Exhibit 10(k)


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                                 TRUST AGREEMENT


                                     BETWEEN


                      EMPIRE INSURANCE COMPANY, AS GRANTOR,


                                       AND

                DEUTSCHE BANK TRUST COMPANY AMERICAS, AS TRUSTEE


                          DATED AS OF JANUARY 31, 2003





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                                 TRUST AGREEMENT

           THIS TRUST AGREEMENT, dated as of January 31, 2003 (the "AGREEMENT"),
is by and between EMPIRE INSURANCE COMPANY, a New York domiciled insurer
("GRANTOR") and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking
corporation (the "TRUSTEE"). The Grantor and the Trustee are hereinafter each
sometimes referred to individually as a "PARTY" and collectively as the
"PARTIES".

                              W I T N E S S E T H:

           WHEREAS, the Grantor desires to convey assets ("ASSETS") to the
Trustee for deposit to a trust account (the "TRUST ACCOUNT") established and
maintained in accordance with the terms of this Agreement in an amount
sufficient to provide for payment of its Retention Bonus and/or Severance
Obligations (as defined in section 13, hereof) with respect to its Employees;
and

           WHEREAS, the Trust is established for the benefit of certain
Beneficiaries, each of which is currently an employee of the Grantor and is
potentially entitled to the payment of salary, Retention Bonus and Severance
Obligations in accordance with Retention Letters sent to certain Beneficiaries
or in accordance with the Grantor's severance program as defined in the
Grantor's Employee Handbook; and

           WHEREAS, the Trustee has agreed to act as Trustee hereunder, and to
accept, hold and release the Assets and/or the proceeds thereof, in accordance
with the terms of this Agreement; and

           WHEREAS, this Agreement is made for the benefit of the Beneficiaries
and for the purpose of setting forth the duties and powers of the Trustee and
the rights of the Grantor and the Beneficiaries with respect to the Trust
Assets.

           NOW, THEREFORE, for and in consideration of the premises and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Parties hereby agree as follows:

           1. APPOINTMENT OF TRUSTEE; CONVEYANCE OF ASSETS

                     1.1 APPOINTMENT OF TRUSTEE. The Grantor hereby appoints and
authorizes Deutsche Bank to act as Trustee as provided herein and to exercise
such powers under this Agreement as are delegated to the Trustee by the terms
hereof, together with all such powers as are reasonably incidental thereto. The
Trustee hereby accepts such appointment and agrees to exercise such powers and
perform such functions from time to time as are specifically delegated to the
Trustee by the terms hereof.

                     1.2 ESTABLISHMENT OF TRUST ACCOUNT. The Grantor shall
establish the Trust Account with the Trustee and the Trustee shall administer
the Trust Account in its name as Trustee for the benefit of the Beneficiaries,
upon the terms and conditions set forth herein. The Trust Account shall be
subject to withdrawal only as expressly provided herein.


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                     1.3 CONVEYANCE OF ASSETS TO TRUSTEE. Concurrently with the
execution of this Trust Agreement, the Grantor shall transfer, assign, set-over,
and otherwise convey to the Trustee, for deposit into the Trust Account for the
benefit of the Beneficiaries, all right, title and interest of the Grantor in,
to and under Assets in the amount of $3,727,299 for Retention Bonus and/or
Severance Obligations estimated as of December 31, 2002, other than the
Grantor's reversionary interest in the Assets upon payment of all Retention
Bonus and/or Severance Obligations. The foregoing transfer, assignment, set-over
and conveyance is intended to vest title to the Assets in the Trustee.

           2. WITHDRAWAL OF TRUST ASSETS FROM TRUST ACCOUNT

                     2.1 BENEFICIARIES' RIGHTS TO WITHDRAW ASSETS. Each person
that is a Beneficiary shall have the right to withdraw from the Trust Account,
subject only to written notice from the Beneficiary to the Grantor and the
Trustee in the form annexed hereto as Exhibit A-1 or Exhibit A-2 (each of
Exhibit A-1 and Exhibit A-2 being referred to herein as a "WITHDRAWAL NOTICE")
and to the objection period set forth in Section 2.3 hereof, the Trust Assets
described in such Withdrawal Notice. A Withdrawal Notice may also designate a
third party (the "DESIGNEE") to whom Trust Assets specified therein shall be
delivered. The Beneficiary need present no statement or document to the Trustee
in addition to a Withdrawal Notice in order to withdraw any Trust Assets. Except
as provided in Sections 2.2, 4, 5 and 6 hereof, no person other than the
Beneficiary may direct a withdrawal of assets from the Trust Account.

                     2.2 GRANTOR'S RIGHT. The Grantor shall have the right, upon
presentation to the Trustee of a release (a "Release"), in the form annexed
hereto as Exhibit B-1 or B-2, or upon the expiration of twenty-two business days
from the Trustee's receipt of Termination Affidavits, as defined and described
in section 12 hereof, signed by two of the individuals whose names are included
in Exhibit E hereto, to withdraw, in respect of the Grantor's reversionary
interest in the Assets, Assets in the amount stated in such Release, provided,
however, that if the Trustee receives, within twenty business days from the
Trustee's receipt of such Termination Affidavits, written notice from any
Beneficiary described in such Termination Affidavits stating that such
Beneficiary disputes the Grantor's right to payment from the Trust Account, the
Trustee shall not permit the withdrawal (stated in the Termination Affidavits)
from the Trust Account until the Trustee receives a Final Order or Settlement
Agreement (each as defined in section 13, hereof), accompanied by a
certification from the party presenting such Final Order or Settlement Agreement
to the Trustee to the effect that the document presented is a Final Order or
Settlement Agreement, as the case may be, stating that such withdrawal is
permitted. In permitting any withdrawal described in this section 2.2, the
Trustee shall be completely protected in conclusively relying upon any two
Termination Affidavits, and any Release, Final Order or Settlement Agreement,
and on any related certification.

                     2.3 TRANSFER BY THE TRUSTEE. An objection, if any, by the
Grantor to the withdrawal of Assets stated in a Withdrawal Notice must be made
by the Grantor, in writing, to the Trustee and the Beneficiary on or before the
expiration of the twentieth business day after the Grantor's receipt of the
Withdrawal Notice. If no objection is made by the Grantor to the Withdrawal
Notice, the Trustee shall, no sooner than twenty two Business Days and no later
than twenty seven Business Days, after its receipt of a Withdrawal Notice, take
any and all steps to transfer absolutely and unequivocally all right, title, and


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interest in the Trust Assets specified in such Withdrawal Notice to, or for the
account of, the Beneficiary or such Designee as specified in such Withdrawal
Notice. The Trustee shall be protected in conclusively relying upon any written
demand of the Beneficiary for such withdrawal, including any Withdrawal Notice,
Final Order, Settlement Agreement and any related certification. In the event
that the Trustee receives timely objection by the Grantor to a Withdrawal
Notice, the Trustee shall retain the Assets described in the Withdrawal Notice
until the Grantor or the Beneficiary presents a Final Order or Settlement
Agreement (accompanied by the certification described in section 2.2 hereof),
each as defined in Section 13, hereof.

           3. APPLICATION OF TRUST ASSETS

                     3.1 WITHDRAWAL PURPOSES. Trust Assets may be withdrawn for
the following purposes only:

                  (a)   to pay pursuant to a Withdrawal Notice, or to reimburse
                        the Grantor pursuant to a Release (as described in
                        Section 4.1, below) for the payment of, Retention Bonus
                        and/or Severance Obligations to Retained Empire
                        Employees in accordance with the terms of a Retention
                        Letter or the provisions of the Grantor's Employee
                        Handbook relating to severance for employees of the
                        Grantor;

                  (b)   to release the Trust Assets to the Grantor in accordance
                        with Sections 4, 5 and 6, hereof;

provided, however, that the Trustee shall not permit any Withdrawal until the
Grantor has furnished to the Trustee an initial Beneficiary List in the form
described in section 3.2, hereof.

                     3.2 MAINTENANCE OF BENEFICIARY LIST. The Trustee shall
maintain a list of Beneficiaries (a "Beneficiary List"), which will be,
initially, in the form of the counterparts that are each designated as, and
considered as a whole to be, Exhibit C hereto, and which may be amended from
time to time in accordance with section 3.3 hereof, upon:

                  (a)   Receipt by the Trustee of written notification from the
                        Grantor that a Beneficiary (or Beneficiaries) should be
                        added to the Beneficiary List, or

                  (b)   Receipt by the Trustee of a Release, as described in
                        section 4.1 below, or a Termination Affidavit, as
                        described in section 2.2, above, indicating that the
                        Grantor's Retention Bonus and/or Severance Obligation
                        with respect to a Beneficiary has been fully satisfied
                        or otherwise terminated, eliminated or discharged.

                     3.3 REMOVAL OF BENEFICIARY FROM BENEFICIARY LIST. The
Trustee shall, subject to the resolution of any dispute described in section 2.2
hereof and the Trustee's receipt of a Final Order or Settlement Agreement
accompanied by an appropriate certification as described in Section 2.2 hereof,
remove a Beneficiary described in a Release or a Termination Affidavit received
by the Trustee in accordance with section 3.2 (b) from the Beneficiary List, and
such Beneficiary will cease to be a Beneficiary under this Agreement.


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                     3.4 CONFIDENTIALITY OF INFORMATION CONTAINED IN BENEFICIARY
LIST. With the exception of the names of individuals designated as Beneficiaries
on the Beneficiary List List and except as permitted in Sections 7.3 and 7.5
hereof, the information contained in the Beneficiary List, including, but not
limited to, the amount of the Grantor's Retention Bonus and/or Severance
Obligation owed or potentially owed to any individual Beneficiary or group of
Beneficiaries, shall be confidential and, notwithstanding any other provision of
this Agreement, shall not be revealed or disclosed by the Trustee to any
Beneficiary. Notwithstanding anything herein to the contrary, the foregoing
shall not be construed to prohibit (i) disclosure of any and all information
that is or becomes publicly known, (ii) disclosure of any and all information
(A) if required to do so by any applicable statute, law, rule or regulation, (B)
to any government agency or regulatory body having or claiming authority to
regulate or oversee any respects of the Trustee's business or that of its
affiliates, (C) Pursuant to any subpoena, civil investigative demand or similar
demand or request of any court, regulatory authority, arbitrator or arbitration
to which the Trustee or an affiliate or an officer, director, employer or
shareholder thereof is a party, (D) in any preliminary or final offering
circular, registration statement or contract or other document pertaining to the
transactions contemplated by the Agreement approved in advance by the Grantor or
(E) to any affiliate, independent or internal auditor, agent, employee or
attorney of the Trustee having a need to know the same, provided that the
Trustee receives approval from the Grantor and advises such recipient of the
confidential nature of the information being disclosed, or (iii) any other
disclosure authorized by Grantor and the relevant Beneficiaries as applicable.

                     3.5 LIMITATIONS ON THE TRUSTEE'S DUTIES. The Trustee shall
have no duty or responsibility whatsoever to determine that any Trust Assets
withdrawn from the Trust Account pursuant to Section 2 of this Agreement will be
used and applied in the manner provided by Section 3.1.

           4. RELEASE OF TRUST ASSETS FROM TRUST ACCOUNT

                     4.1 RELEASE OF TRUST ASSETS TO GRANTOR. The Trustee shall
release to the Grantor within ten Business Days of execution and delivery by the
Beneficiary or the Grantor to the Trustee of a Release, in the form annexed
hereto as Exhibit B-1 or B-2, indicating that the Grantor's Retention Bonus
and/or Severance Obligation with respect to the Beneficiary has been paid or in
part or in full by the Grantor, all or a portion of the Trust Assets equal to
the amount indicated in such Release.

                     4.2 GRANTOR'S RIGHT TO REVERSION. To the extent that the
Grantor has satisfied all Retention Bonus and/or Severance Obligations, or a
change in the existing applicable law eliminates all or a portion of the
Retention Bonus and/or Severance Obligations, the Grantor shall be entitled to
receive all Assets remaining in the Trust, upon the presentation to the Trustee
of a Release or a Termination Affidavit (or in the event of a dispute as
described in section 2.2 hereof a Final Order or a Settlement Agreement
resolving such dispute) with respect to the last remaining Beneficiary, or an
affidavit of the Grantor stating that all Beneficiaries' claims to Retention
Bonus and/or Severance Obligations have been eliminated.


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                     4.3 DELIVERY TO GRANTOR. The Trustee shall pay and deliver
Trust Assets to the Grantor by delivering such Assets in accordance with the
instructions stated in Section 14.6, hereof.

           5. REDEMPTION, INVESTMENT AND SUBSTITUTION OF ASSETS

                     5.1 SUBSTITUTIONS. From time to time, the Grantor may
direct the Trustee to substitute Eligible Securities of comparable Market Value
for other securities presently held in the Trust Account. The Trustee shall have
no responsibility whatsoever to determine the value of such substituted
securities or that such substituted securities constitute Eligible Securities.

                     5.2 INVESTMENT ORDERS. Any instruction or order concerning
an investment or substitution of securities shall be referred to herein as an
"Investment Order" and shall be in writing by the Grantor. The Trustee shall
have no obligation to invest and reinvest any cash held in the Trust Account in
the absence of timely and specific written Investment Orders from the Grantor.
The Trustee shall execute Investment Orders given by the Grantor and settle
securities transactions by itself or by means of an agent or broker. The Trustee
shall not be responsible for any act or omission unless said action is the
result, in whole or in part, of the Trustee's gross negligence, willful
misconduct or lack of good faith, nor shall the Trustee be responsible for any
loss resulting from the insolvency or bankruptcy of any such agent or broker.
The Trustee shall have no obligation to invest or reinvest the Trust Assets if
deposited with the Trustee after 11:00 a.m. (E.S.T.) on such day of deposit.
Investment Orders received after 11:00 a.m. (E.S.T.) will be treated as if
received on the following business day. The Trustee shall have no responsibility
for any investment losses resulting from the investment, reinvestment or
liquidation of the Trust Assets. Subject to the provisions of section 6, hereof,
any interest or other income received on such investment and reinvestment of the
Trust Assets shall become part of the Trust Assets and any losses incurred on
such investment and reinvestment of the Trust Assets shall be debited against
the Trust Assets. If a selection is not made and a written direction not given
to the Trustee, the Trust Assets shall remain uninvested with no liability for
interest therein. In no event shall the Trustee be liable for the selection of
investments or for investment losses incurred thereon. The trustee shall have no
liability in respect of losses incurred as a result of the failure of the
Grantor to provide timely written investment direction.

                     5.3 ADDITIONAL DEPOSITS. The Grantor may at any time after
the effective date of this Agreement assign, convey, transfer and deliver
Eligible Securities (in addition to those Eligible Securities delivered
initially to fund the Trust Account) to the Trustee for inclusion in the Trust
Account.

                     5.4 INVESTMENT LOSSES. Any loss incurred from any
investment pursuant to the terms of this Section 5 shall be borne exclusively by
the Trust Account.

                     5.5 MATURING TRUST ASSETS. The Trustee shall surrender for
payment all maturing Trust Assets and all Trust Assets called for redemption and
deposit the principal amount of the proceeds of any such payment into the Trust
Account.


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           6. DIVIDENDS, INTEREST AND OTHER INCOME

           All dividends, distributions, interest and other income resulting
from the Trust Assets shall be the property of the Grantor. To the extent that
the Trustee shall collect and receive such income from the Trust Assets, upon
request from the Grantor, it shall pay over the amount of such income to the
Grantor within 10 business days, provided, that if such day is not a day on
which banks in the State of New York are open, the Trustee shall pay over such
income on the next preceding banking day, and, provided, further, that the
Trustee shall have no obligation with respect to the collection of such income.

           7. ADDITIONAL RIGHTS AND DUTIES OF THE TRUSTEE

                     7.1 ACTION UPON INSTRUCTION. The Trustee shall accept
instructions from the Grantor and/or a Beneficiary in the forms described herein
and give such notice or direction, take such action, exercise such right, power
or remedy or perform such obligation under and pursuant to the terms of this
Agreement or in respect of all or any portion of the Trust Assets, as shall be
specified in such instructions. The Trustee shall also notify the Grantor of
deposits to, withdrawals from and substitutions in the Trust Account within ten
calendar days following the last day of each preceding month.

                     7.2 DEPOSIT OF ASSETS. The Trustee may deposit the Assets
consisting of securities or securities entitlements in a book-entry account
maintained at the Federal Reserve Bank of New York or in depositories such as
the Depository Trust Company. The Trustee may hold the Assets in its vaults or
may hold on deposit portions of the Assets with such depositories or
subcustodians that provide handling, clearance, or safekeeping services. The
Trustee shall be responsible for the selection of such agents subject to the
approval of the Grantor, but shall not be liable to the Grantor and the
Beneficiaries for the acts or omissions of such agents appointed with due care.
The Trustee will use the same care with respect to the safekeeping of the Assets
as it uses in respect of its own similar property.

                     7.3 MONTHLY REPORTS. The Trustee shall furnish to the
Grantor as of the date of the inception of the Trust Account, and at the end of
each calendar month thereafter, a written statement identifying in reasonable
detail the Trust Assets then on deposit in the Trust Account on the last day of
such calendar month. In the event that a Beneficiary or Beneficiaries make a
written request to the Trustee for a statement identifying the Trust Assets on
deposit in the Trust Account, the Trustee shall furnish such information to such
Beneficiary(ies) only upon the Trustee's receipt of written consent from the
Grantor, which consent is signed by two authorized signatories of the Grantor
named in the attached Exhibit E, to the release of a written statement in the
same form as is required herein to be furnished to the Grantor. In the event
that the Grantor does not provide such consent, the Trustee shall not furnish
information regarding the Trust Account and/or the Trust Assets to the
Beneficiary(ies).

                     7.4 TRANSFER OF TRUST ASSETS. Except as may otherwise be
expressly provided herein, the Trustee shall not have any power to sell, assign,
transfer, encumber, pledge, or grant any security interest in, or consent to the
placement of any lien upon or against the Trust Assets.


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                     7.5 AUDIT. Upon the written request of, and at the expense
of, the Grantor, the Trustee shall promptly permit the Grantor, its respective
agents, employees and independent auditors to examine, audit, excerpt,
transcribe, and copy, during the Trustee's normal business hours, any books,
documents, papers, and records relating to the Trust Account or the Trust
Assets. In the event that a Beneficiary or Beneficiaries make a written request
to the Trustee, the Trustee shall permit such Beneficiary(ies) to examine,
audit, excerpt, transcribe, and copy, during the Trustee's normal business
hours, any books, documents, papers, and records relating to the Trust Account
or the Trust Assets only upon the Trustee's receipt of written consent thereto
from the Grantor, which written consent is signed by two authorized signatories
of the Grantor named in the attached Exhibit E. In the event that the Grantor
does not provide such consent, the Trustee shall not furnish to the
Beneficiary(ies), or permit the examination or audit by the Beneficiary(ies) of,
information regarding the Trust Account and/or the Trust Assets.

                     7.6 RELIANCE UPON WRITTEN INSTRUCTIONS. The Trustee is
authorized to follow and conclusively rely upon all written instructions given,
in accordance with the terms of this Agreement, jointly by any two officers of
the Grantor named in Exhibit E, as amended and updated from time to time by the
Grantor, or a Beneficiary under the written authority furnished to the Trustee
by a Beneficiary, including without limitation, instructions given by letter or
facsimile transmission, if the Trustee believes such instructions to be genuine
and to have been signed by the proper party or parties, and the Trustee shall be
fully protected in acting or refraining from acting, as the case may be, in
accordance with such written instructions. The Trustee shall not incur any
liability to anyone resulting from actions taken by the Trustee in reliance in
good faith on such instructions. The Trustee shall not incur any liability in
executing instructions (i) from any attorney-in-fact or (ii) from any officer of
the Grantor or Beneficiary, named in an incumbency certificate delivered
hereunder prior to receipt by it of a more current certificate.

                     7.7 NO IMPLIED DUTIES. The duties and obligations of the
Trustee shall only be such as are specifically set forth in this Agreement, as
it may from time to time be amended, and no implied duties or obligations shall
be read into this Agreement against the Trustee. The Trustee shall be liable for
its own gross negligence, willful misconduct, or lack of good faith.

                     7.8 NO VIOLATION. No provision of this Agreement shall
require the Trustee to take any action, which in the Trustee's reasonable
judgment, would result in any violation of this Agreement, or any provision of
law.

                     7.9 NO LIABILITY. Notwithstanding anything in this
Agreement to the contrary, in no event shall the Trustee or any of its officers,
directors, employees or agents be liable under or in connection with this
Agreement for indirect, special, incidental, punitive or consequential losses or
damages of any kind whatsoever, whether or not foreseeable, even if the Trustee
has been advised of the possibility thereof and regardless of the form of action
in which such damages are sought. The Trustee shall not be responsible for the
existence, genuineness or value of the Trust Assets, whether impaired by
operation of law or by reason of any action or omission to act on its part
hereunder, except to the extent such action or omission constitutes gross
negligence, bad faith or willful misconduct on the part of the Trustee. The
Trustee shall not be responsible for the validity of title to the Trust Assets,
for insuring the Trust Assets or for the payment of taxes, charges assessments
or liens upon the Trust Assets. The Grantor (for itself and any person and/or


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entity claiming through it) hereby releases, waives, discharges, exculpates, and
covenants not to sue, the Trustee for any action taken or omitted to be taken in
accordance with the terms of this Agreement, except to the extent that such
action is caused by the Trustee's gross negligence, willful misconduct or lack
of good faith.

                     7.10 NO EXPENDITURES OF TRUSTEE'S FUNDS. None of the
provisions of this Agreement shall require the Trustee to expend or risk its own
funds or otherwise to incur any liability, financial or otherwise, in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or indemnity satisfactory to it.

                     7.11 RELIANCE ON ADVICE OF COUNSEL. The Trustee may consult
with counsel and the advice or any opinion of counsel shall be full and complete
authorization and protection in respect of any action taken or omitted by it
hereunder in good faith and in accordance with such advice or opinion of
counsel.

           8. COMPENSATION AND INDEMNIFICATION OF THE TRUSTEE

                     8.1 COMPENSATION. The Grantor shall pay the Trustee, as
compensation for its services under this Agreement, a fee computed at rates as
may be agreed to from time to time in writing between the Trustee and the
Grantor. The Grantor shall pay or reimburse the Trustee for all of the Trustee's
expenses and disbursements in connection with its duties under this Agreement
(including reasonable attorney's fees and expenses), except any such expense or
disbursement as may arise from the Trustee's gross negligence, willful
misconduct or lack of good faith. Notwithstanding anything contained herein to
the contrary, the Trustee shall be entitled to deduct its compensation and
expenses from payments of distributions, interest and other income in respect of
the Trust Assets prior to the delivery thereof to the Grantor, and shall have a
lien prior to the Beneficiaries on such Assets with respect to any amount
payable to the Trustee hereunder, provided the Trustee provides the Grantor with
advance written notice advising of such deduction.

                     8.2 INDEMNITY. The Grantor also hereby agrees to indemnify
the Trustee and its officers, directors, employees and agents for, and hold it
harmless from and against, any loss, liability, claims, obligations, damages,
injuries (to person, property, or natural resources), penalties, stamp, or other
similar taxes, action suits, judgments, costs or expenses (including reasonable
attorney's fees and expenses) of whatever kind or nature regardless of their
merit, demanded, asserted or claimed against the Trustee directly or indirectly
relating to, or arising out of, claims against the Trustee by reason of its
participation in the transactions contemplated hereby, including without
limitation all reasonable costs required to be associated with claims for
damages to persons or property, and reasonable attorneys' and consultants' fees
and expenses, court costs and any loss, liability, costs or expenses arising out
of or in connection with the role of the Trustee hereunder except to the extent
caused by the Trustee's gross negligence, will misconduct or lack of good faith.
The Grantor hereby acknowledges that the foregoing indemnities shall survive the
resignation or removal of the Trustee or the termination of this Agreement.


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           9. RESIGNATION AND REMOVAL OF THE TRUSTEE

                     9.1 RESIGNATION. The Trustee may resign at any time by
giving not less than sixty calendar days' advance written notice thereof to the
Grantor, which resignation shall be effective on the Effective Date (as defined
below).

                     9.2 REMOVAL. The Trustee may be removed by the Grantor
delivering to the Trustee at least sixty calendar days' advance written notice
of removal, signed by the Grantor, which removal shall be effective on the
Effective Date.

                     9.3 APPOINTMENT OF A SUCCESSOR TRUSTEE. Upon receipt by the
Grantor of the notice of resignation, or upon removal of the Trustee as provided
in Sections 9.1 and 9.2, the Grantor shall promptly appoint a successor trustee.
Any successor trustee shall (i) be a bank or trust company in good standing and
organized and doing business under the laws of the United States of America or
of any state thereof, (ii) be a member of the Federal Reserve System or
chartered in the State of New York, and (iii) not be a Parent, a Subsidiary or
Affiliate of the Grantor. Upon the acceptance of the appointment as trustee
hereunder by a successor trustee and the transfer to such successor trustee of
the Trust Assets, the resignation or removal of the Trustee shall become
effective (the "EFFECTIVE DATE") and the Grantor shall release the Trustee by
written instrument. Thereupon, such estate, rights, powers, privileges and
duties of the resigning or removed Trustee shall survive and continue in the
successor trustee, and the resigning or removed Trustee shall be discharged from
any future duties and obligations under this Agreement; provided however that
the resigning or removed Trustee shall continue after the Effective Date to be
entitled to the benefits of the indemnities provided herein for the Trustee. If
no successor Trustee has been appointed and been accepted within sixty days
after the giving by the existing Trustee of notice of resignation as described
in section 9.1 hereof, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.

                     9.4 MERGER OR CONSOLIDATION. Any corporation into which the
Trustee in its individual capacity may be merged or converted or with which it
may be consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee in its individual capacity shall be a party
or any corporation to which substantially the corporate trust business of the
Trustee in its individual capacity may be transferred, shall, subject to the
terms of this Section 10, be the Trustee under this Agreement without any
further action.

           10. TERMINATION

                     10.1 TERMINATION BY THE GRANTOR. The Trust Account and this
Agreement shall be effective until:

                  (a)   the satisfaction in full of all Retention Bonus and/or
                        Severance Obligations, provided, that, in the event that
                        a Beneficiary notifies the Trustee, which notification
                        must be in writing and be delivered simultaneously to
                        the Trustee and the Grantor, of a dispute regarding the
                        satisfaction of Retention Bonus and/or Severance
                        Obligations, the Trust Account and this Agreement shall
                        not terminate until receipt by the Trustee of a Final


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                        Order or Settlement Agreement as defined in section 13
                        hereof and accompanied by an appropriate certification
                        of the Grantor, indicating that the disputed Retention
                        Bonus and/or Severance Obligation has been satisfied.

                  (b)   payment and delivery by the Trustee of all Trust Assets
                        pursuant to Section 2.3, 4.1 or 4.2.

                     10.2 EFFECT OF TERMINATION. Upon termination of the Trust
Account the Trustee shall, transfer, pay over and deliver to the Grantor all of
the Trust Assets remaining in the Trust Account less all its proper fees and
expenses then owing in exchange for a written receipt from the Grantor. The
indemnities provided under this Agreement shall survive termination.

           11. REPRESENTATIONS AND WARRANTIES OF THE GRANTOR

           The Grantor hereby represents and warrants to the Trustee that:

                  (a)   This Agreement has been duly and validly executed and
                        delivered and constitutes the legal, valid, binding,
                        enforceable obligation of the Grantor; and

                  (b)   The execution, delivery and performance of this
                        Agreement and the transfer and conveyance of the Trust
                        Assets pursuant hereto, do not and will not (i) violate
                        or conflict with any of its charter documents or any
                        provisions of any law, rule, regulation, order, writ,
                        judgment, decree, determination or award presently in
                        effect having applicability to such party, or (ii)
                        result in a breach of, or constitute a default under,
                        any indenture, loan or credit agreement, or any other
                        agreement or instrument to which the Grantor is a party
                        or by which the Grantor may be bound or affected.

           The Grantor further represents and warrants that at the date of
delivery to the Trustee of the Trust Assets, the Trustee will then be the lawful
owner of, and will have good and marketable title to the Trust Assets, free and
clear of all liens.

           12. DEFINITIONS

           Except as the context shall otherwise require, the following terms
shall have the following meanings for all purposes of this Agreement (the
definitions to be applicable to both the singular and the plural forms of each
term defined if both such forms of such term are used in this Agreement):

           "BENEFICIARIES" shall mean the Retained Empire Employees named in the
           forms annexed hereto as Exhibit C hereto, and "BENEFICIARY" shall
           refer to any one of the Retained Empire Employees, individually, and
           shall include any successor of a Beneficiary by operation of law,
           including, without limitation, any liquidator, rehabilitator,
           receiver, conservator or lawful heir. Upon satisfaction of the


                                       11
<PAGE>
           Grantor's Retention Bonus and/or Severance Obligations to a
           Beneficiary, such person shall cease to be a beneficiary of this
           Agreement.

           "BUSINESS DAY" shall mean any day on which the offices of the Trustee
           in New York, New York are open for business.

           "ELIGIBLE SECURITIES" shall mean and include cash in U.S. dollars;
           fully insured certificates of deposit issued by a U.S. bank and
           payable in U.S. dollars; and obligations issued by or guaranteed by
           the United States Government.

           "FINAL ORDER" shall mean an order, decree, award, decision, or
           judgment from a court of competent jurisdiction, provided, however,
           that the Trustee shall have no duty or responsibility to determine
           the competency of a court, with respect to which rights of appeal
           have been exhausted, as certified by the party presenting such order
           to the Trustee, provided further, that the Trustee shall have no duty
           or responsibility to determine the veracity of such certification.

           "MARKET VALUE" shall mean, as of the time of any determination is to
           be made, (1) with respect to the Assets, the value of all assets in
           the Trust Account as of the last day of the preceding calendar
           quarter as determined by the Trustee.

           "PERSON" shall mean and include an individual, a corporation, a
           partnership, an association, a trust, an unincorporated organization
           or a government or political subdivision thereof.

           "RETAINED EMPIRE EMPLOYEES" shall mean, collectively, each of the
           addressees of the Retention Letters and/or employees of the Grantor
           entitled to severance in accordance with the terms of the Grantor's
           employee handbook, and such term used in singular form shall mean any
           such individual.

           "RETENTION BONUS" shall mean the amount due, or potentially due, from
           the Grantor to a Beneficiary, or if the context indicates that such
           term is used to refer to one or more persons, to Beneficiaries, under
           a Retention Letter, or, in reference to more than one Beneficiary,
           Retention Letters, offered by the Grantor to such Beneficiary (or
           Beneficiaries) in consideration of continued employment with the
           Grantor, as calculated in the Schedule annexed hereto as Exhibit D.
           "BUSINESS DAY" shall mean any day on which the offices of the Trustee
           in New York, New York are open for business.

           "RETENTION BONUS AND/OR SEVERANCE OBLIGATIONS" shall mean the total
           of the Grantor's obligations to a Beneficiary, or if the context
           indicates that such term is used to refer to one or more persons, to
           the Beneficiaries either under the Retention Letter(s) or pursuant to
           the severance policy established by the Grantor's employee handbook
           (such policy being subject to change based upon change to the
           applicable law), as calculated in the Schedule annexed hereto as
           Exhibit D. The aggregate amount of the Retention Bonus and/or
           Severance Obligations shall be reduced to the extent of Empire's
           payment, or the payment from the Trust, of amounts due under the
           Retention Letter(s) or pursuant to the severance policy established
           by the Grantor's employee handbook (such policy being subject to


                                       12
<PAGE>
           change based upon change in the applicable law), and may increase in
           accordance with the terms of certain of the Retention Letters.

           "RETENTION LETTER" shall mean a letter issued by Empire to one of the
           persons listed on the forms annexed hereto as Exhibit C, describing
           the salary, Retention Bonus and/or Severance offered to such persons.
           The plural form of this term shall have a corresponding meaning in
           reference to all such letters.

           "SETTLEMENT AGREEMENT" shall mean an agreement whereby a settlement
           has been made with the approval of the Grantor and the Beneficiary,
           which settles all the issues among them (the "Settled Issues"), and
           has been approved by the court, if any, before which the Settled
           Issues were pending, provided that, if the Settled Issues were not
           the subject of a court action and the party presenting the agreement
           to the Trustee also delivers a certification so stating, and,
           provided further that the Trustee shall have no duty or
           responsibility to determine the veracity of such certification, no
           court approval of the agreement shall be required.

           "SEVERANCE" shall refer to amount due, pursuant to the Grantor's
           employee handbook, to employees of the Grantor based upon the
           continued employment by such employees with the Grantor.

           "TERMINATION AFFIDAVIT" shall mean an affidavit of an authorized
           representative of the Grantor, in the form annexed hereto as
           Exhibit F.

           13. MISCELLANEOUS

                     13.1 GOVERNING LAW. This Agreement shall be subject to and
governed by the laws of the State of New York.

                     13.2 SUCCESSORS AND ASSIGNS. No Party may assign this
Agreement or any of its obligations hereunder without the prior written consent
of the other Parties; provided, however, that this Agreement will inure to the
benefit of and bind those who, by operation of law, become successors to the
Parties, including, without limitation, any liquidator, rehabilitator, receiver,
conservator, lawful heir and any successor merged or consolidated entity or
person, as the case may be, and provided further that, in the case of the
Trustee, the successor trustee is eligible to be a trustee under the terms
hereof.

                     13.3 SEVERABILITY. In the event that any provision of this
Agreement shall be declared invalid or unenforceable by any regulatory body or
court having jurisdiction, such invalidity or unenforceability shall not affect
the validity or enforceability of the remaining portions of this Agreement.

                     13.4 ENTIRE AGREEMENT. This Agreement (including any
Exhibits hereto) constitutes the entire agreement among the Parties, and there
are no understandings or agreements, conditions or qualifications relative to
this Agreement which are not fully expressed in this Agreement.


                                       13
<PAGE>
                     13.5 AMENDMENTS. This Agreement may be modified or
otherwise amended, and the observance of any term of this Agreement may be
waived, if such modification, amendment or waiver is in writing and signed by
all of the Parties; provided, that the Trustee shall not be obligated to enter
into any amendment which affects its own rights, duties or obligations
hereunder.

                     13.6 NOTICES. Unless otherwise provided in this Agreement,
all notices, directions, requests, demands, acknowledgments and other
communications required or permitted to be given or made under the terms hereof
shall be in writing and shall be deemed to have been duly given or made (a)(i)
when delivered personally, (ii) when made or given by prepaid telex, telegraph
or telecopier (with originals promptly to follow by mail), or (iii) in the case
of mail delivery, upon the expiration of three (3) business days after any such
notice, direction, request, demand, acknowledgment or other communication shall
have been deposited in the United States mail for transmission by first class
mail, postage prepaid, or upon receipt thereof, whichever shall first occur and
(b) when addressed as follows:

         If to the Grantor:     EMPIRE INSURANCE COMPANY
                                45 Main Street, Brooklyn, NY 11201
                                Attention:  Mr. Rocco J. Nittoli
                                Telephone:  718-422-4365
                                Facsimile:  718-422-4419

                                Wire Transfer instructions:

                                Bank Name:  JP Morgan Chase Bank
                                Account #:  012014974
                                Bank Routing #:  021000021

                                Account Holder: EMPIRE INSURANCE COMPANY

         If to the Trustee:     DEUTSCHE BANK TRUST COMPANY
                                AMERICAS
                                280 Park Avenue
                                MS NY C03-0912
                                New York, New York  10017

                                Attention:  Joseph Fernandez
                                Telephone:  (212) 454-4203
                                Facsimile:  (212) 454-2226/07

                                Wire Transfer instructions:

                                Deutsche Bank Trust Company Americas
                                ABA # 021001033
                                Account # 01419647:
                                Ref:  Empire Insurance
                                Attn:  Joseph Fernandez


                                       14
<PAGE>
         If to a Beneficiary:   At the address or location specified in a
                                Withdrawal Notice.

Each Party may from time to time designate a different address for notices,
directions, requests, demands, acknowledgments and other communications by
giving written notice of such change to the other Parties.

                     13.7 AUTHORIZED SIGNATORIES. The Grantor represents and
warrants that any two of the individuals listed on the attached Exhibit E are
authorized, by their signatures, a sample of each is also being shown on the
attached Exhibit E, to bind the Grantor.

                     13.8 FURTHER ASSURANCES. Each Party shall from time to time
execute and deliver such further documents and instruments and shall take such
further actions as any other Party may reasonably request to effectuate the
intent of this Agreement or to evidence compliance herewith.

                     13.9 REMEDIES. In the event of any breach of this
Agreement, in addition to any legal remedies to the extent allowed by law, the
Parties shall be entitled to equitable remedies, including without limitation,
specific performance and injunctive relief.

                     13.10 TRUST ACCOUNT RECORDS. The Trustee will keep full and
complete records of the administration of the Trust Account. The Grantor and/or
any Beneficiary may examine such records at any time during the Trustee's
business hours, upon reasonable request.

                     13.11 HEADINGS. The headings of the Sections have been
inserted for convenience of reference only, and shall not be deemed to
constitute a part of this Agreement.

                     13.12 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall
constitute an original, but such counterparts together shall constitute one and
the same Agreement. The Exhibits to the Agreement requiring signatures may be
executed in any number of counterparts, each of which when so executed and
delivered shall constitute an original, but such counterparts of each Exhibit
together shall constitute one and the same Exhibit. All signatures of the
Parties and the Beneficiaries may be transmitted by facsimile, and such
facsimile will, for all purposes, be deemed to be the original signature of such
Party and/or Beneficiary whose signature it reproduces and, with respect to
facsimile signatures of a Party, will be binding upon such Party, provided that,
the Parties provide hard copy original signatures to each other within ten (10)
Business Days following execution.


                                       15
<PAGE>
           IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their respective officers thereunto duly authorized
as of the date first above written.



                              EMPIRE INSURANCE COMPANY,
                                      AS GRANTOR

                              By:
                                      ------------------------------------------
                                      Name:
                                      Title:


                              By:
                                      ------------------------------------------
                                      Name:
                                      Title:




                              DEUTSCH BANK TRUST COMPANY AMERICAS, AS TRUSTEE

                              By:
                                      ------------------------------------------
                                      Name:
                                      Title:






                                       16
<PAGE>
                                   EXHIBIT A-1

                                 [ON LETTERHEAD]

                                WITHDRAWAL NOTICE


Deutsche Bank Trust Company Americas
60 Wall Street
MS NY C60-2515
New York, New York  10005

Attention:  Joseph Fernandez

Re:  Empire Insurance Company Trust Agreement

           Reference is made to the Trust Agreement (the "Trust Agreement"),
dated January , 2003, by and between Empire Insurance Company, as grantor
("Empire"), and Deutsche Bank Trust Company Americas, as trustee (the
"Trustee"). This certificate is hereby executed and delivered pursuant to
Section 2.1 of the Trust Agreement.

           All capitalized terms used in this certificate that are not otherwise
defined herein shall have the meanings given to them in the Trust Agreement.

           The undersigned hereby certifies to the Trustee that:

          1. He or she, as the case may be, is a Beneficiary under the Trust
          Agreement;

          2. The undersigned is entitled to the payment of $_________ from the
          Trust Account in consideration of Retention Bonus and/or Severance
          Obligations owed to the undersigned by the Grantor.

          3. The undersigned has sent a copy of this notice, by hand-delivery or
          by certified mail to an authorized representative of the Grantor.

          4. The Trustee is hereby instructed to withdraw the Trust Assets
          specified in line 2, above, from the Trust Account established
          pursuant to the Trust Agreement and, in the absence of any objection
          as described in section 2.3 of the Trust Agreement, to deliver such
          Assets, or the U.S. dollar equivalent in cash proceeds thereof, to the
          undersigned on [Date] , in accordance with the instructions stated
          below:

WIRE TRANSFER INSTRUCTIONS:
Bank Routing Number:
Account Number:

Or


                                       17
<PAGE>
Check payable to _____________________
At address line 1:____________________
At address line 2:____________________
At City, State:_______________________
At Zip Code:___________________ (and Country, if outside of the United States)


           This certificate and the statements contained herein are made for
your benefit and the benefit of Empire.

Date:                                       By:
                                                -------------------------------

















                                       18
<PAGE>
                                   EXHIBIT A-2

                                 [ON LETTERHEAD]

                                WITHDRAWAL NOTICE


Deutsche Bank Trust Company Americas
60 Wall Street
MS NY C60-2515
New York, New York  10005

Attention:  Joseph Fernandez

Re:  Empire Insurance Company Trust Agreement

           Reference is made to the Trust Agreement (the "Trust Agreement"),
dated January , 2003, by and between Empire Insurance Company, as grantor
("Empire"), and Deutsche Bank Trust Company Americas, as trustee (the
"Trustee"). This certificate is hereby executed and delivered pursuant to
Section 2.1 of the Trust Agreement.

           All capitalized terms used in this certificate that are not otherwise
defined herein shall have the meanings given to them in the Trust Agreement.

           The undersigned hereby certifies to the Trustee that:

          1. He or she, as the case may be, is a Beneficiary under the Trust
          Agreement;

          2. The undersigned is entitled to the payment of $ from the Trust
          Account in consideration of Severance owed to the undersigned by the
          Grantor.

          3. The undersigned has sent a copy of this notice, by hand-delivery or
          by certified mail to an authorized representative of the Grantor.

          4. The Trustee is hereby instructed to withdraw the Trust Assets
          specified in line 2, above, from the Trust Account established
          pursuant to the Trust Agreement and, in the absence of any objection
          as described in section 2.3 of the Trust Agreement, to deliver such
          Assets, or the U.S. dollar equivalent in cash proceeds thereof, to the
          undersigned on [Date] , in cash proceeds thereof, to the undersigned
          in accordance with the instructions stated below:

WIRE TRANSFER INSTRUCTIONS:
Bank Routing Number:
Account Number:

Or


                                       19
<PAGE>
Check payable to _____________________
At address line 1:____________________
At address line 2:____________________
At City, State:_______________________
At Zip Code:___________________ (and Country, if outside of the United States)



           This certificate and the statements contained herein are made for
your benefit and the benefit of Empire.


Date:                                  By:
                                          -----------------------------------


















                                       20
<PAGE>
                                   EXHIBIT B-1

                                 [ON LETTERHEAD]


Deutsche Bank Trust Company Americas
60 Wall Street
MS NY C60-2515
New York, New York  10005

Attention:  Joseph Fernandez

Re:  Empire Insurance Company Trust Agreement

           Reference is made to the Trust Agreement (the "Trust Agreement"),
dated January , 2003, by and between Empire Insurance Company, as grantor
("Empire"), and Deutsche Bank Trust Company Americas, as trustee (the
"Trustee"). This release is hereby executed and delivered pursuant to Section
2.1 of the Trust Agreement.

           All capitalized terms used in this release that are not otherwise
defined herein shall have the meanings given to them in the Trust Agreement.

           The undersigned hereby certifies to the Trustee that:

          1. The undersigned is a Beneficiary under the Trust Agreement.

          2. The undersigned was paid $ by the Grantor in consideration of
          Retention Bonus and/or Severance Obligations owed to the undersigned
          by the Grantor, which Retention Bonus and/or Severance Obligations are
          now paid in full.

          3. The undersigned authorizes and instructs the Trustee to withdraw
          the Trust Assets specified in line 2, above, from the Trust Account
          established pursuant to the Trust Agreement and to deliver such
          Assets, or the U.S. dollar equivalent in cash proceeds thereof, to the
          undersigned on [Date] , in cash proceeds thereof

           This certificate and the statements contained herein are made for
your benefit and the benefit of Empire.

Date:                                  By:
                                           -----------------------------------
                                       Name:
                                       Title:



                                       21
<PAGE>
                                   EXHIBIT B-2

                                 [ON LETTERHEAD]


Deutsche Bank Trust Company Americas
60 Wall Street
MS NY C60-2515
New York, New York  10005

Attention:  Joseph Fernandez

Re:  Empire Insurance Company Trust Agreement

           Reference is made to the Trust Agreement (the "Trust Agreement"),
dated January , 2002, by and between Empire Insurance Company, as grantor
("Empire"), and Deutsche Bank Trust Company Americas, as trustee (the
"Trustee"). This release is hereby executed and delivered pursuant to Section
2.1 of the Trust Agreement.

           All capitalized terms used in this release that are not otherwise
defined herein shall have the meanings given to them in the Trust Agreement.

           The undersigned hereby certifies to the Trustee that:

          1. The undersigned is a Beneficiary under the Trust Agreement.

          2. The undersigned was paid $ by the Grantor in consideration of
          Severance owed to the undersigned by the Grantor, which Severance is
          now paid in full.

          3. The undersigned authorizes and instructs the Trustee to withdraw
          the Trust Assets specified in line 2, above, from the Trust Account
          established pursuant to the Trust Agreement and to deliver such
          Assets, or the U.S. dollar equivalent in cash proceeds thereof, to the
          undersigned on [Date] , in cash proceeds thereof.

           This certificate and the statements contained herein are made for
your benefit and the benefit of Empire.


Date:                                  By:
                                          ------------------------------------
                                       Name:
                                       Title:



                                       22
<PAGE>
                                    EXHIBIT C

             LIST OF BENEFICIARIES OF EMPIRE INSURANCE COMPANY TRUST



Name:                                          Specimen Signature: ____________

Address &

Social Security #
















                                       23
<PAGE>
                                    EXHIBIT D

            SCHEDULE OF RETENTION BONUS AND/OR SEVERANCE OBLIGATIONS




















                                       24
<PAGE>
                                    EXHIBIT E

                      AUTHORIZED SIGNATORIES OF THE GRANTOR


Name:  H. E. Scruggs                            Signature: ____________________
       -------------

TITLE:   PRES. & CHIEF EXEC. OFFICER



Name:  Rocco J. Nittoli                         Signature: ____________________
       ----------------

TITLE:   CHIEF OPERATING OFFICER



Name:  Douglas M. Whitenack                     Signature: ____________________
       --------------------

TITLE:   CHIEF FINANCIAL OFFICER



Name:  Christopher J. Gruttemeyer               Signature: ____________________
       --------------------------

TITLE:   VICE PRESIDENT



Name:  C. Gary Brown                            Signature: ____________________
          ----------

TITLE:   VICE PRESIDENT


Name:  Edward A. Hayes                          Signature: ____________________
       ---------------

TITLE:    SENIOR VICE PRESIDENT



                                       25
<PAGE>
                                    EXHIBIT F

                        AFFIDAVIT OF ON BEHALF OF EMPIRE
                         INSURANCE COMPANY IN CONNECTION
                      WITH THE TERMINATION OR CESSATION OF
                        EMPLOYMENT OF , TRUST BENEFICIARY


STATE OF                         )
                                 ) ss.:
COUNTY OF                        )

           __________________________ , being a duly authorized officer of
Empire Insurance Company ("Grantor") and being duly sworn, deposes and says:

           1. I am authorized by the Grantor to make this affidavit and to
present this affidavit to Deutsche Bank Trust Company Americas (the "Trustee")
in accordance with the terms of the Trust Agreement (the "Trust Agreement"),
dated January , 2003, by and between the Grantor and the Trustee. ---

           1. I am aware that any false statement or representation made herein
would be subject to the penalties for perjury provided under the laws of the
State of New York and/or the federal laws of the United States.

           2. _________ was terminated, failed to perform in accordance with a
Retention Letter or the Grantor's employee handbook (as the case may be), or
otherwise ceased employment with the Grantor in a manner or on terms that
resulted in the loss by ____________ of rights to the payment of Retention Bonus
and/or Severance Obligations by the Grantor from the Trust Account.

           3. The Trust Account contains $_______ in respect of the Retention
Bonus and/or Severance Obligations that are no longer due from the Grantor to,
____________.


           4. The Grantor is entitled to withdraw from the Trust Account the
amount described in paragraph 4 above.

           5. A true and correct copy of this affidavit was sent to
______________________ Employee by certified U.S. mail, on the same date as this
affidavit was sent to the Trustee, at _______________________'s address as
reflected by the Grantor's records.



                                       26
<PAGE>
           6. The Trustee is hereby instructed to withdraw the Trust Assets
specified in paragraph 4, above, from the Trust Account established pursuant to
the Trust Agreement and, in the absence of any objection as described in section
2.2 of the Trust Agreement, to deliver such Assets, or the U.S. dollar
equivalent in cash proceeds thereof, to the Grantor, on  [Date]

                                                        /s/
                                                        -----------------------
                                                        [name]

Sworn to before me this
31st day of May 2002

  /s/
  -----------------------------------
        Notary Public


















                                       27