[sheet: D&O Tower Summary]
Field | Detail
Named Insured | Nexford Industrial Holdings Inc.
EIN | 83-2174650
Additional Named Insureds | Nexford Conveyor Systems, LLC (EIN 83-2174651); Triton Fastener Corp. (EIN 36-4892103); Marlowe Asset Management Precision Machining, Inc. (EIN 31-1784529)
Named Insured Address (HQ) | 2200 Corporate Center Drive, Suite 800, Schaumburg, IL 60173
State of Incorporation | Delaware
Registered Agent Address | c/o Cobalt Ridge Technologies, 1209 Orange Street, Wilmington, DE 19801
Policy Period | July 1, 2021 – July 1, 2022
Program Type | Directors & Officers Liability
Tower Structure | Primary + 3 Excess Layers + Side-A DIC
Total Aggregate Limit | $55,000,000
Total Annual Premium | $1,363,450
Rate-on-Line | 2.48%
Entity Coverage SIR | $1,000,000
Side-A DIC SIR | None ($0)
Board Composition | 9 directors (4 independent, 5 sponsor-appointed)
Majority Owner | Veltrano Capital Partners Fund IV, LP (68.5%)
Management Rollover Equity | 19.3%
Co-Investor Equity | 12.2%
FY2021 Revenue | $1,420,000,000
FY2021 EBITDA | $218,000,000
Estimated Enterprise Value | ~$2,600,000,000
Broker of Record | Ashford Breckinridge LLP
Broker Contact | Phillip Garza, SVP, Executive Risk Practice; Tamara Fisk, Account Executive
Broker Address | 321 South Plymouth Court, Suite 1500, Chicago, IL 60604
Outside Counsel (Tower Review) | Calderwood & Harkness LLP
C&H Matter Number | 1005-00003
Five-Year D&O Loss History | 1 reported claim (shareholder demand letter, 2020, resolved without payment); $0 paid losses
Prepared By | Naomi Petersen, Lead Associate, Calderwood & Harkness LLP
Reviewed By | Douglas Fairchild, Responsible Partner, Calderwood & Harkness LLP
Date Prepared | May 2022
[sheet: Layer Detail]
Layer | Carrier Full Legal Name | Carrier Short Name | Carrier Domicile | Policy Number | Policy Period Inception | Policy Period Expiration | Limit of Liability | Attachment Point | Annual Premium | Rate-on-Line | Self-Insured Retention / Deductible | Coverage Type | Side-A (Individual) Coverage | Side-B (Corporate Reimbursement) Coverage | Side-C / Entity Coverage | Follow-Form / Manuscript | Key Coverage Grants | Notable Exclusions | Severability of Application | Definition of Insured Person | Prior Acts Date | Reporting / Extended Reporting | Notes
Primary | Vandermeer National Insurance Company | Vandermeer | Connecticut | VNI-DO-2021-88473 | 07/01/2021 | 07/01/2022 | $10,000,000 | $0 (ground-up; subject to SIR for entity coverage) | $487,500 | 4.88% | $1,000,000 SIR (entity coverage only; no SIR for Side-A) | Claims-Made | Yes — full Side-A (non-indemnifiable loss) | Yes — corporate reimbursement | Yes — entity coverage, subject to $1M SIR | Manuscript form | Defense costs within limits; pre-claim inquiry coverage; extradition expenses; spousal/estate coverage; emergency defense costs; presumptive indemnification | Insured vs. Insured exclusion; prior/pending litigation (prior to retroactive date); bodily injury/property damage; ERISA; pollution; professional services; nuclear hazard | Full severability — knowledge of CEO, CFO, General Counsel, and Risk Manager imputed; all other insureds severed | All past, present, and future directors, officers, and certain senior management of the Named Insured and its subsidiaries | Unlimited / full prior acts | Basic: 60 days; Optional: 12 months (100% additional premium) or 24 months (175% additional premium) | Manuscript policy form; definition of 'Claim' includes written demand, civil/criminal proceeding, regulatory proceeding, and formal investigation; review noted concern regarding scope of informal inquiry coverage
1st Excess | Commonwealth Indemnity Group | Commonwealth | Pennsylvania | CIG-XDO-2021-04451 | 07/01/2021 | 07/01/2022 | $10,000,000 | $10,000,000 (xs Primary) | $312,000 | 3.12% | N/A — follows primary SIR | Claims-Made | Yes — follows primary | Yes — follows primary | Yes — follows primary | Follow-form to Vandermeer primary with stated exceptions | Follows primary coverage grants; drop-down provision in event of primary insolvency or refusal to pay | Follows primary exclusions; additional prior acts exclusion scope narrower than primary — review flagged inconsistency | Follows primary | Review noted inconsistency with primary — Commonwealth uses narrower definition excluding certain senior management below VP level | Follows primary retroactive date | Follows primary | Prior acts exclusion scope identified as a gap item; definition of 'Insured Person' inconsistency flagged in coverage gap memorandum
2nd Excess | Graystone Mutual Assurance Co. | Graystone | Ohio | GMA-EXS-2021-77823 | 07/01/2021 | 07/01/2022 | $10,000,000 | $20,000,000 (xs Primary + 1st Excess) | $198,750 | 1.99% | N/A — follows primary SIR | Claims-Made | Yes — follows primary | Yes — follows primary | Yes — follows primary | Follow-form to Vandermeer primary | Follows primary coverage grants; drop-down provision | Follows primary exclusions | Follows primary | Follows primary | Follows primary retroactive date | Follows primary | Non-renewed at 2022-2023 renewal; replaced by Northfield Excess Insurance Company
3rd Excess | Pinnacle Re Insurance Ltd. | Pinnacle Re | Bermuda | PRI-XDO-2021-0198 | 07/01/2021 | 07/01/2022 | $10,000,000 | $30,000,000 (xs Primary + 1st Excess + 2nd Excess) | $141,200 | 1.41% | N/A — follows primary SIR | Claims-Made | Yes — follows primary | Yes — follows primary | Yes — follows primary | Follow-form to Vandermeer primary | Follows primary coverage grants; drop-down provision | Follows primary exclusions | Follows primary | Follows primary | Follows primary retroactive date | Follows primary | Bermuda-domiciled carrier; regulatory considerations noted
Side-A DIC | Harrington Specialty Insurance Co. | Harrington | Delaware | HSI-DIC-2021-00342 | 07/01/2021 | 07/01/2022 | $15,000,000 | N/A — dedicated Side-A limit; responds when underlying does not (DIC trigger) | $224,000 | 1.49% | No SIR ($0) | Claims-Made (Difference-in-Conditions) | Yes — dedicated Side-A only (individual directors and officers) | No — Side-A only | No — Side-A only | Standalone manuscript DIC form | Non-indemnifiable loss; DIC trigger (underlying refuses, fails, or is unable to pay); bankruptcy/insolvency of Named Insured; broader definition of 'Loss' than underlying; personal coverage extensions (spousal liability, estate, legal representative); extradition coverage; pre-authorized defense costs | Narrower exclusion set than primary; no Insured vs. Insured exclusion (critical given PE sponsor control — Veltrano's 68.5% ownership and 5 sponsor-appointed directors); no conduct exclusion absent final adjudication | Full severability — no imputation | All past, present, and future directors and officers of the Named Insured and its subsidiaries — natural persons only | Unlimited / full prior acts | Basic: 90 days; Optional: 36 months (200% additional premium) | Dedicated limit — does not erode or stack with ABC tower; recommendation made to increase from $15M to $20M at renewal (adopted); no SIR; critical coverage given PE sponsor board dynamics
[sheet: Premium Summary]
Layer | Carrier | Limit | Attachment | Annual Premium | Rate-on-Line | % of Total Premium
Primary | Vandermeer National Insurance Company | $10,000,000 | $0 | $487,500 | 4.88% | 35.76%
1st Excess | Commonwealth Indemnity Group | $10,000,000 | $10,000,000 | $312,000 | 3.12% | 22.88%
2nd Excess | Graystone Mutual Assurance Co. | $10,000,000 | $20,000,000 | $198,750 | 1.99% | 14.58%
3rd Excess | Pinnacle Re Insurance Ltd. | $10,000,000 | $30,000,000 | $141,200 | 1.41% | 10.36%
Side-A DIC | Harrington Specialty Insurance Co. | $15,000,000 | DIC (dedicated) | $224,000 | 1.49% | 16.43%
TOTAL | — | $55,000,000 | — | $1,363,450 | 2.48% | 100.00%
[sheet: Carrier Information]
Layer | Carrier Full Legal Name | Entity Type | Domicile | AM Best Rating | Policy Number | Underwriter / Contact | Broker Contact
Primary | Vandermeer National Insurance Company | Insurance Company | Connecticut | A (Excellent), XV | VNI-DO-2021-88473 | Per broker records | Phillip Garza / Tamara Fisk, Ashford Breckinridge LLP
1st Excess | Commonwealth Indemnity Group | Insurance Company | Pennsylvania | A+ (Superior), XV | CIG-XDO-2021-04451 | Per broker records | Phillip Garza / Tamara Fisk, Ashford Breckinridge LLP
2nd Excess | Graystone Mutual Assurance Co. | Mutual Insurance Company | Ohio | A (Excellent), XIV | GMA-EXS-2021-77823 | Per broker records | Phillip Garza / Tamara Fisk, Ashford Breckinridge LLP
3rd Excess | Pinnacle Re Insurance Ltd. | Insurance Company | Bermuda | A (Excellent), XV | PRI-XDO-2021-0198 | Per broker records | Phillip Garza / Tamara Fisk, Ashford Breckinridge LLP
Side-A DIC | Harrington Specialty Insurance Co. | Insurance Company | Delaware | A+ (Superior), XV | HSI-DIC-2021-00342 | Per broker records | Phillip Garza / Tamara Fisk, Ashford Breckinridge LLP
[sheet: Named Insureds]
Entity Full Legal Name | Short Name | Entity Type | Jurisdiction of Formation | EIN | Principal Address | Role | Revenue (FY2021) | Revenue Share
Nexford Industrial Holdings Inc. | Nexford / NIH | Corporation | Delaware | 83-2174650 | 2200 Corporate Center Drive, Suite 800, Schaumburg, IL 60173 | First Named Insured / Parent | $1,420,000,000 (consolidated) | 100%
Nexford Conveyor Systems, LLC | NCS | Limited Liability Company | Delaware | 83-2174651 | 4500 Industrial Parkway, Joliet, IL 60436 | Subsidiary / Additional Named Insured | $795,200,000 | 56%
Triton Fastener Corp. | Triton | Corporation | Illinois | 36-4892103 | 1010 Whitman Avenue, Rockford, IL 61101 | Subsidiary / Additional Named Insured | $397,600,000 | 28%
Marlowe Asset Management Precision Machining, Inc. | Marlowe Asset Management | Corporation | Ohio | 31-1784529 | 775 Summit Industrial Boulevard, Akron, OH 44311 | Subsidiary / Additional Named Insured | $227,200,000 | 16%
[sheet: Loss History — D&O]
Year | Claim Description | Claimant | Date Reported | Status | Paid Losses | Open Reserves | Total Incurred | Layer Responding | Notes
2020 | Shareholder demand letter | N/A (demand letter from minority investor) | 2020 | Closed | $0 | $0 | $0 | N/A — resolved without payment | Resolved without payment; no coverage trigger
TOTAL (5-Year) | — | — | — | 1 claim reported; 0 open | $0 | $0 | $0 | — | Zero paid D&O losses over five-year history