1
CONTRACT OF EMPLOYMENT
THIS AGREEMENT is entered into as of the 1st day of February 1999, between
George E. King (the "Employee"), and McM Corporation, Occidental Fire &
Casualty Company of North Carolina, and Wilshire Insurance Company (the three
companies collectively being the "Employer").
WHEREAS the Employee is currently employed by the Employer, the Employer wishes
to continue to employ the Employee and the Employee wishes to remain employed.
NOW THEREFORE in consideration of the covenants and agreements set forth
hereinafter which are acknowledged to be good and valuable consideration, the
Employer and the Employee agree as follows:
1. The Employer agrees to continue to employ the employee at will and the
Employee agrees to continue to be so employed at will.
2. For all services rendered by the Employee, the Employer shall pay a
salary to the Employee of $200,000 (the "Salary") per annum, such
amount to be pro rated and paid in equal semi-monthly amounts.
3. The Employee's accrued vacation as established in accordance with the
written policy of the Employer as of December 31, 1998, shall be fixed
as of December 31, 1998, and such fixed amount shall be payable to the
Employee at such time as he may cease to be employed by the Employer.
The Employee agrees that further accrual of vacation shall cease at
December 31, 1998.
4. The Employer may terminate the Employee at any time. Should the
Employee be terminated, the Employee would be entitled to
Post-Termination Payments (referred to hereinafter as "PTP's"). PTP's
are defined as continuing installments of the Salary to be made
subsequent to termination of the Employee if, and only if, the
cumulative sum of the Salary measured from the date of this Agreement,
shall be less than the sum of $450,000 (the "Cumulative Compensation
Amount"). Neither the Employer nor the Board of Directors of the
Employer may take any unilateral action, other than for Cause, that
would preclude the Employee from receiving the Cumulative Compensation
Amount.
5. Termination of the Employee for cause shall immediately terminate the
Employer's obligation to pay the Salary or pay PTP's. "Cause" is
defined as the Employee's commission of any act constituting a felony,
willful misconduct or material non-performance of those duties
bestowed upon him after 30 days written notice setting out the
specific deficiencies in performance of those duties.
6. The Employee shall have the right to terminate his employment
hereunder at any time by giving notice in writing to the Employer, the
date of such notice to be considered the effective
85
2
date of termination. The obligation of the Employer under this
Agreement to pay Salary or PTP's shall be terminated upon the Employee
giving written notice that he is terminating his employment.
7. If the Employee dies prior to the Salary accumulating to the level of
the Cumulative Compensation Amount, the Employer shall pay to the
Employee's estate the Salary that would otherwise be payable to the
Employee under the terms of this Agreement.
8. If the Employee becomes incapacitated by reason of mental or physical
disability during the term of this Agreement, the Employer shall
provide short term and long term disability benefits to the Employee
as are in effect under the Employer's group benefits plan as they
exist from time to time.
9. No waiver of any provision of this Agreement or any change to this
Agreement shall be valid unless the Board of Directors of McM
Corporation approves it in writing.
10. This Agreement contains the entire understanding of the parties. This
Agreement supersedes in full any prior employment agreements, written
or oral, that may have existed between the Employer and any of its
subsidiaries and the Employee.
AGREED TO AND ACCEPTED BY: /s/ GEORGE E. KING
-----------------------------------------------
George E. King
Employee
/s/ PETER R. KELLOGG
-----------------------------------------------
Peter R. Kellogg
Chairman - Compensation Comm.
/s/ STEPHEN L. STEPHANO
-----------------------------------------------
Stephen L. Stephano, for the Employer
President/COO - McM Corporation
President/CEO - Occidental Fire & Casualty
Co. of NC
President/CEO - Wilshire Insurance Company
86
3
CONTRACT OF EMPLOYMENT
THIS AGREEMENT is entered into as of the 1st day of February 1999, between
Stephen L. Stephano (the "Employee"), and McM Corporation, Occidental Fire &
Casualty Company of North Carolina, and Wilshire Insurance Company (the three
companies collectively being the "Employer").
WHEREAS the Employee is currently employed by the Employer, the Employer wishes
to continue to employ the Employee and the Employee wishes to remain employed.
NOW THEREFORE in consideration of the covenants and agreements set forth
hereinafter which are acknowledged to be good and valuable consideration, the
Employer and the Employee agree as follows:
1. The Employer agrees to continue to employ the employee at will and the
Employee agrees to continue to be so employed at will.
2. For all services rendered by the Employee, the Employer shall pay a
salary to the Employee of $200,000 (the "Salary") per annum, such
amount to be pro rated and paid in equal semi-monthly amounts.
3. The Employee's accrued vacation as established in accordance with the
written policy of the Employer as of December 31, 1998, shall be fixed
as of December 31, 1998, and such fixed amount shall be payable to the
Employee at such time as he may cease to be employed by the Employer.
The Employee agrees that further accrual of vacation shall cease at
December 31, 1998.
4. The Employer may terminate the Employee at any time. Should the
Employee be terminated, the Employee would be entitled to
Post-Termination Payments (referred to hereinafter as "PTP's"). PTP's
are defined as continuing installments of the Salary to be made
subsequent to termination of the Employee if, and only if, the
cumulative sum of the Salary measured from the date of this Agreement,
shall be less than the sum of $450,000 (the "Cumulative Compensation
Amount"). Neither the Employer nor the Board of Directors of the
Employer may take any unilateral action, other than for Cause, that
would preclude the Employee from receiving the Cumulative Compensation
Amount.
5. Termination of the Employee for cause shall immediately terminate the
Employer's obligation to pay the Salary or pay PTP's. "Cause" is
defined as the Employee's commission of any act constituting a felony,
willful misconduct or material non-performance of those duties
bestowed upon him after 30 days written notice setting out the
specific deficiencies in performance of those duties.
6. The Employee shall have the right to terminate his employment hereunder
at any time by giving
87
4
notice in writing to the Employer, the date of such notice to be
considered the effective date of termination. The obligation of the
Employer under this Agreement to pay Salary or PTP's shall be
terminated upon the Employee giving written notice that he is
terminating his employment.
7. If the Employee dies prior to the Salary accumulating to the level of
the Cumulative Compensation Amount, the Employer shall pay to the
Employee's estate the Salary that would otherwise be payable to the
Employee under the terms of this Agreement.
8. If the Employee becomes incapacitated by reason of mental or physical
disability during the term of this Agreement, the Employer shall
provide short term and long term disability benefits to the Employee
as are in effect under the Employer's group benefits plan as they
exist from time to time.
9. No waiver of any provision of this Agreement or any change to this
Agreement shall be valid unless the Board of Directors of McM
Corporation approves it in writing.
10. This Agreement contains the entire understanding of the parties. This
Agreement supersedes in full any prior employment agreements, written
or oral, that may have existed between the Employer and any of its
subsidiaries and the Employee.
AGREED TO AND ACCEPTED BY: /s/ STEPHEN L. STEPHANO
------------------------------------------
Stephen L. Stephano
Employee
/s/ PETER R. KELLOGG
------------------------------------------
Peter R. Kellogg
Chairman - Compensation Comm.
/s/ MICHAEL D. BLINSON
------------------------------------------
Michael D. Blinson, for the Employer
SVP - McM Corporation
SVP - Occidental Fire & Casualty Co. of NC
SVP - Wilshire Insurance Company
88