ORION CAPITAL CORP, DEF 14A, 1996-04-10

ORION CAPITAL CORP
DEF 14A, 1996-04-10
FIRE, MARINE & CASUALTY INSURANCE

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant /X/
Filed by a party other than the registrant / /

Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

ORION CAPITAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of filing fee (Check the appropriate box):

/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

(1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)

- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

(1) Amount previously paid:

- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:

- --------------------------------------------------------------------------------
(3) Filing party:

- --------------------------------------------------------------------------------
(4) Date filed:

- --------------------------------------------------------------------------------

- ---------------
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2

[ORION CAPITAL CORPORATION LETTERHEAD]

April 11, 1996

Dear Stockholder:

On behalf of the Board of Directors and management, I cordially invite you
to the Annual Meeting of Stockholders to be held on Wednesday, June 5, 1996, at
Chase Bank (formerly Chemical Bank), 270 Park Avenue, 3rd Floor Auditorium, New
York, New York, commencing at 10:00 A.M. Your Board of Directors and management
look forward to greeting in person those stockholders able to attend. The formal
notice of this meeting and the Proxy Statement accompany this letter.

Resolutions pertaining to the annual election of your Board of Directors
and ratification of the appointment of independent accountants for 1996 will be
acted upon at this year's meeting. In addition to the matters covered by the
attached notice, the meeting will give us an opportunity to review with you the
business and affairs of your Company during 1995 and to provide a current report
on the progress being made by the Company in 1996 and the Company's prospects
for the future. A discussion period will follow the report, during which
stockholders are invited to raise matters of interest about the Company.

Your vote is important, regardless of the number of shares you may own. TO
BE SURE YOUR SHARES ARE VOTED AT THE MEETING, IF YOU ARE UNABLE TO ATTEND IN
PERSON, PLEASE TAKE A MOMENT NOW TO SIGN, DATE AND MAIL YOUR PROXY IN THE
ENCLOSED POSTAGE PAID ENVELOPE. This will not prevent you from voting your
shares in person if you attend the meeting. Your cooperation in mailing your
proxy promptly will be greatly appreciated.

Thank you for your continued support. We look forward to seeing you on
Wednesday, June 5.

Very truly yours,

/s/ ALAN R. GRUBER

<PAGE> 3

ORION CAPITAL CORPORATION
600 FIFTH AVENUE
NEW YORK, NEW YORK 10020-2302
------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

JUNE 5, 1996 AT 10:00 A.M., EASTERN DAYLIGHT SAVING TIME

CHASE BANK
270 PARK AVENUE
3RD FLOOR AUDITORIUM
NEW YORK, NEW YORK

Notice is hereby given that the Annual Meeting of Stockholders of Orion
Capital Corporation (the "Company") will be held at Chase Bank (formerly
Chemical Bank), 270 Park Avenue, 3rd Floor Auditorium, New York, New York, on
Wednesday, June 5, 1996 at 10:00 A.M., Eastern Daylight Saving Time, for the
following purposes:

1. To elect a Board of Directors to serve until the 1997 Annual
Meeting of Stockholders and until their successors are elected and qualify.

2. To act upon a proposal to ratify the selection of Deloitte & Touche
LLP, independent certified public accountants, as auditors for the Company
for the year 1996.

3. To transact such other business as may properly come before the
Annual Meeting or any adjournment or adjournments thereof.

Holders of the Company's Common Stock are entitled to vote for the election
of directors and on each of the other matters set forth above.

The stock transfer books of the Company will not be closed. The Board of
Directors has fixed the close of business on April 8, 1996 as the record date
for the determination of stockholders entitled to notice of, and to vote at, the
Annual Meeting and any adjournment thereof. A complete list of all stockholders
entitled to vote at the Annual Meeting will be available for examination by any
stockholder, for any purpose germane to the Annual Meeting, at the Company's
offices, 600 Fifth Avenue, 24th Floor, New York, New York 10020-2302, during the
ten-day period preceding the meeting.

You are cordially invited to be present. Stockholders who do not expect to
attend in person are requested to sign and return the enclosed form of proxy in
the envelope provided. At any time prior to their being voted, proxies are
revocable by written notice to the Secretary of the Company or by attendance at
the meeting and voting in person. The immediate return of your proxy will be of
great assistance in preparing for the meeting and is therefore urgently
requested.
By order of the Board of Directors,
April 11, 1996
MICHAEL P. MALONEY
Vice President, General Counsel
and Secretary
<PAGE> 4

ORION CAPITAL CORPORATION
600 FIFTH AVENUE
NEW YORK, NEW YORK 10020-2302

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 5, 1996

This statement is furnished in connection with the solicitation of proxies
by your Board of Directors (the "Board") from holders of the outstanding shares
of Common Stock, $1.00 par value (the "Common Stock"), of Orion Capital
Corporation (the "Company") entitled to vote at the Annual Meeting of
Stockholders of the Company (and at any and all adjournments thereof) for the
purposes referred to below and set forth in the accompanying Notice of Annual
Meeting of Stockholders. This Proxy Statement and enclosed proxy are first being
mailed to stockholders on or about April 11, 1996. A copy of the Company's
Annual Report for 1995 is being mailed to all stockholders with this Proxy
Statement.

The Company's Board has fixed the close of business on April 8, 1996 as the
record date for the determination of stockholders entitled to notice of, and to
vote at, the Annual Meeting and any adjournment thereof. On that date, there
were outstanding and entitled to vote 13,868,306 shares of Common Stock (which
number excludes 1,469,344 shares owned by the Company and its subsidiaries).
Holders of Common Stock are entitled to one vote for each share held of record
on the record date with respect to matters on which such holder is entitled to
vote.

The presence, in person or by proxy, of a majority in number of the
outstanding shares of Common Stock as of the record date constitutes a quorum
and is required in order for the Company to conduct business at the Annual
Meeting. Such majority being present, the election of each nominee for Director
requires a plurality of the votes cast, and the affirmative vote of the holders
of a majority of the shares of Common Stock represented in person or by proxy at
the Annual Meeting is required to ratify the appointment of the Company's
independent accountants. Abstentions and broker non-votes are counted towards a
quorum. Abstentions are counted in the tabulations of the votes cast, but broker
non-votes are not counted in such tabulations for purposes of determining
whether a proposal has been approved. Thus, abstentions on the Company's
proposal to ratify the appointment of the Company's independent accountants will
have the effect of a vote against such proposal, but any broker non-votes will
have no effect on the outcome of such matter.

1. ELECTION OF DIRECTORS

Pursuant to the Company's By-Laws, the Board has fixed the number of
Directors at thirteen. Directors are to be elected by the holders of the
Company's Common Stock to serve until the 1997 Annual Meeting of Stockholders
and until their successors are elected and qualify. Except for Mr. W. Marston
Becker, each nominee was reelected by the stockholders at the last Annual
Meeting of Stockholders. Mr. Becker, Vice Chairman of the Board and President
and Chief Executive Officer of the DPIC Companies, subsidiaries of the Company,
was first appointed a Director of the Company on March 8, 1996. On that date the
Board announced its present intention of electing Mr. Becker as Chairman of the
Board and Chief Executive Officer of the Company, effective January 1, 1997,
following Mr. Alan Gruber's planned retirement from these positions on December
31, 1996. As of January 1, 1997, Mr. Gruber will continue as a member of the
Company's Board and as Chairman of its Executive Committee, and, on a part-time
basis as a Senior Executive Consultant to the Company. The number of Directors
on the Board was increased on March 8, 1996 from twelve to thirteen to permit
Mr. Becker to be added to the Board. Unless instructions to the contrary are
received, proxies obtained in response to this solicitation will be voted in
favor of the nominees listed below to be Directors of the Company. If any
nominee should become unavailable for election, the shares represented by the
enclosed proxy will be voted for such substitute nominee as may be proposed by
the Board. If you do not wish your shares to be voted for particular nominees,
please so indicate on the proxy card.
<PAGE> 5

The following information with respect to principal occupation and business
experience has been furnished to the Company by the respective nominees:

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, FIVE-YEAR
NAME, AGE AND POSITION BUSINESS EXPERIENCE AND OTHER
WITH THE COMPANY DIRECTOR SINCE CORPORATE DIRECTORSHIPS
- ------------------------- ------------------ ----------------------------------------------
<S> <C> <C>
W. Marston Becker, 43.... March 8, 1996 Vice Chairman of the Board, Orion Capital
Vice Chairman of the Corporation, since March 8, 1996; Senior Vice
Board, Orion Capital President, Orion Capital Corporation from July
Corporation; President 1994 to March 1996; President and Chief
and Chief Executive Executive Officer of the DPIC Companies since
Officer of the DPIC July 1994; President and Chief Executive
Companies Officer of McDonough Caperton Insurance Group,
an insurance brokerage firm, from March 1987
to July 1994.
Bertram J. Cohn, 70...... April 18, 1977 Managing Director, First Manhattan Company
Director (investment bankers) 1982-present.
John C. Colman, 69....... March 31, 1976 Private investor and consultant. Director:
Director Duplex Products, Inc. and Premier Industrial
Corp.
Alan R. Gruber, 68....... March 31, 1976 Chairman of the Board and Chief Executive
Chairman of the Board Officer of the Company, 1976-present.
and Chief Executive Director: Guaranty National Corporation,
Officer, Orion Capital Trenwick Group Inc. and trustee of six trusts
Corporation which manage the Neuberger & Berman family of
equity mutual funds.
Larry D. Hollen, 50...... March 20, 1992 President and Chief Operating Officer of the
President and Chief Op- Company since March 1, 1994; Executive Vice
erating Officer, Orion President and Assistant Chief Operating
Capital Corporation Officer of the Company from December 1, 1992
to February 28, 1994 and Senior Vice President
from 1990 to 1992. President of the EBI
Companies, wholly-owned subsidiaries of the
Company, from January 1990 to May 31, 1993.
Director: Guaranty National Corporation.
Robert H. Jeffrey, 66.... March 31, 1976 Chairman of the Board, Jeflion Investment Com-
Director pany, 1994-present, President from 1974 to
1994; Chairman of the Board, The Jeffrey
Company (a privately held investment company
which is the parent of Jeflion Investment
Company), 1994-present, President from 1973 to
1994.
Warren R. Lyons, 50...... September 9, 1992 Chairman, Avco Financial Services (a financial
Director services company and a subsidiary of Textron
Inc.), August 1995-present, President from
1989 to July 1995.
James K. McWilliams, 68... January 7, 1981 Proprietor of McWilliams & Company and general
Director partner of McWilliams Associates (investment
counselors), 1967-present; General Partner,
Mt. Eden Vineyards, 1986-present.
Ronald W. Moore, 51...... April 1, 1991 Adjunct Professor of Business Administration,
Director Graduate School of Business Administration,
Harvard University, 1990-present. Director:
CMAC Investment Corporation.
Robert B. Sanborn, 67.... June 3, 1987 Senior Executive Consultant to the Company
Senior Executive Con- since March 1, 1995; Vice Chairman of the
sultant, Orion Board of the Company from March 1, 1994 to
Capital Corporation February 28, 1995; President and Chief
Operating Officer of the Company from 1987 to
1994; Chairman of the American Insurance
Association (a property and casualty in-
surance company trade group) from January 1993
to January 1994. Director: Guaranty National
Corporation, HCG Lloyd's Investment Trust plc,
Intercargo Corporation and Nobel Insurance
Limited.
</TABLE>

2
<PAGE> 6

The Board of Directors has an Audit Committee, the current members of which
are Messrs. Colman (Chairman), Moore, Cohn and Thorne, none of whom is an
employee of the Company. The Audit Committee confers periodically with
management, the Company's internal auditors and the Company's independent
accountants in connection with the preparation of financial statements and
audits thereof and the maintenance of proper financial records and controls. The
Audit Committee also reviews the nature and extent of any non-audit services
provided by the Company's independent accountants. The Audit Committee makes
recommendations to the Board with respect to the foregoing and brings to the
attention of the Board any criticisms and recommendations that the independent
accountants may have or any suggestions of the Audit Committee itself. During
1995, the Audit Committee held three meetings.

The Board has a Compensation Committee, the current members of which are
Messrs. Shepherd (Chairman), Jeffrey, Lyons and McWilliams, none of whom is an
employee of the Company. The Compensation Committee reviews the amount and terms
of compensation paid to the principal executive officers of the Company and of
the Company's subsidiaries and may authorize, or recommend to the Board the
authorization of, such salary levels, employment agreements and general
incentive compensation arrangements as the Compensation Committee may deem
appropriate. Based on the Committee's ongoing review of the performance of the
Company's key executives and of alternative forms of current incentive and
performance-based compensation, the Board may authorize the adoption of one or
more of the available alternatives in addition to or in substitution for one or
more of the present components of the Company's compensation arrangements. The
Company does not have a standing nominating committee, but the Compensation
Committee is authorized to act as a search and nomination committee to recommend
nominees to the full Board for membership on the Company's Board of Directors.
Nominees suggested by stockholders (accompanied by biographical material and the
candidate's written consent to nomination) sent to the Company in care of the
Secretary will be considered by the Compensation Committee. During 1995 the
Compensation Committee held four meetings.

The Board also has an Executive Committee, the members of which are Messrs.
Gruber (Chairman), Shepherd and Cohn. The Executive Committee, during intervals
between meetings of the Board, may exercise all of the powers of the Board in
the management and control of the business of the Company, except as limited by
law and except with respect to matters within the powers of the Audit Committee
or Compensation Committee. Actions taken by the Executive Committee are reported
to the Board at the next meeting of the Board. During 1995, the Executive
Committee held two meetings.

3
<PAGE> 7

The Board held seven meetings in 1995. Each Director attended at least 75%
of the aggregate number of meetings of the Board and of all committees on which
he served.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company's subsidiaries hold slightly less than 50% of the outstanding
common stock of Guaranty National Corporation ("Guaranty"). The Company and
Guaranty have entered into a shareholder agreement with respect to the
composition of the Board of Directors and committees of Guaranty. So long as the
Company or its subsidiaries beneficially own in the aggregate 30% or more of the
voting securities of Guaranty, the Company has the right to designate three
nominees to the Guaranty Board (one of whom will be the Chairman of Guaranty's
Board), and so long as the Company or its subsidiaries beneficially own 20% or
more of such Guaranty securities, the Company has the right to designate two
nominees. The Company may require that Guaranty's Compensation Committee include
the Company's nominees to the Guaranty Board. Currently, Messrs. Gruber, Hollen
and Shepherd serve as Orion's designated directors on Guaranty's Board. Mr.
Sanborn, Mr. Hollen's predecessor as Chief Operating Officer of the Company, is
also a member of Guaranty's Board. Messrs. Gruber, Sanborn and Shepherd
represent three of the four members of Guaranty's Compensation Committee. The
Company's Compensation Committee is composed of Messrs. Shepherd, Jeffrey,
Lyons, and McWilliams. Mr. Shepherd is the Chairman of both the Company's
Compensation Committee and Guaranty's Compensation Committee. Roger B. Ware,
Guaranty's President and Chief Executive Officer, serves as a member of the
Company's Board of Directors but is not a member of any of its committees. Mr.
Ware receives the regular fees and other benefits provided to all non-employee
Directors of the Company.

DIRECTORS' COMPENSATION

Fees: During 1995 each Director who was not an officer of the Company
received a retainer fee of $18,000. Effective January 1, 1996 the annual
retainer fee was increased to $20,000. The Chairman of the Audit Committee and
of the Compensation Committee of the Board each receives an additional fee of
$10,000. Also, each Director receives an attendance fee of $1,000 for each
meeting of the Board and each meeting of a committee attended, except that a fee
of $300 is paid for a committee meeting held on the same day as a meeting of the
Board. Officers of the Company who serve as Directors do not receive either a
retainer or any attendance fee for such service. The Company reimburses all
Directors and officers for travel, lodging and related expenses which they incur
in attending Directors' and committee meetings.

Directors' Benefit Plans: Retirement Plan. Since 1990, the Company has had
a pension plan for the non-employee Directors of the Company. Under the terms of
the plan, a Director is entitled on retirement to receive an annual payment
equal to one half the annual retainer fee (excluding meeting fees, fees paid to
chairmen and expenses) for Directors of the Company in effect on the date of his
retirement. This retirement benefit is to be paid to the Director, or his
beneficiaries, for fifteen years or the number of years that the individual
served as a Director of the Company, whichever is less. In addition, benefits
under the plan will be paid out as a lump sum following a Change in Control (as
defined in the plan) of the Company. The plan was amended, as of September 12,
1994, to require that any director newly elected after that date must serve at
least five years as a Board member in order to be entitled to benefits under the
plan. The plan is not qualified under the Employee Retirement Income Security
Act of 1974 and is not funded.

Deferred Compensation Plan. Under the Company's Deferred Compensation Plan
(the "Deferred Plan"), non-employee Directors may elect to defer receipt of all
or a portion of fees to be earned in the next succeeding year and have such fees
accrue either (i) at the interest rate determined by the Compensation Committee
(currently 9% compounded quarterly) or (ii) as units equivalent to shares of the
Company's Common Stock to which additional amounts equivalent to dividends paid
on such shares are credited quarterly. A participating non-employee Director
will receive all amounts deferred and accrued under the Deferred Plan, either in
one payment or as ten equal annual installments, starting in the first month of
the year following the year in which the participant ceases to be a Director.

4
<PAGE> 8

Non-Employee Director Stock Option Plan. The 1994 Stock Option Plan for
Non-Employee Directors (the "Option Plan") was approved by the stockholders of
the Company on May 31, 1995. Under the Option Plan, each member of the Board of
Directors who is not otherwise an employee of the Company or any subsidiary of
the Company is eligible to participate. The Option Plan is administered by the
Compensation Committee of the Board. Options granted under the Option Plan are
nonstatutory options and have no tax consequences until exercised.

Upon first being elected to the Board an individual who is eligible will be
granted an initial option to purchase 5,000 shares. Thereafter, each year an
option to purchase 1,000 shares is granted to each eligible Director immediately
following the Company's Annual Meeting. Each option granted under the Option
Plan expires ten years from the date of grant. The option exercise price per
share may not be less than 100% of the fair market value per share at the close
of business on the day the option is granted. Options granted immediately
following an Annual Meeting shall fully vest and become exercisable and
non-forfeitable on the day of the next Annual Meeting, if the optionee has
continued to serve as a Director until that meeting. Options granted other than
immediately following an Annual Meeting fully vest and become exercisable and
non-forfeitable on the first anniversary of the day on which such option is
granted, if the optionee has continued to serve as a Director until that day.

The Company's nine eligible non-employee Directors were each awarded an
initial option to purchase 5,000 shares of the Company's Common Stock on
September 12, 1994 at an exercise price of $32.75 per share and on May 31, 1995,
each such Director received an additional option to purchase 1,000 shares at an
exercise price of $38.75 per share.

SECURITY OWNERSHIP OF DIRECTORS, OFFICERS

AND PRINCIPAL BENEFICIAL OWNERS

The following table sets forth information concerning the shares of the
Company's Common Stock beneficially owned by all Directors, by each of the
executive officers named in the Summary Compensation Table on page 8 and all
Directors and officers of the Company as a group, and each person or group who
is known by the Company to be the beneficial owner of more than five percent of
the total number of shares of the Company's Common Stock outstanding and
entitled to vote.(1) All such information is given as of April 8, 1996, unless
otherwise indicated.

<TABLE>
<CAPTION>
PERCENT
NAME OF AMOUNT AND NATURE OF
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP CLASS
------------------------------------------- ----------------------- -------
<S> <C> <C>
W. Marston Becker.......................... 18,704(2) .13%
Bertram J. Cohn............................ 13,812(3) .10%
John C. Colman............................. 18,822(4) .14%
Alan R. Gruber............................. 245,113(5) 1.77%
Larry D. Hollen............................ 53,788(6) .39%
Raymond W. Jacobsen........................ 19,899(7) .14%
Robert H. Jeffrey.......................... 10,137(3) .07%
Warren R. Lyons............................ 7,133(8) .05%
James K. McWilliams........................ 10,687(3) .08%
Ronald W. Moore............................ 7,086(3) .05%
Robert B. Sanborn.......................... 84,712(9) .61%
Raymond J. Schuyler........................ 34,787(10) .25%
William J. Shepherd........................ 21,625(3) .16%
John R. Thorne............................. 14,593(3) .11%
Roger B. Ware.............................. 8,918(3) .06%
All Directors and officers as a group
(19 persons)............................. 702,171(11) 5.06%
Neuberger & Berman......................... 1,233,118(12) 8.89%
605 Third Ave,
New York, New York 10158
Orion Capital Corporation Employees' Stock
Savings and Retirement Plan.............. 782,761(11) 5.64%
600 Fifth Avenue
New York, New York 10020
</TABLE>

5
<PAGE> 9

- ---------------

(1) Excludes 1,469,344 shares owned by the Company and its subsidiaries and the
shares covered by the Options awarded to the Company's non-employee
Directors under the Option Plan, as described above.

(2) Includes 4,911 shares as to which Mr. Becker has sole voting and investment
power, 2,000 shares held in trust for Mr. Becker's children, 7,500 shares
of Restricted Stock held pursuant to the terms of the 1982 Long-Term
Performance Incentive Plan ("Performance Incentive Plan") 3,750 shares as
to which Mr. Becker has a right to purchase as of June 30, 1996 pursuant to
the terms of the Performance Incentive Plan and approximately 543 shares
which represent his proportionate interest in shares held by the Trustee
under the Company's Employees' Stock Savings and Retirement Plan ("Savings
and Retirement Plan") as of December 31, 1995. Mr. Becker disclaims
beneficial ownership of the shares owned by his children.

(3) Indicates sole voting and investment power and 6,000 shares which the
Director has a right to purchase as of June 30, 1996, pursuant to the terms
of the Option Plan..

(4) Includes 6,000 shares which Mr. Colman has a right to purchase as of June
30, 1996 pursuant to the terms of the Option Plan, 3,204 shares held in
trust for Mr. Colman's children (over which he has shared voting and
investment power) and 1,643 shares held by Mrs. Colman. Mr. Colman
disclaims beneficial ownership of the shares held by his wife and held in
trust for his children.

(5) Includes 136,025 shares as to which Mr. Gruber has sole voting and
investment power, 81,048 shares which Mr. Gruber has a right to purchase as
of June 30, 1996 pursuant to the terms of the Performance Incentive Plan
and approximately 28,040 shares which represent his proportionate interest
in shares held by the Trustee under the Savings and Retirement Plan as of
December 31, 1995.

(6) Includes 20,389 shares as to which Mr. Hollen has sole voting and
investment power, 12,773 shares which Mr. Hollen has a right to purchase as
of June 30, 1996 pursuant to the terms of the Performance Incentive Plan,
7,812 shares of Restricted Stock held pursuant to the terms of the
Performance Incentive Plan and approximately 12,382 shares which represent
his proportionate interest in shares held by the Trustee under the Savings
and Retirement Plan as of December 31, 1995. Also includes 432 shares held
by Mrs. Hollen, as to which Mr. Hollen disclaims beneficial ownership.

(7) Includes 2,342 shares as to which Mr. Jacobsen has sole voting and
investment power, 7,274 shares which Mr. Jacobsen has a right to purchase
as of June 30, 1996 pursuant to the terms of the Performance Incentive
Plan, 8,000 shares of Restricted Stock held pursuant to the terms of the
Performance Incentive Plan and approximately 2,283 shares which represent
his proportionate interest in shares held by the Trustee under the Savings
and Retirement Plan as of December 31, 1995.

(8) Includes 902 shares as to which Mr. Lyons has sole voting and investment
power, 6,000 shares which Mr. Lyons has a right to purchase as of June 30,
1996 pursuant to the terms of the Option Plan and 231 shares owned by Mrs.
Lyons. Mr. Lyons disclaims beneficial ownership of the shares owned by Mrs.
Lyons.

(9) Includes 53,562 shares as to which Mr. Sanborn has sole voting and
investment power, 20,822 shares which Mr. Sanborn has a right to purchase
as of June 30, 1996 pursuant to the terms of the Performance Incentive Plan
and approximately 7,828 shares which represent his proportionate interest
in shares held by the Trustee under the Savings and Retirement Plan as of
December 31, 1995. Also includes 2,500 shares held by Mrs. Sanborn, as to
which Mr. Sanborn disclaims beneficial ownership.

(10) Includes 18,318 shares as to which Mr. Schuyler has sole voting and
investment power, 5,702 shares which Mr. Schuyler has a right to purchase
as of June 30, 1996 pursuant to the terms of the Performance Incentive
Plan, and approximately 10,767 shares which represent his proportionate
interest in shares held by the Trustee under the Savings and Retirement
Plan as of December 31, 1995.

6
<PAGE> 10

(11) Includes 91,157 shares which represent the group's proportionate interest
in shares held by the Trustee under the Savings and Retirement Plan as of
December 31, 1995, 206,605 shares which the group has rights to acquire as
of June 30, 1996 pursuant to the Performance Incentive Plan and 23,312
shares of Restricted Stock held pursuant to the terms of the Performance
Incentive Plan. As of December 31, 1995, the Savings and Retirement Plan,
as a whole, held 782,761 shares (5.64%) of the Company's Common Stock.
Shares of the Company's Common Stock held by the Savings and Retirement
Plan Trustee will be voted in accordance with the instructions of the
employee for whose account the shares are held. If no such instructions are
received, the Savings and Retirement Plan Trustee will vote such shares in
the same proportion as it votes shares for which it does receive
instructions from other participating employees.

(12) Neuberger & Berman ("N&B") reported in an amendment to its Schedule 13G
filed with the Securities and Exchange Commission on February 12, 1996 that
it held 1,233,118 shares of the Company's Common Stock with shared power to
dispose or direct the disposition of all such shares, sole voting power
with respect to 238,436 shares and shared voting power as to 716,775 of
such shares. N&B has reported that it held such shares for many unrelated
clients, none of whom has an interest relating to five percent or more of
the Company's Common Stock. The number reported in the table excludes
71,875 shares of Common Stock held by certain partners of N&B in their own
personal securities accounts and 74,800 shares held by the Neuberger &
Berman Profit Sharing Retirement Plan ("N&B Plan") for the benefit of the
N&B Plan's participants who are current and former N&B employees and
partners. N&B disclaims beneficial ownership of such shares owned directly
by N&B partners and the N&B Plan. Mr. Gruber is a trustee of six trusts
which manage the N&B family of equity mutual funds.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT.

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's Directors and executive officers to file
with the Securities and Exchange Commission (the "SEC") and the New York Stock
Exchange initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Officers and Directors
are required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.

To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations from reporting
persons that they were not required to file Form 5, all of its officers and
Directors have complied with all filing requirements applicable to them with
respect to transactions during 1995.

7
<PAGE> 11

EXECUTIVE COMPENSATION

The information presented in this section and elsewhere in this Proxy
Statement with respect to the Company's Common Stock market prices, number of
shares of Restricted Stock, number of shares of Common Stock covered by Options,
Option exercise prices and number of Performance Units have been adjusted to
reflect the effect of the 5-for-4 stock split paid on November 15, 1993.

SUMMARY COMPENSATION TABLE

The Summary Compensation Table shows information concerning the annual and
long-term compensation for services in all capacities to the Company for the
years ended December 31, 1995, 1994 and 1993 of those persons who were at
December 31, 1995 (1) the chief executive officer and (2) the other four most
highly compensated executive officers of the Company who were serving as
executive officers at the end of 1995. (The chief executive officer and the
other four most highly compensated executive officers are referred to
collectively as the "Named Officers.") Mr. Becker was not employed by the
Company until July 1994 and was elected Vice Chairman of the Board on March 8,
1996.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------------------
AWARDS PAYOUTS
--------------------------------- ------------
ANNUAL COMPENSATION RESTRICTED STOCK LONG-TERM
-------------------- STOCK OPTIONS INCENTIVE ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY $ BONUS $ AWARD(S)$(1)(2) (SHARES)(2)(3) PAYOUTS $(4) COMPENSATION $(5)
- --------------------------- ---- -------- -------- --------------- -------------- ------------ ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Alan R. Gruber............. 1995 497,186 450,000 -0- -0- 114,624 97,783
Chairman of the Board & 1994 479,496 410,000 -0- 25,000 94,702 72,663
Chief Executive Officer 1993 466,794 370,000 -0- -0- 87,891 74,272
W. Marston Becker.......... 1995 218,892 150,000 307,500 -0- -0- 40,143
Vice Chairman of the
Board 1994 97,154 60,000 -0- 15,000 -0- 10,877
of the Company
and President of the
DPIC Companies
Larry D. Hollen............ 1995 287,738 225,000 -0- -0- 94,044 54,855
President & Chief 1994 252,546 200,000 -0- 22,500 75,707 42,583
Operating Officer 1993 212,450 150,000 -0- -0- 22,116 35,527
Raymond Jacobsen........... 1995 207,738 140,000 -0- -0- 26,753 37,640
Senior Vice President 1994 169,469 125,000 270,000 8,000 20,203 27,690
of the Company 1993 147,700 90,000 -0- 1,563 14,194 20,539
and Chairman of the
EBI Companies
Raymond J. Schuyler........ 1995 184,584 105,000 -0- -0- 22,925 41,937
Vice President -- 1994 177,354 90,000 -0- 6,400 18,940 33,457
Investments 1993 169,700 85,000 -0- -0- 19,169 33,040
</TABLE>

- ---------------

(1) Represents the value of shares of Restricted Stock awarded to the Named
Officers pursuant to the terms of the Performance Incentive Plan. Pursuant
to Mr. Becker's employment agreement, 7,500 shares of Restricted Stock were
awarded to him on October 31, 1995, based on a market price per share of
$41.00. Pursuant to Mr. Jacobsen's employment agreement, 8,000 shares of
Restricted Stock were awarded to him on July 19, 1994, based on a market
price per share of $33.75. Each award of Restricted Stock vests in four
equal installments beginning on the second anniversary of such award. Awards
of Restricted Stock are subject to restrictions on transfer and will be
forfeited if the Named Officer terminates his employment prior to the fifth
anniversary of the date of each award. In the event of death, the Restricted
Stock awarded to Mr. Becker in 1995, to Mr. Jacobsen in 1994 and to Mr.
Hollen in 1992 continues to vest and would be paid to his designated
beneficiary. If a Change in Control (as defined in the Performance Incentive
Plan) were to occur before the shares of Restricted Stock were fully vested,
all of such shares would become immediately vested. Dividends on Restricted
Stock are paid when and as dividends are paid on the Company's Common Stock.

8
<PAGE> 12

The aggregate total of Restricted Stock holdings of each of the Named
Officers, valued as of December 31, 1995, at a market price of $43.375 per
share are as follows:

<TABLE>
<CAPTION>
RESTRICTED STOCK
------------------
NAME SHARES VALUE $
----- -------
<S> <C> <C>
W. Marston Becker.......................................... 7,500 325,313
Larry D. Hollen............................................ 7,812 338,846
Raymond W. Jacobsen........................................ 8,000 347,000
</TABLE>

(2) Awards of Restricted Stock or Options are made in tandem with awards of
Performance Units pursuant to the terms of the Performance Incentive Plan.
The value of a Performance Unit under the Performance Incentive Plan will be
equal at any time to the book value per share of the Company's Common Stock.
However, the right of any Named Officer to receive payment in respect of a
Performance Unit award is contingent upon (a) whether the Named Officer
remains an employee of the Company (except in the case of retirement,
disability or death) throughout the applicable period ("Performance
Period"), and (b) whether the applicable target ("Performance Target"), as
established at the time of award by the Compensation Committee, has been
achieved. The Compensation Committee has determined that all Performance
Units awarded to date will have a Performance Target of an 11% compound
annual increase in the Company's book value per share during a five-year
Performance Period to achieve the maximum payout. If the compound annual
increase in the Company's book value per share during the Performance Period
does not exceed 6%, no payout is made. If a Change in Control (as defined)
were to occur before the Performance Units were fully vested, all such Units
would become immediately vested and the Compensation Committee may, in its
sole discretion, declare the Performance Units immediately payable in such
amounts as the Committee may determine.

On March 7, 1996, October 31, 1995 and July 19, 1994, 2,500, 3,750 and 3,750
Performance Units, respectively, were awarded to Mr. Becker; on March 9,
1994, 1,875 Performance Units were awarded to Mr. Hollen; on July 19, 1994,
4,000 Performance Units were awarded to Mr. Jacobsen; and on September 12,
1994, 6,250, 3,750, 2,000 and 1,600 Performance Units were awarded to
Messrs. Gruber, Hollen, Jacobsen and Schuyler, respectively. On June 2,
1993, 391 Performance Units were awarded to Mr. Jacobsen.

(3) Options awarded to the Named Officers are granted pursuant to the terms of
the Performance Incentive Plan. To the maximum possible extent, all stock
options have been structured to qualify as Incentive Stock Options. No
Option may be exercised more than ten years from the date of grant, and the
exercise price may not be less than 100% of the fair market value of the
shares covered thereby on the date of grant. When an Option is exercised,
the full exercise price must be paid in cash and/or by the surrender, at
fair market value, of shares of the Company's Common Stock. Generally, each
Option is exercisable in installments, as follows: 25% of the shares of
Common Stock covered by the Option may be purchased on and after the first
anniversary of the date of grant and additional 25% installments on and
after each of the second, third and fourth anniversaries of the date of
grant. If a Change in Control (as defined) were to occur before the Option
is exercisable in full, the Option would become immediately exercisable for
all shares of Common Stock covered by such Option.

(4) Cash value of Performance Units paid under the Performance Incentive Plan
for Performance Periods ended December 31, 1995, 1994 and 1993.

(5) Detail of amounts reported in the "All Other Compensation" column for 1995
is provided in the table below.

<TABLE>
<CAPTION>
MR. MR.
ITEM MR. GRUBER MR. BECKER MR. HOLLEN JACOBSEN SCHUYLER
- ----------------------------------------------------- ---------- ---------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C>
- - Company Contributions to the Supplemental Benefits
Plan (see below)................................... $ 73,798 $ 16,262 $ 33,967 $19,092 $ 13,965
- - Company Contributions to Savings and Retirement
Plan............................................... 13,592 13,592 13,592 12,655 13,587
- - Split Dollar Insurance Premium..................... -- 10,289 7,296 5,893 14,385
- - Term Life Insurance Premium........................ 10,393 -- -- -- --
---------- ---------- ------------ ----------- ----------
Total All Other Compensation.................. $ 97,783 $ 40,143 $ 54,855 $37,640 $ 41,937
=========== ========== ============ =========== ==========
</TABLE>

9
<PAGE> 13

The Savings and Retirement Plan is a qualified 401(k) savings plan in which
all employees of the Company are eligible to participate. The Company makes
matching contributions to the Plan of up to 6% of a participating employee's
base salary, unless limited by federal tax regulations. The Company
contributes to the Supplemental Benefits Plan ("Supplemental Plan") that
portion of the Company's contribution in the Savings and Retirement Plan
that an employee failed to receive because of federal tax regulations
limiting such contributions. All benefits under the Supplemental Plan are
fully vested but no benefits are paid until January of the year following
the year employment terminates. The Supplemental Plan is not qualified under
the Employee Retirement Income Security Act of 1974 and is not funded.

OPTION GRANTS, EXERCISES AND FISCAL YEAR-END VALUES

Option Grants in Last Fiscal Year

No options were granted to the Named Officers in 1995. However, on March 7,
1996, Mr. Becker was granted an Option for 10,000 shares at an exercise price of
$46.75 per share.

Aggregate Option Exercises in Last Fiscal Year and Year End Option Values

The following table provides information with respect to the unexercised
options to purchase Common Stock granted in prior years under the Performance
Incentive Plan for each of the Named Officers and held by them at December 31,
1995.

<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT DECEMBER 31, 1995 AT DECEMBER 31, 1995 $(2)
ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE REALIZED $(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------- ------------ ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alan R. Gruber............... 17,000 492,960 81,048 24,610 2,197,808 113,263
W. Marston Becker............ -0- -0- 3,750 11,250 36,094 16,875
Larry D. Hollen.............. -0- -0- 10,898 18,633 162,825 63,509
Raymond W. Jacobsen.......... -0- -0- 6,883 8,149 109,627 32,718
Raymond J. Schuyler.......... -0- -0- 5,702 6,167 96,800 27,491
</TABLE>

- ---------------

(1) Represents difference between exercise price and market value on date of
exercise. For a description of the material terms of Options and the
Performance Units awarded in tandem therewith, see footnotes 2 and 3 on page
9.

(2) Based on the closing price on the New York Stock Exchange -- Composite
Transactions of the Company's Common Stock on that date ($43.375).

Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act that might incorporate future filings, including this Proxy Statement, in
whole or in part, the following Report of the Compensation Committee and the
Performance Graph on page 14 shall not be incorporated by reference into any
such filing.

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee, currently composed of four members of the Board
of Directors, is a standing committee of the Board and only "outside"
non-employee Directors serve on this Committee. Among its duties the
Compensation Committee is charged with the responsibilities of establishing and
administering the Company's policies concerning the compensation of management,
including the Chief Executive Officer and all other key officers. In discharging
such duties, the Compensation Committee is responsible for annually determining,
and recommending to the full Board, the annual base salary and bonus for each of
the Company's officers and for awarding grants under the Company's Performance
Incentive Plan.

GENERAL

The Company's stated objective is to achieve superior growth in stockholder
value by being the best specialty property and casualty insurer in each of its
businesses. In furtherance of that mission the Committee attempts to provide
incentives to motivate management to superior performance in order to enhance
the profitability of the Company (and, thus, stockholder value). Such incentives
also

10
<PAGE> 14

enable the Company to attract and retain qualified executives who will
contribute significantly to the long-term success of the Company.

Executive compensation consists of a base salary, annual bonus and
long-term incentive compensation. Guidelines for executive compensation at the
Company are at levels which are generally at about the median of the range of
salaries paid to peer executives at other companies of generally similar size
that are engaged in similar businesses. The Committee emphasizes variable
compensation programs and believes that compensation should be based upon the
attainment of individual and Company goals and should make possible total
compensation levels in excess of industry averages if the Company's or business
unit's performance is above average. The program is intended to cause management
to focus on managing the Company from an owner's perspective of enhancing value
and achieving long-term financial success and earnings growth.

In the first quarter of 1996 the Compensation Committee reviewed material
provided by Messrs. Gruber and Hollen and the Company's Human Resources
Department in connection with recommendations for bonuses with respect to
services provided in the prior year and for adjustments in base salaries. The
process involves an evaluation of many diverse elements.

ANNUAL COMPENSATION

The Committee believes that it is important to encourage a
performance-based environment that motivates individual performance by
recognizing the past year's results and by providing incentives for improvements
in the future. This includes an evaluation of an executive's ability to
implement the Company's business plans as well as to react to unanticipated
external factors that can have a significant impact on the Company's
performance. It also takes into account the actual performance of the Company or
a business unit of the Company compared to its expected potential. In making its
recommendations for base salaries and annual bonuses for key officers, the
Compensation Committee considers a variety of factors, including material on
salary movements for peer executives at other companies, each executive's
success in meeting both personal and Company objectives, level of
responsibility, length of service, knowledge and potential for advancement,
although none of these factors is assigned a specific weight. The Committee also
gives consideration to its assessment of the quality of services rendered by the
executive during the year, the Company's success compared to its competitors,
and the internal comparability of compensation among the Company's executives.
The Committee in its discretion subjectively weighs the above factors in
determining appropriate salary levels.

All cash bonuses awarded to officers in respect of fiscal 1995 were awarded
pursuant to the Company's Annual Incentive Plan, a target-oriented bonus
program. While bonuses to executive officers are discretionary, a variety of
financial and project targets are established for each senior officer to measure
both individual performance and Company performance. These targets may include
one or more of the following measurements: return on stockholders' equity,
operating earnings, premium growth, loss and expense ratios, control of expenses
and completion of specific projects. Awards are generally based on the degree to
which the targets are attained and on individual performance during the year.
Target annual bonus awards, as a percentage of base salary, range from 25% for
certain vice presidents to 40% and 45% for the President and the Chairman,
respectively. Depending on performance, an individual could receive no bonus or
an amount equal to as much as twice his or her target bonus. In addition,
personal performance is measured against other relevant non-quantitative
factors, such as customer satisfaction, work efficiency or degree of skill
required to perform the task. In determining the amount of a bonus, the
Committee subjectively weighs a variety of these factors. The Compensation
Committee, when it deems appropriate, may authorize the payment of an individual
bonus award even if the individual's targets are not achieved. After the
Company's year-end results have been audited by its independent certified public
accountants, payments under the program are made in cash. During 1995, the
Company's performance exceeded all goals.

Certain of the Named Officers are employed under employment agreements that
provide for minimum base compensation. Determinations as to bonus levels and
salary increases for these Named

11
<PAGE> 15

Officers, as well as those without employment agreements, have been
discretionary and have not been made on the basis of a formulaic weighing of the
factors described above. The weight given to each factor with respect to each
element of compensation is within the individual discretion and judgment of each
member of the Committee. Each member also takes the appropriateness of the
entire package into account when evaluating each element of compensation.

CEO'S COMPENSATION

Mr. Gruber has an employment agreement with the Company (see "Employment
Agreements" below), pursuant to which he was paid a base salary of $500,000 for
the twelve month period beginning April 1, 1995. In determining bonus and base
salary for Mr. Gruber for 1996, the Committee considered the Company's continued
outstanding performance during 1995 which met or exceeded agreed upon
objectives, including among other factors, the Company's high return on equity,
low combined ratios over each of the past six years, the 23.05% increase in the
market price of the Company's stock from the end of 1994 and a 13.4% increase in
operating earnings. As part of its consideration of Mr. Gruber's compensation,
the Committee also reviewed his activities and accomplishments in promoting the
long term interests of the Company such as the development of strong strategic,
operating and succession plans. The relative weight assigned to each factor, or
component thereof, is not quantified. Based on the above factors, Mr. Gruber was
awarded a cash bonus for 1995 of $450,000, an increase of approximately 10% over
the bonus awarded for services rendered in 1994. Mr. Gruber's base salary
remains unchanged at $500,000 per year for the period beginning April 1, 1996.

In determining the bonus awards to other key officers, the Committee
reviewed with Messrs. Gruber and Hollen recommendations of management based on
individual performance of each officer as well as the evaluation of general
factors substantially comparable to those considered in establishing the award
for Mr. Gruber.

LONG-TERM INCENTIVES

Long-term incentives for the Company's Chief Executive Officer and other
key officers are provided through the Company's Performance Incentive Plan. The
Committee grants awards under the Performance Incentive Plan to individuals that
the Company believes have the ability to influence its long-term growth and
profitability. Generally, the Committee grants larger awards commensurate with
higher position level and that reflect competitive practices within the property
and casualty insurance industry. The awards can be in the form of Stock Options
and Performance Units or Restricted Stock and Performance Units. Awards under
the Performance Incentive Plan are usually made every two years and the last
awards were made in 1994. Consequently, except for the award of Restricted Stock
and Performance Units made to Mr. Becker in October 1995 pursuant to the terms
of his employment contract, no awards were made in 1995. In general, prior to
1992, awards of Options were limited to the Chairman of the Board and the Chief
Operating Officer, with all other officers receiving awards of Restricted Stock.
However, based in part on a study completed in 1992 by an outside consultant,
the Company now as a general rule awards Stock Options, rather than Restricted
Stock, to the top 10 officers of the Company. The basis for determining the
amount of awards was subjective and was not based upon the amount and terms of
Options already held; however, the Compensation Committee did consider the
results of the Company's performance and the executive officer's contribution to
that performance as well as expected future contributions to the success of the
Company in determining the amount of individual awards. Future awards may be
granted on the same basis. Performance Unit awards are made in tandem with
Option and Restricted Stock awards. The number of Stock Options or shares of
Restricted Stock granted is, in general, based on the grade level of an
executive's position and the most recent assessment of the executive's
performance. The number of Performance Units awarded is usually equal to a
quarter of the number of shares covered by an Option or one half of the number
of shares of Restricted Stock.

The Committee has the authority to determine the individuals to whom awards
are made, the type of awards (Options or Restricted Stock), the conditions of
the awards, the number of shares of Restricted Stock, the number of shares
covered by an Option and number of Performance Units. In

12
<PAGE> 16

general, it is through the award of Options and Restricted Stock that the
Company attempts to align management's interests with those of the stockholders
and to provide an opportunity to its key officers to build a meaningful stake in
the Company. The Option exercise price must be no less than the fair market
value of the Company's stock on the date of grant. The Committee has never
repriced an Option's exercise price. Thus, the value of each stockholder's
investment in the Company must appreciate before an optionee receives any
benefit from the Option. Maximum payout on awards of Performance Units is made
only if the Company achieves an 11% compound annual increase in its book value
per share during the Performance Period. As a result, as with Options, the value
of the Performance Unit to the executive will be realized only with the creation
of value for stockholders.

The Committee believes that these non-cash awards emphasize the Committee's
position that a significant equity stake in the Company connects an executive's
compensation to future enhancement of stockholder value.

OTHER BENEFITS

Executive officers may also participate in the Company's Employees' Stock
Savings and Retirement Plan which includes the Company's contributions to that
Plan, a Supplemental Benefits Plan under which certain executives are entitled
to additional benefits that cannot be awarded under qualified plans due to
Internal Revenue Code limitations, as well as other benefits that are generally
available to all employees.

DEDUCTIBILITY OF COMPENSATION

Section 162 (m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1 million
paid to the Company's Chief Executive Officer and the four other most highly
compensated executive officers. Qualifying performance-based compensation will
not be subject to the deduction limit if certain requirements are met. No
executive officer was subject to the limitations of Section 162 (m) in 1995. The
Committee intends to structure any compensation for executive officers so that
it qualifies for deductibility under Section 162(m) to the extent feasible.
However, to maintain a competitive position within the Company's peer group of
companies, the Committee retains the authority to authorize payments, including
salary and bonus, that may not be deductible.

Compensation Committee
William J. Shepherd, Chairman
Robert H. Jeffrey
Warren R. Lyons
James K. McWilliams

13
<PAGE> 17

PERFORMANCE GRAPH

Set forth below is a line graph comparing the cumulative total stockholder
return on the Company's Common Stock, based on the market price of the Common
Stock and assuming reinvestment of dividends, with the cumulative total return
of companies on the Standard & Poor's 500 Stock Index and the Dow Jones Property
and Casualty Index.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* AMONG THE
COMPANY'S COMMON STOCK,
THE STANDARD & POOR'S 500 STOCK INDEX AND THE DOW JONES
PROPERTY AND CASUALTY INDEX

<TABLE>
<CAPTION>
MEASUREMENT PERIOD DOW JONES
(FISCAL YEAR COVERED) ORION CAPITAL S&P 500 P & C
<S> <C> <C> <C>
1990 100 100 100
1991 187 130 124
1992 268 140 152
1993 308 154 153
1994 349 156 161
1995 438 215 223
</TABLE>

- ---------------
* Assumes that the investment in the Corporation's Common Stock and each index
was $100 on December 31, 1990 and that all dividends were reinvested.

There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in the graph
above. The Company will not make or endorse any predictions as to future stock
performance.

EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS

The Company has employment agreements with four of its current executive
officers: Alan R. Gruber, Larry D. Hollen, Raymond W. Jacobsen and W. Marston
Becker and a former officer and current director, Robert B. Sanborn.

Mr. Gruber: The Company entered into an employment agreement with Mr.
Gruber as of March 1993. Mr. Gruber's agreement provides for a minimum base
annual compensation beginning April 5, 1996 of not less than $500,000 with such
salary increases as may from time to time be approved by the Board and requires
that the Company provide Mr. Gruber with term life insurance in the amount of
$500,000. The contract has an Initial Term ending on December 31, 1996, during
which Mr. Gruber

14
<PAGE> 18

will serve as Chairman and Chief Executive Officer, and a Successive Term of
five years during which Mr. Gruber will be a Senior Executive Consultant.

The Initial Term of Mr. Gruber's contract may be shortened by Mr. Gruber in
certain circumstances; the Successive Term would then start at such earlier
date. Mr. Gruber may terminate the Initial Term of the contract at any time on
three months' notice. In addition, either the Company or Mr. Gruber may
terminate the Initial Term of his contract at any time after the end of four
months following a change in effective voting control of the Company, effective
ten days after notice. A change in effective voting control shall be deemed to
have occurred upon (i) acquisition by any person or group of 40% or more of the
Company's Common Stock, (ii) a merger or consolidation in which the Company is
not a survivor or (iii) any time a majority of the members of the Board are
persons who were not members of the Board twelve months prior to that time
(collectively "Change in Control"). If there is a Change in Control of the
Company and at any time thereafter Mr. Gruber terminates his employment or if
Mr. Gruber receives written notice of termination, he (or his beneficiary) would
be entitled to receive, until the termination date of his agreement, base salary
(at the level in effect on the date of notice), a bonus equal to the bonus which
would have been payable to him in the year in which notice is given if he had
achieved target performance, and other usual employee benefits provided by the
Company.

If the Initial Term of Mr. Gruber's contract is ended on notice, as
described above, all previously unexercised Stock Options will be deemed to be
exercisable and all unexpired periods of performance with respect to any
Performance Units or awards will be deemed to have expired. Mr. Gruber will be
entitled to receive the value of such Performance Units at the end of the month
during which termination occurs on the basis of an equitable pro-rating of the
Performance Period, Performance Target and award amount.

Mr. Gruber's contract provides that in the event of his death during the
Initial Term, his beneficiaries would be entitled to receive his base salary to
date of death, a pro-rata portion of any bonus that would have been payable to
him with respect to the fiscal year in which he dies and other usual death
benefits provided by the Company. If he becomes disabled, he will be entitled to
receive, for the remainder of the Initial Term, disability compensation of not
less than 50% of base salary plus other usual employee benefits provided by the
Company.

Upon commencement of the Successive Term, the cash compensation to be paid
to Mr. Gruber will be reduced. Mr. Gruber's base compensation will be reduced to
an amount equal to (i) one-half his average salary and bonus compensation during
the five years preceding the start of the Successive Term minus (ii) the
annuitized present value of all amounts credited to him by the Company under its
former Pension Plan, under the Company's Savings and Retirement Plan and under
the Company's Supplemental Benefits Plan. Such reduced level of compensation
shall continue for Mr. Gruber's life. It is currently estimated that, assuming
continued appreciation of the Company's Common Stock and other factors, the
actuarially determined net present value of the aggregate cash compensation is
approximately $900,000. Mr. Gruber can elect actuarially-equivalent survivor
benefits prior to the start of the Successive Term. Mr. Gruber will not be
eligible to participate in the Company's bonus, option and other benefit plans
for its employees after the second year of his contract's Successive Term.

The Company agreed to purchase an annuity to fund the payments to be made
to Mr. Gruber following termination of the Initial Term. If Mr. Gruber chooses a
payment option other than the one provided in his contract, the amount payable
per month will be actuarially adjusted. Unless a "transfer event" shall occur
(by reason of a Change in Control or of a certain lowering of the Company's
credit standing), his annuity shall be the property of the Company. If a
transfer event occurs, ownership of the annuity contract will be transferred to
his designated beneficiary, if any, and the income tax cost to the recipient of
that transfer will be borne by the Company, subject to recoupment as and to the
extent payments are subsequently made under the annuity contracts.

Messrs. Hollen, Jacobsen and Becker: The Company entered into an
employment agreement with Mr. Hollen as of December 1, 1992 which agreement was
amended and restated as of December 6,

15
<PAGE> 19

1995. The agreement with Mr. Hollen currently provides for a base salary of
$300,000 with such salary increases as may from time to time be approved by the
Company. Pursuant to the agreement, Mr. Hollen was granted, as of December 1,
1992, 15,625 shares of Restricted Stock and 7,812.5 Performance Units in
accordance with the terms of the Performance Incentive Plan.

The Company also entered into an employment agreement with Mr. Jacobsen on
July 19, 1994, when Mr. Jacobsen was promoted to Senior Vice President of the
Company. His employment agreement was amended and restated as of December 6,
1995. The agreement currently provides for a base salary of $230,000 with such
salary increases as may from time to time be approved by the Company. Pursuant
to the agreement, Mr. Jacobsen was granted 8,000 shares of Restricted Stock and
4,000 Performance Units in accordance with the terms of the Performance
Incentive Plan.

The Company entered into an employment agreement with Mr. Becker on October
31, 1995. The agreement currently provides for a base salary of $300,000 with
such salary increases as may from time to time be approved by the Company, and
on that same date, pursuant to the agreement, Mr. Becker was granted 7,500
shares of Restricted Stock and 3,750 Performance Units in accordance with the
terms of the Performance Incentive Plan. Each of Mr. Hollen, Mr. Jacobsen and
Mr. Becker is referred to as "Executive" below.

The term of each agreement is for five years and is automatically renewed
yearly until either party thereto gives notice of termination. The agreements
will not be terminated by any merger, consolidation, sale of assets or voluntary
or involuntary dissolution in which the Company is not the survivor. Each
agreement may be terminated by the Company in the event the Executive becomes
disabled, is convicted of a felony or a misdemeanor, engages in conduct which is
materially injurious to the Company or willfully fails to substantially perform
his duties with the Company. In addition, termination may be effected on seven
days notice by the Company or Executive at any time prior to the expiration of
the term of the agreement or during the twelve months following the month in
which there is a Change in Control. For a period of two years after the term of
the agreement the Executive agrees not to compete with the Company.

Each agreement provides that in the event of the Executive's death while
employed, his beneficiaries would be entitled to receive his base salary to date
of death, a pro-rata portion of any bonus that would have been payable to him
with respect to the fiscal year in which he dies and other usual death benefits
provided by the Company. If the Executive becomes disabled, he would be entitled
to receive disability compensation in accordance with the terms of the Company's
disability insurance program, a pro-rata portion of any bonus as described
above, plus other usual employee benefits provided by the Company. In addition,
if the Executive dies or becomes disabled prior to the complete vesting of the
shares of Restricted Stock and Performance Units awarded to him under the
agreement, such awards will nevertheless continue to vest as if he were fully
employed by the Company.

For a period of one year following a Change in Control of the Company, if
the Executive terminates his employment or if the Executive receives written
notice of termination, he (or his beneficiary) would be entitled to receive,
until the termination date of his agreement, base salary (at the level in effect
on the date of notice), a bonus equal to the bonus which would have been payable
to him in the year in which notice shall have been given if he had achieved
target performance, and other usual employee benefits provided by the Company.
In addition, all previously unexercised stock options would be deemed to be
exercisable, all restrictions with respect to any Restricted Stock would be
deemed to have been satisfied and lapsed, and all unexpired periods of
performance with respect to any performance-related units or awards would be
deemed to have expired. The Executive will be entitled to receive the value of
such units at the end of the month during which termination occurs on the basis
of an equitable pro-rating of the performance period, performance target and
award amount.

Mr. Sanborn: Robert B. Sanborn, a member of the Company's Board of
Directors and a Senior Executive Consultant, entered into an employment contract
with the Company in March 1993 when he

16
<PAGE> 20

was President and Chief Operating Officer of the Company. The provisions of that
contract, effective as of February 28, 1995, provide for a minimum base annual
compensation of not less than $125,000, with such salary increases as may from
time to time be approved by the Board. The employment contract terminates on
February 28, 2001. The Company will purchase an annuity to fund a joint-and-
survivor benefit of $48,000 per year to Mr. Sanborn and his spouse, commencing
upon completion of his contract. If he chooses a payment option other than the
one provided in his contract, the amount payable per month will be actuarially
adjusted. Unless a "transfer event" shall occur (by reason of a Change in
Control or a certain lowering of the Company's credit standing), the annuity
shall be the property of the Company. If a transfer event occurs, ownership of
the annuity contract will be transferred to his designated beneficiary, if any,
and the income tax cost to Mr. Sanborn of that transfer will be borne by the
Company, subject to recoupment as and to the extent payments are subsequently
made under the annuity contract.

Severance Policy: The Board of Directors has adopted a severance policy
applicable to the executive officers of the Company including the Named
Officers. Pursuant to this policy, such officers will be entitled to receive one
year's notice of termination, except in the event of termination for cause. This
policy currently applies to the executive officers of the Company, including Mr.
Schuyler, who do not have an individual employment agreement with the Company.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company and certain of its subsidiaries have a policy of making loans
to key officers, in connection with hiring or transfer to new locations, to
assist such personnel in purchasing new residences. During 1989, Larry D. Hollen
was required to move his residence from Illinois to Connecticut. In connection
with this move, the Company loaned Mr. Hollen an aggregate of $150,000, secured
by a mortgage on his Connecticut residence, for fifteen years, with interest at
10% per year. During 1994, W. Marston Becker, was required to move his residence
from West Virginia to California. In connection with the move, the Company
loaned Mr. Becker an aggregate of $250,000 secured by a mortgage on his
California residence, for 5 years, with interest at 7.75% per year. As a result
of Mr. Becker's election as Vice Chairman of the Company, during 1996 Mr. Becker
will be required to move his residence from California to Connecticut. In
connection with that move, the Company has agreed to purchase Mr. Becker's
California residence at its fair market value less the outstanding amount
remaining on the Company's mortgage.

At the 1987 Annual Meeting of Stockholders of the Company, the stockholders
authorized the execution by the Company of indemnification agreements with its
Directors and executive officers. Subsequently, the Company entered into
indemnification agreements with each of its Directors and executive officers
which, among other things, contractually confirmed the indemnity provided under
the Company's Restated Certificate of Incorporation, its By-Laws and under the
Delaware General Corporation law.

The Company and its subsidiaries have entered into several agreements with
Guaranty. Mr. Ware, a director of the Company, is Guaranty's President and Chief
Executive Officer. Pursuant to one such agreement, Messrs. Gruber, Hollen and
Shepherd serve on Guaranty's board of directors (see Compensation Committee
Interlocks and Insider Participation, at page 4). Also, the Company and Guaranty
have an investment management agreement pursuant to which a portion of
Guaranty's investment portfolio is managed by the Company's investment managers
(under the direction and supervision of Guaranty) for a fee of approximately
$650,000 for 1996. In addition, the Company's insurance subsidiaries have
entered into certain reinsurance agreements and a trade name agreement with
Guaranty.

During 1995, as part of Guaranty's financing of its acquisition of Viking
Insurance, the Company provided a commitment for a $21,000,000 Bridge Loan to
Guaranty for which Guaranty paid a $210,000 commitment fee to the Company. In
order to facilitate the financing of Guaranty's acquisition during 1995,
$20,896,000 of Guaranty's outstanding subordinated notes due 2003 (the "2003
Notes") which

17
<PAGE> 21

were held by the Company, were converted into 1,326,128 shares of Guaranty's
common stock. Total interest paid to the Company on the 2003 Notes in 1995 was
$1,122,000.

In the ordinary course of business, Guaranty's wholly-owned insurance
subsidiaries reinsure certain risks with other companies. In 1995, certain of
Guaranty's subsidiaries entered into a 100% reinsurance agreement with one of
the Company's insurance subsidiaries. During that year, $152,000 in premiums
were ceded under that reinsurance agreement and Guaranty was paid $5,000 for
fees and expenses. Also, pursuant to other reinsurance agreements, a Guaranty
insurance subsidiary assumed business written through the Company's insurance
subsidiaries totaling $9,495,000 in premiums in 1995. Guaranty paid $160,000 in
fees and reimbursed the Company's subsidiaries $178,000 of actual expenses
incurred in conjunction with those reinsurance agreements. Also, a subsidiary of
the Company is an agent for Guaranty and produced $411,000 in premiums for
Guaranty and was paid $72,000 in commissions in 1995. During 1995, an investment
by Guaranty in a leasehold participation in an office building in Monterey,
California, owned and primarily occupied by the DPIC Companies matured and was
repaid in cash. Interest paid to Guaranty during 1995 on the participation was
$407,000.

The Company has committed to invest up to $5,000,000 in Insurance Partners
L.P., a partnership formed to make equity investments of up to $550 million in
the insurance industry. Guaranty has committed to participate in the Company's
commitment in an aggregate amount not to exceed $1,500,000. To date, the Company
has invested $510,000 and Guaranty has invested $219,000 in partnership
investments. Insurance Partners L.P. is managed by Insurance Partners Advisors
L.P., of which Steven B. Gruber, a son of Mr. Alan R. Gruber, is a managing
director.

2. RATIFICATION OF SELECTION OF AUDITORS

The Board has selected Deloitte & Touche LLP, independent certified public
accountants, as independent auditors for the Company for the year 1996. A
resolution will be submitted to stockholders at the meeting for ratification of
such selection and the accompanying proxy will be voted for such ratification,
unless instructions to the contrary are indicated therein. Although ratification
by stockholders is not a legal prerequisite to the Board's selection of Deloitte
& Touche LLP as the Company's independent certified public accountants, the
Company believes such ratification to be desirable. If the stockholders do not
ratify the selection of Deloitte & Touche LLP, the selection of independent
certified public accountants will be reconsidered by the Board; however, the
Board may select Deloitte & Touche LLP, notwithstanding the failure of the
stockholders to ratify its selection.

The Board expects that a representative of Deloitte & Touche LLP will be
present at the meeting, will have an opportunity to make a statement if he or
she so desires, and will be available to respond to appropriate questions.

Deloitte & Touche LLP has been the Company's independent certified public
accountants since March 31, 1976. During the fiscal year ended December 31,
1995, Deloitte & Touche LLP performed audit services for the Company, including
attendance at meetings with the Audit Committee and the Board on matters related
to the audit, consultations during the year on matters related to accounting,
tax and financial reporting and review of financial and related information
included in filings with the SEC and other regulatory agencies.

The appointment of auditors is approved annually by the Board. The decision
of the Board is based upon the recommendation of the Audit Committee of the
Board. In making its recommendation as to the appointment of auditors, the Audit
Committee has regularly reviewed both the proposed audit scope and the estimated
audit fees for the coming year.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.

3. MISCELLANEOUS MATTERS

As of the date of this Proxy Statement, the Board knows of no business that
will be presented for consideration at the meeting other than that which has
been referred to above. As to other business, if

18
<PAGE> 22

any, that may come before the meeting, proxies in the enclosed form will be
voted in accordance with the judgment of the person or persons voting the
proxies.

STOCKHOLDER NOMINATIONS AND PROPOSALS

The Company's By-Laws require that there be furnished to the Company
written notice with respect to the nomination of a person for election as a
Director (other than a person nominated at the direction of the Board), as well
as the submission of a proposal (other than a proposal submitted at the
direction of the Board), at a meeting of stockholders. In order for any such
nomination or submission to be proper, the notice must contain certain
information concerning the nominating or proposing stockholder, and the nominee
or the proposal, as the case may be, and must be furnished to the Company not
later than April 4, 1997. A copy of the applicable provisions of the By-Laws may
be obtained by a stockholder, without charge, upon written request to the
Secretary of the Company at its principal executive offices.

In addition to the foregoing, in accordance with the rules of the SEC, any
proposal of a stockholder intended to be presented at the Company's 1997 Annual
Meeting of Stockholders must be received by the Secretary of the Company by
December 18, 1996, in the form required under and subject to the other
requirements of the applicable rules of the SEC, in order for the proposal to be
considered for inclusion in the Company's notice of meeting, proxy statement and
proxy relating to the 1997 Annual Meeting, scheduled for Wednesday, June 4,
1997.

COST OF PROXY SOLICITATION

The Company will bear the cost of the solicitation of proxies, including
the charges and expenses of brokerage firms and others for forwarding
solicitation material to beneficial owners of shares of Common Stock. In
addition to solicitation by mail, officers and regular employees of the Company
may solicit proxies personally or by telephone. No compensation other than their
regular compensation will be paid to officers or employees for any solicitation
which they may make. The Company has retained D.F. King & Co., Inc., New York,
New York to assist in the solicitation of proxies for an estimated fee of $9,000
plus reimbursement of out-of-pocket expenses.

At any time prior to being voted, the enclosed proxy is revocable by
written notice to the Secretary of the Company or by attendance at the meeting
and voting in person.

By order of the Board of Directors,
April 11, 1996
Michael P. Maloney
Vice President, General Counsel
and Secretary

19
<PAGE> 23
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

ORION CAPITAL CORPORATION

PROXY FOR HOLDERS OF COMMON STOCK--ANNUAL MEETING JUNE 5, 1996

The undersigned holder of Common Stock of Orion Capital Corporation hereby
appoints Alan R. Gruber, Larry D. Hollen and Michael P. Maloney, and each of
them, with full power of substitution to each of them, and with authority in
each to act in the absence of the other, as attorneys and proxies of the
undersigned to vote, as designated below, all the shares of Common Stock which
the undersigned could vote if personally present at the Annual Meeting of
Stockholders of Orion Capital Corporation to be held at 10:00 A.M., Eastern
Daylight Savings Time, Wednesday, June 5, 1996, at Chase Bank, 270 Park Avenue,
3rd Floor Auditorium, New York, New York, and at any adjournments thereof.

PROXIES WILL BE VOTED AS SPECIFIED. WHERE NO SPECIFICATION IS GIVEN, PROXIES
WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR PROPOSAL 2. IF ANY NOMINEE
FOR DIRECTOR SHOULD BECOME UNAVAILABLE FOR ELECTION, THIS PROXY WILL BE VOTED
FOR SUCH SUBSTITUTE NOMINEE AS MAY BE PROPOSED BY THE BOARD OF DIRECTORS.

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)

-FOLD AND DETACH HERE-

<PAGE> 24
PROXIES WILL BE VOTED AS SPECIFIED. WHERE NO SPECIFICATION IS GIVEN, PROXIES
WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS AND "FOR" PROPOSAL 2. IF ANY
NOMINEE FOR DIRECTOR SHOULD BECOME UNAVAILABLE FOR ELECTION, THIS PROXY WILL BE
VOTED FOR SUCH SUBSTITUTE NOMINEE AS MAY BE PROPOSED BY THE BOARD OF DIRECTORS.

/X/ PLEASE MARK YOUR VOTES AS THIS

1. ELECTION OF DIRECTORS for all nominees listed (except as marked)

M. Becker, B. Cohn, J. Colman, A. Gruber, L. Hollen, R. Jeffrey, W. Lyons,
J. McWilliams, R. Moore, R. Sanborn, W. Shepherd, J. Thorne, R. Ware

FOR / / WITHHOLD AUTHORITY / /

(INSTRUCTIONS: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below.)

- -------------------------------------------------------------------------------

THE BOARD RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.

2. APPROVAL OF AUDITORS. A proposal to ratify the selection of Deloitte &
Touche LLP, independent certified public accountants, as auditors for the
Company for the year 1996.

FOR / / AGAINST / / ABSTAIN / /

3. Upon such other business as may properly come before the meeting, or any
adjournments thereof.

FOR / / AGAINST / / ABSTAIN / /

- -------------------------------------------------------------------------------

The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders, the Proxy Statement for such meeting and Annual Report
of the Company for 1995.

I PLAN TO ATTEND MEETING / /

Signature(s) Date
------------------------------------------ --------------------
NOTE: Please sign exactly as your name appears hereon. All joint owners must
sign. When signing as executor, administrator, attorney, trustee or guardian,
please give full title for each. If a corporation, please sign in full
corporation name by president, vice president or other authorized person. If a
partnership, please sign in partnership name by a partner. PLEASE SIGN, DATE
AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE.

-FOLD AND DETACH HERE-
<PAGE> 25
VOTING INSTRUCTIONS TO VANGUARD FIDUCIARY TRUST COMPANY AS TRUSTEE

UNDER THE ORION CAPITAL CORPORATION

EMPLOYEE'S STOCK SAVINGS AND RETIREMENT PLAN

I hereby direct that at the Annual Meeting of Stockholders of Orion
Capital Corporation on June 5, 1996, and at any adjournments thereof, the
voting rights pertaining to my pro rata share of Orion Capital Corporation
Common Stock held by the Trustee under the Employee's Stock Savings and
Retirement Plan shall be exercised in accordance with the Proxy Statement for
the election of the persons nominated as directors (unless such authority is
withheld as provided on this card) and with respect to all the additional
proposals as checked on this card, or if not checked, for such proposals.

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)

-FOLD AND DETACH HERE-
<PAGE> 26
PROXIES WILL BE VOTED AS SPECIFIED. WHERE NO SPECIFICATION IS GIVEN, PROXIES
WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS AND "FOR" PROPOSAL 2. IF ANY
NOMINEE FOR DIRECTOR SHOULD BECOME UNAVAILABLE FOR ELECTION, THIS PROXY WILL
BE VOTED FOR SUCH SUBSTITUTE NOMINEE AS MAY BE PROPOSED BY THE BOARD OF
DIRECTORS.
/X/ Please mark
your votes
as this.

WITHHOLD
FOR AUTHORITY

1. ELECTION OF DIRECTORS for all nominees listed / / / /
(except as marked)

M. Becker, B. Cohn, J. Colman, A. Gruber,
L. Hollen, R. Jeffrey, W. Lyons, J. McWilliams,
R. Moore, R. Sanborn, W. Shepherd, J. Thorne, R. Ware

(INSTRUCTIONS: To withhold authority to vote for any
individual nominee write that nominee's name in the
space provided below.)

- ----------------------------------------------------

THE BOARD RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.

FOR AGAINST ABSTAIN
2. APPROVAL OF AUDITORS. A proposal to ratify the
selection of Deloitte & Touche LLP, independent / / / / / /
certified public accountants, as auditors for the
Company for the year 1996.

3. Upon such other business as may properly
come before the meeting, or any adjournments thereof. / / / / / /

The undersigned hereby acknowledges
receipt of the Notice of Annual Meeting of
Stockholders, the Proxy Statement for such
meeting and Annual Report of the Company
for 1995.

Signature(s)______________________________________________ Date________________
PLEASE SIGN AND RETURN THIS CARD PROMPTLY. As to any matters coming before the
Meeting (whether or not specifically mentioned above) for which no written
direction is received by the Trustee prior to the date of the Meeting, the
Trustee shall exercise voting rights on your behalf in the same proportions as
the Trustee was instructed to vote with respect to the shares for which it
received instructions.
PLEASE SIGN DATE AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE.

-FOLD AND DETACH HERE-