereunder only after the insurers under
each of the Underlying Policies have paid or have been held liable to
pay the full amount of the Underlying Limit of Liability.
D. Subject to Clause IV.B., in the event of the reduction or exhaustion
of the Underlying Limit of Liability by reason of payment of loss,
this Policy shall:
(1) in the event of reduction, pay excess of the reduced limits and
(2) in the event of exhaustion, continue in force as primary
insurance; provided, however that in the case of exhaustion
90
this Policy shall only pay excess of the retention or deductible
applicable to the Primary Policy as set fort in Item G. of the
Declarations, which shall be applied to any subsequent loss in
the same manner as specified in this Primary Policy.
E. More than one claim involving the same wrongful act or related
wrongful acts of one or more directors and officers shall be deemed to
constitute a single claim and such single claim shall be deemed to
have been made at the earliest of the following times:
(1) the time the earliest claim involving the same wrongful act or
related wrongful acts is first made, or
(2) the time the claim involving the same wrongful act or related
wrongful acts shall be deemed to have been made pursuant to
Clause V.B., if applicable.
V. NOTIFICATION
A. If during the Policy period or any optional extension period, if
applicable, any claim is made against any director or officer, those
insured hereunder shall, as a condition precedent to their right to be
reimbursed under this Policy, give to Underwriters notice in writing
as soon as practicable of any such claim, but in no event later than
sixty (60) days after such claim is first made.
B. If during the Policy Period or any optional extension period, if
applicable, those insured hereunder first become aware of a specific
wrongful act, and if those insured hereunder shall, during such
period, give written notice to Underwriters as soon as practicable of:
(1) the specific wrongful act, and
(2) the consequences which have or may result herefrom, and
(3) the circumstances by which those insured hereunder first
became aware thereof,
then any claim not otherwise excluded by the terms of this Policy
subsequently made against the directors and officers arising out of
such wrongful act or any related wrongful act shall be deemed for the
purposes of this Policy to have been made at the time such notice was
first given.
C. Notice to Underwriters provided for in this Clause V. shall be given
to
91
the firm shown under Item E. of the Declarations.
VI. WARRANTY CLAUSE
It is warranted that the particulars and statements contained in the
application for this Policy or contained in any application for any policy
issued by Underwriters of which this Policy is a renewal thereof, a copy of
which is attached hereto, and any material submitted therewith (which shall
be retained on file by Underwriters and be deemed attached hereto, as if
physically attached hereto), are the basis of this Policy and are to be
considered as incorporated in to and constituting a part of this Policy.
This Policy shall be deemed to be a single unitary contract and not a
severable contract of insurance or a series of individual contracts of
insurance with each of the persons or entities insured hereunder.
VII. SERVICE OF SUIT
It is agreed that in the event of the failure of the Underwriters heron to
pay any amount claimed to be due hereunder, the Underwriters hereon at the
request to the Insured (or Reinsured), will submit to the jurisdiction of a
Court of competent jurisdiction within the United States. Nothing in this
Clause constitutes or should be understood to constitute a waiver of
Underwriters' rights to commence an action in any court of competent
jurisdiction in the United States, to remove an action to a United States
District Court, or to seek a transfer of a case to another court as
permitted by the laws of the United States or of any State in the United
States. It is further agreed that service of process in such suit may be
made upon Mendes and Mount, 750 Seventh Avenue, New York, N.Y. 10019-6829,
U.S.A., and that in such suit instituted against any one of them upon this
contract, Underwriters will abide by the final decision of such court or of
any Appellate Court in the event of an appeal.
The above-named are authorized and directed to accept service of process on
behalf of Underwriters in any such suit and/or upon the request of the
Insured (or Reinsured) to give a written undertaking to the Insured (or
Reinsured) that they will enter a general appearance upon Underwriters'
behalf in the event such a suit shall be instituted.
Further, pursuant to the statute of any state, territory or district of the
United States which makes provision therefore, Underwriters hereon hereby
designate the Superintendent, Commissioner or Director of Insurance or
other officer specified for that purpose in the statute, or his successor
or successors in office, as their true and lawful attorney upon whom may be
served any lawful process in any action, suit or proceeding instituted by
or on behalf of the Insured (or Reinsured) or any beneficiary hereunder
arising out
92
of this contract of insurance (or reinsurance), and hereby designate the
above-named as the person to whom the said officer is authorized to mail
such process or a true copy thereof.
93
U.S.A.
NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY - DIRECT (BROAD)
(Approved by Lloyd's Underwriters' Non-Marine Association)
For attachment to insurances of the following classifications in the U.S.A.,
its Territories and Possessions, Puerto Rico and the Canal Zone:-
Owners, Landlords and Tenants Liability, Contractual Liability, Elevator
Liability, Owners or Contractors (including railroad) Protective Liability,
Manufacturers and Contractors Liability, Product Liability, Professional
and Malpractice Liability, Storekeepers Liability, Garage Liability,
Automobile Liability (including Massachusetts Motor Vehicle or Garage
Liability),
not being insurances of the classifications to which the Nuclear Incident
Exclusion Clause - Liability - Direct (Limited) applies.
THIS POLICY*
does not apply:-
1. Under any Liability Coverage, to injury, sickness, 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, under any agreement
entered into by the United States of America, or any agency thereof,
with any person or organization.
2. 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 material and arising out
of the operation of a nuclear facility by any person or organization.
3. Under any Liability coverage, to injury, sickness, disease, death or
destruction resulting from the hazardous properties of nuclear material, if
94
(a) the nuclear material (1) is at any nuclear facility owned by, or
operated by or 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 of 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.
4. As used in this endorsement:
"HAZARDOUS PROPERTIES" include radioactive, toxic or explosive properties;
"NUCLEAR MATERIAL" means source material, special nuclear material or
byproduct material; "SOURCE MATERIAL", "SPECIAL NUCLEAR MATERIAL", and
"BYPRODUCT MATERIAL" have the meanings given them in the Atomic Energy Act
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 at 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.
95
With respect to injury to or destruction of property, the word "INJURY" or
"DESTRUCTION" includes all forms of radioactive contamination of property.
It is understood and agreed that, except as specifically provided in the
foregoing to the contrary, this clause is subject tot the terms,
exclusions, conditions and limitations of the Policy to which it is
attached.
*NOTE:- As respects policies which afford liability coverages and other forms
of coverage in addition, the words underlined should be amended to
designate the liability coverage to which this clause is to apply.
17/3/60
N.M.A. 1256
96
U.S.A.
RADIOACTIVE CONTAMINATION EXCLUSION CLAUSE - LIABILITY -
DIRECT
(Approved by Lloyd's Underwriters' Non-Marine Association)
For attachment (in addition to the appropriate Nuclear Incident Exclusion
Clause - Liability - Direct) to liability insurances affording worldwide
coverage.
In relation to liability arising outside the U.S.A. its Territories or
Possessions, Puerto Rico or the Canal Zone, this Policy does not cover any
liability of whatsoever nature directly or indirectly caused by or contributed
to by or arising from ionizing radiations or contamination by radioactivity from
any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel.
13/2/64
N.M.A. 1477
97
PRIOR AND PENDING LITIGATION EXCLUSION
(11.01)
In consideration of the premium charged for this Policy, it is hereby understood
and agreed that Underwriters shall not be liable to make any payment in
connection with any Claim:
Based upon, arising out of, directly or indirectly resulting from or in
consequence of or in any way involving;
(1) any prior and/or pending litigation as of 1st December 1993, or
(2) any fact, circumstance, situation, transaction or event underlying or
alleged in such litigation,
regardless of the legal theory upon which such Claim is predicated.
98
LINES CLAUSE
This Insurance, being signed for 96.9305%, of 100% insures only that proportion
of any loss, whether total or partial, including but not limited to that
proportion of associated expenses, if any, to the extent and in the manner
provided in this Insurance.
The percentages signed in the Table are percentages of 100% of the amount (s) of
Insurance stated herein.
N.M.A. 2419
SEVERAL LIABILITY NOTICE
The subscribing insurers' obligations under contracts of insurance to which they
subscribe are several and not joint and are limited solely to the extent of
their individual subscriptions. The subscribing insurers are not responsible
for the subscription of any co-subscribing insurer who for any reason does not
satisfy all or part of its obligations.
LSW 1001 (Insurance) 08/94
99
Date:
Policy No: 757/FD940716
THE SCHEDULE
The Insured: BOLT BERANEK AND NEWMAN INC.
Premium: US $1,995.17 part of US $65,000.00
Limits of Liability: 3.0695% of
US $5,000,000 in the aggregate each policy
year which is excess of US $15,000,000 which
in turn is excess of :-
US$NIL/US$NIL Directors and Officers
Liability
US $1,000,000 Reimbursement Liability.
The Interest Insured: EXCESS DIRECTORS AND OFFICERS
LIABILITY AND EXCESS
REIMBURSEMENT FOR DIRECTORS AND
OFFICERS LIABILITY.
As more fully set forth in the co-insuring
Lloyd's policy.
Period of Insurance;
FROM: 1st December 1994 TO: 1st December 1995 BOTH DAYS AT 12:01 AM LOCAL
STANDARD TIME AND FOR SUCH FURTHER PERIOD OR PERIODS AS MAY BE MUTUALLY AGREED.
COINSURANCE CLAUSE
It is warranted that this Policy shall run concurrently with and be subject to
the same terms, provisions, and limitations as are contained in Policy No.
757/FD940716 issued by certain underwriting members at Lloyd's of London
covering the identical subject matter and risk.
100
LIRMA
COMPANY
THE INSURERS NUMBER PROPORTION REFERENCE
Zurich
RE (UK)
Limited Z4508 3.0695% Z70003635494
SEVERAL LIABILITY NOTICE
The subscribing insurers' obligations under contracts of insurance to which they
subscribe are several and not joint and are limited solely to the extent of
their individual subscriptions. The subscribing insurers are not responsible
for the subscription of any co-subscribing insurer who for any reason does not
satisfy all or part of its obligations.
LSW 1001 (Insurance) 8/94
101
J. & H. 757 Dated in London:
Endorsement No.01 attaching to and forming part of LIRMA Policy No.
757/FD940716
NAME OF ASSURED: BOLT BERANEK AND NEWMAN, INC.
It is understood and agreed that with effect from 13th December 1994 this policy
shall follow the Predetermined Allocation for Securities Claims Endorsement
attaching to the Primary Policy No. 8137-71-31.
In consequence of the foregoing there is due from the Assured an Additional
Premium of US $ 482.34 part of US$15,714.00
All other terms and conditions remain unchanged.
102
LIRMA POLICY
IN CONSIDERATION of the Insured named in the Schedule hereto having paid or
promised to pay the premium stated in the said Schedule to the Insurers named
herein who have hereunto subscribed their names ("the Insurers").
THE INSURERS HEREBY SEVERALLY AGREE each for the proportion set against its own
name to indemnify the Insured or the Insured's Executors and Administrators
against loss, damage or liability to the extent and in the manner set forth
herein. Provided that the aggregate liability of the Insurers shall not exceed
the Sum Insured or other limits as are set forth in the Schedule.
If the Insured shall make any claim knowing the same to be false or fraudulent,
as regards amount or otherwise, this Policy shall become void and all claim
hereunder shall be forfeited.
IN WITNESS WHEREOF the Director of Policy Signing Services of LONDON INSURANCE
AND REINSURANCE MARKET ASSOCIATION ("LIRMA") has subscribed his name on behalf
of each of the LIRMA Companies and (where the Companies Collective Signing
Agreement ("CCSA") is being implemented) on behalf of the Leading CCSA Company
which is a LIRMA member and authorized to sign this Policy (either itself or by
delegation to LIRMA) on behalf of all the other CCSA Companies.
s/
Date:
103
EXCESS INSURANCE POLICY
IMPORTANT NOTICE
THIS POLICY PROVIDES EXCESS INSURANCE ON A CLAIMS
MADE BASIS. ALL CLAIMS MUST BE REPORTED TO THE
COMPANY EVEN IF THEY DO NOT EXCEED THE AMOUNT OF
UNDERLYING INSURANCE. PLEASE READ THE POLICY AND ALL
ENDORSEMENTS CAREFULLY TO DETERMINE YOUR RIGHTS,
DUTIES AND WHAT IS AND IS NOT COVERED.
104
OLD REPUBLIC
EXCESS INSURANCE POLICY
In consideration of the payment of premium and in reliance upon the statements
in the Declaration and subject to all the terms of this policy, agrees with the
insured named in the Declarations, to provide coverage as follows:
INSURING AGREEMENT
To indemnify the insured for that amount of loss which exceeds the amount of
loss payable by underlying policies described in Declaration 4, but the
company's obligation hereunder shall not exceed the limit of liability stated
in Declaration 5.
CONDITIONS
A. Application of Underlying Insurance Except as otherwise stated herein, and
except with respect to (1) any obligation to investigate or defend any claim
or suit, or (2) any obligation to renew, the insurance afforded by this
policy shall apply in like manner as the underlying insurance described in
Declaration 4.
B. Maintenance of Underlying Insurance It is warranted by the insured that no
less than the amount of underlying insurance stated in Declaration 4 is
available to the insured, and that such underlying insurance shall be
maintained in force during the currency of this policy, except for any
reduction of the aggregate limits contained therein solely by payment of
claims in respect to occurrences during the period of this policy and
covered by such underlying insurance. Notice of exhaustion of underlying
insurance shall be given the company as soon as practicable after such
exhaustion.
C Loss Payable Liability of the company with respect to any once occurrence
shall not attach unless an until the insured, or the insured's underlying
insurer, has paid the amount of underlying insurance stated in Declaration 4
and after the insured's liability shall have been made certain by final
judgment after actual trial, or by written agreement of the insured, the
claimant and the company.
D. Premium The premium for this policy shall be stated in Declaration 3.
E. Assistance and Co-operation The company shall not be called upon to assume
charge of the settlement or defense of any claim made or proceeding
instituted against the insured; but the company shall have the right and
opportunity to associate with the insured in the defense and control of any
claim or proceeding reasonably likely to involve the company. In such event
the insured and the company shall cooperate fully.
F. Expenses Loss and legal expenses incurred by the insured with the consent
of the company in the investigation or defense of claims, including court
costs and interest, shall be borne by both the company and the insured in
the proportion that each party's share of loss bears to the total amount of
such loss. For purposes of this allocation, the insured's share of such
loss shall include the amount, if any, of the loss borne by its underlying
insurer. Salaries and expenses of the insured's employees shall not be
considered as part of the above expenses. Expenses thus paid by
105
the company shall be paid in addition to the limit of liability stated in
Declaration 5. If, however, expenses are included in the limit of
liability of the underlying insurance, then expenses paid by the company
shall be included in the limit of liability of this policy and not in
addition thereto.
G. Notice of Occurrence Upon the happening of an occurrence reasonably likely
to involve the company hereunder, written notice shall be given as soon as
practicable to the company or any of its authorized agents as designated in
Declaration 6. Such notice shall contain particulars sufficient to
identify the insured and the fullest information obtainable at the time.
The insured shall give like notice of any claim made on account of such
occurrence. If legal proceedings are begun, the insured, when requested by
the company, shall forward to it each paper thereon, or a copy thereof,
received by the insured or the insured's representatives, together with
copies of reports of investigations made by the insured with respect to such
claim proceedings.
H. Appeals In the event the insured or the insured's underlying insurer elects
not to appeal a judgment which exceeds the underlying insurance, the company
may elect to do so at its own expense, and shall be liable for the taxable
costs, disbursements and interest incidental thereto, but in no event shall
the liability of the company for excess loss exceed the amount set forth in
Declaration 5.
106
Policy Number: CUG 24032
Previous Number: CUG 23731
DECLARATIONS - EXCESS INSURANCE POLICY
1. NAMED INSURED AND ADDRESS:
Bolt Beranek and Newman Inc.
150 Cambridge Park Drive
Cambridge, Massachusetts 02140
2. POLICY PERIOD: From: December 1, 1994 To: December 1, 1995
12:01 A.M. STANDARD TIME AT THE NAMED INSURED'S ADDRESS
ABOVE.
3. PREMIUM $80,000.
4. UNDERLYING INSURANCE:
Coverage: Directors & Officers Liability Insurance
Primary Insurer: Federal Insurance Company
Policy Number: 8137-71-31-A
Policy Term: December 1, 1994 to December 1, 1995
Limit of Liability: $3,000,000 annual aggregate
Retention: $0.00 each Director or Officer each loss, but
in no event exceeding $0.00 in the aggregate
each loss as respects Directors and
Officers Liability. $1,000,000 in the
aggregate each loss as respects Company
Reimbursement Liability.
First Excess Insurer: St. Paul Mercury Insurance Company
Policy Number: 900/DX0103
Policy Term: December 1, 1994 to December 1, 1995
Limit of Liability: $5,000,000 annual aggregate in excess of the
Limit shown above.
Second Excess Insurer: Federal Insurance Company
Policy Number: 81377132-A
Policy Term: December 1, 1994 to December 1, 1995
Limit of Liability: $2,000,000 annual aggregate in excess of the
Limits shown above.
107
5. LIMIT OF LIABILITY:
$5,000,000 each claim and aggregate in excess o the total limits of
underlying insurance stated in Item 4. All expenses resulting from the
investigation and defense of claims to which this policy applies,
including court costs and interest, shall be included in the limit of
liability of this policy and not in addition thereto.
6. NOTICE OF CLAIM (CONDITION G) TO:
CHICAGO UNDERWRITING GROUP, INC.
211 West Wacker Drive, Third Floor
Chicago, Illinois 60606
7. ATTACHMENTS: ORUG-5 (10/88), Endorsements #1, #2, #3, #4, #5, and
Application dated October 7, 1994.
Date: May 10, 1995 ____________________________________________________
Authorized Representative
108
AMENDATORY ENDORSEMENTS
It is agreed that conditions A, B, C, F and G of this policy are deleted and
replaced by the following:
A. Application of Underlying Insurance - Except as otherwise stated herein,
and except with respect to (1) any obligation to investigate or defend any
claim or suit, or (2) any obligation to renew, this policy shall adopt and
incorporate by reference the terms, conditions, exclusions and limitations
of the underlying insurance described in Declaration 4.
B. Maintenance of Underlying Insurance - It is warranted by the insured that
no less than the amount of underlying insurance stated in Declaration 4 is
available to the insured and that such underlying insurance shall be
maintained in force during the period of this policy, except or the
reduction or exhaustion of the aggregate limits contained therein solely
by payment of loss and/or defense expenses which, except for the amount
thereof, would be indemnifiable under this policy and which results from
claims first made against the insured during the period of this policy.
C. Loss Payable - Liability of the company with respect to any claim shall
not attach unless and until the insured, or the insured's underlying
insurer, has paid an amount equal to the underlying insurance stated in
Declaration 4 and after the insured's liability shall have been made
certain by final judgment after actual trial or by written agreement of
the insured, the claimant and the company.
The insolvency, bankruptcy, receivership or refusal or inability to pay of
the insured or any underlying insurer shall not operate to lower the
amount of underlying insurance stated in Declaration 4 or increase the
company's liability under this policy. In no event shall the company
assume the liabilities and/or responsibilities and/or obligations of the
insured or any underlying insurer.
F. Expenses - Notwithstanding anything contained in the underlying insurance
to the contrary, all expenses resulting from the investigation and defense
of claims to which this policy applies, including court costs and
interest, shall be included in the limit of liability of this policy and
not in addition thereto.
G. Notice of Claims - The insured must give the company, through its
authorized agent designated in Declaration 6, written notice of any claim
first made against the insured during the period of this policy whether or
not the claim exceeds the amount of the underlying insurance. Such notice
shall be given within the period of time required by the underlying
insurance, but in no event shall the notice be given later than sixty (60)
days after the termination of this policy. Any notice of claim must
contain particulars sufficient to identify the insured, the claimant and
the alleged acts, errors or omissions that caused the claim.
The insured shall cooperate with the company in providing any information
that the company may reasonably require, including copies of all demands,
notices, summonses or legal papers that relate to any claim.
All other terms and conditions of this policy remain unchanged.
This endorsement is a part of the policy and takes effect on the effective date
of the policy, unless another effective date is shown below.
Complete Only When This Endorsement Is Not Prepared with
Must Be Completed the Policy Or Is Not to be Effective with the Policy
ENDT. NO. POLICY NO. ISSUED TO EFFECTIVE DATE OF THIS ENDORSEMENT
1 CUG 24032
Countersigned by___________________________
Authorized Representative
109
EXCESS INSURANCE APPLICATION
It is agreed that this policy is issued in reliance upon
the statements made in the company's written application,
a copy of which is attached hereto and made a part hereof,
and upon the written applications submitted by the
insureds with respect to the underlying insurance stated
in Declaration 4 and are to be considered as incorporated
in and constituting part of this policy.
It is further agreed that the policy shall not apply to
liability of any kind based upon, involving or arising out
of:
(1) any claims or suits described or
referenced by the insured in answer to
questions #10, #11, and #12 of the
company's application, or any facts,
situations or circumstances alleged
therein, or
(2) any facts, situations or circumstances
described or referenced by the insured in
answer to question #13 of the application.
All other terms and conditions of this policy remain unchanged.
This endorsement is a part of the policy and takes effect on the effective date
of the policy, unless another effective date is shown below.
Complete Only When This Endorsement Is Not Prepared with
Must Be Completed the Policy Or Is Not to be Effective with the Policy
ENDT. NO. POLICY NO. ISSUED TO EFFECTIVE DATE OF THIS ENDORSEMENT
2 CUG 24032
Countersigned by___________________________
Authorized Representative
110
It is understood and agreed that the Company shall not be liable to make
any payment for loss in connection with any claim made against the
Directors or Officers based upon, arising out of, in consequence of or in
any way attributable to litigation, arbitration or administrative
proceeding prior to or pending as of December 1, 1993 involving the named
insured and/or any Director or Officer of the named insured and/or any
Subsidiary of the named insured or arising out of any facts or
circumstances underlying or alleged in any such prior or pending
litigation, arbitration or administrative proceeding.
All other terms and conditions of this policy remain unchanged.
This endorsement is a part of the policy and takes effect on the effective date
of the policy, unless another effective date is shown below.
Complete Only When This Endorsement Is Not Prepared with
Must Be Completed the Policy Or Is Not to be Effective with the Policy
ENDT. NO. POLICY NO. ISSUED TO EFFECTIVE DATE OF THIS ENDORSEMENT
3 CUG 24032
Countersigned by___________________________
Authorized Representative
111
If the insurer shall cancel this policy for any reason, except for the
nonpayment of premium, or refuse to renew this policy, the Company shall
have the right, upon payment within ten (10) days after the effective date
of such cancellation or non-renewal of an additional premium of 75% of the
annual premium hereunder to an extension of the insurance granted by this
policy in respect of any claim or claims made against the Directors or
Officers during the period of twelve (12) months after the date of such
cancellation or non-renewal, but only in respect of any Wrongful Act
committed before the date of such cancellation or non-renewal. Such twelve
(12) month period is herein after referred to as "extended discovery
period".
All other terms and conditions of this policy remain unchanged.
This endorsement is a part of the policy and takes effect on the effective date
of the policy, unless another effective date is shown below.
Complete Only When This Endorsement Is Not Prepared with
Must Be Completed the Policy Or Is Not to be Effective with the Policy
ENDT. NO. POLICY NO. ISSUED TO EFFECTIVE DATE OF THIS ENDORSEMENT
4 CUG 24032
Countersigned by___________________________
Authorized Representative
112
In consideration of the premium charged it is understood and agreed that
General Condition Clause J. of the policy wording, Cancellation, is amended
by deleting the words "thirty (30)" and replacing with "sixty (60)".
All other terms and conditions of this policy remain unchanged.
This endorsement is a part of the policy and takes effect on the effective date
of the policy, unless another effective date is shown below.
Complete Only When This Endorsement Is Not Prepared with
Must Be Completed the Policy Or Is Not to be Effective with the Policy
ENDT. NO. POLICY NO. ISSUED TO EFFECTIVE DATE OF THIS ENDORSEMENT
5 CUG 34032
Countersigned by___________________________
Authorized Representative
113
APPLICATION FOR DIRECTORS AND OFFICERS LIABILITY
AND COMPANY REIMBURSEMENT LIABILITY INSURANCE
(for non financial institutions operating on a for-profit basis)
1. Name of Organization: Bolt Beranek and Newman, Inc.
Principal Address: 150 Cambridge Park Drive
Cambridge, MA 02140
2. (a) Date since the Company has continuously carried on business:
1948 as Partnership
(b) State of Incorporation: Massachusetts
Date of Incorporation 1953 as Corporation.
(c) Nature of business: Consulting and Diversified Technologies
3. Officer designated to receive notices pertaining to this insurance: John
Montjoy, Vice President and Corporate Counsel
4. Stock Ownership:
(a) Number of common shares outstanding: 1,665,680
(b) Number of common stock shareholders: 2,225 (as of 6/30/94)
(c) Number of common shares owned (directly and beneficially) by directors:
See Page 17 of Proxy
(d) Number of common shares owned (directly and beneficially) by officers
who o are not directors: See Page 17 of Proxy
(e) Name and percentage of holds of any shareholder owning 5% or more of the
common shares (directly or beneficially): See Page 17 of Proxy
(f) Describe fully any other securities that are convertible to common
stock: 6% convertible subordinated debentures due 2012
5. (a) Latest Moody's or Standard and Poor's bond rating: N/A
(b) Has this rating changed in the last 12 months? ( ) YES ( ) NO
(If Yes, please attach full details).
6. Has the Company under consideration at the present time or has it considered
within the last 6 months or does it contemplate any acquisitions, leveraged
buy outs, tender offers or mergers? ( ) YES ( ) NO
(If Yes, please attach full details).
7. Has the Company filed or contemplated filing any registration statement with
the Securities and Exchange Commission within the past 18 months or within
the next 12 months for a public offering for securities? ( ) YES (x) NO
(If Yes, please attach full details including copy of prospectus or
registration statement).
From time to time company has under consideration acquisition or disposition
of one or more entities or business units.
8. (a)Within the last 18 months has the Company or any of its subsidiaries made
or joined in a Schedule 13-D filing with the Securities and Exchange
Commission with respect to the ownership of the securities of another
corporation. ( ) YES (x) NO
(b)Is the Company 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 Company or any of its subsidiaries? ( ) YES (x) NO
(If yes to either of the above, please furnish copies of all filings.)
9. Is coverage proposed for directors and officers of subsidiaries? See
Attached Schedule (x) YES ( ) NO
(If Yes, please attach a separate sheet listing the name of each
subsidiary, the date acquired or created, the percentage of ownership by the
Company, any minority shareholders and type of operation.)
10. Has the Company or any of its directors or officers been involved in any of
the following:
(a) any anti-trust, copywrite or patent litigation? ( ) YES (x) NO
(b) any civil or criminal action or administrative proceeding charging a
violation of any federal or state security law or regulation?
( ) YES (x) NO
(c) any representative actions, class actions or derivative suits?
( ) YES (x) NO
(If Yes, please attach full details).
114
I. SUBROGATION In the event of payment under this policy, the company will
participate with the insured and any underlying insurer in the exercise
of all the insured's rights of recovery against any person or
organization liable therefor. Recoveries shall be applied first to
reimburse any interest (including the insured) that may have paid any
amount, with respect to liability in excess of the limit of the
company's liability hereunder, then to reimburse the company up to the
amount paid hereunder, and lastly to reimburse such interests (including
the insured), to whom this insurance is excess as are entitled to clam
the residue, if any. Such expenses incurred in the exercise of rights
of recovery shall be apportioned among all interests in the ratio of
their respective losses for which recovery is sought.
J. CANCELLATION This policy may be cancelled by the named insured by
surrender thereof to the company or any of its authorized agents, or by
mailing to the company written notice stating when thereafter such
cancellation shall be effective. If cancelled by the named insured, the
company shall retain the customary short rate proportion of the premium.
This policy may be cancelled by the company by mailing to the named
insured at the address shown in this policy written notice stating when,
not less than thirty (30) days thereafter, such cancellation shall be
effective, except this policy may be cancelled as aforesaid by not less
than ten (10) days notice when the cancellation is being effected by
reason of the named insured's nonpayment of premium.
The mailing of notice as aforesaid shall be sufficient notice and the
effective date of cancellation stated in the notice shall become the end
of the policy period. If the company cancels, earned premium shall be
computed pro rata. Delivery of such written notice either by the named
insured or by the company shall be equivalent to mailing.
Premium adjustment shall be made by the company either at the time
cancellation is effected or as soon as practicable thereafter. The
check of the company or its representative, mailed or delivered, shall
be sufficient tender of any refund due the named insured.
If this policy insures more than one named insured, cancellations may
be effected by the first such named insureds for the account of
insureds; and notice of cancellation by the company to such first named
insured shall be notice to all insureds. Payment of any unearned
premium to such first named insured shall be for the account of all
interests therein.
K. OTHER INSURANCE If other valid and collective insurance is available to
the insured which covers a loss also covered by this policy, other than
insurance that is specifically purchased as being in excess of this
policy, this policy shall operate in excess of, and not contribute with,
such other insurance.
L. CHANGES IN UNDERLYING INSURANCE Any changes in coverage or the insurer
in the underlying insurance shall be promptly reported to the company
and the insured shall, upon request, furnish the company with copies of
such changes. Any change in premium in the underlying insurance shall
be promptly reported tot he company and the premium for this policy may
be adjusted in accordance with the manuals of the company then in
effect.
IN WITNESS WHEREOF, the company has caused this policy to be signed by its
president and secretary but this policy shall not be valid unless completed by
the attachment hereto of a Declaration page countersigned by a duly authorized
representative of the company.
Secretary President
115
NUCLEAR ENERGY LIABILITY
EXCLUSION ENDORSEMENT
It is agreed that:
I. This policy does not apply:
(a) under any liability coverage, to injury, sickness, disease,
death, destruction or loss
1. 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
2. resulting from the hazardous properties or nuclear material and with
respect to which (a) any person or organization is required to
maintain financial protection pursuant to the Atomic Energy Act of
1954, or any law amendatory thereof, or (b) the insured is, or had its
policy not been issued would be, entitled to indemnity from the United
States of America, or any agency thereof, under any agreement entered
into by the United States of America, or any agency thereof, with any
person or organization;
(b) under any liability coverage, to injury, sickness, disease, death,
destruction or loss resulting from the hazardous properties of
nuclear material, if
1. the nuclear material (a) is at any nuclear facility owned by, or
operated by or on behalf of, an insured or (b) has been
discharged or dispersed therefrom;
2. 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
3. the injury, sickness, disease, death, destruction or loss arises out of
the furnishing by an insured of 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 (3) applies only to injury to or
destruction of or loss of property at such nuclear facility;
II. As used in this endorsement:
"hazardous properties" include radioactive, toxic or explosive properties;
"nuclear material" means source material, special nuclear 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 (1) or (2) thereof;
"nuclear facility" means
1. any nuclear reactor:
2. any equipment or device designed or used for (a) separating the
isotopes of uranium or plutonium, (b) processing or
utilizing spent fuel, or (c) handling, processing or packaging waste:
3. any equipment or devise used for processing, fabricating or alloying of
special nuclear material if at any time the total amount of such
material in the custody of the insured at the premises where such
equipment or devise is located consists of or contains more than 25
grams of plutonium or uranium 223 or any combination thereof, or more
than 250 grams of uranium 235;
4. 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 self-supporting chain reaction or to contain a critical mass
of fissionable material;
With respect to injury to or destruction of or loss of property, the word
"injury" or "destruction" or "loss" includes all forms of radioactive
contamination of property;
All other terms and conditions of this policy remain unchanged.
116
IMPORTANT NOTE: THIS IS CLAIMS MADE COVERAGE. PLEASE READ THIS POLICY
CAREFULLY.
THIS POLICY, SUBJECT TO THE DECLARATIONS, INSURING AGREEMENTS, TERMS,
CONDITIONS, LIMITATIONS AND AMENDMENTS, APPLIES ONLY TO CLAIM OR CLAIMS THAT
ARE FIRST MADE AGAINST THE INSURED(S) AND REPORTED TO THE INSURER DURING THE
POLICY PERIOD OR DISCOVERY PERIOD (IF APPLICABLE)
THE LIMIT OF LIABILITY AVAILABLE TO PAY JUDGMENTS OR SETTLEMENTS SHALL BE
REDUCED AND MAY BE EXHAUSTED BY AMOUNTS INCURRED FOR DEFENSE COSTS, CHARGES AND
EXPENSES. THE RETENTION(S) APPLY(IES) TO DEFENSE COSTS. CHARGES AND EXPENSES.
ST. PAUL MERCURY INSURANCE COMPANY
EXCESS DIRECTORS AND OFFICERS LIABILITY AN CORPORATE INDEMNIFICATION POLICY
DECLARATIONS
Item 1. Named Insured: The Directors and Officers of
BOLT BERANEK AND NEWMAN, INC. AND ITS SUBSIDIARIES
Item 2. Address (No., Street, City, State and Zip Code)
150 Cambridge Park Drive
Cambridge, MA 02140
Item 3. Policy Period
From To
12-01-94 12-01-95 (12:01 A.M. Standard Time at the address stated
in Item 2.)
Item 4. Limit of Liability $ 5,000,000 each Policy Period in excess of Item
7(E). The limit of liability available to pay judgments or settlements
shall be reduced and may be exhausted by amounts incurred for legal
defense costs, charges and expense.
Item 5. Retentions (Applicable to Section 2(B)(2))
$ 1,000,000 Corporate Indemnification Each Loss
$ -0- Each Insured Each Loss
$ -0- Aggregate All Insureds Each Loss
Item 6. Premium $ 149,010
Item 7. Schedule of Underlying Insurer(s)
(A)1. Underlying Insurer: Federal Insurance Company
2. Policy Number: 8137-71-31-A
3. Policy Period: From: 12-01-94 To: 12-01-95
4. Limit of Liability: $ 3,000,000
5. Retentions:
$ 1,000,000Corporate Indemnification Each Loss
$ -0- Each Insured Each Loss
$ -0- Aggregate All Insureds Each Loss
(B)1. Underlying Insurer: Not Applicable
117
2. Policy Number:
3. Policy Period: From: To:
4. Limit of Liability: $
(C)1. Underlying Insurer: Not Applicable
2. Policy Number:
3. Policy Period: From: To:
4. Limit of Liability: $
(D)1. Underlying Insurer: Not Applicable
2. Policy Number:
3. Policy Period: From: To:
4. Limit of Liability: $
(E)Total amount of Underlying Limit of Liability $ 3,000,000 and any
retentions or deductibles as applicable under the policy(ies) as stated
in this Item 7.
Item 8. Subject to the Terms, Conditions and Limitations of this policy as
hereinafter provided, this policy follows the form of:
Insurer's Name: Federal Insurance Company
Policy Number: 8137-71-31-A
Item 9. Forms Attached
1) St. Paul Mercury Insurance Company Policy, Form #50408.
2) Endorsement one.
3) St. Paul Mercury Insurance Renewal Application, Form #50264, and its
attachments.
118
INSURING CLAUSE
In consideration of the payment of the premium, in reliance upon the statements
made to the Insurer by application including its attachments, a copy of which
is attached to and forms a part of this policy, and any material submitted
herewith (which shall be retained on file by the Insurer and be deemed attached
hereto), and except as hereinafter otherwise provided or amended, this
policy is subject to the same Insuring Agreement(s), Terms, Conditions and
Limitations as provided by the policy stated in Item 8 of the Declarations and
any amendments thereto, provided:
A. 1. the Insurer has received prior written notice from the
Insured(s) of any amendments to the policy stated in Item 8 of the
Declarations, and
2. the Insurer has given to the Insured(s) its written consent to any
amendments to the policy stated in Item 8 of the Declarations, and
3. the Insured has paid any additional premium.
B. This policy is not subject to the same premium or the amount and Limit of
Liability of the policy stated in Item 8 of the Declarations.
TERMS, CONDITIONS AND LIMITATIONS
Section 1. UNDERLYING INSURANCE
A. It is a condition precedent to the Insured(s) rights under this policy
that the Insured(s) notify the Insurer, as soon as practical in writing,
of a failure to maintain in full force and effect, except as provided for
under Section 2(B), an without alteration of any Terms, Conditions,
Limit of Liability or Retentions, any of the underlying insurance policies
as stated in Item 7 of the Declarations.
B. Failure to maintain, as set forth above, any of the underlying insurance
policies as stated in Item 7 of the Declarations, except as provided for
under Section 2(B), shall not invalidate this policy, but the liability of
the Insurer for loss under this policy shall apply only to the same extent
it would have been liable had the underlying insurance policies been
maintained as set forth above. In no event shall the Insurer be liable to
pay loss under this policy until the total amount of the Underlying Limit
of Liability, as stated in Item 7(E) of the Declarations, has been paid
solely by reason of the payment of loss.
Section 2. LIMIT OF LIABILITY
A. The Insurer shall only be liable to make payment under this policy after
the total amount of the Underlying Limit of Liability as stated in Item
7(E) of the Declarations has been paid solely by reason of the payment of
loss.
119
B. In the event of the reduction or exhaustion of the total amount of the
Underlying Limit of Liability as stated in Item 7(E) of the Declarations
solely by reason of the payment of loss, this policy shall:
1. in the event of such reduction pay excess of the reduced amount
of the Underlying Limit of Liability but not to exceed the amount
stated in Item 4 of the Declarations, or
2. in the event of exhaustion continue in force provided always that
this policy shall only pay the excess over the Retention amount stated
in Item 5 of the Declarations as respects each and every loss
hereunder, bot not to exceed the amount stated in Item 4 of the
Declarations.
C. The Insurer's liability for loss subject to paragraphs (A) and (B) above
shall be the amount stated in Item 4 of the Declarations which shall be the
maximum liability of the Insurer in the Policy Period stated in Item 3 of
the Declarations. The Limit of Liability of the Insurer for the Discovery
Period, if elected, shall be part of, and not in addition to, the Limit of
Liability as stated in Item 4 of the Declarations.
Section 3. LOSS PROVISIONS
The Insured(s) shall as a condition precedent to the right to be indemnified
under this policy give to the Insurer notice in writing, as soon as practicable
and during the Policy Period or during the Discovery Period, if effective, or
any claim made against the Insured(s).
Section 4. NOTICE
Notice hereunder shall be given to St. Paul Mercury Insurance Company, 385
Washington Street, St. Paul, MN 55102.
Section 5. CANCELLATION
This policy may be cancelled by the Corporation at any time by mailing written
notice to the Insurer at the address shown in Section 4 stating when thereafter
such cancellations shall be effective or by surrender of this policy to the
Insurer or its authorized agent. This policy may also be cancelled by or on
behalf of the Insurer by delivering to the Corporation or by mailing to the
Corporation by registered, certified, or other first class mail, at the
Corporation's address as shown in Item 2 of the Declarations, written notice
stating when, not less than sixty (60) days thereafter, the cancellation shall
be effective. The mailing of such notice as aforesaid shall be sufficient
proof of notice. The Policy Period terminates at the date and hour specified
in such notice, or at the date and time of surrender.
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.
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Section 6. DISCOVERY PERIOD
If the Insurer shall cancel or refuse to renew (refuse to renew is hereafter
referred to as non-renewal) this policy, the Corporation or the Insureds shall
have the right, upon payment of the additional premium of 75% of the premium
hereunder, to an extension of the cover granted by this policy to report any
claim or claims in accordance with Section 3, which claim or claims are made
against the Insureds during the period of twelve (12) months after the
effective date of cancellation or non-renewal, herein called Discovery Period,
but only for any Wrongful Act committed before the effective date of such
cancellation or non-renewal and otherwise covered by this policy.
This right shall terminate, however, unless the Corporation or the Insureds
provide written note of such election together with the payment or the
additional premium due and this is received by the Insurer at the address shown
in Section 4 within then (10) days after the effective date of cancellation or
non-renewal.
Discovery Period wherever used in this policy shall also mean optional
extension period or extended reporting period as defined by the policy stated
in Item 8 of the Declarations.
The offer by the Insurer of renewal terms, conditions, limits of liability
and/or premiums different from those of the expiring policy shall not
constitute non-renewal.
The provisions of this Section 6 an the rights granted herein to the
Corporation or the Insureds shall not apply to any cancellation resulting from
non-payment or premium.
Section 7. NUCLEAR ENERGY LIABILITY EXCLUSION
It is agreed that:
A. This policy does not apply:
1. Under any Liability Coverage, to bodily injury or property damage
a. with respect to which an Insured under this 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 an agency
thereof, under any agreement entered into by the United States
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of America, or any agency thereof with any person or
organization.
2. Under any Medical Payments coverage, or under any Supplementary
Payments provision relating to first aid, to expenses incurred with
respects to bodily injury resulting from hazardous properties of
nuclear material and arising out of the operation of a nuclear facility
by any person or organization.
3. Under any Liability Coverage, to bodily injury or property damage
resulting from the hazardous properties of nuclear material, if
a. the nuclear material (1) is at any nuclear facility owned by,
or operated by or 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 bodily injury or property damage arises out of the
furnishing by an Insured of 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 property damage to such nuclear facility and any property
thereat.
B. As used in this exclusion:
"hazardous properties" includes radioactive, toxic or explosive properties;
"nuclear material" means source material. special nuclear material or by-
product material.
"source material," "special nuclear material," and by-product 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 by-product 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 (1) or (2) thereof;
"nuclear facility" means
(1) any nuclear reactor,
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(2) 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,
(3) any equipment or device used for the processing, fabricating or
alloying of special nuclear material if at any time the total amount of
such material in the custody of the Insured and the premises where
such equipment or device is located consists of or contains more than 25
grams of plutonium or uranium 223 or any combination thereof, or more than
250 grams or uranium 235,
(4) 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, and 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 critical mass of
fissionable material, "property damage" includes all forms of radioactive
contamination of property.
Section 8. ACTION AGAINST THE INSURER
No action shall lie against the Insurer unless, as a condition precedent
thereto, there shall have been full compliance with all of the terms of this
policy, nor until the amount of the Corporation's obligation to pay and /or the
Insureds' obligation to pay have been finally determined either by judgment
against the Insureds after actual trial or by written agreement of the
Corporation and/or the Insureds, the claimant and the Insurer.
Any person or organization or the legal representative thereof who has secured
such judgment or written agreement shall thereafter be entitled to recover
under this policy to the extent of the insurance afforded by this policy. No
person or organization shall have any right under this policy to join the
Insurer as a party to any action against the Corporation and/or Insureds to
determine the Insured's liability, nor shall the Insurer be impleaded by the
Corporation and/or Insureds or their legal representatives. Bankruptcy or
insolvency of the Corporation or the Corporation's estate, or bankruptcy or
insolvency of the Insureds or the Insureds' estate shall not relieve the
Insurer of any of its obligations hereunder.
IN WITNESS WHEREOF, the Insurer designated on the Declarations page has caused
this policy to be signed by its President and Secretary and countersigned on
the Declaration page by a duly authorized representative of the Insurer.
Secretary President
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ENDORSEMENT #1
The following spaced preceded by an asterisk (*) need not be completed if this
endorsement and the policy have the same inception date.
ATTACHED TO AND * EFFECTIVE DATE OF * ISSUED TO
FORMING PART OF POLICY ENDORSEMENT
NO.
900DX0103
PRIOR AN PENDING LITIGATION EXCLUSION
M1150 Ed. 3-90
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 or claims made against the Insured(s) arising from any prior or
pending litigation as of 12-31-92, as well as all future claims or litigation
based upon the pending or prior litigation or derived from the same or
essentially the same facts (actual or alleged) that gave rise to the prior or
pending litigation.
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.
*Agency Name and Address In Witness Whereof, the Company
has caused this endorsement to be
signed by a duly authorized
representative of the Company