<PAGE>
As filed with the Securities and Exchange Commission on August 17, 1998,
Registration No. 333-___________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
HCC INSURANCE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0336636
(State of Incorporation) (I.R.S. Employer Identification No.)
13403 NORTHWEST FREEWAY, HOUSTON, TEXAS 77040
(Address of principal executive offices) (zip code)
HCC INSURANCE HOLDINGS, INC.
1997 FLEXIBLE INCENTIVE PLAN
(Full title of the plan)
Copies of All Communications to:
CHRISTOPHER L. MARTIN, VICE PRESIDENT ARTHUR S. BERNER, ESQ.
AND GENERAL COUNSEL WINSTEAD SECHREST & MINICK P.C.
13403 NORTHWEST FREEWAY 910 TRAVIS STREET, SUITE 2400
HOUSTON, TEXAS 77040 HOUSTON, TEXAS 77002
(713) 462-1000 (713) 650-2729
(Name and address and telephone
number, including area code,
of agent for service)
<TABLE>
- -----------------------------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Amount Maximum Maximum Amount of
Securities Being Offering Price Aggregate Registration
Being Registered Registered(1) Per Share(2) Offering Price(2) Fee
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1.00
par value per share 4,000,000 Shares $20 $80,000,000 $23,600
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended, (the
"Securities Act") this registration statement also covers an indeterminate
number of shares as may be required to cover possible adjustments under the
Plan by reason of any stock dividend, stock split, share combination,
exchange of shares, recapitalization, merger, consolidation, separate
reorganization or the like of or by the Registrant.
(2) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457(h), based on the average of the high and low prices of
the Common Stock of the Registrant on the New York Stock Exchange on August
13, 1998.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. Plan Information *
ITEM 2. Registrant Information and Employee Plan Annual Information *
- ------------
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with
the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents (as filed with the Securities and Exchange
Commission (the "Commission") by the Registrant) are incorporated by
reference in this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 and Quarterly Reports on Form 10-Q for the periods
ended March 31, 1998 and June 30, 1998.
(b) All other reports filed by the Registrant pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since December 31, 1997.
(c) The description of the Common Stock contained in the Registrant's
Prospectus filed with the Commission on September 3, 1993 as part of the
Registrant's Registration Statement on Form S-1 (Registration No. 33-67342).
(d) All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act prior to the filing
of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in this Registration
Statement and to be part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant is incorporated under the laws of the State of Delaware.
Section 145 of the General Corporation Law of the State of Delaware ("Section
145") provides that a Delaware corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such person is or
was an officer, director, employee or agent of such corporation, or is or was
serving at the request of such corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or
enterprise, including an employee benefit plan. The indemnity may include
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, provided that such person acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interests and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that his conduct was unlawful,
except that no indemnification shall be made in connection with any action or
suit by or in the right of the corporation to procure a judgment in its favor
in respect of any claim, issue, or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses that such court
deems proper. The termination of any action, suit, or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful.
Section 145 also provides that to the extent that a director, officer,
employee or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to above, or
in defense of any claim, issue or matter therein, the corporation must
indemnify him against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
Section 145 further provides that any indemnification (unless ordered by
a court) must be made only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or
agent is proper in the circumstances because he has met the applicable
standard of conduct set forth above. Such determination must be made (i) by
a majority vote of the directors who were not parties to such action, suit or
proceeding, even though less than a quorum, or (ii) if there are no such
directors, or if such directors so direct, by independent legal counsel in a
written opinion, or (iii) by the stockholders.
Section 145 also provides that expenses (including attorneys' fees)
incurred by an officer or director in defending or settling any civil,
criminal, administrative or investigative action, suit or proceeding may be
paid by the corporation in advance of the final disposition of such action,
suit or
2
<PAGE>
proceeding, upon receipt of an undertaking by or on behalf of such director
or officer to repay such amount if it is ultimately determined that he is not
entitled to be indemnified by the corporation.
Section 145 further provides that the indemnification and advancement of
expenses provided by, or granted pursuant to, Section 145 shall not exclude
any other rights to which a person seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
Article IX of the Registrant's Certificate of Incorporation, as amended
and restated, requires the Registrant to indemnify the Registrant's directors
and officers to the extent permitted under Section 145.
Article VIII of the Registrant's Bylaws also provides that the
Registrant shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending, or completed action, suit, or
proceeding whether civil, criminal, administrative, or investigative, by
reason of the fact that he is or was a director or officer of the Registrant,
or is or was serving at the request of the Registrant as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
or other enterprise, in accordance with provisions corresponding to Section
145. However, such Article requires that the determination of whether a
person is entitled to indemnification is to be made, unless ordered by a
court: (i) by a majority vote of a quorum consisting of directors who at the
time of the vote are not parties to the proceeding; (ii) if such quorum
cannot be obtained, or even if obtainable a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion; or (iii) by
the stockholders of the Registrant. Further, the Registrant's Bylaws provide
that any person, other than an officer or director, who was or is a party or
is threatened to be made a party to any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative, or
investigative, by reason of the fact that he is or was an employee or agent
of the Registrant, or was serving at the request of the Registrant as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust, or other enterprise, and who desires indemnification
shall make written application for such indemnification to the Board of
Directors for its determination that indemnification is appropriate, and if
so, to what extent.
Section 145 further provides that a corporation may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the corporation would
have the authority to indemnify him against such liability and expenses under
the provisions described in the preceding paragraphs. The Registrant
maintains liability insurance covering its directors and officers.
Section 102(b)(7) of the General Corporation Law of the State of
Delaware permits a Delaware corporation to include a provision in its
Certificate of Incorporation eliminating or limiting the personal liability
of a director to the corporation or its stockholders for monetary damages for
3
<PAGE>
breach of fiduciary duty as a director, except (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) pursuant to Section 174 of the General
Corporation Law of the State of Delaware (providing for liability of
directors for unlawful payment of dividends or unlawful stock purchases or
redemptions), or (iv) for any transaction from which the director derived an
improper personal benefit. Article X of the Registrant's Certificate of
Incorporation eliminates liability of directors of the Registrant to the
Registrant or its shareholders for monetary damages for breach of fiduciary
duty to the extent permitted by Section 102(b)(7) of the General Corporation
Law of the State of Delaware.
The foregoing discussion is qualified in its entirety by reference to
the General Corporation Law of the State of Delaware and the Registrant's
Certificate of Incorporation and Bylaws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
EXHIBIT NUMBER DESCRIPTION
<S> <C>
4.1 Restated Certificate of Incorporation and Certificate of
Amendment of Certificate of Incorporation of the
Registrant, filed with the Delaware Secretary of State
on July 23, 1996 and May 21, 1998, respectively - filed
herewith.
4.2 By-laws of the Registrant, as amended (filed as Exhibit
3.4 to the Registrant's Registration Statement on Form
S-1 (Registration No. 33-48737) and incorporated herein
by reference.
4.3 HCC Insurance Holdings, Inc. 1997 Flexible Incentive
Plan - filed herewith.
5 Opinion of Winstead Sechrest & Minick P.C. as to the
legality of the securities being registered - filed
herewith.
23.1 Consent of PricewaterhouseCoopers LLP, independent
certified public accountants - filed herewith.
23.2 Consent of KPMG Peat Marwick LLP, independent certified
public accountants - filed herewith.
23.3 Consent of Winstead Sechrest & Minick P.C. (included in
the opinion filed as Exhibit 5 to this Registration
Statement).
24 Powers of Attorney - filed herewith.
</TABLE>
4
<PAGE>
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or
the most recent post-effective amendment thereof), which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement; and
(iii) to include any information with respect to the plan of
distribution not previously disclosed in this Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (ii) do not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that
are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions described in Item 6 above, or otherwise, the Registrant
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification
against such
5
<PAGE>
liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer of
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized in the City of Houston, State of Texas, on August 17, 1998.
HCC INSURANCE HOLDINGS, INC.
/s/ STEPHEN L. WAY
-------------------------------------
By: Stephen L. Way
Chairman of the Board and
Chief Executive Officer
Pursuant to the Securities Act, this Registration Statement has been
signed below by the following persons in the capacities and on the dates
indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ STEPHEN L. WAY * Chairman of the Board and August 17, 1998
---------------------- Chief Executive Officer
Stephen L. Way (Principal Executive
Officer)
/s/ JAMES M. BERRY * Director August 17, 1998
----------------------
James M. Berry
/s/ FRANK J. BRAMANTI Executive Vice President and August 17, 1998
---------------------- Director
Frank J. Bramanti
6
<PAGE>
/s/ PATRICK B. COLLINS * Director August 17, 1998
----------------------
Patrick B. Collins
/s/ J. ROBERT DICKERSON * Director August 17, 1998
------------------------
J. Robert Dickerson
/s/ EDWARD H. ELLIS, JR. * Senior Vice President and August 17, 1998
------------------------ Chief Financial Officer
Edward H. Ellis, Jr. (Chief Accounting Officer)
/s/ EDWIN H. FRANK, III * Director August 17, 1998
-----------------------
Edwin H. Frank, III
/s/ ALAN W. FULKERSON * Director August 17, 1998
----------------------
Alan W. Fulkerson
/s/ WALTER J. LACK * Director August 17, 1998
----------------------
Walter J. Lack
/s/ STEPHEN J. LOCKWOOD
------------------------ * Director and Vice Chairman August 17, 1998
Stephen J. Lockwood
/s/ JOHN N. MOLBECK, JR. * President and Director August 17, 1998
------------------------
John N. Molbeck, Jr.
/s/ PETER B. SMITH, JR. * Executive Vice President and August 17, 1998
---------------------- Director
Peter B. Smith, Jr.
/s/ HUGH T. WILSON * Director August 17, 1998
----------------------
Hugh T. Wilson
*By: /s/ FRANK J. BRAMANTI
-----------------------------
Frank J. Bramanti
Attorney-in-Fact
<PAGE>
Exhibit 4.1
RESTATED
CERTIFICATE OF INCORPORATION
OF
HCC INSURANCE HOLDINGS, INC.
HCC INSURANCE HOLDINGS, INC., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation") hereby certifies as
follows:
1. The name of the Corporation is HCC INSURANCE HOLDINGS, INC. which was
originally incorporated under the name HCC Holdings, Inc., and the original
Certificate of Incorporation was filed with the Secretary of State of the
State of Delaware on March 27, 1991.
2. Pursuant to Section 245 of the General Corporation Law of the State
of Delaware, this Restated Certificate is duly adopted by the Board of
Directors without a vote of the shareholders. This Restated Certificate of
Incorporation only restates and integrates and does not further amend the
provisions of the Corporation's Certificate of Incorporation, as theretofore
amended or supplemented, and there is no discrepancy between those provisions
and the provisions of the Restated Certificate of Incorporation.
3. The text of the Restated Certificate of Incorporation is hereby
restated and integrated to read in its entirety as follows:
ARTICLE I
The name of the Corporation is HCC INSURANCE HOLDINGS, INC.
ARTICLE II
The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is
The Corporation Trust Company.
ARTICLE III
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware.
<PAGE>
ARTICLE IV
The total number of shares of all classes of stock which the Corporation
shall be authorized to issue is one hundred million (100,000,000) shares of
common stock, of the par value $1.00 per share ("Common Stock").
(a) VOTING RIGHTS.
(1) COMMON STOCK. Except as set forth herein or as otherwise required
by law, each outstanding share of Common Stock shall be entitled to vote on
each matter on which the shareholders of the Corporation shall be entitled to
vote, and each holder of Common Stock shall be entitled to one vote for each
share of such stock held by such holder.
(b) DIVIDENDS. The Board of Directors of the Corporation may cause
dividends to be paid to holders of shares of Capital Stock out of funds
legally available for the payment of dividends.
(c) LIQUIDATION. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, all distributions on the Common
Stock of the Corporation shall be payable to the holders of shares of Common
Stock.
ARTICLE V
No shareholder of the Corporation shall have the right of cumulative
voting at any election of directors or upon any other matter. No holder of
securities of the Corporation shall be entitled as a matter of right,
preemptive or otherwise, to subscribe for or purchase any securities of the
Corporation now or hereafter authorized to be issued, or securities held in
the treasury of the Corporation, whether issued or sold for cash or other
consideration or as dividend or otherwise. Any such securities may be issued
or disposed of by the Board of Directors to such persons on such terms as in
its discretion it shall deem applicable.
ARTICLE VI
The Corporation is to have perpetual existence.
ARTICLE VII
The Board of Directors of the Corporation is expressly authorized to
make, alter, or repeal the by-laws of the Corporation. Elections of
directors need not be written by ballot.
ARTICLE VIII
The Corporation reserves the right to amend, alter, change, or repeal
any provision contained in this Certificate of Incorporation, in the manner
now or hereafter prescribed by statute, and all rights conferred upon
shareholders herein are granted subject to this reservation.
<PAGE>
ARTICLE IX
(a) ACTIONS NOT BY OR IN THE RIGHT OF THE CORPORATION. The Corporation
shall indemnify its officers and directors and may indemnify its other
employees or agents to the fullest extent permitted by law if any such person
was or is a party, or is threatened to be made a party, to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, arbitrative, or investigative (other than an action by or in
the right of the corporation ), by reason of the fact that he is or was a
director, officer, employee, or agent of the corporation, or is or was
serving at the request of the Corporation as a director, officer, employee,
or agent of another Corporation, partnership, joint venture, trust, or other
enterprise, to the fullest extent authorized or permitted by the General
Corporation Law of Delaware and any other applicable law, as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to
the extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the corporation to provide
prior to such amendment), against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit, or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
(b) ACTION BY OR IN THE RIGHT OF THE CORPORATION. The Corporation shall
indemnify its officers and directors and may indemnify its other employees or
agents to the fullest extent permitted by law if any such person was or is a
party, or is threatened to be made a party, to any threatened, pending, or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee, or agent of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise,
to the fullest extent authorized or permitted by the General Corporation Law
of Delaware and any other applicable law, as the same exists or may hereafter
be amended (but, in the case of any such amendment, only to the extent that
such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interest of the Corporation.
Notwithstanding the foregoing, no indemnification shall be made in respect of
any claim, issue, or matter as to which such person shall have been adjudged
to be liable to the Corporation unless and only to the extent that the Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
(c) EXPENSES ALLOWED. Expenses incurred by an officer or director in
defending a civil or criminal action, suit, or proceeding shall be paid by
the Corporation in advance of the final disposition of such action, suit, or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Corporation as authorized herein or
otherwise. Such expense incurred by
<PAGE>
other employees and agents may be so paid upon such terms and conditions, if
any, as the Board of Directors deems appropriate.
(d) NOT EXCLUSIVE. Such right of indemnification shall not be deemed
exclusive of any other rights to which such person may be entitled under any
by-law, agreement, vote of stockholders, or otherwise.
ARTICLE X
No director of the Corporation shall be personally liable to the
Corporation or any of its shareholders for monetary damages for breach of
fiduciary duty or as a director, provided however, that the limitation of
liability contained in this Article X shall not eliminate or limit the
liability of a director:
(1) For any breach of the director's duty of loyalty to the Corporation or
its shareholders;
(2) For acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
(3) Under Section 174 of the General Corporation Law of Delaware; or
(4) For any transaction from which the director derived an improper
personal benefit.
If the General Corporation Law of Delaware is amended to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the personal liability of a director of the Corporation shall
be eliminated or limited to the fullest extent permitted by the General
Corporation Law of Delaware, as so amended. Any repeal or modification of
the provisions of this Article X by the shareholders of the Corporation shall
not adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been
executed this 17th day of June, 1996 by Frank J. Bramanti, the Corporation's
authorized officer.
/S/ FRANK J. BRAMANTI
----------------------------------------
Frank J. Bramanti, Secretary
<PAGE>
Exhibit 4.1
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
HCC INSURANCE HOLDINGS, INC.
Pursuant to Section 242 of the Delaware General Corporation Law, HCC
Insurance Holdings, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the "
Corporation"), does hereby certify:
FIRST: The Certificate of Incorporation of the Corporation is hereby
amended by deleting and replacing the first paragraph of Article Four of the
Certificate of Incorporation. The new first paragraph of Article Four shall
read as follows:
"ARTICLE IV
The total number of shares of all classes of stock which the Corporation
shall be authorized to issue is two hundred fifty million (250,000,000)
shares of common stock, of the par value $1.00 per share ("Common Stock")."
SECOND: This amendment to the Certificate of Incorporation has been
duly adopted in accordance with the provisions of Section 242 of the Delaware
General Corporation Law.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Christopher L. Martin, its authorized officer, this 21st day of
May, 1998.
HCC INSURANCE HOLDINGS, INC.
By: /S/ CHRISTOPHER L. MARTIN
-------------------------------------
Christopher L. Martin, Secretary
<PAGE>
Exhibit 4.3
HCC INSURANCE HOLDINGS, INC.
1997 FLEXIBLE INCENTIVE PLAN
1. PURPOSE
The purposes of HCC Insurance Holdings, Inc. 1997 Flexible Incentive
Plan (the "1997 Flexible Plan") are to promote the interests of HCC Insurance
Holdings, Inc. and its subsidiaries (together with any successor thereto, the
"Company") and its Shareholders by enabling the Company to attract, motivate
and retain key employees by offering such key employees performance-based
stock incentives and other equity interests in the Company and other
incentive awards that recognize the creation of value for the Shareholders of
the Company and promote the Company's long-term growth and success. To
achieve these purposes, eligible persons may receive stock options, Stock
Appreciation Rights, Restricted Stock, Performance Awards, performance stock,
Dividend Equivalent Rights and any other Awards, or any combination thereof.
2. DEFINITIONS
As used in the 1997 Flexible Plan, the following terms shall have the
meanings set forth below unless the content otherwise requires:
2.1 "AWARD" shall mean the grant of a stock option, a Stock
Appreciation Right, a Restricted Stock, a Performance Award, performance
stock, a Dividend Equivalent Right or any other Award under the 1997 Flexible
Plan.
2.2 "BOARD" shall mean the Board of Directors of the Company, as the
same may be constituted from time to time.
2.3 "CHANGE IN CONTROL" shall mean, after the effective date of the
1997 Flexible Plan, (i) the occurrence of an event of a nature that would be
required to be reported in response to Item 1 or Item 2 of a Form 8-K Current
Report of the Company promulgated pursuant to Sections 13 and 15(d) of the
Exchange Act; provided that, without limitation, such a Change in Control
shall be deemed to have occurred if (a) any "person," as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any
trustee or other fiduciary holding securities under any employee benefit plan
of the Company, or any company owned, directly or indirectly, by the
Shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the
combined voting power of the Company's then outstanding securities or (b)
during any period of two consecutive years, individuals who at the beginning
of such period constitute the Board cease for any reason to constitute at
least a majority thereof, unless the election by the Board or the nomination
for election by the Company's Shareholders was approved by a vote of at least
two-thirds (2/3) of the Directors then still in office who either were
Directors at the beginning of the two-year period or whose election or
nomination for election was previously so approved; (ii) the Shareholders of
the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining
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outstanding or by being converted into voting securities of the surviving
entity) more than fifty-one percent (51%) of the combined voting power of the
voting securities of the surviving entity outstanding immediately after such
merger or consolidation; provided, however, that a merger or consolidation
effected to implement a reorganization or recapitalization of the Company, or
a similar transaction (collectively, a "Reorganization"), in which no
"person" acquires more than twenty percent (20%) of the combined voting power
of the Company's then outstanding securities shall not constitute a Change in
Control of the Company; or (iii) the Shareholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets.
2.4 "CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
2.5 "COMMITTEE" shall mean the Stock Option or Compensation Committee,
if such a separate committee is appointed by the Board, or, until such time
as a separate committee is appointed, it shall mean the Board. If a separate
committee is appointed, the Committee shall meet the applicable requirements
for "disinterested administration" within the requirements of Rule 16b-3
promulgated under the Exchange Act and any successor thereunder promulgated
during the duration of the 1997 Flexible Plan. The Board may amend the 1997
Flexible Plan to modify the definition of Committee within the limits of Rule
16b-3 to assure that the 1997 Flexible Plan is administered in compliance
with Rule 16b-3. Initially, the Committee will consist of not less than three
(3) members of the Board who are appointed by, and serve at the pleasure of,
the Board and who are (i) "disinterested" within the meaning of Rule 16b-3
and (ii) "outside directors," as required under Section 162(m) of the Code
and such Treasury Regulations as may be promulgated thereunder.
2.6 "COMMON STOCK" shall mean the Common Stock, $1.00 par value per
share, of the Company.
2.7 "DESIGNATED BENEFICIARY" shall mean the beneficiary designated by
an Optionee in a manner determined by the Committee, to exercise rights of
the Optionee in the event of the Optionee's death. In the absence of an
effective designation by an Optionee the Designated Beneficiary shall be the
Optionee's estate.
2.8 "DISABILITY" shall mean permanent and total inability to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not
less than twelve (12) months, as determined in the sole and absolute
discretion of the Committee.
2.9 "DIVIDEND EQUIVALENT RIGHT" shall mean the right of the holder
thereof to receive credits based on the cash dividends that would have been
paid on the Shares specified in an Award granting Dividend Equivalent Rights
if the Shares subject to such Award were held by the person to whom the Award
is made.
2.10 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
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2.11 "FAIR MARKET VALUE" shall mean with respect to the Shares, as of
any date, (i) the last reported sales price on any stock exchange on which
the Common Stock is traded or, if not reported on such exchange, on the
composite tape, or, in case no such sale takes place on such day, the average
of the reported closing bid and asked quotations on such exchange; (ii) if
the Common Stock is not listed on a stock exchange or no such quotations are
available, the closing price of the Common Stock as reported by the National
Market System of the National Association of Securities Dealers, Inc., or, if
no such quotations are available, the average of the high bid and low asked
quotations in the over-the-counter market as reported by the National
Quotation Bureau Incorporated, or similar organization; or (iii) in the event
that there shall be no public market for the Common Stock, the fair market
value of the Common Stock as determined (which determination shall be
conclusive) in good faith by the Committee, based upon the value of the
Company as a going concern, as if such Common Stock were publicly owned
stock, but without any discount with respect to minority ownership.
2.12 "INCENTIVE STOCK OPTION" shall mean any stock option awarded under
the 1997 Flexible Plan which qualifies as an "Incentive Stock Option" under
Section 422 of the Code or any successor provision.
2.13 "NON-TANDEM STOCK APPRECIATION RIGHT" shall mean any Stock
Appreciation Right granted alone and not in connection with an Award which is
a stock option.
2.14 "NON-QUALIFIED STOCK OPTION" shall mean any stock option awarded
under the 1997 Flexible Plan that does not qualify as an Incentive Stock
Option.
2.15 "OPTIONEE" shall mean any person who has been granted a stock
option under the 1997 Flexible Plan and who has executed a written stock
option agreement with the Company reflecting the terms of such grant.
2.16 "PERFORMANCE AWARD" shall mean any Award hereunder of Shares, units
or rights based upon, payable in, or otherwise related to, Shares (including
Restricted Stock), or cash of an equivalent value, as the Committee may
determine, at the end of a specified performance period established by the
Committee.
2.17 "1997 FLEXIBLE PLAN" shall mean the HCC Insurance Holdings, Inc.
1997 Flexible Incentive Plan set forth herein.
2.18 "RESTRICTED STOCK" shall mean any Award of Shares under the 1997
Flexible Plan that are subject to restrictions or risk of forfeiture.
2.19 "RETIREMENT" shall mean termination of employment other than
discharge for cause, after age 65 or on or before age 65 if pursuant to the
terms of any retirement plan maintained by the Company or any of its
Subsidiaries in which such person participates.
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2.20 "SHARES" shall mean shares of the Company's Common Stock and any
shares of capital stock or other securities of the Company hereafter issued
or issuable upon, in respect of or in substitution or exchange for such
Shares.
2.21 "STOCK APPRECIATION RIGHT" shall mean the right of the holder
thereof to receive an amount in cash or Shares equal to the excess of the
Fair Market Value of a Share on the date of exercise over the Fair Market
Value of a Share on the date of the grant (or such other value as may be
specified in the agreement granting the Stock Appreciation Right).
2.22 "SUBSIDIARY" shall mean a subsidiary corporation of the Company, as
defined in Section 424(f) of the Code.
2.23 "TANDEM STOCK APPRECIATION RIGHT" shall mean a Stock Appreciation
Right granted in connection with an Award which is a stock option.
3. ADMINISTRATION OF THE 1997 FLEXIBLE PLAN
3.1 COMMITTEE. The 1997 Flexible Plan shall be administered and
interpreted by the Committee.
3.2 AWARDS. Subject to the provisions of the 1997 Flexible Plan and
directions from the Board, the Committee is authorized to:
(a) determine the persons to whom Awards are to be granted;
(b) determine the types and combinations of Awards to be granted, the
number of Shares to be covered by the Award, the pricing of the Award, the
time or times when the Award shall be granted and may be exercised, the
terms, performance criteria or other conditions, vesting periods or any
restrictions for an Award, any restrictions on Shares acquired pursuant to
the exercise of an Award and any other terms and conditions of an Award;
(c) conclusively interpret the provisions of the 1997 Flexible Plan;
(d) prescribe, amend and rescind the rules and regulations relating to
the 1997 Flexible Plan or make individual decisions as questions arise, or
both;
(e) determine whether, to what extent and under what circumstances to
provide loans from the Company to participants to purchase Shares subject to
Awards under the 1997 Flexible Plan, and the terms and conditions of such
loans;
(f) rely upon employees of the Company for such clerical and record
keeping duties as may be necessary in connection with the administration of
the 1997 Flexible Plan; and
(g) make all other determinations and take all other actions necessary
or advisable for the administration of the 1997 Flexible Plan.
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3.3 PROCEDURES. A majority of the Committee members shall constitute a
quorum. All determinations of the Committee shall be made by a majority of
its members. All questions of interpretation and application of the 1997
Flexible Plan or pertaining to any question of fact or Award granted
hereunder shall be decided by the Committee, whose decision shall be final,
conclusive and binding upon the Company and each other affected party.
4. SHARES SUBJECT TO 1997 FLEXIBLE PLAN
4.1 LIMITATIONS. The maximum number of Shares that may be issued with
respect to Awards under the 1997 Flexible Plan shall not exceed 4,000,000
unless such maximum shall be increased or decreased by reason of changes in
capitalization of the Company as hereinafter provided. The Shares issued
pursuant to the 1997 Flexible Plan may be authorized but unissued Shares, or
may be issued Shares which have been reacquired by the Company.
4.2 CHANGES. To the extent that any Award under the 1997 Flexible
Plan, shall be forfeited, shall expire or shall be canceled, in whole or in
part, then the number of Shares covered by the Award or stock option so
forfeited, expired or canceled may again be awarded pursuant to the
provisions of the 1997 Flexible Plan. In the event that Shares are delivered
to the Company in full or partial payment of the exercise price for the
exercise of a stock option granted under the 1997 Flexible Plan, the number
of Shares available for future Awards under the 1997 Flexible Plan shall be
reduced only by the net number of Shares issued upon the exercise of the
option. Awards that may be satisfied either by the issuance of Shares or by
cash or other consideration shall, until the form of consideration to be paid
is finally determined, be counted against the maximum number of Shares that
may be issued under the 1997 Flexible Plan. If the Award is ultimately
satisfied by the payment of consideration other than Shares, as, for example,
a stock option granted in tandem with a Stock Appreciation Right that is
settled by a cash payment of the stock appreciation, such Shares may again be
made the subject of an Award under the 1997 Flexible Plan. Awards will not
reduce the number of Shares that may be issued pursuant to the 1997 Flexible
Plan if the settlement of the Award will not require the issuance of Shares,
as, for example, a Stock Appreciation Right that can be satisfied only by the
payment of cash.
5. ELIGIBILITY
Eligibility for participation in the 1997 Flexible Plan shall be
confined to those persons who are employed by the Company, and who are
officers of the Company, or who are in managerial or other key positions
within the Company or are otherwise valuable employees of the Company. In
making any determination as to persons to whom Awards shall be granted, the
type of Award, and/or the number of Shares to be covered by the Award, the
Committee shall consider the position and responsibilities of the person, his
or her importance to the Company, the duties of such person, his or her past,
present and potential contributions to the growth and success of the Company,
and such other factors as the Committee shall deem relevant in connection
with accomplishing the purposes of the 1997 Flexible Plan.
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6. STOCK OPTIONS
6.1 GRANTS. The Committee may grant stock options alone or in addition
to other Awards granted under the 1997 Flexible Plan to any eligible officer
or other key employee. Each person so selected shall be offered an option to
purchase the number of Shares determined by the Committee. The Committee
shall specify whether such option is an Incentive Stock Option or
Non-Qualified Stock Option and any other terms and conditions relating to
such Award. To the extent that any stock option does not qualify as an
Incentive Stock Option (whether because of its provisions or the time or
manner of its exercise or otherwise), such stock option or the portion
thereof which does not qualify shall constitute a separate Non-Qualified
Stock Option. Each such person so selected shall have a reasonable period of
time within which to accept or reject the offered option. Failure to accept
within the period so fixed by the Committee may be treated as a rejection.
Each person who accepts an option shall enter into a written agreement with
the Company, in such form as the Committee may prescribe, setting forth the
terms and conditions of the option, consistent with the provisions of the
1997 Flexible Plan. The Optionee and the Company shall enter into option
agreements for Incentive Stock Options and Non-Qualified Stock Options. At
any time and from time to time, the Optionee and the Company may agree to
modify an option agreement so that an Incentive Stock Option may be converted
to a Non-Qualified Stock Option.
The Committee may require that an Optionee meet certain conditions
before the option or a portion thereof may vest or be exercised, as, for
example, that the Optionee remain in the employ of the Company for a stated
period or periods of time before the option, or stated portions thereof, may
vest or be exercised.
6.2 OPTION PRICE. The option exercise price of the Shares covered by
each stock option shall be determined by the Committee; provided, however,
that the option exercise price of an Incentive Stock Option shall not be less
than one hundred percent (100%) of the Fair Market Value of Shares on the
date of the grant of such Incentive Stock Option.
6.3 INCENTIVE STOCK OPTIONS LIMITATIONS.
(a) In no event shall any person be granted Incentive Stock Options to
the extent that the Shares covered by any Incentive Stock Options (and any
Incentive Stock Options granted under any other plans of the Company and its
Subsidiaries) that may be exercised for the first time by such person in any
calendar year have an aggregate Fair Market Value in excess of $100,000. For
this purpose, the Fair Market Value of the Shares shall be determined as of
the dates on which the Incentive Stock Options are granted. It is intended
that the limitation on Incentive Stock Options provided in this subsection
6.3(a) be the maximum limitation on options which may be considered Incentive
Stock Options under the Code.
(b) Notwithstanding anything herein to the contrary, in no event shall
any employee owning more than ten percent (10%) of the total combined voting
power of the Company or any Subsidiary be granted an Incentive Stock Option
hereunder unless the option exercise price shall be at least one hundred ten
percent (110%) of the Fair Market Value of the Shares subject to such
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Incentive Stock Option at the time that the Incentive Stock Option is granted
and the term of such Incentive Stock Option shall not exceed five (5) years.
6.4 OPTION TERM. Subject to subsection 6.3(b) hereof, the term of a
stock option shall be for such period of months or years from the date of its
grant as may be determined by the Committee; provided, however, that no stock
option shall be exercisable later than ten (10) years from the date of its
grant. Furthermore, no stock option may be exercised unless, at the time of
such exercise, the Optionee is, and has been continuously since the date of
grant of his or her stock option, employed by the Company, except that:
(a) A stock option may, to the extent vested, be exercised within the
period of two months after the date the Optionee ceases to be an employee of
the Company (or within such lesser period as may be specified in the
applicable option agreement), provided that the option agreement may
designate a longer exercise period and that the exercise after such two-month
period shall be treated as the exercise of a NonQualified Stock Option under
the 1997 Flexible Plan;
(b) If the Optionee dies within two months of the Optionee ceasing to
be an employee of the Company, the stock option may, to the extent vested and
previously unexercised, be exercised by the Optionee's Designated Beneficiary
within the period of one year after the date of death (or within such lesser
period as may be specified in the applicable option agreement, whichever is
shorter); and
(c) If the Optionee dies while in the employ of the Company, the stock
option may be exercised by the Optionee's Designated Beneficiary for the full
number of shares or any portion thereof except as to the issuance of
fractional shares, to the full extent of the option, less any previously
exercised shares, at any time within the period of one year after the date of
death of the Optionee (or within such lesser period as may be specified in
the applicable option agreement, whichever is shorter); and
(d) If the Optionee ceases to be an employee of the Company by reason
of the Optionee's Disability, the stock option may be exercised by the
Optionee for the full number of shares or any portion thereof except as to
the issuance of fractional shares, to the full extent of this option less any
previously exercised shares at any time within the period of one year after
the date of Disability of the Optionee (or within such lesser period as may
be specified in the applicable option agreement, whichever is shorter).
6.5 VESTING OF STOCK OPTIONS.
(a) Each stock option granted hereunder may only be exercised to the
extent that the Optionee is vested in such option. Each stock option shall
vest separately in accordance with the option vesting schedule, if any,
determined by the Committee in its sole discretion, which will be
incorporated in the stock option agreement entered into between the Company
and each Optionee. The option vesting schedule will be accelerated if, in
the sole discretion of the Committee, the Committee determines that
acceleration of the option vesting schedule would be desirable for the
Company.
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(b) In the event of the dissolution or liquidation of the Company, each
stock option granted under the 1997 Flexible Plan shall terminate as of a
date to be fixed by the Board; provided, however, that not less than thirty
(30) days' written notice of the date so fixed shall be given to each
Optionee and each such Optionee shall be fully vested in and shall have the
right during such period to exercise the option, even though such option
would not otherwise be exercisable under the option vesting schedule. At the
end of such period, any unexercised option shall terminate and be of no other
effect.
(c) In the event of a Reorganization (as defined in Section 2.3 hereof):
(1) If there is no plan or agreement respecting the Reorganization,
or if such plan or agreement does not specifically provide for the change,
conversion or exchange of the Shares under outstanding and unexercised
stock options for other securities then the provisions of subsection 6.5(b)
shall apply as if the Company had dissolved or been liquidated on the
effective date of the Reorganization; or
(2) If there is a plan or agreement respecting the Reorganization,
and if such plan or agreement specifically provides for the change,
conversion or exchange of the Shares under outstanding and unexercised
stock options for securities of another corporation, then the Board shall
adjust the Shares under such outstanding and unexercised stock options (and
shall adjust the Shares remaining under the 1997 Flexible Plan which are
then available to be awarded under the 1997 Flexible Plan, if such plan or
agreement makes no specific provision therefor) in a manner not
inconsistent with the provisions of such plan or agreement for the
adjustment, change, conversion or exchange of such Shares and such options.
(3) In the event of a Change in Control of the Company, all stock
options and any associated Stock Appreciation Rights shall become fully
vested and immediately exercisable and the vesting of all performance-based
stock options shall be determined as if the performance period or cycle
applicable to such stock options had ended immediately upon such Change in
Control; provided, however, that if in the opinion of counsel to the
Company the immediate exercisability of options when taken into
consideration with all other "parachute payments" as defined in
Section 280G of the Code, as amended, would result in an "excess parachute
payment" as defined in such section as well as an excise tax imposed by
Section 4999 of the Code, such options and any associated Stock
Appreciation Rights shall become fully vested and immediately exercisable,
except as and to the extent the Committee, in its sole discretion, shall
otherwise determine, and which determination by the Committee shall be
based solely upon maximizing the after-tax benefits to be received by any
such Optionee.
6.6 EXERCISE OF STOCK OPTIONS.
(a) Stock options may be exercised as to Shares only in amounts and at
intervals of time specified in the written option agreement between the
Company and the Optionee. Each exercise of a stock option, or any part
thereof, shall be evidenced by a notice in writing to the Company. The
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purchase price of the Shares as to which an option shall be exercised shall
be paid in full at the time of exercise, and may be paid to the Company
either:
(1) in cash (including check, bank draft or money order); or
(2) by the delivery of Shares having a Fair Market Value equal to the
aggregate option rate;
(3) by a combination of cash and Shares; or
(4) by other consideration deemed acceptable by the Committee in its
sole discretion.
(b) The amount, as determined by the Committee, of any Federal, state
or local tax required to be withheld by the Company due to the exercise of a
stock option shall be satisfied by payment by the Optionee to the Company of
the amount of such withholding obligation in cash or other consideration
acceptable to the Committee in its sole discretion.
(c) An Optionee shall not have any of the rights of a Shareholder of
the Company with respect to the Shares covered by a stock option except to
the extent that one or more certificates representing such Shares shall have
been delivered to the Optionee, or the Optionee has been determined to be a
Shareholder of record by the Company's transfer agent, upon due exercise of
the option.
6.7 DATE OF A STOCK OPTION GRANT. The granting of a stock option shall
take place only upon the execution and delivery by the Company and an
Optionee of an option agreement. Neither any action taken by the Board nor
anything contained in the 1997 Flexible Plan or in any resolution adopted or
to be adopted by the Board or the Shareholders of the Company shall
constitute the granting of a stock option under the 1997 Flexible Plan.
7. STOCK APPRECIATION RIGHTS
7.1 GRANTS. The Committee may grant to any eligible employee either
Non-Tandem Stock Appreciation Rights or Tandem Stock Appreciation Rights.
Stock Appreciation Rights shall be subject to such terms and conditions as
the Committee shall impose. The grant of the Stock Appreciation Right may
provide that the holder may be paid for the value of the Stock Appreciation
Right either in cash or in Shares, or a combination thereof, at the
discretion of the Committee. In the event of the exercise of a Stock
Appreciation Right payable in Shares, the holder of the Stock Appreciation
Right shall receive that number of whole Shares of stock of the Company
having an aggregate Fair Market Value on the date of exercise equal to the
value obtained by multiplying (i) either (a) in the case of a Tandem Stock
Appreciation Right, the difference between the Fair Market Value of a Share
on the date of exercise over the per share exercise price of the related
option, or (b) in the case of a Non-Tandem Stock Appreciation Right the
difference between the Fair Market Value of a Share on the date of exercise
over the Fair Market Value on the date of the grant by (ii) the number of
Shares as to which the Stock Appreciation Right is exercised. However,
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notwithstanding the foregoing, the Committee, in its sole discretion, may
place a ceiling on the amount payable upon exercise of a Stock Appreciation
Right but any such limitation shall be specified at the time that the Stock
Appreciation Right is granted.
7.2 EXERCISABILITY. A Tandem Stock Appreciation Right may be granted
at the time of the grant of the related stock option or, if the related stock
option is a Non-Qualified Stock Option, at any time thereafter during the
term of the stock option. A Tandem Stock Appreciation Right granted in
connection with an Incentive Stock Option (i) may be exercised at, and only
at, the times and to the extent the related Incentive Plan Stock Option is
exercisable, (ii) expires upon the termination of the related Incentive Stock
Option, (iii) may not exceed 100% of the difference between the exercise
price of the related Incentive Stock Option and the market price of the
Shares subject to the related Incentive Stock Option at the time the Tandem
Stock Appreciation Right is exercised and (iv) may be exercised at, and only
at, such times as the market price of the Shares subject to the related
Incentive Stock Option exceeds the exercise price of the related Incentive
Stock Option. The Tandem Stock Appreciation Right may be transferred at, and
only at, the times and to the extent the related stock option is
transferable. If a Tandem Stock Appreciation Right is granted, there shall
be surrendered and canceled from the related option at the time of exercise
of the Tandem Stock Appreciation Right, in lieu of exercise under the related
option, that number of Shares as shall equal the number of Shares as to which
the Tandem Stock Appreciation Right shall have been exercised.
7.3 CERTAIN LIMITATIONS ON NON-TANDEM STOCK, APPRECIATION RIGHTS. A
Non-Tandem Stock Appreciation Right will be exercisable as provided by the
Committee and will have such other terms and conditions as the Committee may
determine. A Non-Tandem Stock Appreciation Right is subject to acceleration
of vesting or immediate termination in certain circumstances in the same
manner as stock options pursuant to subsections 6.4 and 6.5 of the 1997
Flexible Plan.
7.4 LIMITED STOCK APPRECIATION RIGHTS. The Committee is also
authorized to grant "Limited Stock Appreciation Rights," either as Tandem
Stock Appreciation Rights or Non-Tandem Stock Appreciation Rights. Limited
Stock Appreciation Rights would become exercisable only upon the occurrence
of a Change in Control or such other event as the Committee may designate at
the time of grant or thereafter.
8. RESTRICTED STOCK
8.1 GRANTS. The Committee may grant Awards of Restricted Stock for no
cash consideration, for such minimum consideration as may be required by
applicable law, or for such other consideration as may be specified by the
grant. The terms and conditions of the Restricted Stock shall be specified
by the grant agreement. The Committee, in its sole discretion, may specify
any particular rights which the person to whom an Award of Restricted Stock
is made shall have in the Restricted Stock during the restriction period and
the restrictions applicable to the particular Award, the vesting schedule
(which may be based on service, performance or other factors) and rights to
acceleration of vesting (including, without limitation, whether non-vested
Shares are forfeited or vested upon termination of employment). Further, the
Committee may award performance-based Restricted Stock by conditioning the
grant, or vesting or such other factors, such
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as the release, expiration or lapse of restrictions upon any such Award
(including the acceleration of any such conditions or terms) of such
Restricted Stock upon the attainment of specified performance goals or such
other factors as the Committee may determine. The Committee shall also
determine when the restrictions shall lapse or expire and the conditions, if
any, under which the Restricted Stock will be forfeited or sold back to the
Company. Each Award of Restricted Stock may have different restrictions and
conditions. The Committee, in its discretion, may prospectively change the
restriction period and the restrictions applicable to any particular Award of
Restricted Stock. Unless otherwise set forth in the 1997 Flexible Plan,
Restricted Stock may not be disposed of by the recipient until the
restrictions specified in the Award expire.
8.2 AWARDS AND CERTIFICATES. Any Restricted Stock issued hereunder may
be evidenced such manner as the Committee, in its sole discretion, shall deem
appropriate including, without limitation, book-entry registration or
issuance of a stock certificate or certificates. In the event any stock
certificate is issued in respect of Shares of Restricted Stock awarded
hereunder, such certificate shall bear an appropriate legend with respect to
the restrictions applicable to such Award. The Company may retain, at its
option, the physical custody of any stock certificate representing any awards
of Restricted Stock during the restriction period or require that the
Restricted Stock be placed in escrow or trust, along with a stock power
endorsed in blank, until all restrictions are removed or expire.
9. PERFORMANCE AWARDS
9.1 GRANTS. A Performance Award may consist of either or both, as the
Committee may determine, of (i) "Performance Shares" or the right to receive
Shares, Restricted Stock or cash of an equivalent value, or any combination
thereof as the Committee may determine, or (ii) "Performance Units," or the
right to receive a fixed dollar amount payable in cash, Common Stock,
Restricted Stock or any combination thereof, as the Committee may determine.
The Committee may grant Performance Awards to any eligible employee, for no
cash consideration, for such minimum consideration as may be required by
applicable law or for such other consideration as may be specified at the
time of the grant. The terms and conditions of Performance Awards shall be
specified at the time of the grant and may include provisions establishing
the performance period, the performance criteria to be achieved during a
performance period the criteria used to determine vesting (including the
acceleration thereof), whether Performance Awards are forfeited or vest upon
termination of employment during a performance period and the maximum or
minimum settlement values. Each Performance Award shall have its own terms
and conditions, which shall be determined at the discretion of the Committee.
If the Committee determines, in its sole discretion, that the established
performance measures or objectives are no longer suitable because of a change
in the Company's business, operations, corporate structure or for other
reasons that the Committee deems satisfactory, the Committee may modify the
performance measures or objectives and/or the performance period.
9.2 TERMS AND CONDITIONS. Performance Awards may be valued by
reference to the Fair Market Value of a Share or according to any formula or
method deemed appropriate by the Committee, in its sole discretion,
including, but not limited to, achievement of specific financial, production,
sales, cost or earnings performance objectives that the Committee believes to
be relevant
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to the Company's business and for remaining in the employ of the Company for
a specified period of time, or the Company's performance or the performance
of its Common Stock measured against the performance of the market, the
Company's industry segment or its direct competitors. Performance Awards may
be paid in cash, Shares (including Restricted Stock) or other consideration,
or any combination thereof. If payable in Shares, the consideration for the
issuance of the Shares may be the achievement of the performance objective
established at the time of the grant of the Performance Award. Performance
Awards may be payable in a single payment or in installments and may be
payable at a specified date or dates or upon attaining the performance
objective, all at the Committee's discretion. The extent to which any
applicable performance objective has been achieved shall be conclusively
determined by the Committee.
10. DIVIDEND EQUIVALENT RIGHTS
The Committee may grant a Dividend Equivalent Right either as a
component of another Award or as a separate Award, and, in general, each such
holder of a Dividend Equivalent Right that is outstanding on a dividend
record date for the Company's Common Stock shall be credited with an amount
equal to the cash or stock dividends or other distributions that would have
been received had the Shares covered by the Award been issued and outstanding
on the dividend record date. The terms and conditions of the Dividend
Equivalent Right shall be specified by the grant. Dividend equivalents
credited to the holder of a Dividend Equivalent Right may be paid currently
or may be deemed to be reinvested in additional Shares (which may thereafter
accrue additional Dividend Equivalent Rights). Any such reinvestment shall
be at the Fair Market Value at the time thereof. Dividend Equivalent Rights
may be settled in cash or Shares, or a combination thereof, in a single
payment or in installments. A Dividend Equivalent Right granted as a
component of another Award may provide that such Dividend Equivalent Right
shall be settled upon exercise, settlement or payment for or lapse of
restrictions on such other Award, and that such Dividend Equivalent Right
shall expire or be forfeited or annulled under the same conditions as such
other Award. A Dividend Equivalent Right granted as a component of another
Award may also contain terms a conditions different from such other Award.
11. OTHER AWARDS
The Committee may grant to any eligible employee other forms of Awards
based upon, payable in or otherwise related to, in whole or in part, Shares,
if the Committee, in its sole discretion, determines that such other form of
Award is consistent with the purposes and restrictions of the 1997 Flexible
Plan. The terms and conditions of such other form of Award shall be
specified by the grant including, but not limited to, the price, if any, and
the vesting schedule, if any. Such Awards may be granted for no cash
consideration, for such minimum consideration as may be required by
applicable law or for such other consideration as may be specified by the
grant.
12. COMPLIANCE WITH SECURITIES AND OTHER LAWS
In no event shall the Company be required to sell or issue Shares under
any Award if the sale or issuance thereof would constitute a violation of
applicable Federal or state securities laws or regulations or a violation of
any other law or regulation of any governmental or regulatory agency
12
<PAGE>
or authority or any national securities exchange. As a condition to any sale
or issuance of Shares, the Company may place legends on Shares, issue stop
transfer orders and require such agreements or undertakings as the Company
may deem necessary or advisable to assure compliance with any such laws or
regulations, including, if the Company or its counsel deems it appropriate,
representations from the person to whom an Award is granted that he or she is
acquiring the Shares solely for investment and not with a view to
distribution and that no distribution of the Shares will be made unless
registered pursuant to applicable Federal and state securities laws, or in
the opinion of counsel of the Company, such registration is unnecessary.
13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR REORGANIZATION
The value of an Award in Shares shall be adjusted from time to time as
follows:
(a) Subject to any required action by Shareholders, the number of
Shares covered by each outstanding Award, and the exercise price, shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares of the Company resulting from a subdivision or consolidation of Shares
or the payment of a stock dividend (but only in Shares) or any other increase
or decrease in the number of Shares affected without receipt of consideration
by the Company.
(b) Subject to any required action by Shareholders, if the Company
shall be the surviving corporation in any Reorganization, merger or
consolidation, each outstanding Award shall pertain to and apply to the
securities to which a holder of the number of Shares subject to the Award
would have been entitled, and if a plan or agreement reflecting any such
event is in effect that specifically provides for the change, conversion or
exchange of Shares, then any adjustment to Shares relating to an Award
hereunder shall not be inconsistent with the terms of any such plan or
agreement.
(c) In the event of a change in the Shares of the Company as presently
constituted, which is limited to a change of par value into the same number
of Shares with a different par value or without par value, the Shares
resulting from any such change shall be deemed to be the Shares within the
meaning of the 1997 Flexible Plan.
To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Board, whose
determination shall be final, binding and conclusive.
Except as hereinbefore expressly provided in the 1997 Flexible Plan, any
person to whom an Award is granted shall have no rights by reason of any
subdivision or consolidation of stock of any class or the payment of any
stock dividend or any other increase or decrease in the number of shares of
stock of any class or by reason of any dissolution, liquidation,
reorganization, merger or consolidation or spin-off of assets or stock of
another corporation, and any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect and no adjustment by reason thereof shall be made with respect to, the
number or exercise price of Shares subject to an Award.
13
<PAGE>
The grant of an Award pursuant to the 1997 Flexible Plan shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, Reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell or
transfer all or any part of its business or assets.
14. AMENDMENT OR TERMINATION OF THE 1997 FLEXIBLE PLAN
14.1 AMENDMENT OF THE 1997 FLEXIBLE PLAN. Notwithstanding anything
contained in the 1997 Flexible Plan to the contrary, all provisions of the
1997 Flexible Plan may at any time or from time to time be modified or
amended by the Board; provided, however, that no Award at any time
outstanding under the 1997 Flexible Plan may be modified, impaired or
canceled adversely to the holder of the Award without the consent of such
holder; and provided, further, that the 1997 Flexible Plan may not be amended
without approval by the holders of a majority of the Shares of the Company
represented and voted at a meeting of the Shareholders (a) to increase the
maximum number of Shares subject to the 1997 Flexible Plan, (b) to materially
modify the requirements as to eligibility for participation in the 1997
Flexible Plan, (c) to decrease the minimum exercise price for options, (d) to
otherwise materially increase the benefits accruing to persons to whom Awards
may be made under the 1997 Flexible Plan, as amended, or (e) if such approval
is otherwise necessary, to comply with Rule 16b-3 promulgated under the
Exchange Act as amended, or to comply with any other applicable laws,
regulations or listing requirements, or to qualify for an exemption or
characterization that is deemed desirable by the Board.
14.2 TERMINATION OF THE 1997 FLEXIBLE PLAN. The Board may suspend or
terminate the 1997 Flexible Plan at any time, and such suspension or
termination may be retroactive or prospective. However, no Award may be
granted on or after the tenth anniversary of the adoption of the 1997
Flexible Plan. Termination of the 1997 Flexible Plan shall not impair or
affect any Award previously granted hereunder and the rights of the holder of
the Award shall remain in effect until the Award has been exercised in its
entirety or has expired or otherwise has been terminated by the terms of such
Award.
15. AMENDMENTS AND ADJUSTMENTS TO AWARDS
The Committee may amend, modify or terminate any outstanding Award with
the Participant's consent at any time prior to payment or exercise in any
manner not inconsistent with the terms of the 1997 Flexible Plan, including,
without limitation to change the date or dates as of which (a) an option
becomes exercisable or (b) a performance-based Award is deemed earned. The
Committee is also authorized to make adjustments in the terms and conditions
of, and the criteria included in, Awards in recognition of unusual or
non-recurring events (including, without limitation, the events described in
Section 13 hereof) affecting the Company, or the financial statements of the
Company or any Affiliate, or of changes in applicable laws, regulations or
accounting principles, whenever the Committee determines that such
adjustments are appropriate in order to prevent reduction or enlargement of
the benefits or potential benefits intended to be made available under the
1997 Flexible Plan. Any provision of the 1997 Flexible Plan or any agreement
regarding an Award to the contrary notwithstanding, the Committee may cause
any Award granted to be canceled in consideration of a cash payment or
alternative Award made to the holder of such canceled Award
14
<PAGE>
equal in value to the Fair Market Value of such canceled Award. The
determinations of value under this Section 15 shall be made by the Committee
in its sole discretion.
16. GENERAL PROVISIONS
16.1 NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in
the 1997 Flexible Plan shall prevent the Company from adopting or continuing
in effect other compensation arrangements, and such arrangements may be
either generally applicable or applicable only in specific cases.
16.2 NO RIGHT TO EMPLOYMENT. Nothing in the 1997 Flexible Plan or in
any Award, nor the grant of any Award, shall confer upon or be construed as
giving any recipient of an Award any right to remain in the employ of the
Company. Further, the Company may at any time dismiss an Optionee in the 1997
Flexible Plan from employment, free from any liability or any claim under the
1997 Flexible Plan, unless otherwise expressly provided in the 1997 Flexible
Plan or in any Award agreement. No employee, Optionee or other person shall
have any claim to be granted any Award, and there is no obligation for
uniformity or treatment of employees, participants or holders or
beneficiaries of Awards.
16.3 GOVERNING LAW. THE VALIDITY, CONSTRUCTION AND EFFECT OF THE 1997
FLEXIBLE PLAN AND ANY RULES AND REGULATIONS RELATING TO THE 1997 FLEXIBLE
PLAN SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
16.4 SEVERABILITY. If any provision of the 1997 Flexible Plan or any
Award is or becomes or is deemed to be invalid, illegal or unenforceable in
any jurisdiction or as to any person or Award, or would disqualify the 1997
Flexible Plan or any Award under any law deemed applicable by the Committee,
such provision shall be construed or deemed amended to conform to applicable
laws, or if it cannot be construed or deemed amended without, in the sole
determination of the Committee, materially altering the intent of the 1997
Flexible Plan or the Award, such provision shall be stricken as to such
jurisdiction, person or Award and the remainder of the 1997 Flexible Plan and
any such Award shall remain in full force and effect.
16.5 NO FRACTIONAL SHARES. No fractional Shares shall be issued or
delivered pursuant to the 1997 Flexible Plan or any Award, and the Committee
shall determine whether cash, other securities or other property shall be
paid or transferred in lieu of any fractional Shares or whether such
fractional Shares or any rights thereto shall be canceled, terminated or
otherwise eliminated.
16.6 HEADINGS. Headings are given to the subsections of the 1997
Flexible Plan solely as a convenience to facilitate reference. Such headings
shall not be deemed in any way material or relevant to the construction or
interpretation of the 1997 Flexible Plan or any provision thereof.
16.7 EFFECTIVE DATE. The 1997 Flexible Plan shall be effective as of
June 1, 1997 after its approval by the holders of a majority of the Shares of
the Company represented and voting at the
15
<PAGE>
Annual Meeting of Shareholders to be held May 22, 1997. If the 1997 Flexible
Plan is not approved by the Shareholders at the 1997 Annual Meeting, the 1997
Flexible Plan shall be null and void.
16.8 NON-TRANSFERABILITY OF AWARDS. Awards shall not be transferable
otherwise than by will or the laws of descent and distribution, and Awards
may be exercised, during the lifetime of the holder, only by the holder;
provided, however, that with the approval of the Committee, Awards other than
Incentive Stock Options may be transferred as directed under a qualified
domestic relations order. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of an Award contrary to the provisions
hereof, or the levy of any execution, attachment or similar process upon an
Award shall be null and void and without effect.
17. NAMED EXECUTIVE OFFICERS
17.1 APPLICABILITY OF SECTION 17. The provisions of this Section 17
shall apply only to those Executive Officers (i) whose compensation is
required to be reported in the Company's proxy statement pursuant to Item
402(a)(3)(i) and (ii) of Regulation S-K under the general rules and
regulations under the Exchange Act, as amended, and (ii) whose total
compensation, including estimated Awards, is determined by the Committee to
possibly be subject to the limitations on deductions imposed by Section
162(m) of the Code ("Named Executive Officers"). In the event of any
inconsistencies between this Section 17 and the other 1997 Flexible Plan
provisions as they pertain to Named Executive Officers, the provisions of
this Section 17 shall control.
17.2 ESTABLISHMENT OF PERFORMANCE GOALS. Awards for Named Executive
Officers, other than stock options and Stock Appreciation Rights, shall be
based on the attainment of certain performance goals. No later than the
earlier of (i) ninety (90) days after the commencement of the applicable
fiscal year or such other award period as may be established by the Committee
("Award Period") and (ii) the completion of twenty-five percent (25%) of such
Award Period, the Committee shall establish, in writing, the performance
goals applicable to each such Award for Named Executive Officers. At the
time the performance goals are established by the Committee, their outcome
must be substantially uncertain. In addition, the performance goal must
state, in terms of an objective formula or standard, the method for computing
the amount of compensation payable to the Named Executive Officer if the goal
is obtained. Such formula or standard shall be sufficiently objective so
that a third party with knowledge of the relevant performance results could
calculate the amount to be paid to the subject Named Executive Officer. The
material terms of the performance goals for Named Executive Officers and the
compensation payable thereunder shall be submitted to the Shareholders of the
Company for their review and approval. Shareholder approval shall be
obtained for such performance goals prior to any Award being paid to such
Named Executive Officer. If the Shareholders do not approve such performance
goals, no amount shall be paid to such Named Executive Officer for such
applicable Award Period under the 1997 Flexible Plan. The disclosure of the
"material terms" of a performance goal and the compensation payable
thereunder shall be determined under the guidelines set forth under Section
162(m) of the Code, and the Treasury Regulations thereunder.
17.3 COMPONENTS OF AWARDS. Each Award to a Named Executive Officer,
other than stock options and Stock Appreciation Rights, shall be based on
performance goals which are sufficiently
16
<PAGE>
objective so that a third party having knowledge of the relevant facts could
determine whether the goal was met. Except as provided in subsection 17.8
herein, performance measures which may serve as determinants of Named
Executive Officers Awards shall be limited to the following measures:
earnings per share; return on assets; return on equity; return on capital;
net profit after taxes; net profit before taxes; economic value added;
operating profits; stock price; market share; and sales or expenses. Within
ninety (90) days following the end of each Award Period, the Committee shall
certify in writing that the performance goals, and any other material terms
were satisfied. Thereafter, Awards shall be made for each Named Executive
Officer as determined by the Committee. The Awards may not vary from the
pre-established amount based on the level of achievement.
17.4 NO MID-YEAR CHANGE IN AWARDS. Except as provided in subsections
17.8 and 17.9 herein, each Named Executive Officers Awards shall be based
exclusively on the performance measures established by the Committee pursuant
to subsection 17.2.
17.5 NO PARTIAL AWARD PERIOD PARTICIPATION. A Named Executive Officer
who becomes eligible to participate in the 1997 Flexible Plan after
performance goals have been established in an Award Period pursuant to
subsection 17.2 may not participation in the 1997 Flexible Plan prior to the
next succeeding Award Period, except with respect to Awards which are stock
options or Stock Appreciation Rights.
17.6 PERFORMANCE GOALS. Except as provided in subsection 17.8 herein,
performance goals shall not be changed following their establishment, and
Named Executive Officers shall not receive any payout, except with respect to
Awards which are stock options or Stock Appreciation Rights, when the minimum
performance goals are not met or exceeded.
17.7 INDIVIDUAL PERFORMANCE AND DISCRETIONARY ADJUSTMENTS. Except as
provided in subsection 17.8 herein, subjective evaluations of individual
performance of Named Executive Officers shall not be reflected in their
Awards, other than Awards which are stock options or Stock Appreciation
Rights. The payment of such Awards shall be entirely dependent upon the
attainment of the pre-established performance goals.
17.8 AMENDMENTS. No amendment of the 1997 Flexible Plan with respect to
any Named Executive Officer may be made which would (i) increase the maximum
amount that can be paid to any one Optionee under the 1997 Flexible Plan,
(ii) change the specified performance goal for payment of Awards, or (iii)
modify the requirements as to eligibility for participation in the 1997
Flexible Plan, unless the Company's Shareholders have first approved such
amendment in a manner which would permit the deduction under Section 162(m)
of the Code of such payment in the fiscal year it is paid. The Committee
shall amend this Section 17 and such other provisions as it deems
appropriate, to cause amounts payable to Named Executive Officers to satisfy
the requirements of Section 162(m) and the Treasury Regulations promulgated
thereunder.
17
<PAGE>
Exhibit 5
August 12, 1998
HCC Insurance Holdings, Inc.
13403 Northwest Freeway
Houston, Texas 77040
Gentlemen:
You have requested our opinion as to the legality of the securities of
HCC Insurance Holdings, Inc. (the "Company") being registered on Form S-8
(the "Registration Statement") to be filed by the Company with the Securities
and Exchange Commission pursuant to the Securities Act of 1933, as amended,
in connection with the HCC Insurance Holdings, Inc. 1997 Flexible Incentive
Plan, as amended (the "Plan"). You have also requested our opinion as to
whether such securities will, when sold, be legally issued, fully paid, and
nonassessable. The securities to be registered in the Registration Statement
and issued pursuant to the Plan will be up to 4,000,000 shares (the "Shares")
of Common Stock, $1.00 par value per share, of the Company ("Common Stock"),
which may be treasury shares or authorized but unissued shares.
We have examined copies of the Restated Certificate of Incorporation and
amendments thereto and Bylaws of the Company and of the resolutions adopted
by the Shareholders of the Company in connection with the adoption of the
Plan and the amendments thereto. We have also examined such other corporate
records and documents, certificates of corporate officers, and statutes as we
have deemed necessary for purposes of this opinion.
In such examination, we have assumed the genuineness of all signatures,
the authenticity of all corporate records, documents and instruments
submitted to us as originals, the conformity to original documents of all
documents submitted to us as conformed, certified or photostatic copies
thereof, and the authenticity of the originals of such photostatic, certified
or conformed copies. We have assumed compliance both in the past and in the
future with the terms of the Plan by the Company and its employees, officers,
and Board of Directors, and that all statements in all certificates of
officers of the Company are true and correct.
Based upon the foregoing and in reliance thereon, we are of the opinion
that the Shares when issued or sold pursuant to and in accordance with the
terms of the Plan will be validly issued, fully paid and nonassessable shares
of Common Stock.
<PAGE>
HCC Insurance Holdings, Inc.
August 12, 1998
Page 2
We know that we are named in the Registration Statement, and we hereby
consent to the use of our name in the Registration Statement and to the
filing of this opinion as Exhibit 5 to the Registration Statement.
Very truly yours,
WINSTEAD SECHREST & MINICK P.C.
By: /s/ ARTHUR S. BERNER
-------------------------------------
Arthur S. Berner
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of our reports dated March 26, 1998, on our audits of the consolidated
financial statements and financial statement schedules of HCC Insurance
Holdings, Inc. as of December 31, 1997 and 1996, and for the three year period
ended December 31, 1997. Our reports state that they are based on the reports
of KPMG Peat Marwick LLP, independent certified public accountants with respect
to their audit of the 1996 and 1995 consolidated financial statements and
financial statement schedules of AVEMCO Corporation.
PricewaterhouseCoopers LLP
Houston, Texas
August 12, 1998
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Shareholder
AVEMCO Corporation:
We consent to incorporation by reference in this registration statement on
Form S-8 of HCC Insurance Holdings, Inc. of our reports dated January 31,
1997 (February 28, 1997, as to note 12 and February 18, 1998, as to note 14),
relating to the consolidated balance sheet of AVEMCO Corporation and
subsidiaries as of December 31, 1996, and the related consolidated statements
of income, stockholders' equity, and cash flows for each of the years in the
two-year period ended December 31, 1996, and all related schedules, which
reports appear in the December 31, 1997 annual report on Form 10-K of HCC
Insurance Holdings, Inc.
KPMG Peat Marwick LLP
Washington, D.C.
August 12, 1998
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints STEPHEN L. WAY, FRANK J. BRAMANTI, and CHRISTOPHER L. MARTIN and
each of them, his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution for him and in his name, place, and stead,
in any and all capacities, to sign the Form S-8 Registration Statement of HCC
Insurance Holdings, Inc. (the "Registrant") with respect to the HCC Insurance
Holdings, Inc. 1997 Flexible Incentive Plan and the Form S-8 Registration
Statement of the Registrant with respect to the HCC Insurance Holdings, Inc.
1996 Nonemployee Director Stock Option Plan as Restated and Amended, to sign
any and all amendments to same (including post-effective amendments), and to
file same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and/or any state
securities department or any other federal or state agency or governmental
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or any of them,
whether substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
August 17, 1998 /s/ STEPHEN L. WAY
----------------------------------------
Stephen L. Way
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints STEPHEN L. WAY, FRANK J. BRAMANTI, and CHRISTOPHER L. MARTIN and
each of them, his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution for him and in his name, place, and stead,
in any and all capacities, to sign the Form S-8 Registration Statement of HCC
Insurance Holdings, Inc. (the "Registrant") with respect to the HCC Insurance
Holdings, Inc. 1997 Flexible Incentive Plan and the Form S-8 Registration
Statement of the Registrant with respect to the HCC Insurance Holdings, Inc.
1996 Nonemployee Director Stock Option Plan as Restated and Amended, to sign
any and all amendments to same (including post-effective amendments), and to
file same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and/or any state
securities department or any other federal or state agency or governmental
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or any of them,
whether substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
August 17, 1998 /s/ JAMES M. BERRY
---------------------------------------
James M. Berry
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints STEPHEN L. WAY, FRANK J. BRAMANTI, and CHRISTOPHER L. MARTIN and
each of them, his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution for him and in his name, place, and stead,
in any and all capacities, to sign the Form S-8 Registration Statement of HCC
Insurance Holdings, Inc. (the "Registrant") with respect to the HCC Insurance
Holdings, Inc. 1997 Flexible Incentive Plan and the Form S-8 Registration
Statement of the Registrant with respect to the HCC Insurance Holdings, Inc.
1996 Nonemployee Director Stock Option Plan as Restated and Amended, to sign
any and all amendments to same (including post-effective amendments), and to
file same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and/or any state
securities department or any other federal or state agency or governmental
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or any of them,
whether substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
August 17, 1998 /s/ FRANK J. BRAMANTI
---------------------------------------
Frank J. Bramanti
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints STEPHEN L. WAY, FRANK J. BRAMANTI, and CHRISTOPHER L. MARTIN and
each of them, his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution for him and in his name, place, and stead,
in any and all capacities, to sign the Form S-8 Registration Statement of HCC
Insurance Holdings, Inc. (the "Registrant") with respect to the HCC Insurance
Holdings, Inc. 1997 Flexible Incentive Plan and the Form S-8 Registration
Statement of the Registrant with respect to the HCC Insurance Holdings, Inc.
1996 Nonemployee Director Stock Option Plan as Restated and Amended, to sign
any and all amendments to same (including post-effective amendments), and to
file same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and/or any state
securities department or any other federal or state agency or governmental
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or any of them,
whether substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
August 17, 1998 /s/ PATRICK B. COLLINS
---------------------------------------
Patrick B. Collins
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints STEPHEN L. WAY, FRANK J. BRAMANTI, and CHRISTOPHER L. MARTIN and
each of them, his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution for him and in his name, place, and stead,
in any and all capacities, to sign the Form S-8 Registration Statement of HCC
Insurance Holdings, Inc. (the "Registrant") with respect to the HCC Insurance
Holdings, Inc. 1997 Flexible Incentive Plan and the Form S-8 Registration
Statement of the Registrant with respect to the HCC Insurance Holdings, Inc.
1996 Nonemployee Director Stock Option Plan as Restated and Amended, to sign
any and all amendments to same (including post-effective amendments), and to
file same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and/or any state
securities department or any other federal or state agency or governmental
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or any of them,
whether substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
August 17, 1998 /s/ J. ROBERT DICKERSON
---------------------------------------
J. Robert Dickerson
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints STEPHEN L. WAY, FRANK J. BRAMANTI, and CHRISTOPHER L. MARTIN and
each of them, his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution for him and in his name, place, and stead,
in any and all capacities, to sign the Form S-8 Registration Statement of HCC
Insurance Holdings, Inc. (the "Registrant") with respect to the HCC Insurance
Holdings, Inc. 1997 Flexible Incentive Plan and the Form S-8 Registration
Statement of the Registrant with respect to the HCC Insurance Holdings, Inc.
1996 Nonemployee Director Stock Option Plan as Restated and Amended, to sign
any and all amendments to same (including post-effective amendments), and to
file same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and/or any state
securities department or any other federal or state agency or governmental
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or any of them,
whether substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
August 17, 1998 /s/ EDWARD H. ELLIS, JR.
---------------------------------------
Edward H. Ellis, Jr.
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints STEPHEN L. WAY, FRANK J. BRAMANTI, and CHRISTOPHER L. MARTIN and
each of them, his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution for him and in his name, place, and stead,
in any and all capacities, to sign the Form S-8 Registration Statement of HCC
Insurance Holdings, Inc. (the "Registrant") with respect to the HCC Insurance
Holdings, Inc. 1997 Flexible Incentive Plan and the Form S-8 Registration
Statement of the Registrant with respect to the HCC Insurance Holdings, Inc.
1996 Nonemployee Director Stock Option Plan as Restated and Amended, to sign
any and all amendments to same (including post-effective amendments), and to
file same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and/or any state
securities department or any other federal or state agency or governmental
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or any of them,
whether substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
August 17, 1998 /s/ EDWIN H. FRANK, III
---------------------------------------
Edwin H. Frank, III
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints STEPHEN L. WAY, FRANK J. BRAMANTI, and CHRISTOPHER L. MARTIN and
each of them, his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution for him and in his name, place, and stead,
in any and all capacities, to sign the Form S-8 Registration Statement of HCC
Insurance Holdings, Inc. (the "Registrant") with respect to the HCC Insurance
Holdings, Inc. 1997 Flexible Incentive Plan and the Form S-8 Registration
Statement of the Registrant with respect to the HCC Insurance Holdings, Inc.
1996 Nonemployee Director Stock Option Plan as Restated and Amended, to sign
any and all amendments to same (including post-effective amendments), and to
file same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and/or any state
securities department or any other federal or state agency or governmental
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or any of them,
whether substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
August 17, 1998 /s/ ALAN W. FULKERSON
---------------------------------------
Alan W. Fulkerson
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints STEPHEN L. WAY, FRANK J. BRAMANTI, and CHRISTOPHER L. MARTIN and
each of them, his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution for him and in his name, place, and stead,
in any and all capacities, to sign the Form S-8 Registration Statement of HCC
Insurance Holdings, Inc. (the "Registrant") with respect to the HCC Insurance
Holdings, Inc. 1997 Flexible Incentive Plan and the Form S-8 Registration
Statement of the Registrant with respect to the HCC Insurance Holdings, Inc.
1996 Nonemployee Director Stock Option Plan as Restated and Amended, to sign
any and all amendments to same (including post-effective amendments), and to
file same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and/or any state
securities department or any other federal or state agency or governmental
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or any of them,
whether substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
August 17, 1998 /s/ WALTER J. LACK
---------------------------------------
Walter J. Lack
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints STEPHEN L. WAY, FRANK J. BRAMANTI, and CHRISTOPHER L. MARTIN and
each of them, his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution for him and in his name, place, and stead,
in any and all capacities, to sign the Form S-8 Registration Statement of HCC
Insurance Holdings, Inc. (the "Registrant") with respect to the HCC Insurance
Holdings, Inc. 1997 Flexible Incentive Plan and the Form S-8 Registration
Statement of the Registrant with respect to the HCC Insurance Holdings, Inc.
1996 Nonemployee Director Stock Option Plan as Restated and Amended, to sign
any and all amendments to same (including post-effective amendments), and to
file same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and/or any state
securities department or any other federal or state agency or governmental
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or any of them,
whether substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
August 17, 1998 /s/ STEPHEN J. LOCKWOOD
---------------------------------------
Stephen J. Lockwood
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints STEPHEN L. WAY, FRANK J. BRAMANTI, and CHRISTOPHER L. MARTIN and
each of them, his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution for him and in his name, place, and stead,
in any and all capacities, to sign the Form S-8 Registration Statement of HCC
Insurance Holdings, Inc. (the "Registrant") with respect to the HCC Insurance
Holdings, Inc. 1997 Flexible Incentive Plan and the Form S-8 Registration
Statement of the Registrant with respect to the HCC Insurance Holdings, Inc.
1996 Nonemployee Director Stock Option Plan as Restated and Amended, to sign
any and all amendments to same (including post-effective amendments), and to
file same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and/or any state
securities department or any other federal or state agency or governmental
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or any of them,
whether substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
August 17, 1998 /s/ JOHN N. MOLBECK, JR.
---------------------------------------
John N. Molbeck, Jr.
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints STEPHEN L. WAY, FRANK J. BRAMANTI, and CHRISTOPHER L. MARTIN and
each of them, his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution for him and in his name, place, and stead,
in any and all capacities, to sign the Form S-8 Registration Statement of HCC
Insurance Holdings, Inc. (the "Registrant") with respect to the HCC Insurance
Holdings, Inc. 1997 Flexible Incentive Plan and the Form S-8 Registration
Statement of the Registrant with respect to the HCC Insurance Holdings, Inc.
1996 Nonemployee Director Stock Option Plan as Restated and Amended, to sign
any and all amendments to same (including post-effective amendments), and to
file same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and/or any state
securities department or any other federal or state agency or governmental
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or any of them,
whether substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
August 17, 1998 /s/ PETER B. SMITH, JR.
---------------------------------------
Peter B. Smith, Jr.
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints STEPHEN L. WAY, FRANK J. BRAMANTI, and CHRISTOPHER L. MARTIN and
each of them, his true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution for him and in his name, place, and stead,
in any and all capacities, to sign the Form S-8 Registration Statement of HCC
Insurance Holdings, Inc. (the "Registrant") with respect to the HCC Insurance
Holdings, Inc. 1997 Flexible Incentive Plan and the Form S-8 Registration
Statement of the Registrant with respect to the HCC Insurance Holdings, Inc.
1996 Nonemployee Director Stock Option Plan as Restated and Amended, to sign
any and all amendments to same (including post-effective amendments), and to
file same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and/or any state
securities department or any other federal or state agency or governmental
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or any of them,
whether substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
August 17, 1998 /s/ HUGH T. WILSON
---------------------------------------
Hugh T. Wilson
