Document:

exv10w13

 

EXECUTION COPY

EXHIBIT 10.13

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT is executed this 24th day of November,
2003, between United National Insurance Company, a Pennsylvania corporation
with its principal offices in Bala Cynwyd, PA (the “Company”) and Timothy J.
Dwyer, an individual residing at 444 Bowen Drive Exton, PA 19341 (the
“Executive”).

         WHEREAS, the parties hereto desire that the Executive be employed by the
Company upon the terms and conditions provided for herein; and

         WHEREAS, in connection with such employment, the parties desire to provide
the Executive with the opportunity to acquire an equity interest in the
Company.

         NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive agree as follows:

     TERM OF EMPLOYMENT; RENEWAL. The Company agrees to employ the Executive
and the Executive accepts employment with the Company for the period commencing
as of the date hereof (the “Effective Date”) and ending on December 31, 2008
(such initial period, as extended below, shall be referred to as the
“Employment Term”). The term of this Agreement will automatically renew at the
expiration of the then current term for an additional one-year period unless,
at least ninety (90) days prior to the expiration date of the then current
term, either party shall give written notice of nonrenewal to the other, in
which event this Agreement shall terminate at the end of the term then in
effect. If the Company elects not to renew this Agreement at the expiration of
the initial five year term (the “Non-Renewal Date”), and if at such time (i)
there is no other event that would otherwise constitute “Cause” for the
termination of the Executive’s employment hereunder, (ii) the Executive
continues to comply with all his post-termination obligations, and (iii)
executes a general release in form satisfactory to the Company, the Company
shall continue to pay to the Executive his full Annual Direct Salary from the
Non-Renewal Date in equal monthly installments until the earlier of (i) the
Executive secures full time employment or (ii) six months from the Non-Renewal
Date. Following the Non-Renewal Date, the Executive shall notify the Company in
writing upon his commencement of any full time employment.

     POSITION AND DUTIES. The Executive shall serve as the Senior Vice
President – Operations of the Company, reporting to the President and Chief
Executive Officer (“CEO”) of the Company and shall have such authority and
duties, consistent with such position, as may from time to time be specified by
the Board of Directors of the Company (the “Board”) or CEO. At the request of
the Board, the Executive shall also serve, without additional compensation, as
an officer or director of any Affiliates of the Company that are involved in
the business of insurance, underwriting, reinsurance or other matters related
to the business operation of the Company. For purposes hereof, an “Affiliate”
means any company that is controlled by, under common control with, or that
controls the Company.

     ENGAGEMENT IN OTHER EMPLOYMENT. The Executive shall devote his business
time, energies and talents to the business of the Company and shall comply with
each of the Company’s corporate governance and ethics guidelines, conflict of
interests policies and code of

 

 

conduct applicable to all Company employees or senior executives as adopted by
the Board from time-to-time. The Executive first shall obtain the consent of
the Board in writing before engaging in any other business or commercial
activities, duties or pursuits. Notwithstanding the foregoing, nothing shall
preclude the Executive from (i) engaging in charitable activities and community
affairs, (ii) managing his personal investments and affairs, (iii) serving in a
capacity as a certified arbitrator in disputes related to reinsurance or
insurance during the Executive’s personal time and (iv) assisting his prior
employer (but only during the first six (6) months of employment hereunder) to
complete the transition of discrete and limited projects the Executive
previously was primarily responsible for, provided all such activities do not,
either individually or in the aggregate, in the reasonable judgment of the
Board, interfere with the proper performance of his duties and responsibilities
hereunder.

     COMPENSATION.

             (a) ANNUAL DIRECT SALARY. During the term of this Agreement, as
compensation for services rendered to Company under this Agreement, the
Executive shall be entitled to receive from the Company an annual direct salary
of not less than $225,000 per year commencing as of the Effective Date (the
“Annual Direct Salary”). Executive’s Annual Direct Salary shall be payable in
substantially equal bi-weekly installments, prorated for any partial employment
period. The Annual Direct Salary shall be reviewed by the Board in January of
each year this Agreement is in effect and may be adjusted in the discretion of
the Board after taking into account the prevailing market value of the position
and the then current pay increase practice of the Company. In no event shall
the Annual Direct Salary be decreased without the express written consent of
the Executive.

             (b) ANNUAL BONUS. During the term of this Agreement, Executive may be
eligible for annual incentive awards under one or more programs adopted by the
Board and established for each of the Company’s fiscal years. Award
opportunities and other terms and conditions of these awards, if any, will be
determined by the Board based on the achievement of goals and objectives
established for each of the Company’s fiscal years, and shall not be paid until
completion of the Company’s financial statements relating to the performance
period at issue and satisfaction of any other conditions adopted as part of
such programs. Nothing herein shall prohibit the Company from modifying or
amending any such incentive awards plan from time to time, or from terminating
any such plan. The initial bonus program during the first fiscal year for
which the Executive is employed hereunder shall be determined by the Company
subject to approval by the Board.

             (c) EQUITY INCENTIVE AWARDS. As of the Effective Date, the Executive (i)
shall purchase 13,125 Class A Common Shares of United National Group, Ltd.
(“UNG”) at an acquisition price of $131,250 (ii) shall receive a time vesting
stock option grant for 52,500 Class A Common Shares of UNG in the form of
option grant attached as Schedule A and (iii) shall receive a performance based
stock option grant for 65,625 Class A Common Shares of UNG in the form of
option grant attached as Schedule B. During the Employment Term, the Executive
may be eligible to receive additional option awards in UNG as determined by the
Board of the Company in its sole discretion. In addition to any exercise,
vesting or other restrictions imposed on such option awards by the Board in its
discretion, all such option awards shall be subject to the forfeiture
provisions of Annex A attached hereto.

2

 

             FRINGE BENEFITS, VACATION TIME, EXPENSES, AND PERQUISITES.

             (a) EMPLOYEE BENEFIT PLANS. The Executive shall be entitled to
participate in or receive benefits under all corporate employment benefit plans
including but not limited to any pension plan, savings plan, medical or
health-and-accident plan or arrangement generally made available by the Company
to its executives and key management employees as a group, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plans and arrangements.

             (b) The Executive shall be entitled to the number of paid vacation days in
each calendar year determined by the Company from time to time for its senior
executive officers, but not less than four (4) weeks in any calendar year
(prorated in any calendar year during which the Executive is employed hereunder
for less than the entire such year in accordance with the number of days in
such calendar year during which he is so employed). The Executive shall also
be entitled to all paid holidays given by the Company to its senior executive
officers.

             (c) During the term of his employment hereunder, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred
by him (in accordance with the policies and procedures established by the
Company from time to time) in performing services hereunder, provided that the
Executive properly accounts therefor in accordance with Company policy.

             (d) Except as otherwise specifically provided herein, nothing paid to the
Executive under any benefit plan or arrangement shall be deemed to be in lieu
of compensation to the Executive hereunder.

     PROTECTION OF COMPANY INFORMATION. During the period of his employment,
or at any later time following the termination of his employment for any
reason, the Executive shall hold in a fiduciary capacity for the benefit of the
Company and its Affiliates, and shall not, without the written consent of the
Board, knowingly disclose to any person, other than an employee of the Company
or a person to whom disclosure is reasonably necessary or appropriate in
connection with the performance by the Executive of his duties as an executive
of the Company, or use for any purpose other than to perform his duties
hereunder, any “Confidential Information” of the Company or any of its
Affiliates obtained by him while in the employ of the Company. The
Confidential Information protected by this provision shall include all computer
software and files, policy expirations, telephone lists, customer lists,
prospect lists, marketing information, information regarding managing general
agents, pricing policies, contract forms, customer information, copyrights and
patents, the identity of Company and Affiliate employees, Company and Affiliate
books, records, files, financial information, business practices, policies and
procedures, information about all services and products of the Company and its
Affiliates, names of users or purchasers of the products or services of the
Company or its Affiliates, methods of promotion and sale and all information
which constitutes trade secrets under the law of any state in which the Company
or any of its Affiliates does business. No information shall be treated as
Confidential Information if it is generally available public knowledge at the
time of disclosure or use by Executive, provided that information shall not be
deemed to be publicly available merely because it is embraced by general
disclosures or because individual features or combinations thereof are publicly
available. The Executive agrees that any breach of the restrictions set forth
in

3

 

this Section will result in irreparable injury to the Company and/or its
Affiliates for which there is no adequate remedy at law and the Company and its
Affiliates shall, in addition to any other remedies available to them, be
entitled to injunctive relief and specific performance in order to enforce the
provisions hereof. Notwithstanding the foregoing provisions, if the Executive
is required to disclose any such confidential or proprietary information
pursuant to applicable law or a subpoena or court order, the Executive shall
promptly notify the Company in writing of any such requirement so that the
Company or the appropriate affiliate may seek an appropriate protective order
or other appropriate remedy or waive compliance with the provisions hereof.
The Executive shall reasonably cooperate with the Company to obtain such a
protective order or other remedy. If such order or other remedy is not
obtained prior to the time the Executive is required to make the disclosure, or
the Company waives compliance with the provisions hereof, the Executive shall
disclose only that portion of the confidential or proprietary information which
he is advised by counsel that he is legally required to so disclose. All
records, files, memoranda, reports, customer lists, drawings, plans, documents
and the like that the Executive uses, prepares or comes into contact with
during the course of the Executive’s employment shall remain the sole property
of the Company and/or its Affiliates, as applicable. The Executive shall
execute and deliver the Company’s standard “work for hire” agreement regarding
ownership by the Company of all rights in its confidential and business
materials.

     RESTRICTIVE COVENANTS.

             (a) NONCOMPETITION AGREEMENT. The Executive acknowledges and agrees that
the insurance business and operations of the Company are national in scope, and
that the Company operates in multiple locations and business segments in the
course of conducting its business. In consideration of this Agreement and the
equity interests being made available to the Executive hereunder, the Executive
covenants and agrees that during his employment with the Company, and for a
period of eighteen (18) months following the termination of such employment for
any reason (whether termination occurs during, upon expiration of, or following
the original or the renewal term hereof), including without limitation as a
result of his discharge by the Company with or without Cause or Executive’s
voluntary resignation, the Executive shall not directly or indirectly compete
with the business of the Company or its Affiliates by becoming a shareholder,
officer, agent, employee, partner or director of any other corporation,
partnership or other entity, or otherwise render services to or assist or hold
an interest (except as less than a one percent (1%) shareholder of a publicly
traded company), in any “Competitive Business” (as defined below). “Competitive
Business” shall mean any person or entity (including any joint venture,
partnership, firm, corporation, or limited liability company) that engages in
(1) the specialty property and casualty insurance business, including excess
and surplus lines, non-admitted insurance lines, program-style insurance lines
and/or reinsurance, (2) the insurance agency or brokerage business, (3)
employing, contracting or consulting with any managing general agent or
producer of the Company and (4) any other material business of the Company or
any of its Affiliates as of the date of termination of the Executive’s
employment. In the event that this paragraph shall be determined by any court
of competent jurisdiction to be unenforceable in part by reason of its being
too great a period of time or covering too great a geographical area, it shall
be in full force and in effect as to that period of time or geographical area
determined to be reasonable by the court. Notwithstanding anything to the
contrary contained herein (A) other than in the case of a termination of the
Executive’s employment for Cause hereunder, upon termination of the Executive’s
employment by the Company without Cause or as a result of his disability, the

4

 

Executive may elect in writing to have the Company acquire his then
outstanding common stock and options in the Company at the lower of cost or
fair market value (as determined by the Board of the Company) and in connection
therewith execute a release, in form acceptable to the Company, which releases
the Company and its Affiliates (including FPC and its affiliates) from all
obligations to make payments under Section 9 of this Agreement, and upon
compliance by the Executive with the foregoing obligations, the Executive shall
no longer be subject to the restrictions set forth in subclauses (1) and (2) of
this Section 7(a), and (B) in the event of termination by the Company of the
Executive’s employment due to disability, the Executive may elect in writing to
no longer be subject to the restrictions in (1) and (2) of this Section 7(a)
(but upon such election shall no longer qualify for payments pursuant to
Section 9(a)).

             (b) RETURN OF MATERIALS. Upon termination of employment with the Company,
the Executive shall promptly deliver to the Company all correspondence,
manuals, letters, notes, notebooks, computer disks, software, reports and any
other document or tangible items containing or constituting Confidential
Information about the business of the Company and/or its Affiliates.

             (c) NONSOLICITATION OF EMPLOYEES AND CUSTOMERS. Should the Executive’s
employment with the Company be terminated for any reason (whether such
termination occurs during, upon expiration of, or following the original or the
renewal term hereof), including without limitation as a result of his discharge
by the Company with or without Cause or Executive’s voluntary resignation, for
a period of eighteen (18) months following such termination the Executive shall
not: (i) contact, recruit, employ, entice, induce or solicit, directly or
indirectly, any employee, officer, director, agent, consultant or independent
contractor employed by or performing services for the Company or any of its
Affiliates to leave the employ of or terminate services to the Company or such
Affiliate, including without limitation working with the Executive, with the
entity with which the Executive has affiliated (as an employee, consultant,
officer, director, stockholder or otherwise), or with any other entity; (ii)
seek, either in his individual capacity or on behalf of any other entity,
whether directly or indirectly to solicit, communicate with or contact or
advise, or transact or otherwise engage in any insurance related business with
(x) any party who is or was a customer of the Company or any of its Affiliates
during Executive’s employment by the Company or at any time during the said
eighteen (18) month period, or (y) any party who was identified as a prospect
of the Company or any of its Affiliates during Executive’s employment by the
Company; or (iii) engage in or participate in any effort or act to induce any
customer (as defined in subsection 7(c)(ii)) of the Company or any of its
Affiliates to take any action which might be disadvantageous to the Company or
its Affiliates. The Executive agrees that any breach of the restrictions set
forth in Sections 6 and 7 will result in irreparable injury to the Company for
which it shall have no adequate remedy in law and the Company shall, in
addition to any other remedy available to it and in lieu of Section 15 hereof,
be entitled to injunctive relief and specific performance in order to enforce
the provisions hereof. In addition to its other remedies, the Company shall be
entitled to reimbursement from the Executive and/or the Executive’s employer of
costs incurred in securing a qualified replacement as a result of any breach by
the Executive of this Section. For purposes of this Agreement, “customer”
shall include, without limitation, any policyholder, managing general agent or
reinsurer with whom the Company or its Affiliates has transacted business.

5

 

             (d) In the event Executive breaches any of his covenants in this Section
7, the Company and its Affiliates shall be released from their obligation to
make payments under Section 9 of this Agreement and (to the extent permitted by
applicable law) to provide benefits or make payments under all employee benefit
plans in which Executive participates, and the Company shall be entitled to
reimbursement from the Executive of severance payments made to the Executive by
the Company following termination of employment with the Company. In addition,
in the event of a violation by the Executive of his covenants in this Section
7, he shall be subject to the forfeiture provisions of Annex A with respect to
his equity holdings in the Company.

             (e) The Executive acknowledges and agrees that the terms of this Section
7: (i) are reasonable in light of all of the circumstances; (ii) are
sufficiently limited to protect the legitimate interests of the Company and its
subsidiaries; (iii) impose no undue hardship on the Executive; and (iv) are not
injurious to the public. The Executive further acknowledges and agrees that
(x) the Executive breach of the provisions of Section 7 will cause the Company
irreparable harm, which cannot be adequately compensated by money damages, and
(y) if the Company elects to prevent the Executive from breaching such
provisions by obtaining an injunction against the Executive, there is a
reasonable probability of the Company’s eventual success on the merits. The
Executive consents and agrees that if the Executive commits any such breach or
threatens to comment any breach, the Company shall be entitled to temporary and
permanent injunctive relief from a court of competent jurisdiction, without
posting any bond or other security and without the necessity of proof of actual
damage, in addition to, and not in lieu of, such other remedies as may be
available to the Company for such breach, including the recovery of money
damages.

     TERMINATION.

             (a) The Executive’s employment hereunder shall terminate upon his death,
retirement, or the expiration of this Agreement. Upon the Executive’s death,
any sums then due him shall be paid to the executor, administrator or other
personal representative of the Executive’s estate.

             (b) If the Executive becomes disabled (as certified by a licensed
physician selected by the Company) and is unable to perform or complete his
duties under this Agreement for a period of 180 consecutive days or 180 days
within any twelve-month period, the Company shall have the option to terminate
this Agreement by giving written notice of termination to the Executive. Such
termination shall be without prejudice to any right the Executive has under the
disability insurance program maintained by the Company.

             (c) The Company may terminate the Executive’s employment hereunder for
Cause. For the purposes of this agreement, the Company shall have “Cause” to
terminate the Executive’s employment hereunder upon (i) the Executive
substantially failing to perform his duties hereunder after notice from the
Company and failure to cure such violation within 10 days of said notice (to
the extent the Board reasonably determines such failure to perform is curable
and subject to notice) (other than in the case of disability covered under
Section 8(b) hereof) or violating any material Company policies, including
without limitation the Company’s corporate governance and ethics guidelines,
conflicts of interests policies and code of conduct applicable to all Company
employees or senior executives, (ii) the engaging by the Executive in any
malfeasance, fraud, dishonesty or gross misconduct adverse to the interests of
the Company or its

6

 

Affiliates, (iii) the material violation by the Executive of any of the
provisions of Sections 3, 6 or 7 hereof or other provisions of this Agreement
after notice from Company and a failure to cure such violation within 10 days
of said notice (including a “Forfeiture Event” as provided for in Annex A
hereto), (iv) the Board’s determination that the Executive has exhibited
incompetence or gross negligence in the performance of his duties hereunder,
(v) receipt of a final written directive or order of any governmental body or
entity having jurisdiction over the Company requiring termination or removal of
the Executive as Senior Vice President – Operations of the Company, or (vi) the
Executive being charged with a felony or other crime involving moral turpitude.

             (d) The Company may choose to terminate the Executive’s employment at any
time without Cause or reason.

             (e) Notwithstanding any provisions of this Agreement to the contrary, and
subject to the Executive remaining employed by the Company hereunder through
and until December 31, 2005, the Executive shall have the right, upon at least
ninety (90) days’ advance written notice to the Company, to elect to
voluntarily resign his employment, such resignation to be effective at any time
after December 31, 2005, solely in order to accept and immediately begin
employment with The AMC Group, L.P. or one or more of its affiliated entities
(“AMC”); provided such employment with AMC (the “AMC Employment”) must continue
for a period of at least six (6) continuous months following such termination
of employment hereunder, unless the Executive’s employment with AMC is
terminated earlier on account of his death, disability or termination by AMC
without cause, in which case the employment period shall terminate as of such
date. The Company may in its sole discretion elect to terminate the Executive
at any time after its receipt of written notice of Executive’s election to
terminate hereunder, in which case the Company shall pay the Executive his full
Annual Direct Salary through the date of such termination of employment. In
the event the Executive engages in the AMC Employment for at least six (6)
continuous months, the provisions of Annex B attached hereto shall apply and
such provisions and the payment obligations set forth therein, if any, shall be
in lieu of any severance payments or obligations set forth in Section 9.

     PAYMENTS UPON TERMINATION.

             (a) If the Executive’s employment shall be terminated because of death,
disability, or for Cause, the Company shall pay the Executive (or his executor,
administrator or other personal representative, as applicable) his full Annual
Direct Salary through the date of termination of employment at the rate in
effect at the time of termination and the Company shall have no further
obligations to the Executive under this Agreement (and the Executive shall not
be entitled to payment of any unpaid bonus or incentive award); provided that
in the event of a termination by the Company because of disability and other
than in the case of employment in any Competitive Business the Company shall
pay to the Executive, as full and complete liquidated damages hereunder, an
amount equal to the Executive’s then monthly Annual Direct Salary multiplied by
six (6) months, with such amount payable in equal monthly installments and
provided further that the foregoing amounts shall be reduced by any disability
payments for which the Executive may otherwise be entitled. No payments or
benefits shall be provided hereunder in connection with the Executive’s
disability (i) unless and until the Company has first received a signed general
release from the Executive (or the Executive’s guardian or legal
representative) in a form acceptable to the Company releasing the Company and
Affiliates and any other parties

7

 

identified by the Company and Affiliates therein, and (ii) to the extent
that the Executive has breached any of his post-termination obligations
hereunder.

             (b) If the Executive’s employment is terminated by the Company without
Cause or if the Executive terminates his employment as a result of (i) a
written notice from the Company that its principal executive offices are being
relocated more than 90 miles from their current location or that the
Executive’s principal place of employment is transferred to an office location
more than 90 miles from his then current place of employment (unless in either
case the effect of such relocation results in the Executive’s principal place
of employment being less than forty (40) miles from his principal residence),
and (ii) the failure of the Company to offer the Executive a reasonable
relocation package to cover direct out-of-pocket losses (if any) on the sale of
the Executive’s primary residence, and temporary living expenses and moving
costs, then the Company shall pay to the Executive, as full and complete
liquidated damages hereunder, an amount equal to the Executive’s then monthly
Annual Direct Salary multiplied by six (6) months, with such amount payable in
equal monthly installments; provided that if as of December 31, 2005 the
Executive is still employed by the Company and the Executive and the Company
agree in writing by March 31, 2006 to mutually satisfactory terms to amend this
Agreement to provide for a five-year term from January 1, 2006 through December
31, 2010, the foregoing payment obligation shall be modified to reflect the
monthly Annual Direct Salary then agreed to by the parties multiplied by 18 to
the extent that the Executive otherwise qualifies for a termination payment
under the terms of any ongoing agreement. The Company shall also maintain in
full force and effect, for the continued benefit of the Executive for the
period in which the Executive is receiving the foregoing payments, any medical
or health-and-accident plan or arrangement of the Company in which the
Executive is a participant at the time of such termination of employment;
provided that the Executive shall remain responsible for continuing to pay his
share of the costs of such coverage; provided further that the Company shall
not be under any duty to maintain such coverage if the Executive becomes
eligible for coverage under any other employer’s insurance and the Executive
shall give the Company prompt notice of when such eligibility occurs. No
payments or benefits shall be provided hereunder (i) unless and until the
Company has first received a signed general release from the Executive in a
form acceptable to the Company releasing the Company and Affiliates and any
other parties identified by the Company and Affiliates therein, and (ii) to the
extent that the Executive has breached any of his post-termination obligations
hereunder. Notwithstanding the foregoing, the Executive’s right to monthly
Annual Direct Salary payments or continuing benefits following a termination
described in this Section 9(b) shall immediately cease and all further payments
shall be forfeited in the event the Executive provides any employment,
consulting or other services to AMC for any form of remuneration , either
directly or indirectly, as an employee or independent contractor, during the
period in which the Executive is receiving such payments and benefits.

     NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as
follows:

	 	 	 
	If to the Executive:

	 	Timothy J. Dwyer

444 Bowen Drive

Exton, PA 19341

8

 

	 	 	 
	If to the Company:

	 	United National Insurance Company

Three Bala Plaza East, Suite 300

Bala Cynwyd, PA 19004

Attn: General Counsel
	 
	 	 
	With a Copy To:

	 	Fox Paine & Company, LLC

950 Tower Lane, Suite 1150

Foster City, CA 94404

Attn: Troy Thacker

or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

     SUCCESSORS. This Agreement shall be binding upon the Executive, his
heirs, executors or administrator, and the Company, and any successor to or
assigns of the Company. This Agreement is not assignable by Executive. This
Agreement is assignable by the Company to a successor to or purchaser of the
Company’s business.

     ENFORCEMENT OF SEPARATE PROVISIONS. Should provisions of this Agreement
be ruled unenforceable for any reasons, the remaining provisions of this
Agreement shall be unaffected thereby and shall remain in full force and
effect.

     AMENDMENT. This Agreement may be amended or canceled only by mutual
agreement of the parties in writing without consent of any other person and, so
long as the Executive lives, no person other than the parties hereto, shall
have any rights under or interest in this Agreement or the subject matter
hereof.

     ARBITRATION. In the event that any disagreement or dispute whatsoever
shall arise between the parities concerning this Agreement, such disagreement
or dispute shall be submitted to the Judicial Arbitration and Mediation
Services, Inc (“JAMS”) for resolution in a confidential private arbitration in
accordance with the comprehensive rules and procedures of JAMS, including the
internal appeal process provided for in Rule 34 of the JAMS rules with respect
to any initial judgment rendered in an arbitration. Any such arbitration
proceeding shall take place in Philadelphia, Pennsylvania before a single
arbitrator (rather than a panel of arbitrators). The parties agree that the
arbitrator shall have no authority to award any punitive or exemplary damages
and waive, to the full extent permitted by law, any right to recover such
damages in such arbitration. Each party shall each bear their respective costs
(including attorney’s fees, and there shall be no award of attorney’s fees) and
shall split the fee of the arbitrator. Judgment upon the final award rendered
by such arbitrator, after giving effect to the JAMS internal appeal process,
may be entered in any court having jurisdiction thereof. If JAMS is not in
business or is no longer providing arbitration services, then the American
Arbitration Association shall be substituted for JAMS for the purposes of the
foregoing provisions. Each party agrees that it shall maintain absolute
confidentiality in respect to any dispute between them.

     LAW GOVERNING. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.

9

 

     ENTIRE AGREEMENT. This Agreement supersedes any and all prior agreements,
either oral or in writing, between the parties with respect to the employment
of the Executive by the Company and this Agreement contains all the covenants
and agreements between the parties with respect to the Executive’s employment.

     ACKNOWLEDGEMENT. Executive acknowledges that he has carefully read and
fully understands this Agreement and that the Company has provided him
sufficient time to discuss such Agreement with an attorney.

[signature page to follow]

10

 

EXECUTION COPY

[Executive Employment Agreement Signature Page]

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

	 	 	 	 	 
	ATTEST:	 	United National Insurance Company
	 
	 	 	 	 
	/s/ Lynne Gerber-Saionz

	 	By:
	 	/s/ Seth F. Freudberg
	

	 	 	 	

	Secretary

	 	 	 	President
	 
	 	 	 	 
	WITNESS:	 	Timothy J. Dwyer
	 
	 	 	 	 
	/s/ Kevin L. Tate

	 	By:
	 	/s/Timothy J. Dwyer
	

	 	 	 	

 

 

Annex A

Option and Equity Forfeiture

     Forfeiture of Options and Restricted, Common and Preferred Stock and Gains
Realized upon Prior Option Exercises or Sale of Stock. Unless otherwise
determined by the Board of Directors of the Company, the Options granted under
this Employment Agreement, together with any future option grants made to the
Executive or options on the Class A common shares of UNG and any restricted
stock and common or preferred stock, if any, held by the Executive, shall be
subject to the following additional forfeiture conditions to which the
Executive, by accepting such Options or equity interests, hereby agrees. In
the event of (i) the Executive’s breach or failure to comply with any of the
terms or conditions of Section 6 or Section 7 of this Employment Agreement
(whether or not employed by the Company at such breach or failure to comply) (a
“Forfeiture Event”), and (ii) if the Executive is employed by the Company at
the time of a Forfeiture Event, his termination of employment by the Company,
all of the following will result:

	 	(i)	 	The unexercised portion of the Options (both unvested and
vested, if any) will immediately be forfeited and canceled without
payment upon the occurrence of the Forfeiture Event;
	 
	 	(ii)	 	All equity, including restricted stock, common and/or
preferred stock, if any, held by the Executive will, upon the
occurrence of the Forfeiture Event, immediately be repurchased by
the Company or its designee at the lower of fair market value (as
determined by the Board of the Company) or the Executive’s original
purchase price (in each case reduced to reflect any outstanding
liabilities of the Executive to the Company or its Affiliates), with
payment taking the form of a five year note from the Company or its
designee, accruing interest at the lowest then applicable rate
mandated by Federal law, with the principal and interest due on the
fifth anniversary of the date of purchase (or such later date as may
be necessary to permit the Company or its designee to comply with
any applicable borrowing covenants affecting its payment
obligations.) The Executive promptly shall take all appropriate and
necessary action to facilitate the buy back of such equity,
including the prompt delivery to the Company (or its designee) of
all stock certificates or other documents that the Company may
request; and
	 
	 	(iii)	 	The Executive will be obligated to repay to the Company (or
its designee), in cash, within five (5) business days after demand
is made therefor by the Company (or its designee), the total amount
of Award Gain (as defined herein) realized by the Executive (I) upon
each exercise of the Options that occurred on or after (A) the date
that is six (6) months prior to the Forfeiture Event, if the
Forfeiture Event occurred while the Executive was employed by the
Company or a subsidiary or affiliate, or (B) the date that is six
(6) months prior to the date that Executive’s employment by the
Company or a subsidiary or affiliate terminated, if the Forfeiture
Event occurred after the Executive ceased to be so employed, or (II)
upon any sale, transfer or other disposition of the Class A Common
Shares of UNG. For purposes of this Annex A, the term “Award Gain”
shall mean (i) in respect of a given Options exercise, the product
of (X) the Fair Market Value per share of stock at the date of such
exercise (without regard to any subsequent change

 

 

	 	 	 	in the market price of such share of stock) minus the exercise
price times (Y) the number of shares as to which the Options were
exercised at that date, and (ii), in respect of any sale of stock,
the value of any cash or the Fair Market Value of stock or property
paid or payable to the Executive less any cash or the Fair Market
Value of any stock or property (other than stock or options which
would have itself been forfeitable hereunder and excluding any
payment of tax withholding) paid by the Executive to the Company
(or its designee) as a condition or in connection with the
acquisition of such stock or amount otherwise included in subclause
(i) above.

 

 

Annex B

Provisions Relating to AMC Employment

     The parties hereto agree that notwithstanding any contrary provisions of
this Agreement, the Management Shareholders’ Agreement dated as of September 5,
2003 by and among UNG, UN Holdings (Cayman), Ltd. and persons listed on
Schedule I thereto,(the “MSA”) the UNG Share Incentive Plan dated September 5,
2003, as amended, and the agreements attached as Schedule A and Schedule B
hereto, the terms and conditions set forth below shall apply in the event the
Executive engages in the AMC Employment for at least the period of time
required by Section 8(e) (the “AMC Section 8(e) Service Period”):

	 	(i)	 	the Executive shall be entitled to receive payment of the
annual bonus award for the 2005 calendar year, if any, described in
Section 4(b), notwithstanding that he is no longer employed by the
Company on the date such payment would otherwise be made, provided
that (x) all other requirements for the payment of the bonus have
been satisfied and (y) the bonus shall be payable only if the
Executive completes the AMC Section 8(e) Service Period;
	 
	 	(ii)	 	during the period of the AMC Employment (provided it equals
or exceeds the AMC Section 8(e) Service Period), the Executive’s
service with AMC shall be credited with respect to the continued
vesting and exercisability of the time vesting stock option grant
and the performance vesting stock option grant described in Section
4(c);
	 
	 	(iii)	 	during the period of the AMC Employment (provided it equals
or exceeds the AMC Section 8(e) Service Period), the Executive shall
have the right, at his election in writing, (A) if the Class A
Common Shares of UNG are not then publicly traded, to have the
Company purchase all of the Class A Common Shares of UNG described
in Section 4(c)(i) at a per share price equal to the lower of cost
(with cost adjusted to include a 5% annual return compounded on the
Executive’s purchase price from the date of his purchase) and the
fair market value of such shares (as determined by the Board of the
Company) as of the date of exercise of the Executive’s election
hereunder, and (B) if the Class A Common Shares of UNG are then
publicly traded, to sell such shares to the extent permitted
pursuant to Rule 144 as promulgated by the SEC and such public sale
shall not be subject to the provisions of subclause (d) of Section
2.1.4 of the MSA;
	 
	 	(iv)	 	during the period of the AMC Employment (provided it equals
or exceeds the AMC Section 8(e) Service Period), the Executive shall
not be restricted from engaging in activities which would otherwise
be considered to be a violation of the restrictive covenants set
forth in Section 7 of this Agreement if (i) he engages in those
activities in the course of the proper performance of his duties for
AMC and (ii) the engagement in such activities by AMC does not
breach any of AMC’s covenants under Section 6.07 of the Amended and
Restated Investment Agreement dated as of September 5, 2003 among
U.N. Holdings (Cayman), Ltd., Vigilant

 

 

	 	 	 	International, Ltd., U.N. Holdings II, Inc., U.N. Holdings LLC,
U.N. Holdings Inc., Wind River Investment Corporation and the
trusts named therein; and
	 
	 	(v)	 	no payments, benefits or rights shall be provided hereunder
(a) unless and until the Company has first received a signed general
release from the Executive in a form acceptable to the Company
releasing the Company and its Affiliates and any other parties
identified by the Company and its Affiliates therein, and (b) to the
extent that the Executive has breached any of his post-termination
obligations hereunder.
	 
	 	(vi)	 	For purposes of any written notice to be given the Executive
under this Agreement or otherwise, such notice shall be effective
only upon actual receipt of delivery by Executive or on the day
following delivery by the Company of any notice to an overnight
delivery service addressed to the Executive.<PAGE>

                                                                    EXHIBIT 10.8

               AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

   THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is
made effective as of the 20th day of June, 2003 by and between Israel Adan, a
resident of New York (the "Employee"), and Orbit/FR, Inc., a Delaware
corporation (the "Company").

   WHEREAS, Employee has been employed by the Company as its CEO and President
since October 2001 pursuant to an Executive Employment Agreement between the
Company and the Employee dated as of October 15, 2001 (the "Original
Agreement"); and

   WHEREAS, the Company and Employee desire to amend and restate the Original
Agreement to reflect certain agreed upon changes to the Employee's
compensation..

   NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein, and intending to be legally bound, the parties, subject to the
terms and conditions set forth herein, agree to amend and restate the Original
Agreement to read in its entirety as follows:

1.       Employment and Term. The Company hereby employs Employee, and Employee
hereby accepts employment with the Company, as President and CEO (the
"Position") for a period (the "Term") commencing on the date hereof and
continuing until terminated pursuant to the provisions of Section 8 hereof.

2.       Duties. During the Term, Employee shall serve the Company faithfully
and to the best of his ability and shall devote his full time, attention, skill
and efforts to the performance of the duties required by or appropriate for the
Position. Employee will be reporting directly to the company's Chairman, Vice
Chairman and Board of Directors.

3.       Other Business Activities. During the Term, Employee will not, without
the prior written consent of the Board of Directors of the Company in its sole
discretion, directly or indirectly engage in any other business activities or
pursuits whatsoever, except activities in connection with charitable or civic
activities, personal investments and serving as an executor, trustee or in other
similar fiduciary capacity; provided, that such activities do not interfere with
his performance of his responsibilities and obligations pursuant to this
Agreement.

4.       Compensation. The Company shall pay Employee, and Employee hereby
agrees to accept, as compensation for all services rendered hereunder and for
Employee's covenants provided for in Sections 5, 6 and 7 hereof, the
compensation set forth in this Section 4.

   4.1. Base Salary. The Company shall pay Employee a base salary at the annual
rate of One Hundred Fifty thousand dollars ($150,000) (the "Base Salary"). The
Base Salary shall be inclusive of all applicable income and other taxes and
charges that are required by law to be withheld by the Company, are requested to
be withheld by Employee, and shall be withheld and paid in accordance with the
Company's normal payroll practice for its similarly situated employees from time
to time in effect. Upon commencement of Employee's employment hereunder,
Employee shall be entitled to a special payment in an amount equal $6,667.

   4.2. Bonus Program. Employee may be entitled to an annual bonus (the "Bonus")
based upon the achievement (during any calendar year) of such written individual
and corporate annual objectives (the "Objectives") as the Board of Directors may
from time to time establish. Employee acknowledges that such Objectives may be
amended from time to time without Employee's consent. Employee further
acknowledges that any Bonus shall be deemed earned on the last day of the
applicable calendar year and shall be payable to Employee by the end of the
first quarter of the following calendar year, except as expressly otherwise set
forth in Section 8 hereof in connection with a pro-rata payment upon
termination. Without limiting the generality of the foregoing, Employee shall be
entitled to (a) a Bonus in the amount of $15,000 on account of calendar year
2002, and (b) a Bonus on account of calendar year 2003 in the amount of (i) 0.5%
of the amount of the Net Operating Profit Improvement (defined below) up to an
aggregate of $1 million Net Operating Profit Improvement, plus (ii) 2% of the

<PAGE>

amount of Net Operating Profit Improvement in excess of $1 million and up to
$1.5 million, plus (iii) 2.5% of the amount of Net Operating Profit Improvement
in excess of $1.5 million and up to $2 million, plus (iv) 4% of the amount of
Net Operating Profit Improvement in excess of $2 million. The term "Net
Operating Profit Improvement" means the amount by which the Company's net
operating profits in calendar year 2003 improved relative to the Company's net
operating profits in 2002. For clarification purposes, a reduction in net
operating losses shall also be considered a Net Operating Profit Improvement.

   4.3. Fringe Benefits. Employee shall be entitled to participate in any
health, life and disability insurance, 401(k) and other fringe benefit programs
(collectively the "Benefits") of the Company to the extent and on substantially
similar terms and conditions as are accorded to other executives of the Company
and its affiliates (the "Orbit Group"). Provided, that Employee may, subject to
applicable laws, waive in writing participation in the Company's health
insurance plan and receive, in lieu thereof, an additional compensation at an
annual rate of $10,000 (inclusive of all applicable income and other taxes)
payable ratably along with each Base Salary payment.

   4.4. Reimbursement of Expenses. Employee shall be reimbursed for all normal
items of travel and entertainment and miscellaneous expenses reasonably incurred
by him on behalf of Company, provided that such expenses are documented and
submitted to the Company all in accordance with the reimbursement policies of
the Company as in effect from time to time.

   4.5. Stock Options. Subject to approval by the Company's Board of Directors,
Employee shall be granted stock options (the "Options") for 60,000 shares of the
Company's common stock. The Options shall vest in three (3) equal annual
installments, commencing on the first anniversary hereof, and shall otherwise be
subject to all of the terms and conditions of the Company's Employee Stock
Option Plan. Provided, that the award of the Options shall provide for an
acceleration of vesting upon a change in control (i.e. a change of more than 50%
of the beneficial ownership of the Company's capital stock). The Company shall
consider whether to grant Employee additional Options in June 2003.

   4.6. Use of Company Car. The Company shall make available to the Employee a
car of a standard suitable for his position owned or leased by the Company for
the Employee's business and reasonable personal use during the Term. The Company
shall be responsible for the cost of insurance and maintenance for the vehicle.
The Employee shall be responsible for overseeing the proper maintenance of the
vehicle. Employee shall be solely responsible, and shall indemnify the Company,
for the payment of any fines, costs or expenses incurred in connection with
moving or parking violations (the "Violations") involving the vehicle, other
than Violations that occurred while the vehicle was under the control of an
employee of the Company (other than Employee) for business purposes only.

   4.7 M&A. In the event of a Change in Control (defined below) of the Company
during the term hereof, Employee shall be entitled to a special compensation in
an amount equal to five percent (5%) of an amount equal to (i) the aggregate
value of consideration paid in the Change in Control to the Company (in the case
of an asset sale) or its shareholders (in the case of a merger or a stock sale)
(the "Purchase Price"), minus (ii) [$3,000,000] (the "Base Value"). The term
"Change in Control" means a change in the majority ownership of the Company, or
of substantially all of its business, as a result of a bona-fide acquisition by
a third party, and expressly excluding a reorganization involving the Company
and its controlling shareholder. In the event of a sale (the "Partial Business
Sale") of one or more of the Company's business units (the "Sold BU") to a third
party in a bona-fide sale which does not constitute a Change in Control,
Employee shall be entitled to a special compensation in an amount equal to five
percent (5%) of an amount equal to (x) the aggregate value of consideration paid
to the Company in the Partial Business Sale, minus (y) the Relative Base Value.
The term "Relative Base Value" means a percentage of the Base Value equal to the
percentage of the gross revenues of the Sold BU relative to the gross revenues
of the Company during the twelve months immediately preceding the effective date
of the Partial Business Sale.

5.       Confidentiality.

   5.1. Employee recognizes and acknowledges that he will obtain Proprietary
Information (as hereinafter defined) of the Company and other Orbit Group
entities in the course of his employment as an executive employee of the
Company. Employee further recognizes and acknowledges that the Proprietary
Information is a valuable, special and unique asset of the Company and the Orbit
Group. As a result, Employee shall not, without the prior written consent of the
Company, for any reason either directly or indirectly divulge to any third-party
or use for his own benefit, or for any purpose other than the

<PAGE>

exclusive benefit of the Company, any confidential, proprietary, business and
technical information or trade secrets (the "Proprietary Information") of the
Company or any other Orbit Group entity revealed, obtained or developed in the
course of his employment with the Company. Proprietary Information shall
include, but shall not be limited to, any information relating to methods of
production, manufacture and research; computer hardware and software
configurations, computer inputs and outputs (regardless of the media on which
stored or located) and computer processing systems, techniques, designs,
architecture, and interfaces; the identities of, the relationship with, the
terms of contracts and agreements with, the needs and requirements of, and the
course of dealing with, the respective Orbit Group entities' actual and
prospective customers, contractors and suppliers; and any other materials
prepared by Employee in the course of his employment by the Company, or prepared
by any other employee or contractor of the Orbit Group for the Orbit Group's
customers, (including concepts, layouts, flow charts, specifications, know-how,
plans, sketches, blueprints, costs, business studies, business procedures,
finances, marketing data, methods, plans, personnel information, customer and
vendor credit information and any other materials that have not been made
available to the general public). Nothing contained herein shall restrict
Employee's ability to make such disclosures during the course of the employment
as may be necessary or appropriate to the effective and efficient discharge of
the duties required by or appropriate for the Position or as such disclosures
may be required by law. Furthermore, nothing contained herein shall restrict
Employee from divulging or using for his own benefit or for any other purpose
any Proprietary Information that is readily available to the general public so
long as such information did not become available to the general public as a
direct or indirect result of Employee's breach of this Section 5. Failure by the
Company (or any other Orbit Group entity) to mark any of the Proprietary
Information as confidential or proprietary shall not affect its status as
Proprietary Information under the terms of this Agreement.

   5.2. All right, title and interest in and to Proprietary Information shall be
and remain the sole and exclusive property of the respective Orbit Group entity.
During the Term, Employee shall not remove from the Company's offices or
premises any documents, records, notebooks, files, correspondence, reports,
memoranda or similar materials of or containing Proprietary Information, or
other materials or property of any kind belonging to the Company unless
necessary or appropriate in accordance with the duties and responsibilities
required by or appropriate for the Position and, in the event that such
materials or property are removed, all of the foregoing shall be returned to
their proper files or places of safekeeping as promptly as possible after the
removal shall serve its specific purpose. Employee shall not make, retain,
remove and/or distribute any copies of any of the foregoing for any reason
whatsoever except as may be necessary in the discharge of the assigned duties
and shall not divulge to any third person the nature of and/or contents of any
of the foregoing or of any other oral or written information to which he may
have access or with which for any reason he may become familiar, except as
disclosure shall be necessary in the performance of the duties; and upon the
termination of his employment with the Company, he shall return to the Company
all originals and copies of the foregoing then in the possession, whether
prepared by Employee or by others.

6.       Assignment of Developments

   6.1. If at any time or times during Employee's employment with the Company,
he shall (either alone or with others) make, discover or reduce to practice any
invention, modification, discovery, design, development, improvement, process,
software program, work of authorship, documentation, formula, data, technique,
know-how, secret or intellectual property right whatsoever or any interest
therein (whether or not patentable or registrable under copyright or similar
statutes or subject to analogous protection) (herein called "Developments") that
(i) relates to the then current business of the Company or any then current
customer of or supplier to the Company or any of the products or services being
developed, manufactured or sold by the Company, (ii) results from tasks assigned
me by the Company or (iii) results from any use of premises or personal property
(whether tangible or intangible) owned, leased or contracted for by the Company,
such Developments and the benefits thereof shall immediately become the sole and
absolute property of the Company and its assigns, and Employee shall promptly
disclose to the Company (or any persons designated by it) each such Development
and Employee hereby assigns any rights he may have or acquire in the
Developments, and benefits and/or rights resulting therefrom, to the Company and
its assigns without further compensation and shall communicate, without cost or
delay, and without publishing the same, all available information relating
thereto (with all necessary plans and models) to the Company.

   6.2. Upon disclosure of each Development to the Company, Employee will,
during his employment with the Company, and at any time thereafter, at the
request and cost of the Company, sign, execute, make and do all such deeds,
documents, acts and things as the Company and its duly authorized agents may
reasonably require (i) to apply for, obtain and vest in the name

<PAGE>

of the Company alone (unless the Company otherwise directs) letters patent,
copyrights or other analogous protection in any country throughout the world and
when so obtained or vested to renew and restore the same; and (ii) to defend any
opposition proceedings in respect of such applications and any opposition
proceedings or petitions or applications for revocation of such letters patent,
copyright or other analogous protection.

   6.3. In the event the Company is unable, after all diligent effort, to secure
Employee's signature on any letters patent, copyright or other analogous
protection relating to a Development, whether because of Employee's physical or
mental incapacity or for any other reason whatsoever, Employee hereby
irrevocably designate and appoint the Company through its duly authorized
president as his agent and attorney-in-fact, to act for and in his behalf and
stead solely to execute and file any such application or applications and to do
all other lawfully permitted acts to further the prosecution and issuance of
letters patent, copyright or other analogous intellectual property protection
thereon with the same legal force and effect as if executed by him.

7.       Covenant not to Compete.

   7.1. Employee shall not, during the Term and for a period of two (2) years
after termination hereof for any reason whatsoever (the "Restricted Period"), do
any of the following directly or indirectly without the prior written consent of
the Company in its sole discretion:

   7.1.1. engage or participate, directly or indirectly, in any business
activity competitive with the business of the Company or any other Orbit Group
entity (collectively the "Business") as conducted during the Term;

   7.1.2. become interested (as owner, stockholder, lender, partner,
co-venturer, director, officer, employee, agent, consultant or otherwise) in any
person, firm, corporation, association or other entity engaged in any business
that is competitive with the Business as conducted during the Term, or become
interested in (as owner, stockholder, lender, partner, co-venturer, director,
officer, employee, agent, consultant or otherwise) any portion of the business
of any person, firm, corporation, association or other entity where such portion
of such business is competitive with the Business as conducted during the Term
(notwithstanding the foregoing, Employee may hold not more than one percent (1%)
of the outstanding securities of any class of any publicly-traded securities of
a company that is engaged in activities competitive with the Business as
conducted during the Term);

   7.1.3. solicit or call on, either directly or indirectly, any (i) customer
with whom the Company shall have dealt at any time during the Term, or (ii)
supplier with whom the Company shall have dealt at any time during the one (1)
year period immediately preceding the termination of Employee's employment
hereunder;

   7.1.4. influence or attempt to influence any supplier, customer or potential
customer of the Company to terminate or modify any written or oral agreement or
course of dealing with the Company; or

   7.1.5. influence or attempt to influence any person either (i) to terminate
or modify the employment, consulting, agency, distributorship or other
arrangement with the Company or the Orbit Group, or (ii) to employ or retain, or
arrange to have any other person or entity employ or retain, any person who has
been employed or retained by the Company or the Orbit Group as an employee,
consultant, agent or distributor of the Company or the Orbit Group at any time
during the one (1) year period immediately preceding the termination of
Employee's employment hereunder.

   7.2. Employee acknowledges that he has carefully read and considered the
provisions of this Section 7. Employee acknowledges that the foregoing
restrictions may limit his ability to earn a livelihood in a business similar to
the Business, but he nevertheless believes that he has received and will receive
sufficient consideration and other benefits in connection with the payment by
the Company of the compensation set forth in Section 4 to justify such
restrictions, which restrictions Employee does not believe would prevent him
from earning a living in businesses that are not competitive with the Business
and without otherwise violating the restrictions set forth herein.

   7.3. Any reference to the "Company" in Section 7.1 above shall mean the
Company and its subsidiaries, individually and collectively, as appropriate in
context.

<PAGE>

8.       Early Termination. Employee's employment hereunder may be terminated
during the Term upon the occurrence of any one of the events described in this
Section 8. Upon termination, Employee shall be entitled only to such
compensation and benefits as described in this Section 8.

         8.1. Termination for Disability.

   8.1.1. In the event of the disability of Employee such that Employee is
unable to perform the duties and responsibilities hereunder to the full extent
required by this Agreement by reasons of illness, injury or incapacity for a
period of more than ninety (90) consecutive days or more than one hundred eighty
(180) days, in the aggregate, during any twenty four (24) months period,
Employee's employment hereunder may be terminated by the Company by written
notice to Employee.

   8.1.2. In the event of a termination of Employee's employment hereunder
pursuant to Section 8.1.1, Employee shall be entitled to receive all accrued but
unpaid (as of the effective date of such termination) Base Salary, Benefits and
a pro-rata amount (as determined in good faith by the Company's Board of
Directors) of the Bonus applicable to the then calendar year. Except as
specifically set forth in this Section 8.1, the Company shall have no liability
or obligation to Employee hereunder by reason of such termination, except that
Employee shall be entitled to receive any payment prescribed under any
disability benefits plan in which he is a participant as an employee of the
Company, and to exercise any rights afforded under any other benefit plan then
in effect.

   8.2. Termination by Death. In the event that Employee dies during the Term,
Employee's employment hereunder shall be terminated thereby and the Company
shall pay to Employee's executors, legal representatives or administrators an
amount equal to the accrued and unpaid (as of the effective date of such
termination) Base Salary, Benefits and a pro-rata amount (as determined in good
faith by the Company's Board of Directors) of the Bonus applicable to the then
calendar year. Except as specifically set forth in this Section 8.2, the Company
shall have no liability or obligation hereunder to Employee's executors, legal
representatives, administrators, heirs or assigns (or any other person claiming
under or through him by reason of Employee's death), except that Employee's
executors, legal representatives or administrators will be entitled to receive
the payment prescribed under any death or disability benefits plan in which he
is a participant as an employee of the Company, and to exercise any rights
afforded under any benefit plan then in effect.

         8.3. Termination for Cause.

   8.3.1. The Company may terminate Employee's employment hereunder at any time
for "cause" upon written notice to Employee. For purposes of this Agreement,
"cause" shall mean:

                           8.3.1.1 any breach by Employee of any of the
covenants under Sections 5, 6 or 7 of this Agreement;

                           8.3.1.2 Employee has been grossly negligent or has
committed willful misconduct in carrying out his duties hereunder and either
continues to be grossly negligent or commit willful misconduct for a period of,
or fails to cure the results of his gross negligence or willful misconduct
within, 30 days after written notice from the Company to Employee thereof;

                           8.3.1.3 conduct of Employee  involving  any type of
insubordination, or disloyalty to the Company, or willful misconduct with
respect to the Company, including without limitation fraud, embezzlement, theft
or proven dishonesty in the course of the employment;

                           8.3.1.4 conviction of a felony or other criminal act
punishable by more than one (1) year in prison; and

                           8.3.1.5 commission by Employee of an intentional
tort or an act involving moral turpitude or constituting fraud.

   8.3.2. In the event of a termination of Employee's employment hereunder
pursuant to Section 8.3 Employee shall be entitled to receive all accrued but
unpaid (as of the effective date of such termination) Base Salary and Benefits.
All Base

<PAGE>

Salary and Benefits shall cease at the time of such termination. Employee shall
not be entitled to receive any Bonus (whether or not then earned) for (i) the
then calendar year, and (ii) the calendar year in which the event giving rise to
the termination for "cause" occurred. Except as specifically set forth in this
Section 8.3, the Company shall have no liability or obligation to Employee
hereunder by reason of such termination.

         8.4. Termination Without Cause.

   8.4.1. The Company may terminate Employee's employment hereunder at any time,
for any reason whatsoever, with or without cause, effective upon the date
designated by the Company upon one hundred and eighty (180) days (the "Notice
Period") prior written notice to Employee.

   8.4.2. In the event of a termination of Employee's employment hereunder
pursuant to Section 8.4, Employee shall be entitled to receive all accrued but
unpaid (as of the effective date of such termination) Base Salary, Benefits, use
of company car (or economic value thereof) and a pro-rata amount (as determined
in good faith by the Company's Board of Directors) of the Bonus applicable to
the then calendar year. Employee shall further be deemed to have a vested
interest in such portion of the Options equal to the number of months from the
date hereof until the effective date of termination of his employment hereunder,
divided by 36. Except as specifically set forth in this Section 8.4, the Company
shall have no liability or obligation to Employee hereunder by reason of such
termination.

   8.4.3. During the Notice Period, Employee (i) shall not be entitled to retain
the Position, and (ii) shall cooperate in good faith with the Company in
transitioning the duties of the Position to one or more successors as determined
by the Board of Directors or the Chairman.

   8.4.4. The Company shall be deemed to have effected a termination of
Employee's employment under this Section 8.4 in the event of a Change in Control
(defined above). The Notice Period shall commence upon the effective date of the
Change in Control.

   8.4.5. The Company may, at its sole discretion, in lieu of continuing the
Employee's employment during the Notice Period (or any part thereof) terminate
the Employee's employment immediately during the Notice Period by written notice
to the Employee, and pay the Employee, as liquidated damages, an amount equal to
the Base Salary, Bonus, Benefits and other payments which the Employee would
have been entitled to had his employment continued from the date of such
termination until a date (the "Last Payment Date") which is the earlier of (i)
the end of the Notice Period or (ii) the date on which the Employee commences a
new employment. Any such payment shall be made on such dates, and in such form,
as would have been made had the Employee's employment continued through the Last
Payment Date. For the purpose of vesting of Options, the termination of the
Employee's employment hereunder shall be deemed to occur on the Last Payment
Date notwithstanding an earlier termination pursuant to this section 8.4.5.8.5.
Termination By Employee.

   8.5.1. Employee may terminate Employee's employment hereunder at any time for
any reason effective upon the date designated by Employee in written notice of
the termination of the employment hereunder pursuant to this Section 8.5;
provided that, such date shall be at least ninety (90) days after the date of
such notice.

   8.5.2. In the event of a termination of Employee's employment hereunder
pursuant to Section 8.5 hereof, Employee shall be entitled to receive all
accrued but unpaid (as of the effective date of such termination) Base Salary
and Benefits. All Base Salary and Benefits shall cease at the time of such
termination, subject to the terms of any benefit plan then in force and
applicable to Employee. Employee shall not be entitled to receive any Bonus on
account of the then current year. Except as specifically set forth in this
Section 8.5, the Company shall have no liability or obligation to Employee
hereunder by reason of such termination.

9.       Representations, Warranties and Covenants of Employee.

   9.1. Employee represents and warrants to the Company that:

   9.1.1. There are no restrictions, agreements or understandings whatsoever to
which Employee is a party which would prevent or make unlawful Employee's
execution of this Agreement or Employee's employment hereunder, or which is or
would be inconsistent or in conflict with this Agreement or Employee's
employment hereunder, or would prevent, limit or impair in any way the
performance by Employee of the obligations hereunder;

<PAGE>

   9.1.2. Employee has disclosed to the Company all restraints, confidentiality
commitments or other employment restrictions that he has with any other
employer, person or entity; and

10.      Survival of Provisions. The provisions of this Agreement set forth in
Sections 5, 6, 7, 9, 10, 16 and 19 hereof shall survive the termination of
Employee's employment hereunder for any reason whatsoever.

11.      Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company and Employee and their respective successors,
executors, administrators, heirs and/or permitted assigns; provided that neither
Employee nor the Company may make any assignments of this Agreement or any
interest herein, by operation of law or otherwise, without the prior written
consent of the other parties hereto; except that, without such consent, the
Company may assign this Agreement to any successor to all or substantially all
of its assets and business by means of liquidation, dissolution, merger,
consolidation, transfer of assets, or otherwise, provided that such successor
assumes in writing all of the obligations of the Company under this Agreement.

12.      Notice. Any notice hereunder by either party shall be given by personal
delivery or by sending such notice by certified mail, return-receipt requested,
or telecopied, addressed or telecopied, as the case may be, to the other party
at its address set forth below or at such other address designated by notice in
the manner provided in this section. Such notice shall be deemed to have been
received upon the date of actual delivery if personally delivered or, in the
case of mailing, two (2) days after deposit with the U.S. mail, or, in the case
of facsimile transmission, when confirmed by the facsimile machine report.

                  If to Employee:

                           Israel Adan
                           149 Finucane Pl.
                           Woodmere,  NY 11598

                  If to the Company:

                           Orbit/FR, Inc.
                           Att: Chairman
                           506 Prudential Road
                           Horsham, PA 19047

                  With a copy to:

                           Benjamin Strauss, Esquire
                           Pepper Hamilton LLP
                           1201 Market Street
                           Suite 1600
                           Wilmington, DE 19801

13.      Entire Agreement; Amendments. This Agreement contains the entire
agreement and understanding of the parties hereto relating to the subject matter
hereof, and merges and supersedes all prior and contemporaneous discussions,
agreements and understandings of every nature between the parties hereto
relating to the employment of Employee with the Company. This Agreement may not
be changed or modified, except by an agreement in writing signed by each of the
parties hereto.

14.      Waiver. The waiver of the breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any other or
subsequent breach of this Agreement.

15.      Governing Law. This Agreement shall be construed and enforced in
accordance with the substantive laws of the State of Delaware, without regard to
the principles of conflicts of laws of any jurisdiction.

16.      Invalidity. If any provision of this Agreement shall be determined to
be void, invalid, unenforceable or illegal for any reason, the validity and
enforceability of all of the remaining provisions hereof shall not be affected
thereby. If any particular provision of this Agreement shall be adjudicated to
be invalid or unenforceable, such provision shall be deemed amended to delete
therefrom the portion thus adjudicated to be invalid or unenforceable, such
amendment to apply only to the operation of such provision in the particular
jurisdiction in which such adjudication is made; provided that, if any provision
contained in this Agreement shall be adjudicated to be invalid or unenforceable
because such provision is held to be excessively broad as to duration,
geographic scope, activity or subject, such provision shall be deemed amended by
limiting and reducing it so as to be valid and enforceable to the maximum extent
compatible with the applicable laws of such jurisdiction, such amendment only to
apply with respect to the operation of such provision in the applicable
jurisdiction in which the adjudication is made.

<PAGE>

17.      Section Headings. The section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.

18.      Number of Days. In computing the number of days for purposes of this
Agreement, all days shall be counted, including Saturdays, Sundays and legal
holidays; provided that, if the final day of any time period falls on a
Saturday, Sunday or day which is a legal holiday in the location of the
principal place of business of the Company, then such final day shall be deemed
to be the next day which is not a Saturday, Sunday or legal holiday.

19.      Specific Enforcement; Extension of Period.

   19.1. Employee acknowledges that the restrictions contained in Sections 5, 6,
and 7 hereof are reasonable and necessary to protect the legitimate interests of
the Company and its affiliates and that the Company would not have entered into
this Agreement in the absence of such restrictions. Employee also acknowledges
that any breach by him of Sections 5, 6, or 7 hereof will cause continuing and
irreparable injury to the Company for which monetary damages would not be an
adequate remedy. Employee shall not, in any action or proceeding to enforce any
of the provisions of this Agreement, assert the claim or defense that an
adequate remedy at law exists. In the event of such breach by Employee, the
Company shall have the right to enforce the provisions of Sections 5, 6, and 7
of this Agreement by seeking injunctive or other relief in any court, and this
Agreement shall not in any way limit remedies of law or in equity otherwise
available to the Company.

   19.2. The periods of time set forth in Section 7 hereof shall not include,
and shall be deemed extended by, any time required for litigation to enforce the
relevant covenant periods, provided that the Company is successful on the merits
in any such litigation. The "time required for litigation" is herein defined to
mean the period of time from the earlier of Employee's first breach of such
covenants or service of process upon Employee through the expiration of all
appeals related to such litigation.

20. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which together shall be
deemed to be one and the same instrument.

   IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
UNDER SEAL as of the day and year first written above.

Orbit/FR, Inc.                             Israel Adan

By:______________________[SEAL]     ______________________[SEAL]
      Zeev Stein,  Chairman

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}]]