EXHIBIT (10)(X)

HARLEYSVILLE GROUP INC.
AMENDED AND RESTATED EQUITY INCENTIVE PLAN
NOTICE OF AWARD OF
NON-QUALIFIED STOCK OPTIONS

DATED                           , 20       (“DATE OF GRANT”)

Harleysville Group Inc. (“Company”), acting by and through the Compensation &
Personnel Development Committee of the Board of Directors (“Committee”), makes
an award of ______ Non-Qualified Stock Options (“Option”) to ____________
(“Employee”) to purchase Common Stock of the Company ($1.00 par value) at the
price of $______ per share, which represents the Fair Market Value of the Common
Stock on the Date of Grant, pursuant to the terms and conditions of the
Harleysville Group Inc. Amended and Restated Equity Incentive Plan (“Plan”).
 Except as otherwise varied in this Notice, the terms of the Plan are
incorporated by reference into, and made a part of, this Award.  All capitalized
terms used without definition have the meanings set forth in the Plan.

I.

PERIOD OF EXERCISABILITY

1.1 - Commencement of Exercisability

(A)

Except as provided in Section 1.1(B) below, the Option shall become exercisable
in three (3) cumulative installments as follows:

(1)

The first installment shall consist of thirty-three and one-third percent
(33 1/3%) of the shares covered by the Option and shall become exercisable on
the first anniversary of the Date of Grant.

(2)

The second installment shall consist of thirty-three and one-third percent
(33 1/3%) of the shares covered by the Option and shall become exercisable on
the second anniversary of the Date of Grant.

(3)

The third installment shall consist of thirty-three and one-third percent
(33 1/3%) of the shares covered by the Option and shall become exercisable on
the third anniversary of the Date of Grant.

(B)

The Option shall immediately become exercisable without regard to Sections
1.1(A)(1), 1.1(A)(2) and 1.1(A)(3) above in the case of Retirement, death or
Disability; provided that no Option shall be exercisable prior to six months
after the Date of Grant, unless Section 1.4 of this Notice is applicable.

(C)

No portion of the Option which is unexercisable at Termination of Employment
shall thereafter become exercisable.

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1.2 - Duration of Exercisability

The installments provided for in Section 1.1 are cumulative.  Each such
installment which becomes exercisable pursuant to Section 1.1 shall remain
exercisable until it becomes unexercisable under Section 1.3.

1.3 - Expiration of Option

The Option may not be exercised to any extent by anyone after the first to occur
of the following events:

(A)

As of 5:00 p.m. on the tenth anniversary of the Date of Grant of the Option; or

(B)

As of 5:00 p.m. on the thirtieth day after the Employee’s Termination of
Employment except on account of Retirement, death or Disability; or

(C)

As of 5:00 p.m. on the first anniversary of the date of the Employee’s death or
Disability, as defined in the Plan; or

(D)

As of 5:00 p.m. on the second anniversary of the date of the Employee’s
Retirement; provided, however, that if the date of the Employee’s Retirement
occurs after the Employee has attained the age of 62, the period for exercise of
the option shall expire at 5:00 p.m. on the fifth anniversary of the date of
Retirement.  

For purposes of this section, the Employee is eligible for Early Retirement if
the Employee has attained the age of 55 and has at least 10 years of continuous
service or for Normal Retirement if the Employee has attained the age of 62 and
has at least 5 years of continuous service.  Both Early Retirement and Normal
Retirement are referred to in this Notice as “Retirement.”

1.4 - Rights Upon a Change in Control

In the event of a Change in Control as defined in the Plan, notwithstanding any
other restrictive provisions herein, the Option shall become fully vested and
exercisable immediately.

II.

EXERCISE OF OPTIONS

2.1 - Partial or Full Exercise

Any exercisable portion of the Option or the entire Option, if then wholly
vested, may be exercised in whole or in part at any time prior to the time when
the Option or portion thereof terminates under Section 1.3; provided, however,
that each partial exercise shall be for whole shares only.

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2.2 - Manner of Exercise

The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Secretary of the Company of all of the following prior to the
time when the Option or such portion becomes unexercisable under Section 1.3:

(A)

Notice in writing signed by the Employee or transferee stating that the Option
or portion is thereby exercised, such notice complying with all applicable rules
established by the Committee;

(B)

Full payment for the shares with respect to which such Option or portion is
exercised, made as follows:

(1)

payment in check or electronic funds transfer; or

(2)

shares of the Company’s Common Stock owned by the Employee duly endorsed for
transfer to the Company with a fair market value on the date of delivery equal
to the aggregate purchase price of the shares with respect to which such Option
or portion is exercised or attestation of ownership; or

(3)

by such other method as the Committee may approve, including payment through a
broker in accordance with procedures permitted by Regulation T of the Federal
Reserve Board, or

(4)

any combination of the consideration provided in the foregoing subparagraphs
(1), (2) and (3).

If payment is made under Section 2.2(B)(3), such notice may instruct the Company
to deliver shares due upon the exercise of the Option to a registered broker or
dealer, if any, designated by the Employee (“Designated Broker”) in lieu of
delivery to the optionee.  Such instructions must designate the account into
which the shares are to be deposited.

(C)

A written representation in the notice of exercise that the Employee:

(1)

acknowledges that issuance of certificates may be governed by the restrictions
set forth in the Plan and this Notice;

(2)

is aware that the Securities Act of 1933, as amended, and the regulations and
requirements of the Securities and Exchange Commission thereunder, may impose
limitations on the resale of said shares and that any resale of said shares will
be made in compliance with said Act and said regulations and requirements; and

(3)

further affirms that he or she accepts the terms and conditions of the Option as
described in the Notice of Award of Stock Options.

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(D)

Full payment to the Company of all amounts, which, under federal, state or local
law, it is required to withhold upon exercise of the Options.  The Employee may
surrender shares already owned or forego delivery of shares due as a result of
an Option exercise in order to pay for taxes to be withheld to the extent there
is no adverse accounting impact to the Company.  Without limiting the foregoing,
to the extent that the Employee is subject to Section 16 of the Securities
Exchange Act of 1934, as amended, at the time of exercise of all or a portion of
the Option, the Employee is hereby specifically authorized by the Committee to
tender shares already owned or forego delivery of shares in payment of the
exercise price and/or the withholding tax obligations.

2.3 - Transferability

Neither the Option nor any interest or right therein or part thereof shall be
liable for the debts, contracts or engagements of the optionee or his or her
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy) and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 2.3
shall not prevent transfers by will or the laws of descent and distribution or
any other transfer permitted by the Plan.  

2.4 - Conditions to Issuance of Stock Certificates

The shares of stock deliverable upon the exercise of the Option, or any portion
thereof, may be either previously authorized but unissued shares or issued
shares which have then been reacquired by the Company.  Such shares shall be
fully paid and nonassessable.  Nevertheless:

(A)

unless issued pursuant to a registration statement under the Securities Act of
1933, as amended, no shares shall be issued to the Employee under the Plan
unless the Employee represents and agrees with the Company that such shares are
being acquired for investment and not with a view to the resale or distribution
thereof, or such other documentation as may be required by the Company, unless
in the opinion of counsel to the Company such representation, agreement or
documentation is not necessary to comply with such Act;

(B)

any restriction on the resale of shares shall be evidenced by an appropriate
legend on the stock certificate; and

(C)

the Company shall not be obligated to deliver any Common Stock unless it is then
listed on a national securities exchange and until there has been qualification
under or compliance with such federal or state laws, rules or regulations as the
Company may deem applicable.  The Company shall use reasonable efforts to obtain
and maintain such listing, qualification and compliance.

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2.5 - Rights as a Stockholder

The holder of the Option shall not be, nor have any of the rights or privileges
of, a stockholder of the Company in respect of any shares purchasable upon the
exercise of any part of the Option unless and until the Option has been properly
exercised as set forth above.  

III.

ADJUSTMENTS

In the event of stock dividends, stock splits, re-capitalizations, mergers,
consolidations, combinations, exchanges of shares, spin-offs, liquidations,
reclassifications or other similar changes in the capitalization of the Company,
the applicable provisions of the Plan shall control and will affect the Option
granted hereunder.   

IV.

MISCELLANEOUS

4.1 - No Right of Continued Employment

Nothing in this Notice or in the Plan shall confer upon the Employee any right
to continue in the employ of the Company, its Parent or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company, its Parent, or
its Subsidiaries, which are hereby expressly reserved, to discharge the Employee
at any time for any reason whatsoever, with or without cause.

4.2 - Notices

Any notice to be given under the terms of this Notice to the Company shall be
addressed to the Company in care of its Secretary, and any notice to be given to
the Employee shall be addressed to him or her at the most recent address on file
with the Company.  Any notice which is required to be given to the Employee
shall, if the Employee is then deceased, be given to the Employee’s personal
representative if such representative has previously informed the Company of his
or her status and address by written notice under this Section 4.2.  Any notice
shall have been deemed duly given when deposited (with postage prepaid) in a
post office or branch post office regularly maintained by the United States
Postal Service.

4.3 - Titles

Titles are provided herein for convenience only and are not to serve as a basis
for interpretation or construction of this Notice.

4.4 - Conflict Between the Plan and this Notice

The terms of the Plan, unless varied in this Notice, apply to the Option granted
hereunder.  In the event of a conflict between the provisions of the Plan and a
specific provision of this Notice, the provisions of this Notice shall control;
provided, however, if the Plan is amended in the future, and the amendment does
not

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adversely affect the rights of the holder of this Option, the amended terms of
the Plan shall apply to this Option, if it remains outstanding.  This Notice
constitutes the Option Document as defined in the Plan.

I hereby certify that the foregoing Award on the foregoing terms and conditions
has been authorized by the Compensation & Personnel Development Committee of the
Board of Directors of Harleysville Group Inc.

 

 

 

HARLEYSVILLE GROUP INC.                              

 

 

 

 

 

 

 

 

 

 

 

Robert A. Kauffman

 

 

 

 

I acknowledge receipt of a copy of this Notice of Award and have read,
understand and accept its term and conditions, particularly the provisions of
Section V hereof.

 

 

 

 

Date: 

                               

                      

 

 

 

 

Employee

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