EMPLOYMENT AGREEMENT
THE EXECUTIVE'S EMPLOYMENT AGREEMENT AMENDMENT, dated as of the 10th day of
July, 1998 (the "Agreement"), between Orion Capital Corporation, a Delaware
corporation (the "Company"), and W. Marston Becker ("Executive"); WHEREAS, the
Company and the Executive entered into an Employment Agreement, dated October
31, 1995 (the "Original Agreement"); and WHEREAS, as a result of the assumption
by the Executive of additional duties and responsibilities with the Company,
Company and the Executive desire to amend and restate the Original Agreement.
NOW, THEREFORE, the Company and Executive hereby agree that the Original
Agreement shall be amended and restated in its entirety to provide as follows:
EMPLOYMENT. The Company hereby employs Executive to render services as the
Chairman and Chief Executive Officer of the Company. The Executive shall have
such responsibilities, perform such duties and have such authorities as are
consistent with the Executive's position as the Chairman and Chief Executive
Officer of the Company, reporting to, and subject only to the direction and
control of, the Board of Directors of the Company (the "Board"). The Executive
hereby accepts such employment and agrees to render the Executive's services
(unless prevented by sickness, injury or other incapacity) fully, faithfully,
and to the best of the Executive's ability. The Executive's services shall be
exclusive to the Company, except that with the prior approval of the Executive
Committee of the Board, the Executive may serve as a compensated member of the
board of directors of other, "for profit" unaffiliated corporations. PLACE OF
EMPLOYMENT. The Company agrees that the Executive will be located, and will
render such services (subject to necessary and appropriate business related
travel), at the Company's office in Farmington, Connecticut. TERM. The term of
the Executive's employment with the Company ("Term") under the Executive's
Agreement shall be for a period of two (2) years, commencing on July 10, 1998
and ending on July 10, 2000, which ending date shall automatically be extended
by one (1) additional day for each day of the Executive's employment with the
Company after July 10, 1998, unless either party shall at any time have given
written notice to the other of its or the Executive's intention not further to
extend the Term. COMPENSATION AND BENEFITS. Base Salary. The Company shall pay
to the Executive a base salary (the "Base Salary") at an annual rate of not less
than $410,000. The Executive's Base Salary during the Term may be increased by
such amount as shall be determined by the Board in its discretion. Once
established at any specific rate, the Executive's Base Salary shall not be
reduced. The Base Salary shall be payable to the Executive in installments on
the Company's normal payroll dates. Incentive Compensation and Stock Awards. The
Executive shall have the opportunity to participate in long-term and short-term
incentive or performance plans or programs and in stock option and stock award
plans of the Company to the same extent as other senior executive employees.
Expenses. The Executive is authorized to incur and shall be reimbursed for
reasonable business, entertainment and other related expenses (including all
travel and living expenses while away from home on Company business or at the
request of the Company) in the performance of the Executive's duties. The
Executive shall comply with the Company's expense and reimbursement policies as
in effect at the time the expense is incurred. Other Benefit Plans. The
Executive shall participate in, and shall be entitled to receive benefits under,
and in accordance with, the provisions of any health, life insurance,
disability, deferred compensation, profit sharing and savings or other employee
benefit plan or plans adopted, or to be adopted, by the Company and which are
generally applicable to senior executive employees of the Company. Disability
Insurance. In addition to the other benefits offered the Company shall also
maintain, at its expense, an executive long-term disability insurance policy
("Policy") for the Executive providing the Executive with benefits in the event
of a "disability" as such term is defined in the Policy (for all purposes of
this Agreement, "Disability"). The annual benefit payable under the Policy in
the event of a Disability shall be equal to an annual rate of 66.66% of the
Executive's Base Salary or as close there too as reasonably available. PAID TIME
OFF. The Executive shall be entitled to paid time off of not less than five (5)
weeks during each calendar year, earned on a per pay period basis ("Paid Time
Off"). TERMINATION. Death or Disability. The Executive's employment under this
Agreement shall terminate upon the Executive's death or Disability. Cause. The
Board may terminate the Executive's employment for Cause. For purposes of the
Executive's Agreement, the Board shall have "Cause" upon: (A) the commission by
the Executive of any felonious act or any other criminal act involving moral
turpitude, dishonesty, theft or unethical business conduct, (B) the willful and
continued failure of the Executive to substantially perform his duties (other
than as a result of incapacity due to physical or mental injury or illness)
which duties the Executive has been directed in writing to perform by the Board;
or (C) the Executive engaging in willful misconduct or is grossly negligent in
the performance of the Executive's duties hereunder, or (D) the Executive's
failure to comply with the policies or procedures of the Company. No action or
failure to act, by the Executive shall be considered "willful" if it is
determined by the Board to have been done by the Executive in good faith and
with the reasonable belief that the Executive's action or omission is in the
best interest of the Company. Early Termination. Either the Executive or the
Board shall have the right to terminate the Executive's employment at any time
for any reason whatsoever (an "Early Termination"); provided, however, that the
Board or its successor, may not, pursuant to this Section 6 (c), elect an Early
Termination from the date of the occurrence of a Change in Control until after
the expiration of twelve (12) calendar months following the calendar month in
which the Change in Control has occurred. ----------------- Change in Control.
At any time within the twelve (12) calendar months following the month in which
a Change in Control shall have occurred, the Board or the Executive shall have
the right to terminate the Executive's employment for any reason whatsoever. For
purpose this Agreement, a "Change in Control" shall be deemed to have occurred
upon the earliest to happen of the following: -----------------
(1) The acquisition, in one or more transactions, of beneficial ownership
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934 (the
"Exchange Act") by any person or entity or any group of persons or entities who
constitute a group (within the meaning of Rule 13d-3 of the Exchange Act), other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or a subsidiary, of any securities of the Company if, as a
result of such acquisition, such person, entity or group either (1) beneficially
owns (within the meaning of Rule 13d-3 under the Exchange Act), directly or
indirectly, more than 20% of the Company's outstanding voting securities
entitled to vote on a regular basis for a majority of the members of the Board
or (2) otherwise has the ability to elect, directly or indirectly, a majority of
the members of the Board; (2) A change in the composition of the Board such that
a majority of the members of the Board are not Continuing Directors. A
"Continuing Director" means, as of any date of determination, any member of the
Board who (i) was a member of such Board on the date of this Agreement (ii) was
nominated and elected to such Board with the affirmative vote of a majority of
the Continuing Directors who were members of the Board at the time of such
nomination or election; or (3) The stockholders of the Company approve a merger
or consolidation of the Company with any other corporation, other than a merger
or consolidation which 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) at least 80% of the total voting power represented by the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company (in one or more transactions) of all
or substantially all of the Company's assets.
Notice of Termination. A written notice to the other party ("Notice of
Termination") must in order to be effective, precede any termination pursuant to
Section 6 (b), (c) or (d). A Notice of Termination shall indicate the specific
provision in the Executive's Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.
- --------------------- Date of Termination. "Date of Termination" shall mean (i)
if the Executive's employment is terminated by the Executive's death, the date
of the Executive's death, or by reason of the Executive's Disability, the date
all of the conditions to constitute a Disability have occurred, or if upon
expiration of the Term, the last day of the Term, (ii) if the Executive's
employment is terminated for Cause, the date specified in the Notice of
Termination, and (iii) if the Executive's employment is terminated by reason of
the occurrence of a Change of Control or upon an Early Termination, the date
which is seven (7) days after the date of which the Notice of Termination is
given. COMPENSATION AND BENEFITS UPON TERMINATION. Upon termination of the
Executive's employment for any reason whatsoever (including Cause), the
Executive shall receive such other benefits, if any, as may be provided to him
under the terms of any employee benefit, incentive, option, stock award and
other plans or programs of the Company in which he may be, or have been, a
participant and shall be paid the balance of the Executive's earned but unpaid
Base Salary and Paid Time Off with the additions described below.
Involuntary Termination - Upon the Company's election of Early
Termination pursuant to Section 6 (c) for reasons other than Cause, the
following additional provisions shall apply:
Severance Pay - The Executive shall continue to receive Base Salary for two
(2) years after the Date of Termination. Bonus - The Executive shall receive a
prorated portion of the Executive's bonus, if any, as determined by the Board
based on the Company's actual performance during the fiscal year in which the
Executive's Date of Termination occurs. Such determination to be made at
termination and payment will be made at the same time that bonus consideration
and payments for other senior executive employees for the same performance
period are made. Car Allowance - The Executive shall continue to receive a car
allowance for the two- (2) year period after the Executive's Date of
Termination. The amount of such car allowance shall equal the amount, if any,
being received by the Executive as of the Date of Notice. Long-Term Incentive -
The Executive shall continue to vest for the two- (2) year period following the
Executive's Date of Termination. 401(k) Profit Sharing and Supplemental Benefit
Plans - The Executive shall continue to be treated as a participant in all such
plans in which the Executive had been a participant on the date of the Notice of
Termination, based on then applicable and corresponding elections and
contribution rates, for the 2-year period following the Executive's Date of
Termination. If such amounts cannot be paid to the plans, the tax-adjusted value
the Executive would have received shall be determined and paid by the Company
(outside of the plans). The Executive shall be allowed to change the Executive's
payment election under the terms of such Supplemental Benefit Plan at the
Executive's Date of Termination. Deferred Compensation Plan - The Executive
shall cease participation as of the Executive's Date of Termination and shall be
allowed to change the Executive's payment election under the terms of such
Deferred Compensation Plan at the Executive's Date of Termination. Split Dollar
Life Insurance - The Executive shall have the option to purchase the Company's
interest in the split dollar policy on the Executive's Date of Termination or
expiration of the Term, for an amount equal to the sum of the premiums paid to
date of transfer by the Company.
Involuntary Termination for Cause. In the event the Executive is terminated
for Cause, the Executive shall receive only such benefits, if any, as may be
provided to him under the terms of any employee benefit, incentive, option,
stock award and other plans or programs of the Company in which he may be, or
have been, a participant and shall be paid the balance of the Executive's earned
but unpaid Base Salary and Paid Time Off as of the Executive's Date of
Termination. ----------------------------------
Death. In the event of the Executive's death, the following additional
provisions shall apply:
Base Salary - The Executive's Base Salary shall continue to be
paid to the Executive's named beneficiary for six months immediately following
the date of death.
Bonus - A prorated portion of the Executive's bonus, if any, as
determined by the Board of Director's based on the Company's actual performance
during its fiscal year of the Executive's death shall be payable to the
Executive's named beneficiary. Such determination and payment will be made at
the same time that bonus consideration and payments for other senior executive
for the same performance period are made.
Disability. In the event of the Executive's Disability, the following
additional provisions shall apply:
Bonus - The Executive shall receive a prorated portion of the Executive's
bonus, if any, as determined by the Board based on the Company's actual
performance during the fiscal year in which the Date of Termination occurs. Such
determination and payment will be made at the same time that bonus consideration
and payments for other senior executives for the same performance period are
made. Split Dollar Life Insurance -The Company shall assign to the Executive,
without charge or cost, the Company's interest in the Executive's split dollar
policy.
Change in Control. In the event of termination following a Change in
Control the following provisions shall apply.
Severance Pay - The Executive shall receive Base Salary for 3 years after
the Executive's Date of Termination. Bonus - The Executive shall receive a
prorated portion of the Executive's bonus, if any, as determined by the Board
based on the Company's actual performance during the fiscal year in which the
Executive's Date of Termination occurs but not less than the bonus for the prior
fiscal year. Such determination and payment will be made at the same time that
bonus consideration and payments for other senior executive for the same
performance period are made. Car Allowance - The Executive shall continue to
receive a car allowance for the 3- year period after the Executive's Date of
Termination. The amount of such allowance shall equal the amount, if any, being
received by the Executive as of the date of the Change in Control 401(k) Profit
Sharing and Supplemental Benefit Plans - The Executive shall continue to be
treated as a participant in all such plans in which the Executive shall have
been a participant on the date Notice of Termination, based on then applicable
and corresponding elections and contribution rates, for the 3-year period
commencing on the Executive's Date of Termination. If such amounts cannot be
paid to the plans, the tax-adjusted value the Executive would have received
shall be determined and paid by the Company (outside of the plans). The
Executive shall be allowed to change the Executive's payment election under the
terms of such Supplemental Benefit Plan at the Executive's Date of Termination.
1 Deferred Compensation Plan - The Executive shall cease participation as of the
Executive's Date of Termination and shall be allowed to change the Executive's
payment election under the terms of such Deferred Compensation Plan at the
Executive's Date of Termination. Split Dollar Life Insurance - The Company shall
continue to pay the premium related to the Executive's participation in the
Split Dollar Life Insurance Plan for the 3-year period commencing on the
Executive's Date of Termination. The Executive shall have the option to purchase
the Company's interest at the end of such 3-year period for an amount equal to
the sum of the premiums paid to date by the Company Long Term Incentives - All
awards made to the Executive under long-term incentive plans or programs shall
immediately vest and be payable and all restrictions shall lapse.
Continuation of Agreement Provisions. The termination of the Executive's
employment for any reason whatsoever shall not operate to terminate the
Executive's Agreement as an entirety or adversely affect the respective
continuing rights and obligations of the parties under Sections 4(c), 7, 8, 9
and 10 of the Executive's Agreement, all of which shall survive the effective
date of such termination of employment in accordance with their respective
terms. ------------------------------------ EXCISE TAX. ---------- It is the
intention of this provision that the Executive receive a net amount, after
payment of all Excise Taxes (including Excise Taxes on any Excise Tax
Adjustment) equal to the aggregate compensation, benefits and other amounts
which gave rise to the Excise Tax. (a) In the event that Executive receives or
derives from the Company or otherwise any compensation, benefit or any amount
under any option plan, performance plan, or incentive plan, which is determined
to be subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended, (the "Excise Tax"), then the Executive shall be
entitled to receive from the Company an Excise Tax Adjustment Payment equal to
the amount of all applicable U.S. federal, state and local taxes (computed at
the maximum marginal rates and including interest penalties and any cost of
contest or defense) including Excise Tax imposed upon the Excise Tax Adjustment
Payment. The amount of the any Excise Tax Adjustment Payment to be made shall be
determined, at the Company's expense, by a nationally recognized accounting firm
acceptable to the Executive and the Company.
(b) The Executive shall notify the Company in writing promptly of any
written claim by the IRS that would require the payment of the Excise Tax
Adjustment Payment. The Company may elect, by notifying the Executive in writing
within thirty (30) days of its receipt of Executive's notice, to contest such
claim and/or to retain legal counsel selected by the Company to represent the
Executive. Such contest will be at the Company's sole cost and expense and the
Company shall advance any amounts required to be paid in respect of such Excise
tax or the contest thereof. The Executive shall cooperate fully with the Company
in good faith including permitting the Company to participate in any proceedings
relating to such claim or contest and giving the Company any information
reasonably requested by the Company relating to such claim or contest.
(c) The Company shall be entitled to control all proceedings, conferences,
and appeals it may elect to take, but only with respect to the Excise Tax, and
may sue for a refund or contest the claim in any permissible manner provided
that any extension of the statute of limitations relating to payment of taxes
for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount. The
Executive shall promptly pay to the Company the amount of any refund with
respect to such claim (together with any interest paid or credited thereon but
after payment by Executive of any taxes applicable thereto).
CONFIDENTIAL INFORMATION: COMPETITION.
Except as necessary or appropriate to the proper performance of the
Executive's duties, or with the prior written consent of the Company, or as
ordered by a court of competent jurisdiction, the Executive shall not at any
time either during the continuance of the Executive's employment or after its
termination disclose or communicate to any person or use for the Executive's own
benefit or the benefit of any person other than the Company or any subsidiary or
affiliate any information relating to the Company or any subsidiary or affiliate
that is not generally known to the public ("Confidential Information") which may
come to the Executive's knowledge in the course of the Executive's employment,
and the Executive shall during the continuance of the Executive's employment use
the Executive's best endeavors to prevent the unauthorized publication or misuse
of any Confidential Information, provided that such restrictions shall cease to
apply to any Confidential Information which may enter the public domain other
than through the fault of the Executive.
During the Term and for a period of two (2) years following an Early
Termination the Board, or for a period of three (3) years following Executive's
termination following a Change in Control, the Executive agrees not to carry on
or set up or be employed or engaged by or otherwise assist in or be interest in
any capacity (including without limitation as a shareholder) in any State of the
United States of America or in any foreign country in which the Company or any
subsidiary or affiliate thereof is conducting business, any business materially
competitive to that being carried on by the Company or any subsidiary or
affiliate thereof; provided, however, that the ownership by the Executive for
investment purposes (directly or through nominees) of not more than 5% of the
outstanding stock of any corporation which is publicly held and traded shall not
be deemed to be violation of this Agreement. The Executive will not solicit,
entice away, or otherwise encourage any executive or other employee of the
Company or its subsidiaries or affiliates to leave his or her employment in
order to join the Executive in any business endeavor, nor shall the Executive
aid, promote, encourage or be a party to any acts, the effect of which would
divert, diminish or prejudice the goodwill or business of the Company or any of
its subsidiaries or affiliates. The agreements by the Executive in this Section
9 are intended to be separate and severable and enforceable as such. MERGER OR
REORGANIZATION. This Agreement shall not be terminated by the voluntary or
involuntary dissolution of the Company or by any merger or consolidation where
the Company is not the surviving or resulting corporation, or upon any transfer
of all or substantially all of the assets of the Company. In the event of any
such merger or consolidation or transfer of assets, the provisions of this
Agreement shall be binding and shall inure to the benefit of the Executive and
the surviving or resulting corporation or the corporation to which such assets
shall be transferred, and the Company shall require the successor to the
Company, as the Executive's employer (whether such succession is direct or
indirect, by purchase, merger, consolidation or otherwise, to all or a
substantial portion of the business and/or assets of the Company), to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent as the Company would be required to perform it if no such succession had
taken place. As used in this Agreement, the term "Company" shall mean the
Company and any successor to all or a substantial portion of its business and/or
assets as aforesaid. ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, the breach thereof or the coverage of this
arbitration provision shall be settled by arbitration which shall be in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association as such rules shall be in effect on the date of delivery of demand
for arbitration. The arbitration of such issues, including the determination of
the amount of any damages suffered by either party hereto by reason of the acts
or omissions of the other, shall be to the exclusion of any court of law. The
decision of the arbitrators or a majority of them shall be final and binding on
both parties and their respective heirs, executors, administrators, successors
and assigns. Judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction. There shall be three arbitrators, one to be
chosen directly by each party at will and the third arbitrator to be selected by
the two arbitrators so chosen. Each party shall pay the fees of the arbitrator
selected by him and of the Executive's own attorney and the expense of the
Executive's witnesses and all other expenses connected with the presentation of
the Executive's case. All other costs of the arbitration, including the cost of
the third arbitrator, the record or transcripts thereof, if any, administrative
fees, and all other fees and costs shall be borne equally by the parties.
Nothing contained herein shall be construed or interpreted to preclude the
Company prior to, or pending the resolution of, any matter subject to
arbitration from seeking injunctive relief in any court for any breach or
threatened breach of any of the Executive's agreements in Section 9 hereof.
NON-ASSIGNABILITY. The obligations of the Executive hereunder are personal and
may not be delegated, assigned or transferred by the Executive in any manner
whatsoever, nor are such obligations subject to involuntary alienation,
assignment or transfer. AMENDMENT. This Agreement contains the entire agreement
of the parties. It may not be changed orally but only by a written agreement
executed by both of the parties hereto. NOTICES. ---- -- All notices which a
party is required or may desire to give to the other party under or in
connection with this Agreement shall be sufficient if given by addressing same
to the other party as follows:
if to the Executive, to:
W. Marston Becker
48 Ledyard Road
West Hartford, CT06117
if to the Company, to:
Orion Capital Corporation
9 Farms Spring Road
Farmington, CT 06032
Attn: Secretary
or at such other place as may be designed in writing by like notice. Any
notice shall be deemed to have been delivered when addressed as required herein
and deposited postage paid, in the United States Mail. WAIVER: MODIFICATION.
- ----------- --------- No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by the Executive and the Board. The waiver by either party of any
breach by the other party, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall not be deemed a waiver
of the same provisions or conditions at any other time, nor shall it be deemed a
waiver of any other provisions or conditions at any time. SEVERABILITY. The
various Sections of this Agreement are severable, and if any Section or an
identifiable part thereof is held to be invalid or unenforceable by any court of
competent jurisdiction, then such invalidity or unenforceability shall not
affect the validity or enforceability of the remaining Sections or identifiable
parts thereof in this Agreement, and the parties hereto agree that the portion
so held invalid, unenforceable or void shall, if possible, be deemed amended or
reduced in scope, or otherwise be stricken from this Agreement, to the extent
required for the purposes of the validity and enforcement hereof. CHOICE OF LAW.
This Agreement shall be governed by the laws of the State of Connecticut,
without reference to any conflict of law rules. ENTIRE AGREEMENT. This Agreement
sets forth the entire agreement between the parties with respect to the subject
matter hereof and supersedes any and all prior agreements between the Company
and the Executive, whether written or oral, relating to any or all matters
covered by, and contained or otherwise dealt with, in this Agreement. No
agreements or representations, oral or otherwise, express or implied, have been
made by either party with respect to the subject matter of this Agreement,
unless set forth expressly in this Agreement. BENEFICIARIES: REFERENCES. The
Executive shall be entitled to select (and change, to the extent permitted under
any applicable law) a beneficiary or beneficiaries to receive any compensation
or benefit payable hereunder following the Executive's death, and may change
such election by giving the Company written notice thereof. In the event of the
Executive's death, Disability or a judicial determination of the Executive's
incompetence, all references in this Agreement to the Executive shall be deemed,
where appropriate, to refer to the Executive's beneficiary, estate or other
legal representative. ACTIONS FOR THE BOARD. Any reference in this Agreement to
the Board shall include the Compensation Committee thereof and any officers of
the Company to which the Board or the Compensation Committee thereof has by
resolution delegated any explicit authority or responsibilities with respect to
this Agreement.
TAX WITHHOLDINGS.
All payments to the Executive hereunder shall be subject to such withholding
of Federal, state and local income and excise taxes and to such employment taxes
as shall be reasonably determined by the Company to be required.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date hereinabove set forth.
ORION CAPITAL CORPORATION
By:
-------------------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
EXECUTIVE
By:
-------------------------------------------------
Name: W. Marston Becker
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