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                                                                    EXHIBIT 10.6


                      CHANGE IN CONTROL SEVERANCE AGREEMENT

         THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (this "Agreement") is made
by and between Fortis, Inc. (the "Company") and J. Kerry Clayton (the
"Executive"), an officer of the Fortis, Inc. Division (as defined in Section
1(e) below), and is dated as of the 1st day of January, 2002.

         The Executive's Multiplier (as defined in Section 1(k) below) is 3.

                             PURPOSE AND BACKGROUND

         The purpose of this Agreement is to provide the Executive with certain
cash severance payments and welfare benefits in the event that the Executive
becomes unemployed as a result of a change in control of the Division and, thus,
has no employment with the Company or its affiliates, or with the Person that
acquires the Division or that Person's affiliates. This Agreement is intended to
provide the Executive with no payments or benefits in the event that the
Executive remains employed by the Company or any of its affiliates, or becomes
employed by the Person that acquires the Division or such Person's affiliates.

         On the date of this Agreement, the Executive is employed by either the
Company or by one of the Company's affiliates that is involved in the operations
of the Division. The provisions of this Agreement that provide for the Company
to have rights or obligations or to take actions with respect to the Executive's
employment shall be interpreted to mean that either the Company or the Company's
affiliate that actually employs the Executive shall have such rights and
obligations and may take such actions.

         Generally, this Agreement contemplates that, if the Executive is
employed by the Company or any of its affiliates with respect to the Division
immediately prior to the occurrence of a change in control of the Division, a
two-year trigger period will begin to run. During such two-year period, if the
Executive becomes unemployed under certain specified circumstances, then either
the Company or the Person that acquired the Division will provide the Executive
with the payments and benefits required by this Agreement.

         Thus, two events must happen before the Executive is entitled to
payments or benefits under this Agreement: (i) there must have actually occurred
a change in control of the Division or the Company, and (ii) the Executive's
employment must be terminated with respect to the Company and its affiliates
without the Executive being offered employment with the Person that acquires the
Division or any of its affiliates. This Agreement is intended to provide the
Executive with financial assistance in the event that the Executive becomes
unemployed, but it is not intended to provide the Executive with a bonus.

         By way of example, assume that the Executive is presently employed by
Fortis Benefits Insurance Company, which is an affiliate of the Company, with
respect to the Fortis Family Division, which is indirectly controlled by the
Company. Also assume that all of the assets of the Fortis Family Division are
sold to a third party not affiliated with the Company. Such sale would be a
change in control of the Division. If the Executive's employment with respect to
the Division continues, even though the Executive is then employed by the Person
that acquired the Division or one of its affiliates rather than the Company or
one of its affiliates, for at least two

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years after the change in control date, then the Executive would not be entitled
to any payments or other benefits under this Agreement. However, if the
Executive's employment with respect to the Division terminates under the
conditions specified in this Agreement within two years after the change in
control date, the Executive would be entitled to an amount of severance that
generally is a multiple of his or her annual base salary plus short-term bonus,
paid in installments and subject to certain offsets if the Executive becomes
re-employed. The multiple that is applicable to the Executive is set forth in
this Agreement and is related to the Executive's current position with the
Company.

         The Board of Directors of Fortis, Inc. (the "Board") believes that
providing the Executive with such assurance of financial assistance in
circumstances of a change in control will cause the Executive to have less
personal uncertainty in connection with any such possible loss of employment.
The Executive should, therefore, have less distraction in the performance of his
or her duties for the Company, and both the Executive and the Company benefit.
Thus, the Board believes that it is in the best interests of the Company and its
shareholders for the Company to enter into this Agreement.

         Certain capitalized terms that are used throughout this Agreement are
defined in Section 1 below. This "Purpose and Background" preamble is intended
to assist in understanding the Agreement, but it is qualified in its entirety by
reference to the more precise and specific provisions of the Agreement as set
forth below.

         IN CONSIDERATION OF THE MUTUAL PROMISES SET FORTH HEREIN, THE PARTIES
AGREE AS FOLLOWS:

1.       Certain Definitions. Each of the following terms, when used in this
         Agreement, has the meaning set forth below:

         (a)      "Agreement Term" means the period of time beginning on the
                  date of this Agreement and ending on December 31, 2002, unless
                  this Agreement has been previously terminated as provided in
                  Section 10(f). The Company may in its complete and sole
                  discretion, at any time and from time to time, extend the
                  Agreement Term by giving a written notice to the Executive;
                  provided, however, that if an agreement has been executed by
                  the Company or any of its affiliates that contemplates a
                  transaction that will be a Change in Control when consummated,
                  the Agreement Term will be automatically extended until the
                  earlier of the date of such consummation or the termination of
                  such agreement prior to any such consummation.

         (b)      "Business Combination" means any reorganization, merger, share
                  exchange or consolidation of a Person, or the sale or other
                  disposition, directly or indirectly, of 50% or more of the net
                  assets of a Person.

         (c)      "Change in Control" means any one of the following events:

                  (i)      Any event that results in the Division no longer
                           being controlled, directly or indirectly, by Fortis,
                           Inc.; provided, however, that (1) a sale of the
                           Division's investment assets in the ordinary course
                           of business, including,

                                      -2-
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                           without limitation, any sale of assets in connection
                           with financial reinsurance, shall not be a Change in
                           Control of the Division; (2) the liquidation,
                           termination of operations, or other winding down of
                           the Division shall not be a Change in Control of the
                           Division; and (3) the final and binding determination
                           of whether a Change of Control has occurred for
                           purposes of this subsection 1(c)(i) shall be made by
                           the Board of Directors of the Company acting in good
                           faith.

                  (ii)     The acquisition by any Person of direct or indirect
                           beneficial ownership (within the meaning of Rule
                           13d-3 promulgated under the Securities Exchange Act
                           of 1934, as amended, and including, without
                           limitation, such beneficial ownership by means of
                           owning any parent corporation of the Company) of 50%
                           or more of the combined voting power of the then
                           outstanding voting securities of the Company entitled
                           to vote generally in the election of directors (the
                           "Current Securities"); provided, however, that for
                           purposes of this subsection 1(c)(ii), the following
                           acquisitions shall not constitute a Change in
                           Control: (1) any acquisition by Fortis NV, Fortis SA,
                           or a Person who is on the date of this Agreement the
                           beneficial owner, directly or indirectly, of 50% or
                           more of the Current Securities; (2) any acquisition
                           by any employee benefit plan (or related trust)
                           sponsored or maintained by the Company or any Person
                           controlled by Fortis; or (3) any acquisition by any
                           Person pursuant to a transaction that complies with
                           clauses (1), (2) and (3) of subsection (iii) of this
                           Section 1(c).

                  (iii)    Consummation of a Business Combination of the
                           Company, unless immediately following such Business
                           Combination the following three conditions are met:
                           (1) all or substantially all of the Persons who were
                           the beneficial owners of the Current Securities
                           immediately prior to such Business Combination
                           beneficially own, directly or indirectly, more than
                           50% of the combined voting power of the then
                           outstanding voting securities entitled to vote
                           generally in the election of directors of the
                           corporation resulting from such Business Combination
                           (including, without limitation, a corporation that as
                           a result of such transaction owns the Company or all
                           or substantially all of the Company's assets either
                           directly or through one or more subsidiaries) in
                           substantially the same proportions as their ownership
                           of the Current Securities immediately prior to such
                           Business Combination; (2) no Person (excluding any
                           corporation resulting from such Business Combination
                           or any employee benefit plan (or related trust) of
                           the Company or such corporation resulting from such
                           Business Combination) beneficially owns, directly or
                           indirectly, 50% or more of the combined voting power
                           of the then outstanding voting securities of such
                           corporation except to the extent that such ownership
                           existed prior to the Business Combination, and (3) at
                           least a majority of the members of the board of
                           directors of the corporation resulting from such
                           Business Combination were members of the Board at the
                           time of the execution of the initial Business
                           Combination agreement, or of the action of the Board
                           providing for such Business Combination.

                                      -3-
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                  (iv)     Approval by the shareholders of the Company of a
                           complete liquidation or dissolution of the Company,
                           unless the Division has been transferred to some
                           other Person controlled, directly or indirectly, by
                           Fortis prior to such liquidation or dissolution.

         (d)      "Disability" means that the Executive becomes entitled to
                  recover benefits under any group long-term disability plan or
                  policy maintained by Fortis or its affiliates that is by its
                  terms applicable to the Executive.

         (e)      "Division" means the business unit of the Company within which
                  the Executive works from time to time during the Agreement
                  Term.

         (f)      "Fortis" means the joint venture created by Fortis SA and
                  Fortis NV.

         (g)      "Fortis, Inc." means the Nevada corporation that presently
                  controls, either directly or indirectly, the Division.

         (h)      "Fortis NV" means Fortis N.V., a Netherlands corporation and
                  currently an indirect beneficial owner of 50% of the Current
                  Securities of the Company, or any successor thereof; for the
                  avoidance of doubt, Fortis N.V. is the successor to Fortis
                  (NL) N.V. pursuant to a merger that occurred on or about
                  December 17, 2001 in which Fortis (NL) N.V. was merged with
                  and into Fortis N.V.

         (i)      "Fortis SA" means Fortis SA/NV, a Belgium corporation and
                  currently an indirect beneficial owner of 50% of the Current
                  Securities of the Company, or any successor thereof; for the
                  avoidance of doubt, Fortis SA/NV is the successor to Fortis
                  (B) SA/NV pursuant to a merger that occurred on or about
                  December 17, 2001 in which Fortis (B) SA/NV was merged with
                  and into Fortis SA/NV.

         (j)      "Installment Period" means the number of months that is
                  one-half the number derived by multiplying the Multiplier set
                  forth in the second paragraph of this Agreement by 12.

         (k)      "Multiplier" means the number set forth in the second
                  paragraph of this Agreement; provided however, that if the
                  Executive has, prior to the CIC Date, publicly announced his
                  or her Retirement or voluntary termination of employment, the
                  Multiplier will be a fraction with the numerator equal to the
                  remaining whole or partial months between the Date of
                  Termination of employment and the effective date of such
                  announced Retirement or voluntary termination of employment,
                  and with the denominator equal to 12, but in no event shall
                  such fraction be equal to a number greater than the number set
                  forth in the second paragraph of this Agreement.

         (l)      "Person" means any individual, entity or group (within the
                  meaning of Section 13(d)(3) or 14(d)(2) of the Securities
                  Exchange Act of 1934, as amended).

         (m)      "Retirement" means retirement as defined in the Company's
                  then-current tax qualified defined benefit pension plan, or if
                  there is no such retirement plan,

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                  "Retirement" means voluntary termination of employment after
                  age 55 with ten or more years of service, or after age 65 with
                  five or more years of service.

         (n)      Each of the following terms is defined in the Section
                  indicated:

<TABLE>
<CAPTION>
         Term                                       Section
         ----                                       -------
<S>                                              <C>
Accounting Firm                                  8(b)
Accrued Obligations                              4(a)(i)(A)(3)
Base Salary                                      4(a)(i)(A)(1)
Board                                            8th Paragraph
Cause                                            3(b)
CIC Date                                         2
Code                                             7
Current Securities                               1(c)(ii)
Date of Termination                              3(e)
Deferred Compensation                            4(g)
Disability Effective Date                        3(a)
Employer Affiliate                               10(i)
Excise Tax                                       8(a)
Extended Severance                               4(a)(i)(C)
Good Reason                                      3(c)
Gross-Up Payment                                 8(a)
Initial Severance                                4(a)(i)(B)
Notice of Termination                            3(d)
Other Benefits                                   4(a)(iii)
Payment                                          8(a)
Post-CIC Period                                  2
Rabbi Trust                                      4(h)
Target Bonus                                     4(a)(i)(A)(2)
Underpayment                                     8(b)
Welfare Benefits                                 4(a)(ii)
</TABLE>

2.       Post-CIC Period. If the Executive is employed by the Company
         immediately prior to the first date during the Agreement Term on which
         a Change in Control occurs (the "CIC Date"), then the Executive's
         employment during the two-year period beginning on the CIC Date and
         ending on the second anniversary of such date (the "Post-CIC Period")
         shall be subject to all the terms and conditions of this Agreement,
         including, without limitation, the termination events described in
         Section 3 below.

3.       Termination of Employment During Post-CIC Period.

         (a)      Death, Retirement or Disability. During the Post-CIC Period,
                  the Executive's employment shall terminate automatically upon
                  the Executive's death or Retirement. If the Company determines
                  in good faith that the Disability of the Executive has
                  occurred during the Post-CIC Period, the Company may, in its
                  discretion, give the Executive a written notice in accordance
                  with Section 10(b) of

                                      -5-
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                  this Agreement of the Company's intention to terminate the
                  Executive's employment. In such event, the Executive's
                  employment with the Company shall terminate effective on the
                  30th day after receipt of such notice by the Executive (the
                  "Disability Effective Date").

         (b)      Cause. The Company may terminate the Executive's employment
                  during the Post-CIC Period with or without Cause. For purposes
                  of this Agreement, "Cause" means either of the following
                  circumstances:

                  (i)      Failure to Perform. The willful and continued failure
                           of the Executive to perform substantially the
                           Executive's duties with the Division (other than any
                           such failure resulting from incapacity due to
                           physical or mental illness), after a written demand
                           for substantial performance is delivered to the
                           Executive by the Board or the Chief Executive Officer
                           of the Company. Such written demand must specifically
                           identify the manner in which the Board or Chief
                           Executive Officer believes that the Executive has not
                           substantially performed the Executive's duties.

                  (ii)     Engaging in Illegal Conduct or Gross Misconduct. The
                           willful engaging by the Executive in illegal conduct
                           or gross misconduct that is materially injurious to
                           the Company or the Division.

                  For purposes of this Section 3(b), no act or failure to act,
                  on the part of the Executive, shall be considered "willful"
                  unless it is done, or omitted to be done, by the Executive in
                  bad faith or without reasonable belief that the Executive's
                  action or omission was in the best interests of the Division.

         (c)      Good Reason.

                  (i)      The Executive's employment may be terminated by the
                           Executive during the Post-CIC Period for Good Reason
                           or for no reason. For purposes of this Agreement,
                           "Good Reason" means any of the following
                           circumstances:

                           (1)      Diminution of Position. A material
                                    diminution in the Executive's position,
                                    authority, duties or responsibilities, not
                                    including a change in job title or reporting
                                    responsibilities.

                           (2)      Reduction of Compensation. Any material
                                    reduction in the aggregate value of the
                                    Executive's annual base salary, short-term
                                    cash bonus target amount, long-term
                                    incentive plan target amount, and
                                    Company-provided welfare benefits, all as in
                                    effect immediately prior to the CIC Date, or
                                    any failure by the Company to pay any such
                                    amounts to the Executive as earned by the
                                    Executive. An inadvertent failure by the
                                    Company to make any payment of compensation
                                    to the Executive that does not occur in bad
                                    faith and that is remedied by the Company
                                    promptly after the

                                      -6-
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                                    Company receives notice thereof from the
                                    Executive, is excluded from the definition
                                    of "Good Reason."

                           (3)      Employment Location. The Company's requiring
                                    the Executive to be based at any location
                                    that is more than fifty (50) miles from the
                                    location at which the Executive is based
                                    immediately prior to the CIC Date.

                           (4)      Other Termination. Any termination by the
                                    Company of the Executive's employment other
                                    than as expressly permitted by this
                                    Agreement.

                           In the event of a Change in Control as defined in
                           subsection 1(c)(ii), (iii) or (iv), for purposes of
                           this Section 3(c), any good faith determination of
                           "Good Reason" made by the Executive shall be
                           conclusive. In the event of a Change in Control as
                           defined in subsection 1(c)(i), there shall be no such
                           presumption in favor of the Executive's
                           determination.

                  (ii)     Notwithstanding the foregoing, "Good Reason" shall
                           not exist until after (1) the Executive has given the
                           Company written notice of the applicable event not
                           later than 30 days after the occurrence of such
                           event, specifying in reasonable detail the
                           circumstances of the event and stating the
                           Executive's intent to terminate his or her employment
                           if not remedied, and (2) the Company has not remedied
                           such event within 30 days after receipt of such
                           notice; provided, however, that if the specified
                           event reasonably cannot be remedied within such
                           30-day period, the Company commences reasonable steps
                           within such 30-day period to remedy such event and
                           diligently continues such steps thereafter until a
                           remedy is effected, and the remedy is effected within
                           60 days after the Company's receipt of the
                           Executive's notice, then such event shall not
                           constitute "Good Reason."

                  (iii)    Notwithstanding the foregoing, "Good Reason" shall
                           not exist if the Executive is offered employment with
                           the Company or an affiliate thereof in a position
                           other than with the Division, or if the Executive is
                           offered employment with the Person that acquires the
                           Division or any of such Person's affiliates, and in
                           either case such offer of employment includes a
                           position, compensation and employment location that
                           are consistent with the requirements of subsections
                           3(c)(i)(1), (2) and (3).

         (d)      Notice of Termination. Any termination by the Company for
                  Cause, or by the Executive for Good Reason, must be
                  communicated by Notice of Termination to the other party, and
                  must be given in accordance with Section 10(b) of this
                  Agreement. For purposes of this Agreement, a "Notice of
                  Termination" means a written notice that:

                  (i)      indicates the specific termination provision in this
                           Agreement relied upon, and

                                      -7-
<PAGE>

                  (ii)     to the extent applicable, sets forth in reasonable
                           detail the facts and circumstances claimed to provide
                           a basis for termination of the Executive's employment
                           under the provision so indicated, and

                  (iii)    if the Date of Termination is other than the date of
                           receipt of such notice, specifies the termination
                           date (which date shall be not more than 30 days after
                           the giving of such notice, except as provided in
                           Section 3(c)(ii) above).

                  If the Executive or the Company fails to set forth in a Notice
                  of Termination any additional fact or circumstance that
                  contributes to a showing of Good Reason or Cause, but
                  otherwise delivers a Notice of Termination in accordance with
                  this Agreement, such party will not be precluded from
                  asserting the additional fact or circumstance in enforcing
                  such party's rights hereunder.

         (e)      Date of Termination. "Date of Termination" means whichever of
                  the following is applicable:

                  (i)      If the Company terminates the Executive's employment
                           for Cause, the Date of Termination shall be the date
                           of receipt of the Notice of Termination or any later
                           date specified in such Notice.

                  (ii)     If the Company terminates the Executive's employment
                           other than for Cause or Disability, the Date of
                           Termination shall be the date on which the Company
                           notifies the Executive of such termination or any
                           later date specified in such notice.

                  (iii)    If the Executive's employment is terminated by reason
                           of death or Disability, the Date of Termination shall
                           be the date of death of the Executive or the
                           Disability Effective Date.

                  (iv)     If the Executive terminates his or her employment for
                           Good Reason, the Date of Termination shall be in
                           accordance with Section 3(c)(ii) of this Agreement.

4.       Obligations of the Company upon Termination.

         (a)      Good Reason; Other Than for Cause or Disability. If, during
                  the Post-CIC Period, the Company terminates the Executive's
                  employment other than for Cause or Disability, or the
                  Executive terminates his or her employment for Good Reason,
                  then in consideration of Executive's services rendered prior
                  to such termination all of the following shall take place:

                  (i)      Cash Payments.

                           A.       Current Compensation. The Company shall pay
                                    to the Executive in a lump sum in cash
                                    within 30 days after the Date of Termination
                                    the sum of:

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                                    (1)      the Executive's annual base salary
                                             as in effect immediately prior to
                                             the CIC Date ("Base Salary")
                                             through the Date of Termination to
                                             the extent not theretofore paid,

                                    (2)      the product of (x) the Executive's
                                             target annual bonus under the
                                             Division's short-term incentive
                                             bonus plan for the year in which
                                             the Date of Termination occurs (the
                                             "Target Bonus") and (y) a fraction,
                                             the numerator of which is the
                                             number of days in the current
                                             fiscal year of the Division through
                                             the Date of Termination, and the
                                             denominator of which is 365, and

                                    (3)      any accrued vacation pay to the
                                             extent not theretofore paid (the
                                             sum of the amounts described in
                                             clauses (1) and (2) immediately
                                             above and this clause (3) shall be
                                             hereinafter referred to as the
                                             "Accrued Obligations").

                           B.       Initial Severance. The Company shall pay to
                                    the Executive an amount of cash severance
                                    (the "Initial Severance") in a lump sum
                                    within 30 days after the Date of Termination
                                    equal to one-half of the product of the
                                    Multiplier times the sum of (1) the
                                    Executive's Base Salary and (2) the
                                    Executive's Target Bonus.

                           C.       Extended Severance. The Company shall pay to
                                    the Executive an amount of cash severance
                                    (the "Extended Severance") equal to one-half
                                    of the product of the Multiplier times the
                                    sum of (1) the Executive's Base Salary and
                                    (2) the Executive's Target Bonus. Such
                                    Extended Severance will be paid to the
                                    Executive in cash in equal monthly
                                    installments over the Installment Period
                                    immediately following the Date of
                                    Termination, with the first such monthly
                                    payment being due on the first business day
                                    of the calendar month that begins at least
                                    30 days after the Date of Termination, and
                                    each subsequent monthly installment being
                                    due on the first business day of each
                                    calendar month thereafter. Notwithstanding
                                    the foregoing, the Executive shall be
                                    entitled to only that portion of the
                                    Extended Severance that exceeds the amount
                                    of pre-tax compensation otherwise earned by
                                    the Executive for services that he or she
                                    renders during the Installment Period
                                    immediately following the Date of
                                    Termination, whether as an employee or
                                    independent contractor, and the Executive
                                    will provide the Company with copies of his
                                    or her Form W-2 or Form 1099, or other
                                    similar documentation, upon the reasonable
                                    request of the Company. In the event of a
                                    Change in Control as defined in subsection
                                    1(c)(i), the Executive's provision of such
                                    documentation to the Company shall be a
                                    condition to the Executive's right to
                                    receive the Extended Severance.

                                      -9-
<PAGE>

                  (ii)     Welfare Benefits. For 18 months after the Date of
                           Termination, the Company shall continue to provide
                           the same medical, dental, life and/or disability
                           insurance coverages to the Executive and/or the
                           Executive's dependents that the Company and its
                           affiliates provide generally during such 18-month
                           period to their employees who hold positions similar
                           to the position held by the Executive immediately
                           prior to the Date of Termination (the "Welfare
                           Benefits"). For those Welfare Benefits to which COBRA
                           applies, the Company will only be obligated to
                           provide such Welfare Benefits through the Executive's
                           making the elections permitted under COBRA. In order
                           to receive the Welfare Benefits, the Executive shall
                           pay the same amount therefor that he or she paid for
                           such Welfare Benefits immediately prior to the
                           Termination Date, and the Executive must make these
                           elections and pay all required premiums on a timely
                           basis. If the Executive becomes employed with another
                           employer, including, without limitation, the Person
                           that acquired the Division or any of its affiliates,
                           and

                           (A)      the Executive is eligible to receive medical
                                    or dental insurance coverages under another
                                    employer provided plan, then the medical and
                                    dental insurance coverages provided by the
                                    Company pursuant to this subsection 4(a)(ii)
                                    shall be secondary to the medical and dental
                                    insurance coverages, respectively, provided
                                    under such other plan to the Executive
                                    and/or the Executive's dependents during
                                    such applicable period of eligibility;
                                    and/or

                           (B)      the Executive is eligible to receive life or
                                    disability insurance coverages under another
                                    employer provided plan, then the Company
                                    shall have no further obligation to provide
                                    the Executive and/or the Executive's
                                    dependents with life or disability insurance
                                    coverage.

                  The Company shall not be required to compensate the Executive
                  for any taxes that the Executive may incur as a result of the
                  provision of Welfare Benefits hereunder. If the Executive has
                  prior to the CIC Date publicly announced his or her Retirement
                  or voluntary termination of employment, the Executive will
                  receive the Welfare Benefits under this subsection 4(a)(ii)
                  only to the effective date of such announced Retirement or
                  voluntary termination of employment.

                  (iii)    Other Benefits Due at Date of Termination. To the
                           extent not then already paid or provided, the Company
                           shall timely pay or provide to the Executive any
                           other amounts or benefits required to be paid or
                           provided through the Date of Termination, or which
                           the Executive is eligible to receive through and
                           after the Date of Termination, under any plan,
                           program, policy or practice of, or contract or
                           agreement with, the Company and its affiliated
                           companies, including such plans that have change in
                           control provisions in the plans (such other amounts
                           and benefits shall be hereinafter referred to as the
                           "Other Benefits").

                                      -10-
<PAGE>

         (b)      Death. If the Executive's employment is terminated by reason
                  of the Executive's death during the Post-CIC Period, this
                  Agreement shall terminate without further obligations to the
                  Executive's legal representatives, other than for payment of
                  Accrued Obligations and Deferred Compensation, and the timely
                  payment or provision of Other Benefits. The Company shall pay
                  all Accrued Obligations to the Executive's estate or
                  beneficiary, as applicable, in a lump sum in cash within 30
                  days of the Date of Termination, and shall pay all Deferred
                  Compensation to the Executive's estate or beneficiary, as
                  applicable, in accordance with the terms of the plan under
                  which such compensation was deferred.

         (c)      Retirement. If the Executive's employment is terminated by
                  reason of the Executive's Retirement during the Post-CIC
                  Period, this Agreement shall terminate without further
                  obligations to the Executive, other than for payment of
                  Accrued Obligations and Deferred Compensation, and the timely
                  payment or provision of Other Benefits. The Company shall pay
                  all Accrued Obligations to the Executive in a lump sum in cash
                  within 30 days of the Date of Termination, and shall pay all
                  Deferred Compensation to the Executive in accordance with the
                  terms of the plan under which such compensation was deferred.

         (d)      Disability. If the Executive's employment is terminated by
                  reason of the Executive's Disability during the Post-CIC
                  Period, this Agreement shall terminate without further
                  obligations to the Executive, other than for payment of
                  Accrued Obligations and Deferred Compensation, and the timely
                  payment or provision of Other Benefits. The Company shall pay
                  all Accrued Obligations to the Executive in a lump sum in cash
                  within 30 days of the Date of Termination, and shall pay all
                  Deferred Compensation to the Executive in accordance with the
                  terms of the plan under which such compensation was deferred.

         (e)      Cause; Other than for Good Reason. If the Company terminates
                  the Executive's employment for Cause during the Post-CIC
                  Period, this Agreement shall terminate without further
                  obligations to the Executive other than the obligation to pay
                  to the Executive (x) his Base Salary through the Date of
                  Termination, (y) any Deferred Compensation, and (z) Other
                  Benefits, in each case to the extent not then already paid. If
                  the Executive voluntarily terminates employment during the
                  Post-CIC Period (excluding a termination for Good Reason),
                  this Agreement shall terminate without further obligations to
                  the Executive, other than for Accrued Obligations, Deferred
                  Compensation and the timely payment or provision of Other
                  Benefits. In either case described in this Section 4(e), the
                  Company shall pay all Accrued Obligations to the Executive in
                  a lump sum in cash within 30 days of the Date of Termination,
                  and shall pay all Deferred Compensation to the Executive in
                  accordance with the terms of the plan under which such
                  compensation was deferred.

         (f)      Outplacement Services. The Executive shall have the right to
                  make full use of the Company's outplacement services to its
                  officers upon termination of the Executive's employment,
                  except in the event that the Executive's employment is
                  terminated for Cause.

                                      -11-
<PAGE>

         (g)      Deferred Compensation. Any compensation previously deferred by
                  the Executive ("Deferred Compensation") shall be paid to the
                  Executive in accordance with the terms of the plan under which
                  it was deferred.

         (h)      Funding of Certain Obligations. Not later than the CIC Date,
                  regardless of whether the Executive's employment has then
                  terminated or any termination of such employment has then been
                  announced, the Company shall take all actions necessary or
                  appropriate to establish and fund a "rabbi" trust (i.e., a
                  trust based on the model trust contained in Revenue Procedure
                  92-64, and with a trustee selected by the Company, but that is
                  independent of the Company) (hereafter the "Rabbi Trust") for
                  the purpose of ensuring that the Executive will receive the
                  Initial Severance and the Extended Severance in accordance
                  with the terms of this Agreement. The Rabbi Trust shall
                  expressly provide that after the CIC Date occurs, the Rabbi
                  Trust may be amended or revoked only with the prior written
                  consent of the Executive. Without limiting the generality of
                  the foregoing, on or before the CIC Date, the Company will
                  deposit in the Rabbi Trust an amount of cash equal to the
                  aggregate amount of the Initial Severance and the Extended
                  Severance to which the Executive would be entitled if his or
                  her employment terminated on the CIC Date; provided, however,
                  that if such amount deposited in the Rabbi Trust together with
                  any interest or earnings thereon is determined later to be
                  less than or more than the amount, if any, that actually
                  becomes due to the Executive hereunder, the Executive shall be
                  entitled to the amount required by this Agreement and not the
                  amount that is held in such trust. In the event that the
                  Executive does not become entitled to the Initial Severance or
                  any or all of the Extended Severance, as determined by the
                  trustee of the Rabbi Trust, the amount remaining in the Rabbi
                  Trust shall be returned to the Company after the expiration of
                  the Post-CIC Period. The Rabbi Trust shall be used solely for
                  the purpose of holding deposits of funds for the potential
                  Initial Severance and Extended Severance obligations to the
                  Executive hereunder, and other similar obligations to
                  similarly situated employees of the Company. Notwithstanding
                  anything in this Agreement to the contrary, the Company shall
                  have no funding or other obligations under this Section 4(h)
                  if the Change in Control that results in the CIC Date is a
                  Change in Control of the Division as defined in subsection
                  1(c)(i) and not a Change in Control of the Company in any
                  other way.

5.       Termination in Anticipation of a Change in Control. Notwithstanding
         anything in this Agreement to the contrary, if: (1) a Change in Control
         occurs during the Agreement Term, AND (2) within one year prior to the
         CIC Date the Executive's employment with the Company has been
         terminated either by the Company without Cause or by the Executive for
         Good Reason, then if the Executive can reasonably demonstrate that such
         termination of employment (i) was at the request of or with the express
         prior consent of a third party who has taken steps reasonably
         calculated to effect such Change in Control or (ii) otherwise arose in
         anticipation of such Change in Control, then all of the following shall
         take place:

         (a)      Section 2 of this Agreement shall not apply to the Executive;
                  Section 4 of this Agreement shall apply to the Executive as
                  described in subsection (b) below; and

                                      -12-
<PAGE>

                  all other provisions of this Agreement shall apply to the
                  Executive in accordance with their terms.

         (b)      The Company shall pay to the Executive the aggregate of all
                  amounts described in Sections 4(a)(i) and 4(a)(iii) in a lump
                  sum in cash within 30 days after the CIC Date, using as the
                  Executive's Base Salary and Target Bonus his or her annual
                  base salary and target short-term incentive bonus,
                  respectively, as in effect immediately prior to the Date of
                  Termination. The Company shall pay any Deferred Compensation
                  to the Executive in accordance with the terms of the plan
                  under which such compensation was deferred.

         (c)      The Company shall provide to the Executive the Welfare
                  Benefits as and for the time period described in Section
                  4(a)(ii), except that the Company shall reimburse the
                  Executive for the cost of obtaining such Welfare Benefits
                  between the Date of Termination and the CIC Date by paying to
                  the Executive a lump sum in cash equal to the amount that the
                  Executive paid to obtain such Welfare Benefits for such period
                  less the amount that the Executive was paying to obtain such
                  Welfare Benefits immediately prior to the Date of Termination.
                  If the Executive has, prior to the CIC Date, publicly
                  announced his or her Retirement or voluntary termination of
                  employment, the Executive will receive the Welfare Benefits
                  under this subsection 5(c) only to the effective date of such
                  announced Retirement or voluntary termination of employment.

6.       Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
         limit the Executive's continuing or future participation in any plan,
         program, policy or practice provided by the Company or any of its
         affiliated companies and for which the Executive may qualify, nor,
         except as explicitly provided herein, shall anything in this Agreement
         limit or otherwise affect such rights as the Executive may have under
         any contract or agreement with the Company or any of its affiliated
         companies. Amounts that are vested benefits or that the Executive is
         otherwise entitled to receive under any plan, policy, practice or
         program of or any contract or agreement with the Company or any of its
         affiliated companies at or subsequent to the Date of Termination shall
         be payable in accordance with such plan, policy, practice or program or
         contract or agreement except as explicitly modified by this Agreement.

7.       No Company Set-Off; Legal Fees; Interest. Except as provided in Section
         4(a)(i)(C), and except in the event that the Executive's employment is
         terminated with Cause, the Company's obligation to make the payments
         provided for in this Agreement and otherwise to perform its obligations
         hereunder shall not be affected by any set-off, counterclaim,
         recoupment, defense or other claim, right or action that the Company
         may have against the Executive or others. In no event shall the
         Executive be obligated to seek other employment or take any other
         action by way of mitigation of the amounts payable to the Executive
         under any of the provisions of this Agreement. The Company agrees to
         pay as incurred, to the full extent permitted by law, all legal fees
         and expenses that the Executive may reasonably incur in good faith as a
         result of any contest (regardless of the outcome thereof) by the
         Company, the Executive or others of the validity or enforceability of,
         or liability under, any provision of this Agreement or any guarantee of

                                      -13-
<PAGE>

         performance thereof (including as a result of any contest by the
         Executive about the amount of any payment pursuant to this Agreement),
         provided such contest occurs after the CIC Date, plus in each case
         interest on any delayed payment at the applicable federal rate provided
         for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as
         amended (the "Code").

8.       Certain Additional Payments by the Company.

         (a)      Anything in this Agreement to the contrary notwithstanding and
                  except as set forth below, in the event it shall be determined
                  that any payment or distribution by the Company to or for the
                  benefit of the Executive (whether paid or payable or
                  distributed or distributable pursuant to the terms of this
                  Agreement or otherwise, but determined without regard to any
                  additional payments required under this Section 8) (a
                  "Payment") would be subject to the excise tax imposed by
                  Section 4999 of the Code or any interest or penalties are
                  incurred by the Executive with respect to such excise tax
                  (such excise tax, together with any such interest and
                  penalties, are hereinafter collectively referred to as the
                  "Excise Tax"), then the Executive shall be entitled to receive
                  an additional payment (a "Gross-Up Payment") in an amount such
                  that after payment by the Executive of all taxes (including
                  any interest or penalties imposed with respect to such taxes),
                  including, without limitation, any income taxes (and any
                  interest and penalties imposed with respect thereto) and
                  Excise Tax imposed upon the Gross-Up Payment, the Executive
                  retains an amount of the Gross-Up Payment equal to the Excise
                  Tax imposed upon the Payments.

         (b)      Subject to the provisions of Section 8(c), all determinations
                  required to be made under this Section 8, including whether
                  and when a Gross-Up Payment is required and the amount of such
                  Gross-Up Payment and the assumptions to be utilized in
                  arriving at such determination, shall be made by a certified
                  public accounting firm selected by the Executive and
                  reasonably acceptable to the Company (the "Accounting Firm")
                  which shall provide detailed supporting calculations both to
                  the Company and the Executive within 15 business days of the
                  receipt of notice from the Executive that there has been a
                  Payment, or such earlier time as is reasonably requested by
                  the Company. All fees and expenses of the Accounting Firm
                  shall be borne solely by the Company. Any Gross-Up Payment, as
                  determined pursuant to this Section 8, shall be paid by the
                  Company to the Executive within five days after the receipt of
                  the Accounting Firm's determination. Any determination by the
                  Accounting Firm shall be binding upon the Company and the
                  Executive. As a result of the uncertainty in the application
                  of Section 4999 of the Code at the time of the initial
                  determination by the Accounting Firm hereunder, it is possible
                  that Gross-Up Payments which will not have been made by the
                  Company should have been made ("Underpayment"), consistent
                  with the calculations required to be made hereunder. In the
                  event that the Company exhausts its remedies pursuant to
                  Section 8(c) and the Executive thereafter is required to make
                  a payment of any Excise Tax, the Accounting Firm shall
                  determine the amount of the Underpayment that has occurred and
                  any such

                                      -14-
<PAGE>

                  Underpayment shall be promptly paid by the Company to or for
                  the benefit of the Executive.

         (c)      The Executive shall notify the Company in writing of any claim
                  by the Internal Revenue Service that, if successful, would
                  require the payment by the Company of a Gross-Up Payment (or
                  an additional Gross-Up Payment). Such notification shall be
                  given as soon as practicable but no later than ten business
                  days after the Executive is informed in writing of such claim
                  and shall apprise the Company of the nature of such claim and
                  the date on which such claim is requested to be paid. The
                  Executive shall not pay such claim prior to the expiration of
                  the 30-day period following the date on which it gives such
                  notice to the Company (or such shorter period ending on the
                  date that any payment of taxes with respect to such claim is
                  due). If the Company notifies the Executive in writing prior
                  to the expiration of such period that it desires to contest
                  such claim, the Executive shall:

                  (i)      give the Company any information reasonably requested
                           by the Company relating to such claim,

                  (ii)     take such action in connection with contesting such
                           claim as the Company shall reasonably request in
                           writing from time to time, including, without
                           limitation, accepting legal representation with
                           respect to such claim by an attorney reasonably
                           selected by the Company,

                  (iii)    cooperate with the Company in good faith in order
                           effectively to contest such claim, and

                  (iv)     permit the Company to participate in any proceedings
                           relating to such claim;

                  provided, however, that the Company shall bear and pay
                  directly all costs and expenses (including additional interest
                  and penalties) incurred in connection with such contest and
                  shall indemnify and hold the Executive harmless, on an
                  after-tax basis, for any Excise Tax or income tax (including
                  interest and penalties with respect thereto) imposed as a
                  result of such representation and payment of costs and
                  expenses. Without limitation of the foregoing provisions of
                  this Section 8(c), the Company shall control all proceedings
                  taken in connection with such contest (to the extent
                  applicable to the Excise Tax and the Gross-Up Payment) and, at
                  its sole option, may pursue or forgo any and all
                  administrative appeals, proceedings, hearings and conferences
                  with the taxing authority in respect of such claim and may, at
                  its sole option, either direct the Executive to pay the tax
                  claimed and sue for a refund or contest the claim in any
                  permissible manner, and the Executive agrees to prosecute such
                  contest to a determination before any administrative tribunal,
                  in a court of initial jurisdiction and in one or more
                  appellate courts, as the Company shall determine; provided,
                  however, that if the Company directs the Executive to pay such
                  claim and sue for a refund, the Company shall advance the
                  amount of such payment to the Executive, on an interest-free
                  basis and shall indemnify and hold the Executive harmless, on
                  an after-tax basis, from any Excise

                                      -15-
<PAGE>

                  Tax or income tax (including interest or penalties with
                  respect thereto) imposed with respect to such advance or with
                  respect to any imputed income with respect to such advance;
                  and further provided that any extension of the statute of
                  limitations relating to payment of taxes for the taxable year
                  of the Executive with respect to which such contested amount
                  is claimed to be due is limited solely to such contested
                  amount. Furthermore, the Company's control of the contest
                  shall be limited to issues with respect to which a Gross-Up
                  Payment would be payable hereunder and the Executive shall be
                  entitled to settle or contest, as the case may be, any other
                  issue raised by the Internal Revenue Service or any other
                  taxing authority.

         (d)      If, after the receipt by the Executive of an amount advanced
                  by the Company pursuant to Section 8(c), the Executive becomes
                  entitled to receive any refund with respect to such claim, the
                  Executive shall (subject to the Company's complying with the
                  requirements of Section 8(c)) promptly pay to the Company the
                  amount of such refund (together with any interest paid or
                  credited thereon after taxes applicable thereto). If, after
                  the receipt by the Executive of an amount advanced by the
                  Company pursuant to Section 8(c), a determination is made that
                  the Executive shall not be entitled to any refund with respect
                  to such claim and the Company does not notify the Executive in
                  writing of its intent to contest such denial of refund prior
                  to the expiration of 30 days after such determination, then
                  such advance shall be forgiven and shall not be required to be
                  repaid and the amount of such advance shall offset, to the
                  extent thereof, the amount of Gross-Up Payment required to be
                  paid.

9.       Successors.

         (a)      This Agreement is personal to the Executive and arises from
                  his or her current title, employment responsibilities and
                  managerial reporting relationship. Without the prior written
                  consent of the Company, this Agreement shall not be assignable
                  by the Executive other than by will or the laws of descent and
                  distribution. This Agreement shall inure to the benefit of, be
                  enforceable by and be binding upon the Executive's legal
                  representatives.

         (b)      This Agreement shall inure to the benefit of, be enforceable
                  by and be binding upon the Company and its successors and
                  assigns.

         (c)      The Company shall have the right, in its discretion, to assign
                  this Agreement to any successor (whether direct or indirect,
                  by purchase, merger, consolidation or otherwise) to all or
                  substantially all of the business and/or assets of the
                  Division, but such assignment shall in no way prevent the
                  Executive from pursuing his or her rights hereunder against
                  Fortis, Inc. unless the Executive agrees to such assignment in
                  writing.

                                      -16-
<PAGE>

10.      Miscellaneous.

         (a)      Governing Law; Captions; Amendments. This Agreement shall be
                  governed by and construed in accordance with the laws of the
                  State of New York, without reference to principles of conflict
                  of laws. The captions of this Agreement are not part of the
                  provisions hereof and shall have no force or effect. This
                  Agreement may not be amended or modified other than by a
                  written agreement executed by the parties hereto or their
                  respective successors and legal representatives.

         (b)      Notices. All notices and other communications made pursuant to
                  this Agreement must be in writing and must be given by hand
                  delivery, or by certified mail, return receipt requested, or
                  by overnight courier, or by telecopy with a confirmation copy
                  sent by either overnight courier or first-class mail, and
                  addressed as follows:

                           If to the Executive:

                           J. Kerry Clayton
                           90 Druid Hill Road
                           Summit, NJ 07901

                           If to the Company:

                           Fortis, Inc.
                           One Chase Manhattan Plaza
                           41st Floor
                           New York, NY 10005
                           Attention: General Counsel

                  or to such other address as either party shall have furnished
                  to the other in writing in accordance with this Section.
                  Notice and communications shall be effective when actually
                  received by the addressee.

         (c)      Severability. The invalidity or unenforceability of any
                  provision of this Agreement shall not affect the validity or
                  enforceability of any other provision of this Agreement.

         (d)      Withholding. The Company may withhold from any amounts payable
                  under this Agreement such federal, state, local or foreign
                  taxes as shall be required to be withheld pursuant to any
                  applicable law or regulation.

         (e)      Waiver. The failure of either party to insist upon strict
                  compliance with any provision of this Agreement, or the
                  failure of either party to assert any right such party may
                  have under this Agreement shall not be deemed to be a waiver
                  of such provision or right or any other provision or right of
                  this Agreement.

                                      -17-
<PAGE>

         (f)      "At Will" Employment; Termination of Agreement.

                  (i)      The Executive and the Company acknowledge that,
                           except as may otherwise be provided under any other
                           written agreement between the Executive and the
                           Company and to the extent otherwise permitted under
                           applicable law, the employment of the Executive by
                           the Company is "at will" and the Executive's
                           employment may be terminated by either the Executive
                           or the Company at any time prior to the CIC Date. If
                           the Executive's employment is terminated for any
                           reason before the CIC Date, the Executive shall have
                           no further rights under this Agreement, except as
                           provided in Section 5.

                  (ii)     Unless the Executive's employment is terminated, this
                           Agreement may not be terminated by the Company during
                           the Agreement Term and before the CIC Date. From and
                           after the CIC Date, this Agreement may not be
                           terminated by the Company. This Agreement shall
                           supersede any other agreement between the parties
                           with respect to the subject matter hereof.

         (g)      Nondisclosure. Without obtaining the Company's prior written
                  consent, the Executive agrees that he or she will not disclose
                  the existence or the terms of this Agreement to any Person,
                  except for the Executive's advisors, beneficiaries and other
                  Persons that need to know about the Agreement. The Executive
                  agrees that no Person associated with the Company falls within
                  such exception that would permit disclosure by the Executive.

         (h)      Release. In the event of a Change in Control as defined in
                  subsection 1(c)(i) only, as a condition to the Company's
                  obligation to pay the Initial Severance and the Extended
                  Severance pursuant to subsections 4(a)(i)(B) and 4(a)(i)(C)
                  above, the Executive must execute and deliver to the Company a
                  full and complete release of liability in a form satisfactory
                  to the Company and in compliance with applicable state law.

         (i)      Employer Affiliate. Notwithstanding any indication in this
                  Agreement that the Executive is employed directly by the
                  Company, the parties acknowledge and agree that, on the date
                  of this Agreement, the Executive is employed directly either
                  by the Company or by an affiliate of the Company that is
                  involved in the operations of the Division (the "Employer
                  Affiliate"). The parties further agree that the provisions of
                  this Agreement that provide for the Company to have rights or
                  obligations or to take actions with respect to the Executive's
                  employment shall be interpreted to mean that either the
                  Company or the Employer Affiliate shall have such rights and
                  obligations and may take such actions. The Company shall have
                  the discretion to determine whether it or the Employer
                  Affiliate shall exercise such rights, fulfill such obligations
                  and take such actions, and, if the Company determines that an
                  obligation will be fulfilled by the Employer Affiliate, the
                  Company agrees to cause the Employer Affiliate to fulfill such
                  obligations as if the Employer Affiliate were a party to this
                  Agreement.

                                      -18-
<PAGE>

         IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf by its
undersigned officer thereunto, duly authorized, all as of the day and year first
above written.

                                  FORTIS, INC.

                                  By: /s/ ROBERT B. POLLOCK
                                      ---------------------------
                                      Robert B. Pollock
                                      Executive Vice President

                                  EXECUTIVE

                                  /s/ J. KERRY CLAYTON
                                  -------------------------------
                                  J. KERRY CLAYTON

                                      -19-