-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LeMn77LzZ8/Wapnh+ABph2uKNwDPaHcFDbkpuxe/OlWLLUmYy8xbqOeP5TCcnyUB N03NZB3+B3z1hQzRLtgMYQ== 0001047469-98-031936.txt : 19980819 0001047469-98-031936.hdr.sgml : 19980819 ACCESSION NUMBER: 0001047469-98-031936 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19980817 EFFECTIVENESS DATE: 19980817 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HCC INSURANCE HOLDINGS INC/DE/ CENTRAL INDEX KEY: 0000888919 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 760336636 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-61687 FILM NUMBER: 98693228 BUSINESS ADDRESS: STREET 1: 13403 NORTHWEST FRWY CITY: HOUSTON STATE: TX ZIP: 77040-6094 BUSINESS PHONE: 7136907300 S-8 1 S-8 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) - ----------------------------------------------------------------------------------------------------- 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 - ----------------------------------------------------------------------------------------------------- Common Stock, $1.00 par value per share 4,000,000 Shares $20 $80,000,000 $23,600 - -----------------------------------------------------------------------------------------------------
(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. 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. 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 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 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. EXHIBIT NUMBER DESCRIPTION 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.
4 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 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 /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 EX-4.1 2 EXHIBIT 4.1 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. 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. 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 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 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 EX-4.3 3 EXHIBIT 4.3 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 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. 2 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. 3 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. 4 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. 5 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 6 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. 7 (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 8 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, 9 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 10 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 11 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 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 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 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 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 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 EX-5 4 EXHIBIT 5 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. 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 EX-23.1 5 EXHIBIT 23.1 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 EX-23.2 6 EXHIBIT 23.2 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 EX-24 7 EXHIBIT 24 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 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 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 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 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 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. 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 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 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 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 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. 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. 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 -----END PRIVACY-ENHANCED MESSAGE-----