EXHIBIT (99-5)
Directors and Officers (Fourth) Liability Binder of Insurance
COMPANY: Allied World Assurance Company, Ltd.
The Bermuda Commercial Bank Building
43 Victoria Street
Hamilton HM 12
Bermuda
It is hereby understood and agreed that in reliance upon the application and all
statements therein, which form a part of this policy, coverage is bound as
follows:
Insured Name: Procter & Gamble Company (The)
Insured Address: One Procter & Gamble Plaza, Cincinnati, OH 45202, USA
Insurance Company: Allied World Assurance Company Ltd.
Insurance Carrier: Allied World Assurance Company Ltd.
Underwriter: James Perry
Type of Insurance: Directors and Officers Insurance
Policy Form: Follow Form
AWAC Policy Form: Excess D&O (1/03)
Policy Trigger: Claims Made
Policy No: C000539/003
Policy Period: 6/30/2004 to 6/30/2005
Currency: United States Dollars
Coverage Layer Limits: USD $25,000,000 per claim
USD $25,000,000 annual aggregate
Excess of
USD $75,000,000 per claim
USD $75,000,000 annual aggregate
Pending or Prior Litigation Date: 6/30/2002
AWAC Participation of Covered Layer Limits: 100%
AWAC Limits: $25,000,000
AWAC Premium: $892,500
Commission: 12%
Binder Expiry Date: Coverage held by binder until AWAC layer issued.
Applicable Endorsements: Reliance Endorsement (removed if Assignment Letter
completed)
Follow Form: a) Company ACE Bermuda
b) Policy No.: PG-10151D
c) Policy Period: 6/30/2004 to 6/30/2005
d) Policy Limits: $25,000,000 Per Claim
$25,000,000 Annual Aggregate
e) Premium: $1,050,000
f) Policy Form: ACE D&O 03/00
g) Endorsements: Follow the primary binder
on endorsements
ENDORSEMENTS AWAC WILL NOT FOLLOW:
1. State Amendatory, Choice of Law, or Arbitration
Endorsements;
2. Underlying sub-limits, however we will recognize
erosion;
TERMS AND CONDITIONS
1. This binder is strictly conditioned upon no material change in the risk
occurring between the date of this letter and the inception date of the
policy period listed on page one (including any claim or notice of
circumstances which may he reasonably expected to give rise to a claim
under any policy of which the policy being proposed by this letter is a
renewal, replacement or excess of). In the event of such change in risk,
the Insurer may at its sole discretion, whether or not this binder has
already been accepted by the Insured, modify and/or withdraw this binder.
2. In the event any Underlying Policy contains terms and conditions more
restrictive than the Followed Policy, then the Insurer's coverage shall
under no circumstances be broader than the most restrictive terms and
conditions contained in the Followed Policy or any Underlying Policy.
(Premium Payment)
3. Binding is subject to payment of premium on or before 15 calendar days
after the inception of the Policy Period listed on page one or the policy
will be canceled automatically retroactively to the inception date.
(Taxes)
4. With respect to United Kingdom Insurance Premium Tax, any tax due is
payable by the Insured, but collection is required by the Insurer as its
agent. We are unable to determine what UKIPT, if any, is due. Please
complete the UKIPT Questionnaire and return to us prior to binding the
insurance contract. If we do not receive same, the Insured shall be
responsible to the United Kingdom authorities for any UKIPT monies and
penalties due.
5. The premium payable to the insurer does not include any amount with
respect to insurance premium taxes or excise taxes. Under the terms of the
proposal, it is the obligation of the Insured to be liable for and pay any
insurance premium taxes or excise taxes either itself or through its
broker. Allied World Assurance Company, Ltd will be indemnified and fully
reimbursed by the Insured for any premium taxes (and costs associated with
collection, including legal costs) in the event the insured or its broker
fails to pay.
(Extended Reporting Period)
6. Unless specifically stated otherwise in the comments section of this
document, the Extended Reporting Period will be 150% of the annual premium
for 12 months. The cost of discovery, as a percentage of the annual
premium, shall in no event be less than the highest percentage of any
Underlying Policy.
SUBJECTIVITIES: DUE DATE:
This binder is subject to receipt, review and acceptance of
the following information:
1. Final review and acceptance of prospective changes to
underlying language. 7/7/2004
2. Copy of the underlying policies when issued. We will
be able to issue our policy upon receipt of materially
correct primary and followed policies. 6/30/2005
3. We would accept our properly executed Assignment Letter
instead of the Reliance Endorsement at the client's option. 7/7/2004
ADDITIONAL COMMENTS
This is follow form of ACE BDA's $25x50MM layer, and is excess of: CODA primary
$25MM limit for $985,000 annual premium (6/28/04 bdr, DIC cover only), XL
$25x25MM for $738,750 (6/29/04 bdr, excess DIC), and ACE BDA $25x50MM for
$1,050,000 (6/29/04 bdr, ABC coverage, $50MM retention, we follow this)
/s/ JAMES PERRY
- -------------------
James Perry