Exhibit (99.2)
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Directors and Officers (First) Excess Liability Policy
Insured: THE PROCTER & GAMBLE COMPANY/THE PROCTER & GAMBLE FUND
AND OFFICERS OF OPERATING UNITS OF PROCTER AND GAMBLE
COMPANY
Policy No: XLD+O-00364-98
Endorsement No: 3
Effective Date: JUNE 30, 1998
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DELETION OF GENERAL CONDITION I.
In consideration of the premium charged, it is hereby understood and agreed that
Paragraph I, EMPLOYEE BENEFITS PROGRAM EXCLUSION, of Section VI. General
Conditions of the Policy is deleted in its entirety.
All other terms and conditions of the Policy remain unchange.
X.L. INSURANCE COMPANY, LTD.
By: /s/PAUL B. MILLER
PAUL B. MILLER
Title: SENIOR VICE PRESIDENT
Date: AUGUST 10, 1998
Ref: 0D999.01
XL
Insured: THE PROCTER & GAMBLE COMPANY/THE PROCTER & GAMBLE FUND
AND OFFICERS OF OPERATING UNITS OF PROCTER AND GAMBLE
COMPANY
Policy No: XLD+O-00364-98
Endorsement No: 2
Effective Date: JUNE 30, 1998
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DIRECTORS' AND OFFICERS' COVERAGE ENDORSEMENT
Notwithstanding any other provision of the Policy or this Endorsement,
if the Lead Policy provides coverage for any person acting in the capacity as a
Director or Officer of a company or entity which is not an Insured Company under
the Policy and this Endorsement, no such coverage shall be provided pursuant to
the Policy and/or this Endorsement unless (a) it is indicated below that
"Outside Positions" coverage is being afforded, (b) such coverage is subject to
a retention (whether self-insured and/or covered by underlying policy(ies)) in
the amount listed below which shall be deemed to be listed in Item 4 of the
Declarations, and such coverage in any event shall apply in excess of all
Primary and Underlying Excess Insurance listed in Item 4 of the Declarations,
and (c) such coverage is subject to an aggregate sublimit in the amount listed
below, which sublimit shall be the maximum liability of the Company for all
losses in respect of such coverage during the policy period irrespective of the
time of payment by the Company and shall be a sublimit included within and shall
not increase the Aggregate Limit of Liability stated in Item 2 of the
Declarations.
It is further understood and agreed that this extension of cover shall not apply
to any person acting as a Director or Officer of the following companies:
(a) Corporate Officers and Directors Assurance Ltd.
(b) Corporate Officers and Directors Assurance Holdings Ltd.
(c) Exel Ltd.
(d) X. L Insurance Company, Ltd.
Outside Positions Coverage: YES
Outside Positions Coverage (Self-Insured) Retention: $25,000,000
Outside Positions Coverage Aggregate Sublimit: $25,000,000
X.L. INSURANCE COMPANY, LTD.
By: /s/PAUL B. MILLER
PAUL B. MILLER
Title: SENIOR VICE PRESIDENT
Date: AUGUST 10, 1998
Ref: 0D234.01R
XL
Insured: THE PROCTER & GAMBLE COMPANY/THE PROCTER & GAMBLE FUND AND
OFFICERS OF OPERATING UNITS OF PROCTER AND GAMBLE COMPANY
Policy No: XLD+O-00364-98
Endorsement No: 1
Effective Date: JUNE 30, 1998
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POLICY INTERPRETATION ENDORSEMENT
It is agreed that Condition K(5) is hereby deleted and the following is
substituted therefore:
"(5) Law of Construction and Interpretation
"This Policy shall be construed in accordance with the internal laws of
the State of New York, except insofar as such laws:
"(a) may prohibit indemnity in respect of punitive damages hereunder;
"(b) pertain to regulation under the New York Insurance Law, or
regulations issued by the Insurance Department of the State of New York
pursuant thereto, applying to insurers doing insurance business, or
issuance, delivery or procurement of policies of insurance, within the
State of New York or as respects risks or insureds situated in the
State of New York; or
"(c) are inconsistent with any provision of this Policy;
"provided, however, that the provisions, stipulations, exclusions and
conditions of this Policy are to be construed in an evenhanded fashion
as between the Insured and the Company; without limitation, where the
language of this Policy is deemed to be ambiguous or otherwise unclear,
the issue shall be resolved in the manner most consistent with the
relevant provisions, stipulations, exclusions and conditions (without
regard to authorship of the language, without any presumption or
arbitrary interpretation or construction in favor of either the Insured
or the Company and without reference to parol or other extrinsic
evidence)."
X.L. INSURANCE COMPANY, LTD.
By: /s/PAUL B. MILLER
PAUL B. MILLER
Title: SENIOR VICE PRESIDENT
Date: AUGUST 10, 1998
Ref: OD247.01
XL
Form X.L. D&O-003B Policy No. XLD+O-00364-98
XL
X.L. INSURANCE COMPANY, LTD.
Producer: PARK INTERNATIONAL LIMITED
In favor of: THE PROCTER & GAMBLE COMPANY THE PROCTER AND GAMBLE
FUND AND OFFICERS OF OPERATING UNITS OF PROCTER AND
GAMBLE COMPANY
Address: ONE PROCTER & GAMBLE PLAZA
CINCINNATI, OHIO 45202-3314
U.S.A.
Type of Coverage: DIRECTORS AND OFFICERS LIABILITY
In the amount as stated in Item 2 of the
Declarations.
Term: Beginning at 12:01 A.M. on the 30th day of June, 1998 prevailing time at
the address of the Named Insured and in accordance with terms and
conditions of the form(s) attached.
PREMIUM: $140,000
IN WITNESS WHEREOF, this Policy has made,
entered into and executed by the undersigned
in Hamilton, Bermuda 10th day of AUGUST, 1998.
By: /s/PAUL B. MILLER
PAUL B. MILLER
Title: SENIOR VICE PRESIDENT
DATE: AUGUST 10, 1998 POLICY NO: XLD+O-00364-98
X.L. INSURANCE COMPANY, LTD.
POLICY FOR DIRECTORS AND OFFICERS LIABILITY
IMPORTANT: THIS COVERAGE IS ON A CLAIMS MADE AND CLAIMS
REPORTED BASIS. PLEASE READ THIS POLICY CAREFULLY.
DECLARATIONS
Item 1: (a) Named Company: THE PROCTER & GAMBLE COMPANY/
THE PROCTER AND GAMBLE FUND
OFFICERS OF OPERATING UNITS OF
PROCTER AND GAMBLE COMPANY
(b) Address of Named Company: ONE PROCTER & GAMBLE PLAZA
CINCINNATI, OHIO 45202
U.S.A.
Item 2: Aggregate Limit of Liability:
$25,000,000 each policy period in excess of $25,000,000 each policy
year.
Item 3: Policy Period: JUNE 30, 1998 - JUNE 30, 1999
The Declarations along with the completed Application and this
Policy and any Schedules hereto shall constitute the contract
among the Named Company, the Designated Companies, the
Directors and Officers and the Company.
Item 4: Schedule of Current and Known Prospective Underlying Insurance:
Policy MM Policy
Carrier Number Limits Year
------- ------ ------ ------
i. Underlying Second Excess
ii. Underlying Excess. . . .
iii. Primary Insurer(s) . . . CODA PG-106C 25 JUNE 30,
1998-2001
Uninsured Retention under Primary Insurance:
$NIL each Director or Officer each loss, but in no event
exceeding $NIL in the aggregate each loss all Directors and
Officers Liability.
Item 5: Policy to be followed: CODA - POLICY NO. PG-106C
Item 6: Representative of Named Company: THE PROCTER & GAMBLE COMPANY
Item 7: Notice: X.L. Insurance Company, Ltd., Cumberland House, 1 Victoria St.,
P.O. Box HM 2245, Hamilton, Bermuda HM JX. Telex: 3626 XL BA
Item 8: (a) Discovery Coverage Premium: 100% of policy period premium
hereunder.
(b) Discovery Coverage Period: 365 days.
Item 9: Notice Cancellation Period: 60 days.
Said insurance is subject to the provisions, stipulations, exclusions and
conditions contained in this form and the representations and warranties
contained in the Named Company's application for this policy of insurance, which
is hereby made a part of said insurance, together with other provisions,
stipulations, exclusions and conditions as may be endorsed on said policy or
added thereto as therein provided (collectively hereinafter referred to as the
"Policy").
THE PROCTER & GAMBLE COMPANY/THE PROCTER & GAMBLE FUND AND
OFFICERS OF OPERATING UNITS OF PROCTER AND GAMBLE COMPANY
DIRECTORS AND OFFICERS LIABILITY INSURANCE
Named Company: As stated in Item 1 of the Declarations forming a part hereof
(hereinafter called the "Named Company").
INSURING AGREEMENTS
I. COVERAGE
The X.L. Insurance Company, Ltd. (the "Company") hereby agrees with the
Directors and Officers of the Named Company and any other companies
listed in Schedule A hereto ("Designated Companies"), subject to the
limitations, terms, exclusions and conditions hereinafter mentioned
that, if during the policy period any claim or claims are made against
any of the Directors and Officers for a Wrongful Act, and reported to
the Company, the Company in accordance with its limits of liability
shall pay on behalf of such Directors and Officers all loss which such
Directors and Officers shall become legally obligated to pay, except
for such loss which the Designated Companies shall indemnify such
Directors and Officers.
II. LIMIT OF LIABILITY
A. It is expressly agreed that liability for any loss shall
attach to the Company only after the Primary and Underlying
Excess Insurers shall have paid, admitted or been held liable
to pay the full amount of their respective liability and the
Directors and Officers shall have paid the full amount of
self-insured retentions, if any, as set forth in Item 4 of the
Declarations (hereinafter referred to as the "Schedule of
Underlying Insurance"), and the Company shall then be liable
to pay only additional amounts for any and all losses up to
its Aggregate Limit of Liability ("aggregate limit") as set
forth in Item 2 of the Declarations, which shall be the
maximum liability of the Company for all covered losses (with
respect to Directors and Officers, collectively) during the
policy period irrespective of the time of payment by the
Company.
B. In the event and only in the event of the reduction or
exhaustion of the aggregate limits of liability under the said
Primary and Underlying Excess Policies and under self-insured
retentions, if any (as if such retentions were subject to the
same terms, conditions, exclusions and structure of limits of
liability as said policies) by reason of losses paid
thereunder, this coverage shall: (i) in the event of
reduction, pay the excess of the reduced Primary and
Underlying Excess Limits, and (ii) in the event of exhaustion,
continue in force as Primary Insurance; provided always that
in the latter event this coverage shall only pay excess of the
retention applicable to such Primary Insurance for such policy
year as set forth in Item 4 (iii) of the Declarations, which
shall be applied to any subsequent loss in the same manner as
specified in such Primary Insurance. Except insofar as
aggregate limits of liability under the Primary and Underlying
Excess Policies have been reduced or exhausted by reason of
losses paid thereunder and self-insured retentions, if any,
have been fully paid (as if such retentions were subject to
the same terms, conditions, exclusions and structure of limits
of liability as said policies), this coverage shall apply only
as if all Primary and Underlying Policies and self-insured
retentions, if any, listed on the Schedule of Underlying
Insurance covered and were fully collectable for any loss
hereunder.
III. PRIMARY AND UNDERLYING INSURANCE
This Policy is subject to the same warranties, terms, conditions and
exclusions (except as regards the premium, the amount and limits of
liability, the policy period and except as otherwise provided herein)
as are contained in or as may be added to the policy set forth in Item
5 of the Declarations or, if no policy is set forth therein, the policy
of the Primary Insurer(s) as respects coverage of the Directors and
Officers.
It is a condition of this Policy that the policies of the Primary and
Underlying Excess Insurers shall be maintained in full effect during
the policy year(s) listed in the Schedule of Underlying Insurance
except for any reduction of the aggregate limits contained therein by
reason of losses paid thereunder (as provided for in Paragraph II(B)
above). This Policy shall automatically terminate upon the failure to
satisfy this condition (i.e., when any of such listed policies ceases
to be in full effect) unless otherwise agreed by the Company in
writing. If the Named Company notifies the Company in writing of
cancellation of any of the policies listed on the Schedule of
Underlying Insurance at least thirty (30) days prior to the
effectiveness thereof, the Company agrees that within twenty (20) days
thereafter it will review the situation and formulate a proposal for
the terms, conditions, exclusions, underlying amount, limit and premium
for continuation of this Policy upon such cancellation; provided,
however, that (i) the underlying amount shall be at least $20,000,000,
(ii) the limit shall be a maximum of $25,000,000 and (iii) this Policy
shall not continue after such cancellation unless there is an agreement
in writing between the Named Company and the Company providing
therefor.
IV. COSTS, CHARGES AND EXPENSES
No costs, charges or expenses shall be incurred or settlements made
without the Company's consent, such consent not to be unreasonably
withheld; however, in the event of such consent being given, the
Company will pay, subject to the provisions of Article II, such costs,
settlements, charges or expenses.
V. NOTIFICATION
A. If during the policy period or extended discovery period any
claim is made against any Director or Officer, the Directors
and Officers shall, as a condition precedent to their right to
be indemnified under this Policy, give to the Company notice
in writing as soon as practicable of such claims.
B. If during the policy period or extended discovery period:
(1) the Directors and Officers shall receive written or
oral notice from any party that it is the intention
of any such party to hold the Directors and Officers,
or any of them, responsible for a Wrongful Act; or
(2) the Directors and Officers shall become aware of any
fact, circumstance or situation which may
subsequently give rise to a claim being made against
the Directors and Officers, or any of them, for a
Wrongful Act;
and shall in either case during such period give written
notice as soon as practicable to the Company of the receipt of
such written or oral notice under Clause (1) or of such fact,
circumstance or situation under Clause (2), then any claim,
which may subsequently be made against the Directors and
Officers, arising out of such Wrongful Act shall for the
purpose of this Policy be treated as a claim made during the
policy period.
C. Notice to the Company shall be given to the person or firm
shown under Item 7 of the Declarations. Notice shall be deemed
to be received if sent by prepaid mail properly addressed.
VI. GENERAL CONDITIONS
A. DEFINITIONS: The terms "Directors and Officers", "Wrongful
Act", "Loss", "Subsidiary", and "Policy Year" shall be deemed
to have the same meanings in this Policy as are attributed to
them in the policy set forth in Item 5 of the Declarations or,
if no policy is set forth therein, the policy of the Primary
Insurer(s). The term "Company" shall mean the X.L. Insurance
Company, Ltd. The term "policy period" shall mean the period
stated in Item 3 of the Declarations.
B. DISCOVERY CLAUSE: If the Company shall cancel or refuse to
renew this Policy, the Named Company or the Directors and
Officers shall have the right, upon payment of the additional
premium set forth in Item 8(a) of the Declarations to a
continuation of the coverage granted by this Policy in respect
of any claim or claims which may be made against the Directors
and Officers during the period stated in Item 8(b) of the
Declarations after the date of cancellation or non-renewal,
but only in respect of any Wrongful Act committed before the
date of cancellation or non-renewal of this Policy. This right
of extension shall terminate unless written notice is given to
the Company within ten (10) days after the effective date of
cancellation or non-renewal.
C. APPLICATION OF RECOVERIES: All recoveries or payments
recovered or received subsequent to a loss settlement under
this Policy shall be applied as if recovered or received prior
to such settlement and all necessary adjustments shall then be
made between the Named Company or the Directors and Officers
and the Company, provided always that nothing in this Policy
shall be construed to mean that losses under this Policy are
not payable until the Directors' and Officers' ultimate net
loss has been finally ascertained.
D. CANCELLATION CLAUSE: This coverage may be cancelled by the
Named Company at any time by written notice or surrender of
this Policy. This coverage may also be cancelled by, or on
behalf of, the Company by delivering to the Named Company or
by mailing to the Named Company by registered, certified or
other first class mail, at the Named Company's address shown
in Item 1 of the Declarations, written notice stating when,
not less than the number of days set forth in Item 9 of the
Declarations, the cancellation shall become effective. The
mailing of 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 this Policy shall be
cancelled by the Named Company, the Company shall retain the
customary short rate proportion of premium hereon. If this
Policy shall be cancelled by or on behalf of the Company, the
Company shall retain the pro rata proportion of the premium
hereon. Payment or tender of any unearned premium by the
Company shall not be a condition precedent to the
effectiveness of cancellation, but such payment shall be made
as soon as practicable.
E. COOPERATION: The Named Company, the Designated Companies and
the Directors and Officers shall give the Company such
information and cooperation as it may reasonably require.
F. PREMIUM: The premium under this Policy is a flat premium and
is not subject to adjustment except as otherwise provided
herein. The premium shall be paid to the Company.
G. WRONGFUL ACT EXCLUSION: Notwithstanding any other provision of
this Policy, this Policy shall not apply with respect to a
Wrongful Act by any Director or Officer of the Company in his
capacity as such.
H. NUCLEAR EXCLUSION: This Policy shall not apply to, and the
Company shall have no liability hereunder in respect of
liability or alleged liability for:
(1) personal injury, property damage or advertising
liability in the United States, its territories or
possessions, Puerto Rico or the Canal Zone (A) with
respect to which the Named Company, the Designated
Companies and/or Officers and Directors
(collectively, the "Certain Parties") 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
limited liability or (B) resulting from the hazardous
properties of nuclear material and with respect to
which (i) any person or organization is required to
maintain financial protection pursuant to the Atomic
Energy Act of 1954 or any law amendatory thereof or
(ii) a Certain Party is, or had this Policy not been
issued, would be entitled to indemnity from 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) medical or surgical relief or 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 in the
United States, its territories or possessions, Puerto
Rico or the Canal Zone;
(3) injury, sickness, disease, death or destruction
resulting from hazardous properties of nuclear
material, if (A) the nuclear material (i) is at any
nuclear facility owned by or operated by or on behalf
of any of the Certain Parties in the United States,
its territories or possessions, Puerto Rico or the
Canal Zone or (ii) has been discharged or dispersed
therefrom, (B) such nuclear material is contained in
spent fuel or waste at any time possessed, handled,
used, processed, stored, transported or disposed by
or on behalf of any of the Certain Parties in the
United States, its territories or possessions, Puerto
Rico or the Canal Zone or (C) the injury arises out
of the furnishing by any of the Certain Parties of
services, materials, parts or equipment in connection
with the planning, construction, maintenance,
operation or use of a nuclear facility, but if such
facility is located within the United States of
America, its territories or possessions or Canada,
this clause (3)(C) applies only to injury to or
destruction of property at such nuclear facility;
(4) As used in this Section (H):
(A) "hazardous properties" included 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 by the Atomic Energy Act
of 1954 or in 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
(i) containing by-product materials and (ii)
resulting from the operation by a person or
organization of nuclear facility included
within the definition of nuclear facility
under clauses (B)(i) or (B)(ii) (below):
(B) "nuclear facility" means
(i) any nuclear reactor;
(ii) any equipment or device designed
or used for (x) separating the
isotopes of uranium or plutonium,
(y) processing or utilizing spent
fuel, or (z) handling processing
or packaging waste;
(iii) 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 such
premises where such equipment or
device is located consists of or
contains more than 25 grams of
plutonium or uranium 233 or
combination thereof or more than
250 grams of uranium 235;
(iv) any structure, basin, excavation,
premises or place prepared for the
storage or disposal of waste.
(C) "Nuclear facility" includes the site on
which any of the foregoing is located, all
operations conducted on such site and all
premises used for such operations.
(D) "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.
(E) With respect to injury or destruction of
property, the word "injury" or "destruction"
includes all forms of radioactive
contamination of property or loss of use
thereof or liability or alleged liability of
whatsoever nature directly or indirectly
caused by or contributed to by or arising
from ionizing radiations or contamination by
radioactivity outside the United States, its
territories or possessions, Puerto Rico or
the Canal Zone from any nuclear fuel or from
any nuclear waste from the combustion,
fission or fusion of nuclear fuel.
I. EMPLOYEE BENEFITS PROGRAMS EXCLUSION: Notwithstanding any
other provision of this Policy, this coverage shall not apply
with respect to:
(1) any liability or alleged liability arising out of or
alleged to arise out of any negligent act, error or
omission of any Director or Officer, or any other
person for whose acts any Director or Officer is
legally liable, in the administration of Employee
Benefits Programs, as defined in subsection (2)
below, including, without limitation, liability or
alleged liability under the Employee Retirement
Income Security Act of 1974, as amended.
(2) As used in this Section I, the term "Employee
Benefits Programs" means group life insurance, group
accident or health insurance, profit sharing plans,
pension plans, employee stock subscription plans,
workers' compensation, unemployment insurance, social
benefits, disability benefits, and any other similar
employee benefits.
(3) As used in this Section I, the unqualified word
"administration" means:
(A) giving counsel to employees with respect to
the Employee Benefits Programs;
(B) interpreting the Employee Benefits Programs;
(C) handling of records in connection with the
Employee Benefits Programs; and/or
(D) effective enrollment, termination or
cancellation of employees under the Employee
Benefits Programs.
J. INDEMNITY BY DESIGNATED COMPANIES: The Designated Companies
agree with the Company to indemnify their respective Directors
and Officers to the full extent permitted by applicable law.
The Directors and Officers agree that to the extent of any
payment of loss on their behalf or indemnification of them
hereunder they will assign, convey, set over, transfer and
deliver to the Company any and all rights and claims they may
have to indemnification from the Designated Companies and will
take all further steps requested by the Company to assist in
prosecution of such rights and claims, and the Designated
Companies hereby consent to any such assignment, conveyance,
set over, transfer or delivery and agree that any payment by
the Company on behalf of or to indemnify any Director or
Officer shall not be raised as a defense to the Director's or
Officer's right to indemnification from the Designated
Companies as asserted by the Company pursuant hereto.
K. OTHER CONDITIONS: This Policy is subject to the following
additional conditions:
(1) REPRESENTATION
Except as respects the giving of notice to exercise
extended discovery under Paragraph VI(B), the Named
Company or such other person as it shall designate in
Item 6 of the Declarations shall represent the Named
Company, each of the Designated Companies and each
Officer and Director of the Named Company and the
Designated Companies in all matters under this
Policy, including, without limitation, payment of
premium, negotiation of the terms of renewal and/or
reinstatement and the adjustment, settlement and
payment of claims.
(2) CHANGES
Notice to or knowledge possessed by any person shall
not effect waiver or change in any part of this
Policy or estop the Company from asserting any right
under the terms of this Policy; nor shall the terms
of this Policy be waived or changed, except by
endorsement issued to form a part hereof, signed by
the Company or its authorized representative.
(3) ASSIGNMENT
Assignment of interest under this Policy shall not
bind the Company unless and until consent is endorsed
hereon.
(4) ARBITRATION
Any dispute arising under this Policy shall be
finally and fully determined in London, England under
the provisions of the English Arbitration Act of
1950, as amended and supplemented, by a Board
composed of three arbitrators to be selected for each
controversy as follows:
Any party to the dispute may, once a claim or demand
on his part has been denied or remains unsatisfied
for a period of twenty (20) calendar days by any
other, notify the others of its desire to arbitrate
the matter in dispute and at the time of such
notification the party desiring arbitration shall
notify any other party or parties of the name of the
arbitrator selected by it. Any party or parties who
have been so notified shall within ten (10) calendar
days thereafter select an arbitrator and notify the
party desiring arbitration of the name of such second
arbitrator. If the party or parties notified of a
desire for arbitration shall fail or refuse to
nominate the second arbitrator within ten (10)
calendar days following the receipt of such
notification, the party who first served notice of a
desire to arbitrate will, within an additional period
of ten (10) calendar days, apply to a judge of the
High Court of England for the appointment of a second
arbitrator and in such a case the arbitrator
appointed by such a judge shall be deemed to have
been nominated by the party or parties who failed to
select the second arbitrator. The two arbitrators,
chosen as above provided, shall within ten (10)
calendar days after the appointment of the second
arbitrator choose a third arbitrator. In the event of
the failure of the first two arbitrators to agree on
a third arbitrator within said ten (10) calendar day
period, any of the parties may within a period of ten
(10) calendar days thereafter, after notice to the
other party or parties, apply to a judge of the High
Court of England for the appointment of a third
arbitrator and in such case the person so appointed
shall be deemed and shall act as the third
arbitrator. Upon acceptance of the appointment by
said third arbitrator, the Board of Arbitration for
the controversy in question shall be deemed fixed.
All claims, demands, denials of claims and notices
pursuant to this Section (K)(iv) shall be deemed made
if in writing and mailed to the last known address of
the other party or parties.
The Board of Arbitration shall fix, by a notice in
writing to the parties involved, a reasonable time
and place for the hearing and may in said written
notice or at the time of the commencement of said
hearing, at the option of said Board, prescribe
reasonable rules and regulations governing the course
and conduct of said hearing.
The Board shall, within ninety (90) calendar days
following the conclusion of the hearing, render its
decision on the matter or matters in controversy in
writing and shall cause a coy thereof to be served on
all the parties thereto. In case the Board fails to
reach a unanimous decision, the decision of the
majority of the members of the Board shall be deemed
to be the decision of the Board and the same shall be
final and binding on the parties thereto, and such
decision shall be a complete defense to any attempted
appeal or litigation of such decision in the absence
of fraud or collusion.
All costs of arbitration shall be borne equally by
the parties to such arbitration.
The Company and the Insured agree that in the event
that claims for indemnity or contribution are
asserted in any action or proceeding against the
Company by any of the Insured's other insurers in any
jurisdiction or forum other than that set forth in
this Section (K)(iv), the Insured will in good faith
take all reasonable steps requested by the Company to
assist the Company in obtaining a dismissal of these
claims (other than on the merits) and will, without
limitation, undertake to the court or other tribunal
to reduce any judgment or award against such other
insurers to the extent that the court or tribunal
determines that the Company would have been liable to
such insurers for indemnity or contribution pursuant
to this Policy. The Insured shall be entitled to
assert claims against the Company for coverage under
this Policy, including, without limitation, for
amounts by which the Insured reduced its judgment
against such other insurers in respect of such claims
for indemnity or contribution in an arbitration
between the Company and the Insured pursuant to this
Section (K)(iv); provided, however, that the Company
in such arbitration in respect of such reduction of
any judgment shall be entitled to raise any defenses
under this Policy and any other defenses (other than
jurisdictional defenses) as it would have been
entitled to raise in the action or proceeding with
such insurers.
(5) GOVERNING LAW AND INTERPRETATION
This Policy shall be governed by and construed in
accordance with the internal laws of the State of New
York, except insofar as such laws may prohibit
payment in respect of punitive damages hereunder;
provided, however, that the provisions, stipulations,
exclusions and conditions of this Policy are to be
construed in an evenhanded fashion as between the
Insured and the Company; without limitation, where
the language of this Policy is deemed to be ambiguous
or otherwise unclear, the issue shall be resolved in
the manner most consistent with the relevant
provisions, stipulations, exclusions and conditions
(without regard to authorship of the language,
without any presumption or arbitrary interpretation
or construction in favor of either the Insured or the
Company and without reference to parol evidence).
(6) LIABILITY OF THE COMPANY
The Named Company, the Designated Companies and the
Directors and Officers agree that the liability and
obligations of the Company hereunder shall be
satisfied from the funds of the Company alone and
that the individual shareholders of the Company shall
have no liability hereunder.
(7) HEADINGS
The descriptions in the headings and subheadings of
this Policy are inserted solely for convenience and
do not constitute any part of the terms and
conditions hereof.
X.L. INSURANCE COMPANY, LTD.
By: /s/PAUL B. MILLER
PAUL B. MILLER
Title: SENIOR VICE PRESIDENT
Date: AUGUST 10, 1998
THE PROCTER & GAMBLE COMPANY/THE PROCTER & GAMBLE FUND AND
OFFICERS OF OPERATING UNITS OF PROCTER AND GAMBLE COMPANY
SCHEDULE A
All Subsidiaries of the names Insured
--------------
Directors and Officers (First) Excess Liability Policy
Insured: THE PROCTER & GAMBLE COMPANY/THE PROCTER & GAMBLE FUND
AND OFFICERS OF OPERATING UNITS OF PROCTER AND GAMBLE
COMPANY
Policy No: XLD+O-00364-98
Endorsement No: 3
Effective Date: JUNE 30, 1998
---------------------------------------------------------------------------
DELETION OF GENERAL CONDITION I.
In consideration of the premium charged, it is hereby understood and agreed that
Paragraph I, EMPLOYEE BENEFITS PROGRAM EXCLUSION, of Section VI. General
Conditions of the Policy is deleted in its entirety.
All other terms and conditions of the Policy remain unchange.
X.L. INSURANCE COMPANY, LTD.
By: /s/PAUL B. MILLER
PAUL B. MILLER
Title: SENIOR VICE PRESIDENT
Date: AUGUST 10, 1998
Ref: 0D999.01
XL
Insured: THE PROCTER & GAMBLE COMPANY/THE PROCTER & GAMBLE FUND
AND OFFICERS OF OPERATING UNITS OF PROCTER AND GAMBLE
COMPANY
Policy No: XLD+O-00364-98
Endorsement No: 2
Effective Date: JUNE 30, 1998
---------------------------------------------------------------------------
DIRECTORS' AND OFFICERS' COVERAGE ENDORSEMENT
Notwithstanding any other provision of the Policy or this Endorsement,
if the Lead Policy provides coverage for any person acting in the capacity as a
Director or Officer of a company or entity which is not an Insured Company under
the Policy and this Endorsement, no such coverage shall be provided pursuant to
the Policy and/or this Endorsement unless (a) it is indicated below that
"Outside Positions" coverage is being afforded, (b) such coverage is subject to
a retention (whether self-insured and/or covered by underlying policy(ies)) in
the amount listed below which shall be deemed to be listed in Item 4 of the
Declarations, and such coverage in any event shall apply in excess of all
Primary and Underlying Excess Insurance listed in Item 4 of the Declarations,
and (c) such coverage is subject to an aggregate sublimit in the amount listed
below, which sublimit shall be the maximum liability of the Company for all
losses in respect of such coverage during the policy period irrespective of the
time of payment by the Company and shall be a sublimit included within and shall
not increase the Aggregate Limit of Liability stated in Item 2 of the
Declarations.
It is further understood and agreed that this extension of cover shall not apply
to any person acting as a Director or Officer of the following companies:
(a) Corporate Officers and Directors Assurance Ltd.
(b) Corporate Officers and Directors Assurance Holdings Ltd.
(c) Exel Ltd.
(d) X. L Insurance Company, Ltd.
Outside Positions Coverage: YES
Outside Positions Coverage (Self-Insured) Retention: $25,000,000
Outside Positions Coverage Aggregate Sublimit: $25,000,000
X.L. INSURANCE COMPANY, LTD.
By: /s/PAUL B. MILLER
PAUL B. MILLER
Title: SENIOR VICE PRESIDENT
Date: AUGUST 10, 1998
Ref: 0D234.01R
XL
Insured: THE PROCTER & GAMBLE COMPANY/THE PROCTER & GAMBLE FUND AND
OFFICERS OF OPERATING UNITS OF PROCTER AND GAMBLE COMPANY
Policy No: XLD+O-00364-98
Endorsement No: 1
Effective Date: JUNE 30, 1998
--------------------------------------------------------------------------
POLICY INTERPRETATION ENDORSEMENT
It is agreed that Condition K(5) is hereby deleted and the following is
substituted therefore:
"(5) Law of Construction and Interpretation
"This Policy shall be construed in accordance with the internal laws of
the State of New York, except insofar as such laws:
"(a) may prohibit indemnity in respect of punitive damages hereunder;
"(b) pertain to regulation under the New York Insurance Law, or
regulations issued by the Insurance Department of the State of New York
pursuant thereto, applying to insurers doing insurance business, or
issuance, delivery or procurement of policies of insurance, within the
State of New York or as respects risks or insureds situated in the
State of New York; or
"(c) are inconsistent with any provision of this Policy;
"provided, however, that the provisions, stipulations, exclusions and
conditions of this Policy are to be construed in an evenhanded fashion
as between the Insured and the Company; without limitation, where the
language of this Policy is deemed to be ambiguous or otherwise unclear,
the issue shall be resolved in the manner most consistent with the
relevant provisions, stipulations, exclusions and conditions (without
regard to authorship of the language, without any presumption or
arbitrary interpretation or construction in favor of either the Insured
or the Company and without reference to parol or other extrinsic
evidence)."
X.L. INSURANCE COMPANY, LTD.
By: /s/PAUL B. MILLER
PAUL B. MILLER
Title: SENIOR VICE PRESIDENT
Date: AUGUST 10, 1998
Ref: OD247.01
XL
Form X.L. D&O-003B Policy No. XLD+O-00364-98
XL
X.L. INSURANCE COMPANY, LTD.
Producer: PARK INTERNATIONAL LIMITED
In favor of: THE PROCTER & GAMBLE COMPANY THE PROCTER AND GAMBLE
FUND AND OFFICERS OF OPERATING UNITS OF PROCTER AND
GAMBLE COMPANY
Address: ONE PROCTER & GAMBLE PLAZA
CINCINNATI, OHIO 45202-3314
U.S.A.
Type of Coverage: DIRECTORS AND OFFICERS LIABILITY
In the amount as stated in Item 2 of the
Declarations.
Term: Beginning at 12:01 A.M. on the 30th day of June, 1998 prevailing time at
the address of the Named Insured and in accordance with terms and
conditions of the form(s) attached.
PREMIUM: $140,000
IN WITNESS WHEREOF, this Policy has made,
entered into and executed by the undersigned
in Hamilton, Bermuda 10th day of AUGUST, 1998.
By: /s/PAUL B. MILLER
PAUL B. MILLER
Title: SENIOR VICE PRESIDENT
DATE: AUGUST 10, 1998 POLICY NO: XLD+O-00364-98
X.L. INSURANCE COMPANY, LTD.
POLICY FOR DIRECTORS AND OFFICERS LIABILITY
IMPORTANT: THIS COVERAGE IS ON A CLAIMS MADE AND CLAIMS
REPORTED BASIS. PLEASE READ THIS POLICY CAREFULLY.
DECLARATIONS
Item 1: (a) Named Company: THE PROCTER & GAMBLE COMPANY/
THE PROCTER AND GAMBLE FUND
OFFICERS OF OPERATING UNITS OF
PROCTER AND GAMBLE COMPANY
(b) Address of Named Company: ONE PROCTER & GAMBLE PLAZA
CINCINNATI, OHIO 45202
U.S.A.
Item 2: Aggregate Limit of Liability:
$25,000,000 each policy period in excess of $25,000,000 each policy
year.
Item 3: Policy Period: JUNE 30, 1998 - JUNE 30, 1999
The Declarations along with the completed Application and this
Policy and any Schedules hereto shall constitute the contract
among the Named Company, the Designated Companies, the
Directors and Officers and the Company.
Item 4: Schedule of Current and Known Prospective Underlying Insurance:
Policy MM Policy
Carrier Number Limits Year
------- ------ ------ ------
i. Underlying Second Excess
ii. Underlying Excess. . . .
iii. Primary Insurer(s) . . . CODA PG-106C 25 JUNE 30,
1998-2001
Uninsured Retention under Primary Insurance:
$NIL each Director or Officer each loss, but in no event
exceeding $NIL in the aggregate each loss all Directors and
Officers Liability.
Item 5: Policy to be followed: CODA - POLICY NO. PG-106C
Item 6: Representative of Named Company: THE PROCTER & GAMBLE COMPANY
Item 7: Notice: X.L. Insurance Company, Ltd., Cumberland House, 1 Victoria St.,
P.O. Box HM 2245, Hamilton, Bermuda HM JX. Telex: 3626 XL BA
Item 8: (a) Discovery Coverage Premium: 100% of policy period premium
hereunder.
(b) Discovery Coverage Period: 365 days.
Item 9: Notice Cancellation Period: 60 days.
Said insurance is subject to the provisions, stipulations, exclusions and
conditions contained in this form and the representations and warranties
contained in the Named Company's application for this policy of insurance, which
is hereby made a part of said insurance, together with other provisions,
stipulations, exclusions and conditions as may be endorsed on said policy or
added thereto as therein provided (collectively hereinafter referred to as the
"Policy").
THE PROCTER & GAMBLE COMPANY/THE PROCTER & GAMBLE FUND AND
OFFICERS OF OPERATING UNITS OF PROCTER AND GAMBLE COMPANY
DIRECTORS AND OFFICERS LIABILITY INSURANCE
Named Company: As stated in Item 1 of the Declarations forming a part hereof
(hereinafter called the "Named Company").
INSURING AGREEMENTS
I. COVERAGE
The X.L. Insurance Company, Ltd. (the "Company") hereby agrees with the
Directors and Officers of the Named Company and any other companies
listed in Schedule A hereto ("Designated Companies"), subject to the
limitations, terms, exclusions and conditions hereinafter mentioned
that, if during the policy period any claim or claims are made against
any of the Directors and Officers for a Wrongful Act, and reported to
the Company, the Company in accordance with its limits of liability
shall pay on behalf of such Directors and Officers all loss which such
Directors and Officers shall become legally obligated to pay, except
for such loss which the Designated Companies shall indemnify such
Directors and Officers.
II. LIMIT OF LIABILITY
A. It is expressly agreed that liability for any loss shall
attach to the Company only after the Primary and Underlying
Excess Insurers shall have paid, admitted or been held liable
to pay the full amount of their respective liability and the
Directors and Officers shall have paid the full amount of
self-insured retentions, if any, as set forth in Item 4 of the
Declarations (hereinafter referred to as the "Schedule of
Underlying Insurance"), and the Company shall then be liable
to pay only additional amounts for any and all losses up to
its Aggregate Limit of Liability ("aggregate limit") as set
forth in Item 2 of the Declarations, which shall be the
maximum liability of the Company for all covered losses (with
respect to Directors and Officers, collectively) during the
policy period irrespective of the time of payment by the
Company.
B. In the event and only in the event of the reduction or
exhaustion of the aggregate limits of liability under the said
Primary and Underlying Excess Policies and under self-insured
retentions, if any (as if such retentions were subject to the
same terms, conditions, exclusions and structure of limits of
liability as said policies) by reason of losses paid
thereunder, this coverage shall: (i) in the event of
reduction, pay the excess of the reduced Primary and
Underlying Excess Limits, and (ii) in the event of exhaustion,
continue in force as Primary Insurance; provided always that
in the latter event this coverage shall only pay excess of the
retention applicable to such Primary Insurance for such policy
year as set forth in Item 4 (iii) of the Declarations, which
shall be applied to any subsequent loss in the same manner as
specified in such Primary Insurance. Except insofar as
aggregate limits of liability under the Primary and Underlying
Excess Policies have been reduced or exhausted by reason of
losses paid thereunder and self-insured retentions, if any,
have been fully paid (as if such retentions were subject to
the same terms, conditions, exclusions and structure of limits
of liability as said policies), this coverage shall apply only
as if all Primary and Underlying Policies and self-insured
retentions, if any, listed on the Schedule of Underlying
Insurance covered and were fully collectable for any loss
hereunder.
III. PRIMARY AND UNDERLYING INSURANCE
This Policy is subject to the same warranties, terms, conditions and
exclusions (except as regards the premium, the amount and limits of
liability, the policy period and except as otherwise provided herein)
as are contained in or as may be added to the policy set forth in Item
5 of the Declarations or, if no policy is set forth therein, the policy
of the Primary Insurer(s) as respects coverage of the Directors and
Officers.
It is a condition of this Policy that the policies of the Primary and
Underlying Excess Insurers shall be maintained in full effect during
the policy year(s) listed in the Schedule of Underlying Insurance
except for any reduction of the aggregate limits contained therein by
reason of losses paid thereunder (as provided for in Paragraph II(B)
above). This Policy shall automatically terminate upon the failure to
satisfy this condition (i.e., when any of such listed policies ceases
to be in full effect) unless otherwise agreed by the Company in
writing. If the Named Company notifies the Company in writing of
cancellation of any of the policies listed on the Schedule of
Underlying Insurance at least thirty (30) days prior to the
effectiveness thereof, the Company agrees that within twenty (20) days
thereafter it will review the situation and formulate a proposal for
the terms, conditions, exclusions, underlying amount, limit and premium
for continuation of this Policy upon such cancellation; provided,
however, that (i) the underlying amount shall be at least $20,000,000,
(ii) the limit shall be a maximum of $25,000,000 and (iii) this Policy
shall not continue after such cancellation unless there is an agreement
in writing between the Named Company and the Company providing
therefor.
IV. COSTS, CHARGES AND EXPENSES
No costs, charges or expenses shall be incurred or settlements made
without the Company's consent, such consent not to be unreasonably
withheld; however, in the event of such consent being given, the
Company will pay, subject to the provisions of Article II, such costs,
settlements, charges or expenses.
V. NOTIFICATION
A. If during the policy period or extended discovery period any
claim is made against any Director or Officer, the Directors
and Officers shall, as a condition precedent to their right to
be indemnified under this Policy, give to the Company notice
in writing as soon as practicable of such claims.
B. If during the policy period or extended discovery period:
(1) the Directors and Officers shall receive written or
oral notice from any party that it is the intention
of any such party to hold the Directors and Officers,
or any of them, responsible for a Wrongful Act; or
(2) the Directors and Officers shall become aware of any
fact, circumstance or situation which may
subsequently give rise to a claim being made against
the Directors and Officers, or any of them, for a
Wrongful Act;
and shall in either case during such period give written
notice as soon as practicable to the Company of the receipt of
such written or oral notice under Clause (1) or of such fact,
circumstance or situation under Clause (2), then any claim,
which may subsequently be made against the Directors and
Officers, arising out of such Wrongful Act shall for the
purpose of this Policy be treated as a claim made during the
policy period.
C. Notice to the Company shall be given to the person or firm
shown under Item 7 of the Declarations. Notice shall be deemed
to be received if sent by prepaid mail properly addressed.
VI. GENERAL CONDITIONS
A. DEFINITIONS: The terms "Directors and Officers", "Wrongful
Act", "Loss", "Subsidiary", and "Policy Year" shall be deemed
to have the same meanings in this Policy as are attributed to
them in the policy set forth in Item 5 of the Declarations or,
if no policy is set forth therein, the policy of the Primary
Insurer(s). The term "Company" shall mean the X.L. Insurance
Company, Ltd. The term "policy period" shall mean the period
stated in Item 3 of the Declarations.
B. DISCOVERY CLAUSE: If the Company shall cancel or refuse to
renew this Policy, the Named Company or the Directors and
Officers shall have the right, upon payment of the additional
premium set forth in Item 8(a) of the Declarations to a
continuation of the coverage granted by this Policy in respect
of any claim or claims which may be made against the Directors
and Officers during the period stated in Item 8(b) of the
Declarations after the date of cancellation or non-renewal,
but only in respect of any Wrongful Act committed before the
date of cancellation or non-renewal of this Policy. This right
of extension shall terminate unless written notice is given to
the Company within ten (10) days after the effective date of
cancellation or non-renewal.
C. APPLICATION OF RECOVERIES: All recoveries or payments
recovered or received subsequent to a loss settlement under
this Policy shall be applied as if recovered or received prior
to such settlement and all necessary adjustments shall then be
made between the Named Company or the Directors and Officers
and the Company, provided always that nothing in this Policy
shall be construed to mean that losses under this Policy are
not payable until the Directors' and Officers' ultimate net
loss has been finally ascertained.
D. CANCELLATION CLAUSE: This coverage may be cancelled by the
Named Company at any time by written notice or surrender of
this Policy. This coverage may also be cancelled by, or on
behalf of, the Company by delivering to the Named Company or
by mailing to the Named Company by registered, certified or
other first class mail, at the Named Company's address shown
in Item 1 of the Declarations, written notice stating when,
not less than the number of days set forth in Item 9 of the
Declarations, the cancellation shall become effective. The
mailing of 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 this Policy shall be
cancelled by the Named Company, the Company shall retain the
customary short rate proportion of premium hereon. If this
Policy shall be cancelled by or on behalf of the Company, the
Company shall retain the pro rata proportion of the premium
hereon. Payment or tender of any unearned premium by the
Company shall not be a condition precedent to the
effectiveness of cancellation, but such payment shall be made
as soon as practicable.
E. COOPERATION: The Named Company, the Designated Companies and
the Directors and Officers shall give the Company such
information and cooperation as it may reasonably require.
F. PREMIUM: The premium under this Policy is a flat premium and
is not subject to adjustment except as otherwise provided
herein. The premium shall be paid to the Company.
G. WRONGFUL ACT EXCLUSION: Notwithstanding any other provision of
this Policy, this Policy shall not apply with respect to a
Wrongful Act by any Director or Officer of the Company in his
capacity as such.
H. NUCLEAR EXCLUSION: This Policy shall not apply to, and the
Company shall have no liability hereunder in respect of
liability or alleged liability for:
(1) personal injury, property damage or advertising
liability in the United States, its territories or
possessions, Puerto Rico or the Canal Zone (A) with
respect to which the Named Company, the Designated
Companies and/or Officers and Directors
(collectively, the "Certain Parties") 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
limited liability or (B) resulting from the hazardous
properties of nuclear material and with respect to
which (i) any person or organization is required to
maintain financial protection pursuant to the Atomic
Energy Act of 1954 or any law amendatory thereof or
(ii) a Certain Party is, or had this Policy not been
issued, would be entitled to indemnity from 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) medical or surgical relief or 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 in the
United States, its territories or possessions, Puerto
Rico or the Canal Zone;
(3) injury, sickness, disease, death or destruction
resulting from hazardous properties of nuclear
material, if (A) the nuclear material (i) is at any
nuclear facility owned by or operated by or on behalf
of any of the Certain Parties in the United States,
its territories or possessions, Puerto Rico or the
Canal Zone or (ii) has been discharged or dispersed
therefrom, (B) such nuclear material is contained in
spent fuel or waste at any time possessed, handled,
used, processed, stored, transported or disposed by
or on behalf of any of the Certain Parties in the
United States, its territories or possessions, Puerto
Rico or the Canal Zone or (C) the injury arises out
of the furnishing by any of the Certain Parties of
services, materials, parts or equipment in connection
with the planning, construction, maintenance,
operation or use of a nuclear facility, but if such
facility is located within the United States of
America, its territories or possessions or Canada,
this clause (3)(C) applies only to injury to or
destruction of property at such nuclear facility;
(4) As used in this Section (H):
(A) "hazardous properties" included 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 by the Atomic Energy Act
of 1954 or in 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
(i) containing by-product materials and (ii)
resulting from the operation by a person or
organization of nuclear facility included
within the definition of nuclear facility
under clauses (B)(i) or (B)(ii) (below):
(B) "nuclear facility" means
(i) any nuclear reactor;
(ii) any equipment or device designed
or used for (x) separating the
isotopes of uranium or plutonium,
(y) processing or utilizing spent
fuel, or (z) handling processing
or packaging waste;
(iii) 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 such
premises where such equipment or
device is located consists of or
contains more than 25 grams of
plutonium or uranium 233 or
combination thereof or more than
250 grams of uranium 235;
(iv) any structure, basin, excavation,
premises or place prepared for the
storage or disposal of waste.
(C) "Nuclear facility" includes the site on
which any of the foregoing is located, all
operations conducted on such site and all
premises used for such operations.
(D) "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.
(E) With respect to injury or destruction of
property, the word "injury" or "destruction"
includes all forms of radioactive
contamination of property or loss of use
thereof or liability or alleged liability of
whatsoever nature directly or indirectly
caused by or contributed to by or arising
from ionizing radiations or contamination by
radioactivity outside the United States, its
territories or possessions, Puerto Rico or
the Canal Zone from any nuclear fuel or from
any nuclear waste from the combustion,
fission or fusion of nuclear fuel.
I. EMPLOYEE BENEFITS PROGRAMS EXCLUSION: Notwithstanding any
other provision of this Policy, this coverage shall not apply
with respect to:
(1) any liability or alleged liability arising out of or
alleged to arise out of any negligent act, error or
omission of any Director or Officer, or any other
person for whose acts any Director or Officer is
legally liable, in the administration of Employee
Benefits Programs, as defined in subsection (2)
below, including, without limitation, liability or
alleged liability under the Employee Retirement
Income Security Act of 1974, as amended.
(2) As used in this Section I, the term "Employee
Benefits Programs" means group life insurance, group
accident or health insurance, profit sharing plans,
pension plans, employee stock subscription plans,
workers' compensation, unemployment insurance, social
benefits, disability benefits, and any other similar
employee benefits.
(3) As used in this Section I, the unqualified word
"administration" means:
(A) giving counsel to employees with respect to
the Employee Benefits Programs;
(B) interpreting the Employee Benefits Programs;
(C) handling of records in connection with the
Employee Benefits Programs; and/or
(D) effective enrollment, termination or
cancellation of employees under the Employee
Benefits Programs.
J. INDEMNITY BY DESIGNATED COMPANIES: The Designated Companies
agree with the Company to indemnify their respective Directors
and Officers to the full extent permitted by applicable law.
The Directors and Officers agree that to the extent of any
payment of loss on their behalf or indemnification of them
hereunder they will assign, convey, set over, transfer and
deliver to the Company any and all rights and claims they may
have to indemnification from the Designated Companies and will
take all further steps requested by the Company to assist in
prosecution of such rights and claims, and the Designated
Companies hereby consent to any such assignment, conveyance,
set over, transfer or delivery and agree that any payment by
the Company on behalf of or to indemnify any Director or
Officer shall not be raised as a defense to the Director's or
Officer's right to indemnification from the Designated
Companies as asserted by the Company pursuant hereto.
K. OTHER CONDITIONS: This Policy is subject to the following
additional conditions:
(1) REPRESENTATION
Except as respects the giving of notice to exercise
extended discovery under Paragraph VI(B), the Named
Company or such other person as it shall designate in
Item 6 of the Declarations shall represent the Named
Company, each of the Designated Companies and each
Officer and Director of the Named Company and the
Designated Companies in all matters under this
Policy, including, without limitation, payment of
premium, negotiation of the terms of renewal and/or
reinstatement and the adjustment, settlement and
payment of claims.
(2) CHANGES
Notice to or knowledge possessed by any person shall
not effect waiver or change in any part of this
Policy or estop the Company from asserting any right
under the terms of this Policy; nor shall the terms
of this Policy be waived or changed, except by
endorsement issued to form a part hereof, signed by
the Company or its authorized representative.
(3) ASSIGNMENT
Assignment of interest under this Policy shall not
bind the Company unless and until consent is endorsed
hereon.
(4) ARBITRATION
Any dispute arising under this Policy shall be
finally and fully determined in London, England under
the provisions of the English Arbitration Act of
1950, as amended and supplemented, by a Board
composed of three arbitrators to be selected for each
controversy as follows:
Any party to the dispute may, once a claim or demand
on his part has been denied or remains unsatisfied
for a period of twenty (20) calendar days by any
other, notify the others of its desire to arbitrate
the matter in dispute and at the time of such
notification the party desiring arbitration shall
notify any other party or parties of the name of the
arbitrator selected by it. Any party or parties who
have been so notified shall within ten (10) calendar
days thereafter select an arbitrator and notify the
party desiring arbitration of the name of such second
arbitrator. If the party or parties notified of a
desire for arbitration shall fail or refuse to
nominate the second arbitrator within ten (10)
calendar days following the receipt of such
notification, the party who first served notice of a
desire to arbitrate will, within an additional period
of ten (10) calendar days, apply to a judge of the
High Court of England for the appointment of a second
arbitrator and in such a case the arbitrator
appointed by such a judge shall be deemed to have
been nominated by the party or parties who failed to
select the second arbitrator. The two arbitrators,
chosen as above provided, shall within ten (10)
calendar days after the appointment of the second
arbitrator choose a third arbitrator. In the event of
the failure of the first two arbitrators to agree on
a third arbitrator within said ten (10) calendar day
period, any of the parties may within a period of ten
(10) calendar days thereafter, after notice to the
other party or parties, apply to a judge of the High
Court of England for the appointment of a third
arbitrator and in such case the person so appointed
shall be deemed and shall act as the third
arbitrator. Upon acceptance of the appointment by
said third arbitrator, the Board of Arbitration for
the controversy in question shall be deemed fixed.
All claims, demands, denials of claims and notices
pursuant to this Section (K)(iv) shall be deemed made
if in writing and mailed to the last known address of
the other party or parties.
The Board of Arbitration shall fix, by a notice in
writing to the parties involved, a reasonable time
and place for the hearing and may in said written
notice or at the time of the commencement of said
hearing, at the option of said Board, prescribe
reasonable rules and regulations governing the course
and conduct of said hearing.
The Board shall, within ninety (90) calendar days
following the conclusion of the hearing, render its
decision on the matter or matters in controversy in
writing and shall cause a coy thereof to be served on
all the parties thereto. In case the Board fails to
reach a unanimous decision, the decision of the
majority of the members of the Board shall be deemed
to be the decision of the Board and the same shall be
final and binding on the parties thereto, and such
decision shall be a complete defense to any attempted
appeal or litigation of such decision in the absence
of fraud or collusion.
All costs of arbitration shall be borne equally by
the parties to such arbitration.
The Company and the Insured agree that in the event
that claims for indemnity or contribution are
asserted in any action or proceeding against the
Company by any of the Insured's other insurers in any
jurisdiction or forum other than that set forth in
this Section (K)(iv), the Insured will in good faith
take all reasonable steps requested by the Company to
assist the Company in obtaining a dismissal of these
claims (other than on the merits) and will, without
limitation, undertake to the court or other tribunal
to reduce any judgment or award against such other
insurers to the extent that the court or tribunal
determines that the Company would have been liable to
such insurers for indemnity or contribution pursuant
to this Policy. The Insured shall be entitled to
assert claims against the Company for coverage under
this Policy, including, without limitation, for
amounts by which the Insured reduced its judgment
against such other insurers in respect of such claims
for indemnity or contribution in an arbitration
between the Company and the Insured pursuant to this
Section (K)(iv); provided, however, that the Company
in such arbitration in respect of such reduction of
any judgment shall be entitled to raise any defenses
under this Policy and any other defenses (other than
jurisdictional defenses) as it would have been
entitled to raise in the action or proceeding with
such insurers.
(5) GOVERNING LAW AND INTERPRETATION
This Policy shall be governed by and construed in
accordance with the internal laws of the State of New
York, except insofar as such laws may prohibit
payment in respect of punitive damages hereunder;
provided, however, that the provisions, stipulations,
exclusions and conditions of this Policy are to be
construed in an evenhanded fashion as between the
Insured and the Company; without limitation, where
the language of this Policy is deemed to be ambiguous
or otherwise unclear, the issue shall be resolved in
the manner most consistent with the relevant
provisions, stipulations, exclusions and conditions
(without regard to authorship of the language,
without any presumption or arbitrary interpretation
or construction in favor of either the Insured or the
Company and without reference to parol evidence).
(6) LIABILITY OF THE COMPANY
The Named Company, the Designated Companies and the
Directors and Officers agree that the liability and
obligations of the Company hereunder shall be
satisfied from the funds of the Company alone and
that the individual shareholders of the Company shall
have no liability hereunder.
(7) HEADINGS
The descriptions in the headings and subheadings of
this Policy are inserted solely for convenience and
do not constitute any part of the terms and
conditions hereof.
X.L. INSURANCE COMPANY, LTD.
By: /s/PAUL B. MILLER
PAUL B. MILLER
Title: SENIOR VICE PRESIDENT
Date: AUGUST 10, 1998
THE PROCTER & GAMBLE COMPANY/THE PROCTER & GAMBLE FUND AND
OFFICERS OF OPERATING UNITS OF PROCTER AND GAMBLE COMPANY
SCHEDULE A
All Subsidiaries of the names Insured