DIRECTORS AND OFFICERS LIABILITY INSURANCE
We have an insurance policy that provides coverage for Directors
and officers liability and fiduciary liability arising from employee benefit
plans we sponsor. The directors and officers liability coverage provides
that the insurance carriers will (1) reimburse us when we are legally
allowed to indemnify our Directors and officers and (2) pay losses,
including settlements, judgments and legal fees, on behalf of our
Directors and officers when we cannot legally indemnify them. The
fiduciary liability portion of the policy covers Directors and employees
who serve as fiduciaries for our employee benefit plans. It covers losses
from alleged breaches of fiduciary duty as defined in the Employee
Retirement Income Security Act of 1974. Vigilant Insurance Company
issued this policy, which is effective from November 30, 2000 to
November 30, 2003. We expect to renew similar coverage at expiration.
Gulf Insurance Company and a consortium of other insurers led by AIG
provide excess coverage. We pay an annualized premium for these
coverages of approximately $1,064,000.
We also have a supplemental directors and officers liability
insurance policy that covers additional losses in cases where we are not
legally permitted to indemnify our Directors or officers. ACE Insurance
Company Ltd. issued this policy which is effective November 30, 2000,
to November 30, 2003. We expect to renew similar coverage at
expiration. We pay an annualized premium for this policy of $147,200.
