REGISTRATION NO.
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________________
ORION CAPITAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 95-6069054
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
9 Farm Springs Road, Farmington, Connecticut 06032-2504
(Address of Principal Executive Offices) (Zip Code)
Orion Capital Corporation
Equity Incentive Plan
(Full Title of Plan)
John J. McCann
Executive Vice President and Chief Legal Officer
Orion Capital Corporation
9 Farm Springs Road
Farmington, Connecticut 06032-2504
(Name and Address of Agent for Service)
(860) 674-6600
(Telephone Number, Including Area Code, of Agent of Service)
___________________________________________________
CALCULATION OF REGISTRATION FEE
- ---------------- -------------- ---------------- ------------------ ------------
Title of Proposed Maximum Proposed Maximum Amount of
Securities to be Amount to be Offering Price Aggregate Offering Registration
Registered Registered (1) Per Share (2) Price Fee
- ---------------- -------------- ---------------- ------------------ ------------
Common Stock, 1,400,000 $58.031 $81,243,750 $23,966.91
$1.00 par value
per share
- ---------------- -------------- ---------------- ------------------ ------------
(1) The 1,400,000 shares of Common Stock being registered hereby will be
issuable from time to time by Orion Capital Corporation (the "Company") to
employees participating in the Company's Equity Incentive Plan. In
addition to the 1,400,000 shares of Common stock indicated above,
pursuant to Rule 416 under the Securities Act of 1933, as amended (the
"Securities Act"),
this Registration Statement also covers an indeterminate number of shares
of Common Stock which may be issuable as a result of anti- dilution
adjustments made under the Company's Equity Incentive Plan and
pursuant to the Company's stockholder rights plan.
(2) The maximum offering price per share used to calculate the registration
fee with respect to the 1,400,000 shares of Common Stock issuable under
the Company's Equity Incentive Plan was estimated pursuant to Rule 457(h)
under the Securities Act using the average of the high and low prices per
share of the Common Stock reported on the New York Stock Exchange on July
9, 1998.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Pursuant to Rule 428(b)(1) under the Securities Act, the documents
containing the information specified in Part I of Form S-8 will be sent or given
to each participant in the Orion Capital Corporation Equity Incentive Plan (the
"Plan"). These documents and the documents incorporated by reference in this
Registration Statement pursuant to Item 3 of Part II hereof, taken together,
constitute the Section 10(a) Prospectus.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The documents listed below are incorporated by reference herein, and all
documents subsequently filed by Orion Capital Corporation ("Registrant")
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference shall be deemed
to be modified or superseded to the extent that a statement contained in this
Registration Statement or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
o Registrant's Annual Report on Form 10-K for the year ended December
31, 1997.
o Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998.
o The description of Registrant's Common Stock and its preferred stock
purchase rights associated with the Common Stock, contained in its
registration statement filed pursuant to Section 12 of the Exchange
Act and any amendment or report filed for the purpose of updating
those descriptions.
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The consolidated financial statements and schedules of the Registrant
included in the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997 have been audited by Deloitte & Touche LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference.
Item 5. Interests of Named Experts and Counsel
The validity of the securities have been passed upon by Michael P.
Maloney, Esq., Senior Vice President, General Counsel and Secretary for the
Registrant. Mr. Maloney beneficially owns Common Stock and options to purchase
Common Stock.
Item 6. Indemnification of Directors and Officers
Article IX of Registrant's By-Laws requires indemnification of
Registrant's directors and officers to the full extent permitted by the Delaware
General Corporation Law (the "Law") and provides for the advancement of defense
expenses provided the director or officer agrees to repay the advance if it is
ultimately determined that he is not entitled to indemnification. Article IX
also provides that the indemnification provided by the By-Laws is not exclusive.
Section 145(a) of the Law provides in general that a corporation may indemnify
anyone who is or may be a party to a legal proceeding by reason of his service
as a director or officer against expenses, adjustments, fines and settlement
payments actually and reasonably incurred if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation and, as to any criminal proceeding, had no reasonable cause to
believe his conduct was unlawful. Section 145(b) of the Law provides similarly
where the proceeding is by or in the right of the corporation to procure a
judgment in its favor. Section 145(g) of the Law allows a corporation to
maintain insurance on behalf of any officer or director against any liability
incurred by him in such capacity, whether or not the corporation would have the
power to indemnify him against such liability under the Law. Registrant
maintains such directors and officers liability insurance coverage.
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Each of Registrant's directors has entered into an indemnity agreement
with Registrant which (i) confirms the indemnity set forth in the By-laws and
gives assurances that such indemnity will continue to be provided despite any
By-law changes and (ii) provides, subject to certain conditions, that the
director shall be indemnified to the fullest possible extent permitted by law
against all expenses, judgments, fines and settlement amounts incurred or paid
by him in any proceeding.
As permitted by Section 102(b)(7) of the Law, Article VII of Registrant's
Certificate of Incorporation eliminates personal liability of any director to
Registrant and its stockholders for breach of the director's fiduciary duty of
care, except where the director has breached his duty of loyalty, acted in bad
faith, engaged in intentional or knowing misconduct, negligently or willfully
declared an improper dividend or effected an unlawful stock repurchase or
redemption, or obtained an improper personal benefit.
Item 8. Exhibits
4.0 Orion Capital Corporation Equity Incentive Plan
5.0 Opinion of Michael P. Maloney, Esq.
15.0 Letter in Lieu of Consent of Deloitte & Touche LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Michael P. Maloney, Esq. (incorporated in Exhibit 5)
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
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(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(ii) do not
apply if the Registration Statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall
be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the Town of Farmington, State of Connecticut, on this 10th day of
July, 1998.
ORION CAPITAL CORPORATION
By: /S/W. Marston Becker
W. Marston Becker
Chairman of the Board and
Chief Executive Officer of the Company
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Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date or dates indicated:
Signature Title Date
/S/ W. Marston Becker
W. Marston Becker Chairman of the Board and Chief July 10, 1998
Executive Officer of the Company
/S/ Donald W. Ebbert, Jr.
Donald W. Ebbert, Jr. Executive Vice President and July 10, 1998
Chief Financial Officer
/S/ Gordon F. Cheesbrough
Gordon F. Cheesbrough Director July 10, 1998
/S/ John C. Colman
John C. Colman Director July 10, 1998
/S/ David H. Elliott
David H. Elliott Director July 10, 1998
/S/ Victoria R. Fash
Victoria R. Fash Director July 10, 1998
/S/ Robert H. Jeffrey
Robert H. Jeffrey Director July 10, 1998
/S/ Gordon W. Kreh
Gordon W. Kreh Director July 10, 1998
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Warren R. Lyons Director
James K. McWilliams Director
/S/ Ronald W. Moore
Ronald W. Moore Director July 10, 1998
/S/ William W. Weaver
William W. Weaver Director July 10, 1998
ORION CAPITAL CORPORATION
EQUITY INCENTIVE PLAN
Section 1. Purpose of the Plan
The purpose of the Orion Capital Corporation Equity Incentive Plan
(the "Plan") is to further the interests of Orion Capital Corporation (the
"Company") and its shareholders by providing long-term performance incentives to
those key employees of the Company and its Subsidiaries who are largely
responsible for the management, growth and protection of the business of the
Company and its Subsidiaries.
Section 2. Definitions
For purposes of the Plan, the following terms shall be defined as
set forth below:
(a) "Award" means any Option, Performance Unit, SAR (including a Limited
SAR), Restricted Stock, Stock granted as a bonus or in lieu of other awards,
other Stock-Based Award, Tax Bonus or other cash payments granted to a
Participant under the Plan.
(b) "Award Agreement" shall mean the written agreement, instrument or
document evidencing an Award.
(c) "Change of Control" means and includes each of the following: (i) the
acquisition, in one or more transactions, of beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) by any person or entity or any
group of persons or entities who constitute a group (within the meaning of
Section 13(d)(3) of the Exchange Act), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or a
Subsidiary, of any securities of the Company such that, as a result of such
acquisition, such person, entity or group either (A) beneficially owns (within
the meaning of Rule l3d-3 under the Exchange Act), directly or indirectly, more
than 20% of the Company's outstanding voting securities entitled to vote on a
regular basis for a majority of the members of the Board of Directors of the
Company or (B) otherwise has the ability to elect, directly or indirectly, a
majority of the members of the Board; (ii) a change in the composition of the
Board of Directors of the Company such that a majority of the members of the
Board of Directors of the Company are not Continuing Directors; or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80% of the
total voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or
the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of (in one or
more transactions) all or substantially all of the Company's assets.
Notwithstanding the foregoing, the preceding events shall not be
deemed to be a Change of Control if, prior to any transaction or transactions
causing such change, a majority of the Continuing Directors shall have voted not
to treat such transaction or transactions as resulting in a Change of Control.
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(d) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(e) A "Continuing Director" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board on the effective date of the Plan or (ii) was nominated for election or
elected to such Board with the affirmative vote of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.
(f) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
(g) "Fair Market Value" means, with respect to Stock, Awards, or other
property, the fair market value of such Stock, Awards, or other property
determined by such methods or procedures as shall be established from time to
time by the Committee in good faith and in accordance with applicable law.
Unless otherwise determined by the Committee, the Fair Market Value of Stock
shall mean the mean of the high and low sales prices of Stock on the relevant
date as reported on the stock exchange or market on which the Stock is primarily
traded, or if no sale is made on such date, then the Fair Market Value is the
weighted average of the mean of the high and low sales prices of the Stock on
the next preceding day and the next succeeding day on which such sales were
made, as reported on the stock exchange or market on which the Stock is
primarily traded.
(h) "ISO" means any Option designated as an incentive stock option within
the meaning of Section 422 of the Code.
(i) "Limited SAR" means an SAR exercisable only for cash upon a Change of
Control or other event, as specified by the Committee.
(j) "Option" means a right granted to a Participant pursuant to Section
6(b) to purchase Stock at a specified price during specified time periods. An
Option may be either an ISO or a nonstatutory Option (an Option not designated
as an ISO).
(k) "Performance Unit" means a right granted to a Participant pursuant to
Section 6(c) to receive a payment in cash equal to the increase in the book
value of the Company during specified time periods if specified performance
goals are met.
(l) "Restricted Stock" means Stock awarded to a Participant pursuant to
Section 6(d) that may be subject to certain restrictions and to a risk of
forfeiture.
(m) "Stock-Based Award" means a right that may be denominated or payable
in, or valued in whole or in part by reference to the market value of, Stock,
including, but not limited to, any Option, SAR (including a Limited SAR),
Restricted Stock, Stock granted as a bonus or Awards in lieu of cash
obligations.
(n) "SAR" or "Stock Appreciation Right" means the right
granted to a Participant pursuant to Section 6(e) to be paid an amount measured
by the appreciation in the Fair Market Value of Stock from the date of grant to
the date of exercise of the right, with payment to be made in cash, Stock or as
specified in the Award, as determined by the Committee.
(o) "Subsidiary" shall mean any corporation, partnership, joint venture or
other business entity of which 50% or more of the outstanding voting power is
beneficially owned, directly or indirectly, by the Company.
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(p) "Tax Bonus" means a payment in cash in the year in which an amount is
included in the gross income of a Participant in respect of an Award of an
amount equal to the federal, foreign, if any, and applicable state and local
income and employment tax liabilities payable by the Participant as a result of
(i) the amount included in gross income in respect of the Award and (ii) the
payment of the amount in clause (i) and the amount in this clause (ii). For
purposes of determining the amount to be paid to the Participant pursuant to the
preceding sentence, the Participant shall be deemed to pay federal, foreign, if
any, and state and local income taxes at the highest marginal rate of tax
imposed upon ordinary income for the year in which an amount in respect of the
Award is included in gross income, after giving effect to any deductions
therefrom or credits available with respect to the payment of any such taxes.
Section 3. Administration of the Plan
The Plan shall be administered by the Compensation Committee of the Board
of Directors of the Company (the "Committee"). No member of the Committee while
serving as such shall be eligible for participation in the Plan. Any action of
the Committee in administering the Plan shall be final, conclusive and binding
on all persons, including the Company, its Subsidiaries, employees,
Participants, persons claiming rights from or through Participants and
stockholders of the Company.
Subject to the provisions of the Plan, the Committee shall have full
and final authority in its discretion (a) to select the key employees who will
receive Awards pursuant to the Plan ("Participants"), (b) to determine the type
or types of Awards to be granted to each Participant, (c) to determine the
number of shares of Stock to which an Award will relate, the terms and
conditions of any Award granted under the Plan (including, but not limited to,
restrictions as to transferability or forfeiture, exercisability or settlement
of an Award and waivers or accelerations thereof, and waivers of or
modifications to performance conditions relating to an Award, based in each case
on such considerations as the Committee shall determine) and all other matters
to be determined in connection with an Award; (d) to determine whether, to what
extent, and under what circumstances an Award may be settled, or the exercise
price of an Award may be paid, in cash, Stock, other Awards or other property,
or an Award may be cancelled, forfeited, or surrendered; (e) to determine
whether, and to certify that, performance goals to which the settlement of an
Award is subject are satisfied; (f) to correct any defect or supply any omission
or reconcile any inconsistency in the Plan, and to adopt, amend and rescind such
rules and regulations as, in its opinion, may be advisable in the administration
of the Plan; and (g) to make all other determinations as it may deem necessary
or advisable for the administration of the Plan. The Committee may delegate to
officers or managers of the Company or any Subsidiary or to unaffiliated service
providers the authority, subject to such terms as the Committee shall determine,
to perform administrative functions and to perform such other functions as the
Committee may determine, to the extent permitted under Rule 16b-3, Section
162(m) of the Code and applicable law.
Section 4. Participation in the Plan
Participants in the Plan shall be selected by the Committee from
among the key employees of the Company and its Subsidiaries.
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Section 5. Plan Limitations; Shares Subject to the Plan
(a) Subject to the provisions of Section 8(a) hereof, the aggregate number
of shares of common stock, $1.00 par value, of the Company (the "Stock")
available for issuance as Awards under the Plan shall not exceed 700,000 shares.
No Award may be granted if the number of shares to which such Award
relates, when added to the number of shares previously issued under the Plan and
the number of shares which may then be acquired pursuant to other outstanding,
unexercised Awards, exceeds the number of shares available for issuance pursuant
to the Plan. If any shares subject to an Award are forfeited or such Award is
settled in cash or otherwise terminates for any reason whatsoever without an
actual distribution of shares to the Participant, any shares counted against the
number of shares available for issuance pursuant to the Plan with respect to
such Award shall, to the extent of any such forfeiture, settlement, or
termination, again be available for Awards under the Plan; provided, however,
that the Committee may adopt procedures for the counting of shares relating to
any Award to ensure appropriate counting, avoid double counting, and provide for
adjustments in any case in which the number of shares actually distributed
differs from the number of shares previously counted in connection with such
Award.
(b) Subject to the provisions of Section 8(a) hereof, the aggregate number
of Performance Units which may be awarded under the Plan shall not exceed
350,000. If any Performance Units awarded under the Plan shall be forfeited or
cancelled, such Performance Units shall thereafter be available for award under
the Plan.
Section 6. Awards
(a) General. Awards may be granted on the terms and conditions set forth
in this Section 6. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 8(a)),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall determine, including terms requiring forfeiture
of Awards in the event of termination of employment by the Participant;
provided, however, that the Committee shall retain full power to accelerate or
waive any such additional term or condition as it may have previously imposed.
All Awards shall be evidenced by an Award Agreement.
(b) Options. The Committee may grant Options to Participants on the
following terms and conditions:
(i) Exercise Price. The exercise price of each Option shall be
determined by the Committee at the time the Option is granted, but (except as
provided in Section 7(a)) the exercise price of any Option shall not be less
than the Fair Market Value of the shares covered thereby at the time the Option
is granted.
(ii) Time and Method of Exercise. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part, whether
the exercise price shall be paid in cash or by the surrender at Fair Market
Value of Stock, or by any combination of cash and shares of Stock, including,
without limitation, cash, Stock, other Awards, or other property (including
notes or other contractual obligations of Participants to make payment on a
deferred basis, such as through "cashless exercise" arrangements, to the extent
permitted by applicable law), and the methods by which Stock will be delivered
or deemed to be delivered to Participants.
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(iii) Incentive Stock Options. The terms of any Option granted under
the Plan as an ISO shall comply in all respects with the provisions of Section
422 of the Code, including, but not limited to, the requirement that no ISO
shall be granted more than ten years after the effective date of the Plan.
(c) Performance Units. The Committee is authorized to grant Performance
Units to Participants on the following terms and conditions:
(i) Performance Criteria and Period. At the time it makes an award
of Performance Units, the Committee shall establish both the performance goal or
goals and the performance period or periods applicable to the Performance Units
so awarded. A performance goal shall be a goal, expressed in terms of growth in
book value, earnings per share, return on equity or any other financial or other
measurement deemed appropriate by the Committee, or may relate to the results of
operations or other measurable progress of either the Company as a whole or the
Participant's Subsidiary, division or department. The performance period will be
the period of time over which one or more of the performance goals must be
achieved, which may be of such length as the Committee, in its discretion, shall
select. Neither the performance goals nor the performance periods need be
identical for all Performance Units awarded at any time or from time to time.
The Committee shall have the authority, in its discretion, to accelerate the
time at which any performance period will expire or waive or modify the
performance goals of any Participant or Participants. The Committee may also
make such adjustments, to the extent it deems appropriate, to the performance
goals for any Performance Units awarded to compensate for, or to reflect, any
material changes which may have occurred in accounting practices, tax laws,
other laws or regulations, the financial structure of the Company, acquisitions
or dispositions of business or Subsidiaries or any unusual circumstances outside
of management's control which, in the sole judgment of the Committee, alters or
affects the computation of such performance goals or the performance of the
Company or any relevant Subsidiary, division or department.
(ii) Value of Performance Units. The value of each Performance Unit
at any time shall equal the book value per share of the Company's Stock, as such
value appears on the consolidated balance sheet of the Company as of the end of
the fiscal quarter immediately preceding the date of valuation.
(d) Restricted Stock. The Committee is authorized to grant Restricted
Stock to Participants on the following terms and conditions:
(i) Restricted Period. Restricted Stock awarded to a Participant
shall be subject to such restrictions on transferability and other restrictions
for such periods as shall be established by the Committee, in its discretion, at
the time of such Award, which restrictions may lapse separately or in
combination at such times, under such circumstances, or otherwise, as the
Committee may determine.
(ii) Forfeiture. Restricted Stock shall be forfeitable to the
Company upon termination of employment during the applicable restricted periods.
The Committee, in its discretion, whether in an Award Agreement or anytime after
an Award is made, may accelerate the time at which restrictions or forfeiture
conditions will lapse or remove any such restrictions, including upon death,
disability or retirement, whenever the Committee determines that such action is
in the best interests of the Company
(iii) Certificates for Stock. Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Stock are registered in the name of the
Participant, such certificates may bear an appropriate legend referring to the
terms, conditions and restrictions applicable to such Restricted Stock.
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(iv) Rights as a Shareholder. Subject to the terms and conditions of
the Award Agreement, the Participant shall have all the rights of a stockholder
with respect to shares of Restricted Stock awarded to him or her, including,
without limitation, the right to vote such shares and the right to receive all
dividends or other distributions made with respect to such shares. If any such
dividends or distributions are paid in Stock, the Stock shall be subject to
restrictions and a risk of forfeiture to the same extent as the Restricted Stock
with respect to which the Stock has been distributed.
(e) Stock Appreciation Rights. The Committee is authorized to grant SARs
to Participants on the following terms and conditions:
(i) Right to Payment. An SAR shall confer on the Participant to whom
it is granted a right to receive, upon exercise thereof, the excess of (A) the
Fair Market Value of one share of Stock on the date of exercise over (B) the
grant price of the SAR as determined by the Committee as of the date of grant of
the SAR, which grant price (except as provided in Section 7(a)) shall not be
less than the Fair Market Value of one share of Stock on the date of grant.
(ii) Other Terms. The Committee shall determine the time or times at
which an SAR may be exercised in whole or in part, the method of exercise,
method of settlement, form of consideration payable in settlement, method by
which Stock will be delivered or deemed to be delivered to Participants, whether
or not an SAR shall be in tandem with any other Award, and any other terms and
conditions of any SAR. Limited SARs may be granted on such terms, not
inconsistent with this Section 6(e), as the Committee may determine. Limited
SARs may be either freestanding or in tandem with other Awards.
(f) Bonus Stock and Awards in Lieu of Cash Obligations. The Committee is
authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu
of Company or Subsidiary obligations to pay cash or deliver other property under
other plans or compensatory arrangements; provided that, in the case of
Participants subject to Section 16 of the Exchange Act, such cash amounts are
determined under such other plans in a manner that complies with applicable
requirements of Rule 16b-3 so that the acquisition of Stock or Awards hereunder
shall be exempt from Section 16(b) liability. Stock or Awards granted hereunder
shall be subject to such other terms as shall be determined by the Committee.
(g) Other Stock-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to Participants such other
Stock-Based Awards in addition to those provided in Sections 6(b) and (d)
through (e) hereof, as deemed by the Committee to be consistent with the
purposes of the Plan. The Committee shall determine the terms and conditions of
such Awards. Stock delivered pursuant to an Award in the nature of a purchase
right granted under this Section 6(g) shall be purchased for such consideration
and paid for at such times, by such methods, and in such forms, including,
without limitation, cash, Stock, other Awards, or other property, as the
Committee shall determine.
(h) Cash Payments. The Committee is authorized, subject to limitations
under applicable law, to grant to Participants Tax Bonuses and other cash
payments, whether awarded separately or as a supplement to any Stock-Based
Award. The Committee shall determine the terms and conditions of such Awards.
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Section 7. Additional Provisions Applicable to Awards
(a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee, be granted either alone
or in addition to, in tandem with, or in substitution for, any other Award
granted under the Plan or any award granted under any other plan of the Company
or any Subsidiary, or any business entity acquired by the Company or any
Subsidiary, or any other right of a Participant to receive payment from the
Company or any Subsidiary. If an Award is granted in substitution for another
Award or award, the Committee shall require the surrender of such other Award or
award in consideration for the grant of the new Award. Awards granted in
addition to, or in tandem with other Awards or awards may be granted either as
of the same time as, or a different time from, the grant of such other Awards or
awards. The per share exercise price of any Option, grant price of any SAR, or
purchase price of any other Award conferring a right to purchase Stock:
(i) granted in substitution for an outstanding Award or award, shall
be not less than the lesser of (A) the Fair Market Value of a share of Stock at
the date such substitute Award is granted or (B) such Fair Market Value at that
date, reduced to reflect the Fair Market Value at that date of the Award or
award required to be surrendered by the Participant as a condition to receipt of
the substitute Award; or
(ii) retroactively granted in tandem with an outstanding Award or
award, shall not be less than the lesser of the Fair Market Value of a share of
Stock at the date of grant of the later Award or at the date of grant of the
earlier Award or award.
(b) Exchange and Buy Out Provisions. The Committee may at any time offer
to exchange or buy out any previously granted Award for a payment in cash,
Stock, other Awards (subject to Section 7(a)), or other property based on such
terms and conditions as the Committee shall determine and communicate to a
Participant at the time that such offer is made.
(c) Performance Conditions. The right of a Participant to exercise or
receive a grant or settlement of any Award, and the timing thereof, may be
subject to such performance conditions as may be specified by the Committee.
(d) Term of Awards. The term of each Award shall, except as provided
herein, be for such period as may be determined by the Committee; provided,
however, that in no event shall the term of any ISO, or any SAR granted in
tandem therewith, exceed a period of ten years from the date of its grant (or
such shorter period as may be applicable under Section 422 of the Code).
(e) Form of Payment. Subject to the terms of the Plan and any applicable
Award Agreement, payments or transfers to be made by the Company or a Subsidiary
upon the grant or exercise of an Award may be made in such forms as the
Committee shall determine, including, without limitation, cash, Stock, other
Awards, or other property (and may be made in a single payment or transfer, in
installments, or on a deferred basis), in each case determined in accordance
with rules adopted by, and at the discretion of, the Committee. (Such payments
may include, without limitation, provisions for the payment or crediting of
reasonable interest on installments or deferred payments.) The Committee, in its
discretion, may accelerate any payment or transfer upon a change in control as
defined by the Committee. The Committee may also authorize payment upon the
exercise of an Option by net issuance or other cashless exercise methods.
<PAGE>
(f) Loan Provisions. With the consent of the Committee, and subject at all
times to laws and regulations and other binding obligations or provisions
applicable to the Company, the Company may make, guarantee, or arrange for a
loan or loans to a Participant with respect to the exercise of any Option or
other payment in connection with any Award, including the payment by a
Participant of any or all federal, state, or local income or other taxes due in
connection with any Award. Subject to such limitations, the Committee shall have
full authority to decide whether to make a loan or loans hereunder and to
determine the amount, terms, and provisions of any such loan or loans, including
the interest rate to be charged in respect of any such loan or loans, whether
the loan or loans are to be with or without recourse against the borrower, the
terms on which the loan is to be repaid and the conditions, if any, under which
the loan or loans may be forgiven.
(g) Awards to Comply with Section 162(m). The Committee may (but is not
required to) grant an Award pursuant to the Plan to a Participant who, in the
year of grant, may be a "covered employee," within the meaning of Section 162(m)
of the Code, which is intended to qualify as "performance-based compensation"
under Section 162(m) of the Code (a "Performance-Based Award"). The right to
receive a Performance-Based Award, other than Options and SARs granted at not
less than Fair Market Value, shall be conditional upon the achievement of
performance goals established by the Committee in writing at the time such
Performance-Based Award is granted. Such performance goals, which may vary from
Participant to Participant and Performance-Based Award to Performance-Based
Award, shall be based upon the attainment by the Company or any Subsidiary,
division or department of specific amounts of, or increases in, one or more of
the following, any of which may be measured either in absolute terms or as
compared to another company or companies: revenues, earnings, cash flow, net
worth, book value, stockholders' equity, financial return ratios, market
performance or total stockholder return, and/or the completion of certain
business or capital transactions. Before any compensation pursuant to a
Performance-Based Award is paid, the Committee shall certify in writing that the
performance goals applicable to the Performance-Based Award were in fact
satisfied.
The maximum amount which may be granted as Performance-Based Awards
to any Participant in any calendar year shall not exceed (i) Stock-Based Awards
for 100,000 shares of Stock (whether payable in cash or stock), subject to
adjustment as provided in Section 8(a) hereof, (ii) 100,000 Performance Units,
(iii) a Tax Bonus payable with respect to the Stock-Based Awards described in
clause (i) and Performance Units described in clause (ii), and (iv) cash
payments (other than Tax Bonuses) of $1,000,000.
(h) Change of Control. In the event of a Change of Control of the Company,
all Awards granted under the Plan (including Performance-Based Awards) that are
still outstanding and not yet vested or exercisable or which are subject to
restrictions shall become immediately 100% vested in each Participant or shall
be free of any restrictions, as of the first date that the definition of Change
of Control has been fulfilled, and shall be exercisable for the remaining
duration of the Award. All Awards that are exercisable as of the effective date
of the Change of Control will remain exercisable for the remaining duration of
the Award.
Section 8. Adjustments upon Changes in Capitalization;
Acceleration in Certain Events
(a) In the event that the Committee shall determine that any stock
dividend, recapitalization, forward split or reverse split, reorganization,
merger, consolidation, spin-off, combination, repurchase or share exchange, or
other similar corporate transaction or event, affects the Stock or the book
value of the Company such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of Participants under the Plan, then the
<PAGE>
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and kind of shares of Stock which may thereafter be issued in
connection with Awards, (ii) the number and kind of shares of Stock issuable in
respect of outstanding Awards, (iii) the aggregate number and kind of shares of
Stock available under the Plan, (iv) the number of Performance Units which may
thereafter be granted and the book value of the Company with respect to
outstanding Performance Units, and (v) the exercise price, grant price, or
purchase price relating to any Award or, if deemed appropriate, make provision
for a cash payment with respect to any outstanding Award; provided, however, in
each case, that no adjustment shall be made which would cause the Plan to
violate Section 422(b)(1) of the Code with respect to ISOs or would adversely
affect the status of a Performance-Based Award as "performance-based
compensation" under Section 162(m) of the Code.
(b) In addition, the Committee is authorized to make adjustments in the
terms and conditions of, and the criteria included in, Awards in recognition of
unusual or nonrecurring events (including, without limitation, events described
in the preceding paragraph) affecting the Company or any Subsidiary, or in
response to changes in applicable laws, regulations, or accounting principles.
Notwithstanding the foregoing, no adjustment shall be made in any outstanding
Performance-Based Awards to the extent that such adjustment would adversely
affect the status of that Performance-Based Award as "performance-based
compensation" under Section 162(m) of the Code.
Section 9. General Provisions
(a) Changes to the Plan and Awards. The Board of Directors of the Company
may amend, alter, suspend, discontinue, or terminate the Plan or the Committee's
authority to grant Awards under the Plan without the consent of the Company's
stockholders or Participants, except that any such amendment, alteration,
suspension, discontinuation, or termination shall be subject to the approval of
the Company's stockholders within one year after such Board action if such
stockholder approval is required by any federal or state law or regulation or
the rules of any stock exchange or automated quotation system on which the Stock
may then be listed or quoted, and the Board may otherwise, in its discretion,
determine to submit other such changes to the Plan to the stockholders for
approval; provided, however, that without the consent of an affected
Participant, no amendment, alteration, suspension, discontinuation, or
termination of the Plan may materially and adversely affect the rights of such
Participant under any Award theretofore granted and any Award Agreement relating
thereto. The Committee may waive any conditions or rights under, or amend,
alter, suspend, discontinue, or terminate, any Award theretofore granted and any
Award Agreement relating thereto; provided, however, that without the consent of
an affected Participant, no such amendment, alteration, suspension,
discontinuation, or termination of any Award may materially and adversely affect
the rights of such Participant under such Award.
The foregoing notwithstanding, any performance condition specified
in connection with an Award shall not be deemed a fixed contractual term, but
shall remain subject to adjustment by the Committee, in its discretion at any
time in view of the Committee's assessment of the Company's strategy,
performance of comparable companies, and other circumstances, except to the
extent that any such adjustment to a performance condition would adversely
affect the status of a Performance-Based Award as "performance-based
compensation" under Section 162(m) of the Code.
Notwithstanding the foregoing, if the Plan is ratified by the
stockholders of the Company at the Company's 1997 Annual Meeting of
Stockholders, then unless approved by the stockholders of the Company, no
amendment will: (i) change the class of persons eligible to receive Awards; (ii)
materially increase the benefits accruing to Participants under the Plan, or
(iii) increase the number of shares of Stock or the number
<PAGE>
of Performance Units subject to the Plan.
(b) No Right to Award or Employment. No employee or other person shall
have any claim or right to receive an Award under the Plan. Neither the Plan nor
any action taken hereunder shall be construed as giving any employee any right
to be retained in the employ of the Company or any Subsidiary.
(c) Taxes. The Company or any Subsidiary is authorized to withhold from
any Award granted, any payment relating to an Award under the Plan, including
from a distribution of Stock or any payroll or other payment to a Participant
amounts of withholding and other taxes due in connection with any transaction
involving an Award, and to take such other action as the Committee may deem
advisable to enable the Company and Participants to satisfy obligations for the
payment of withholding taxes and other tax obligations relating to any Award.
This authority shall include authority to withhold or receive Stock or other
property and to make cash payments in respect thereof in satisfaction of a
Participant's tax obligations.
(d) Limits on Transferability; Beneficiaries. No Award or other right or
interest of a Participant under the Plan shall be pledged, encumbered, or
hypothecated to, or in favor of, or subject to any lien, obligation, or
liability of such Participants to, any party, other than the Company or any
Subsidiary, or assigned or transferred by such Participant otherwise than by
will or the laws of descent and distribution, and such Awards and rights shall
be exercisable during the lifetime of the Participant only by the Participant or
his or her guardian or legal representative. Notwithstanding the foregoing, the
Committee may, in its discretion, provide that Awards or other rights or
interests of a Participant granted pursuant to the Plan (other than an ISO) be
transferable, without consideration, to immediate family members (i.e.,
children, grandchildren or spouse), to trusts for the benefit of such immediate
family members and to partnerships in which such family members are the only
partners. The Committee may attach to such transferability feature such terms
and conditions as it deems advisable. In addition, a Participant may, in the
manner established by the Committee, designate a beneficiary (which may be a
person or a trust) to exercise the rights of the Participant, and to receive any
distribution, with respect to any Award upon the death of the Participant. A
beneficiary, guardian, legal representative or other person claiming any rights
under the Plan from or through any Participant shall be subject to all terms and
conditions of the Plan and any Award Agreement applicable to such Participant,
except as otherwise determined by the Committee, and to any additional
restrictions deemed necessary or appropriate by the Committee.
(e) No Rights to Awards; No Stockholder Rights. No Participant shall have
any claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Participants. No Award shall confer on any
Participant any of the rights of a stockholder of the Company unless and until
Stock is duly issued or transferred to the Participant in accordance with the
terms of the Award.
(f) Discretion. In exercising, or declining to exercise, any grant of
authority or discretion hereunder, the Committee may consider or ignore such
factors or circumstances and may accord such weight to such factors and
circumstances as the Committee alone and in its sole judgment deems appropriate
and without regard to the affect such exercise, or declining to exercise such
grant of authority or discretion, would have upon the affected Participant, any
other Participant, any employee, the Company, any Subsidiary, any stockholder or
any other person.
<PAGE>
(g) Effective Date. The effective date of the Plan is September 11, 1996.
(h) Shareholder Approval. Unless and until the Plan is approved by the
stockholders of the Company at the Company's 1997 Annual Meeting of
Stockholders, no Stock-Based Award may be granted to any officer of the Company.
EXHIBIT 5
[LETTERHEAD OF MICHAEL P. MALONEY, ESQ.]
June 30, 1998
Orion Capital Corporation
9 Farm Springs Road
Farmington, CT 06032
Orion Capital Corporation:
In connection with the Registration Statement on Form S-8 relating to
1,400,000 shares of Common Stock, (par value $1.00 per share) (the "Shares") of
Orion Capital Corporation ("Orion") under the Equity Incentive Plan (the
"Plan"), it is my opinion that:
1. Orion is duly incorporated and validly existing in good standing
under the laws of the State of Delaware.
2. All necessary corporate proceedings have been taken to authorize the
issuance of the Shares under the Plan, and all such Shares, upon
issuance in accordance with the Plan and upon full payment in cash
for such Shares issued, will be validly issued and outstanding and
fully paid and non-assessable.
In preparing this opinion, I have examined certificates of public
officials, certificates of officers and copies certified to my satisfaction of
such corporate documents and records of Orion and such other papers as I have
thought relevant and necessary as a basis for my opinion. I have relied on such
certificates in connection with the accuracy of actual matters contained in such
documents which were not independently established.
I consent to the use of this opinion in the Registration Statement and to
the reference to my name under the heading "Legal Opinion" in the Prospectus. In
giving such consent, I do not admit that I come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, or the
Rules and Regulations of the Securities and Exchange Commission.
Very truly yours,
/s/ Michael P. Maloney
----------------------------
Michael P. Maloney
Senior Vice President,
General Counsel and
Secretary
EXHIBIT 15
July 10, 1998
Orion Capital Corporation
9 Farm Springs Road
Farmington, CT 06032
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited interim
financial information of Orion Capital Corporation and subsidiaries for the
period ended March 31, 1998 and 1997, as indicated in our report dated April 30,
1998; because we did not perform an audit, we expressed no opinion on that
information.
We are aware that our report referred to above, which was included in your
Quarterly Report on Form 10-Q for the quarter ended March 31, 1998 is being used
in this Registration Statement on Form S-8.
We are also aware that the aforementioned report, pursuant to Rule 436(c)
under the Securities Act, is not considered a part of the Registration Statement
prepared or certified by an accountant or a report prepared or certified by an
accountant within the meaning of Sections 7 and 11 of that Act.
Deloitte & Touche LLP
Hartford, Connecticut
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Orion Capital Corporation on Form S-8 of our report dated February
11, 1998 appearing in the Annual Report on Form 10-K of Orion Capital
Corporation for the year ended December 31, 1997.
Deloitte & Touche LLP
Hartford, Connecticut
July 10, 1998