Exhibit 10.4
Execution Copy
January 1, 2008
RELEASE AND SEVERANCE COMPENSATION AGREEMENT
          THIS RELEASE AND SEVERANCE COMPENSATION AGREEMENT (the “Agreement”) is
made and entered into effective January 1, 2008 (the “Effective Date”) between
and among ProAssurance Group Services Corporation, an Alabama corporation, and
ProAssurance Corporation, a Delaware corporation (“ProAssurance”), and
                                        , an individual (the “Executive”).
ProAssurance and its direct and indirect subsidiaries are hereinafter
collectively referred to as the “Companies.”
RECITALS:
          The Executive currently provides services to the Companies as an at
will employee of ProAssurance Group Services Corporation which is a wholly owned
subsidiary of ProAssurance. Executive is currently employed at the Companies’
offices in Jefferson County, Alabama, which is Executive’s primary location of
employment on date of this Agreement. ProAssurance has offered to expand
protection to the Executive in the form of severance benefits payable on
termination of employment under certain circumstances in consideration of
Executive’s agreement to continue his [her] employment with the Companies.
ProAssurance and Executive have entered into this Agreement to evidence the
terms and conditions for payment of severance benefits upon termination of
Executive’s employment with the Companies.
AGREEMENT
          NOW, THEREFORE, These Premises Considered, and in consideration of the
mutual covenants and promises in this Agreement, the sufficiency of which is
hereby acknowledged, the parties agree as follows:
     1. Definitions. For purposes of this Agreement, the following terms shall
have the meanings set forth below:
          (a) “Annual Base Salary” of the Executive shall be defined as the
Executive’s base rate of compensation in effect as of the Date of Termination
(herein defined), but in no event less than the greater of: (A) the Executive’s
base rate of compensation in effect as of the date of the Agreement; or (B) the
Executive’s base rate of compensation in effect as of the end of the last
calendar quarter preceding the Date of Termination
          (b) “Beneficial Ownership” is used as such term is used within the
meaning of Rule 13d-3 promulgated under the Exchange Act.
          (c) “Board” means the Board of Directors of ProAssurance either acting
as a full Board or through its Compensation Committee.

 

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          (d) “Cause” means: (i) the Executive has been convicted in a federal
or state court of a crime classified as a felony; (ii) action or inaction by the
Executive (A) that constitutes embezzlement, theft, misappropriation or
conversion of assets of the Companies which alone or together with related
actions or inactions involve assets of more than a de minimus amount or that
constitutes intentional fraud, gross malfeasance of duty, or conduct grossly
inappropriate to Executive’s office, and (B) such action or inaction has
adversely affected or is likely to adversely affect the business of the
Companies, taken as a whole, or has resulted or is intended to result in a
direct or indirect gain or personal enrichment of Executive to the detriment of
the Companies; or (iii) Executive has been grossly inattentive to, or in a
grossly negligent manner failed to competently perform, Executive’s job duties
and the failure was not cured within 45 days after written notice from
ProAssurance.
          (e) “Code” means the Internal Revenue Code of 1986, as amended
          (f) “Change of Control” shall mean the occurrence of any one of the
following events during the term of this Agreement:
               (i) an acquisition of the voting securities of ProAssurance by
any Person, immediately after which such Person has Beneficial Ownership of more
than 50.1% of the combined voting power of ProAssurance’s then outstanding
voting securities;
               (ii) a merger, consolidation or reorganization involving
ProAssurance in which an entity other than ProAssurance is the surviving entity
or in which ProAssurance is the surviving entity and the stockholders of
ProAssurance immediately preceding such transaction will own less than 50.1% of
the outstanding voting securities of the surviving entity; or
               (iii) the sale or other disposition of substantially all of the
assets of ProAssurance (as defined in the regulations under Section 409A of the
Code) and ProAssurance ceases to function on a going forward basis as an
insurance holding company system that provides medical professional liability
insurance.
               In no event shall a Change of Control be deemed to have occurred,
with respect to Executive, if the Executive is part of a purchasing group which
consummates a Change of Control Transaction. The Executive shall be deemed “part
of a purchasing group” for purposes of the preceding sentence if the Executive
is an equity participant or has agreed to become an equity participant in the
purchasing company or group (except for ownership of less than 5% of the stock
of the purchasing company).
          (g) “Change of Control Transaction” means any of the transactions as
described in subparagraphs (i), (ii) and (iii) of Section 1(f) hereof.
          (h) “Disability” means a serious injury or illness that requires
Executive to be under regular care of a licenses medical physician and renders
the Executive incapable of performing the essential function of the Executive’s
position for twelve (12) consecutive months as determined by the Board in good
faith and upon receipt of and in reliance on competent medical advice from one
or more individuals selected by the Board, who are qualified to give
professional medical advice. Executive will submit to such medical or
psychiatric examinations

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and tests as such medical professional deems necessary to make any determination
of Executive’s Disability and consent to such medical professional sharing the
results of such examination with a representative of the Board.
          (i) “Date of Termination” means (i) if Executive’s employment is
terminated by Executive for any reason other than death or Disability, the Date
of Termination shall be the last day of employment of Executive; (ii) if
Executive’s employment is terminated by reason of death of the Executive, the
date of death shall be the Date of Termination; (iii) if the Executive’s
employment is terminated by reason of Disability, the Date of Termination shall
be the date of determination of Disability by the Board; or (iv) if Executive’s
employment is terminated by ProAssurance for any reason, the Date of Termination
shall be the last day of employment of Executive unless otherwise provided in
Section 6 hereof.
          (j) “Exchange Act” means the Securities Exchange Act of 1934, as
amended.
          (k) “Good Reason” shall constitute any of the following circumstances
if they occur without the Executive’s express written consent during the term of
this Agreement: (i) a material diminution in the Executive’s authority, duties
or responsibilities such that Executive no longer holds a position with
executive level responsibilities consistent with the Executive’s training and
experience; (ii) the Companies require a material change in the Executive’s
primary location of employment of more than 100 miles from the location of the
Executive’s primary location of employment on date of this Agreement; (iii) the
Companies materially reduce the Executive’s incentive compensation opportunities
and employee benefits to a level that is less than is provided to other
executives of comparable rank with the Companies; (iv) a material breach by the
Companies of any provision of this Agreement; (v) a material reduction by the
Companies in the Executive’s Annual Base Salary (herein defined); or (vi) the
termination or non-renewal of this Agreement by the Companies at any time prior
to December 31 in the year that Executive reaches 65 years of age.
          (l) “Severance Benefits” means the payments and other benefits to be
provided to the Executive under Section 3(a) or Section 3(b), whichever is
applicable.
     2. Term of Agreement. This Agreement shall continue in effect for a initial
period commencing on the Effective Date and ending on December 31, 2008.
Thereafter, this Agreement shall automatically be extended for successive terms
of one year, except that this Agreement shall not be renewed and shall terminate
automatically and without any action of the Companies or the Executive at the
expiration of the term in which the Executive reaches 65 years of age. If not
sooner terminated, any of the Companies may elect to terminate this Agreement at
the expiration of the then current term by delivery of written notice of the
termination of this Agreement at least six months prior to the commencement of
any renewal term.
     3. Severance Benefits.
          (a) Subject to the provisions of Section 3(b) hereof, if (A) during
the term of this Agreement, (x) the Companies terminate the employment of
Executive for any reason other than Cause, death or Disability, or (y) the
Executive terminates employment with the Companies for Good Reason, and (B) the
Executive, executes the Release that is attached to and

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incorporated in this Agreement (“Release”) within sixty (60) days after Date of
Termination, the Executive shall receive the following benefits:
               (i) An amount equal to the Executive’s Annual Base Salary;
               (ii) An amount equal to the average annual incentive award(s) and
bonus(es). The “average annual incentive award(s) and bonus(es)” shall mean the
amount equal to the average of the annual incentive award(s) and bonus(es) paid
to Executive in each of the three complete calendar years prior to the Date of
Termination or, if shorter, in each of the complete calendar years during the
Executive’s entire period of employment with the Companies. The “annual
incentive award(s) and bonus(es)” shall mean the dollar value of the cash or
other consideration paid to the Executive by the Companies as annual performance
based compensation (whether or not deferred) in each calendar year during said
period. The Executive’s annual incentive awards and bonuses do not include
long-term incentive compensation; therefore, annual incentive awards and bonuses
shall be calculated excluding the value of options to purchase stock,
performance shares, or other long-term incentives; and
               (iii) Payment of the Executive’s monthly COBRA premiums for
continued health and dental insurance coverage for the shorter of the following:
(A) twelve (12) months from the Date of Termination; (B) until the Executive no
longer has coverage under COBRA; or (C) until the Executive becomes eligible for
substantially similar coverage under a subsequent employer’s group health plan;
and
               (iv) Outplacement services that are customary to Executive’s
position.
          (b) Notwithstanding the provisions of Section 3(a) hereof, the
Executive shall receive the Severance Benefits described in this Section 3(b) in
lieu of and not in addition to the Severance Benefits described in Section 3(a)
hereof if all of the following conditions are satisfied: (A) a Change of Control
Transaction is publicly announced during the term of this Agreement; (B) during
the period commencing on the public announcement of the Change of Control
Transaction and ending two (2) years after the effective date of the Change of
Control Transaction, (x) the Companies terminate the employment of Executive for
any reason other than Cause, Disability or death, or (y) the Executive
terminates employment with the Companies for Good Reason; and (C) the Executive
executes the Release within sixty (60) days after the Date of Termination. In
such event, the Severance Benefits payable to the Executive pursuant to this
Section 3(b) shall be as follows:
               (i) An amount equal to two (2) times the Executive’s Annual Base
Salary;
               (ii) An amount equal to two (2) times the average annual
incentive award(s) or bonus(es). The “average annual incentive award(s) and
bonus(es)” shall be calculated in the manner set forth in Section 3(a)
(ii) hereof;
               (iii) Payment of the Executive’s monthly COBRA premiums for
continued health and dental insurance coverage for the shorter of the following:
(A) eighteen (18) months from the Date of Termination; (B) until the Executive
no longer has coverage under

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COBRA; or (C) until the Executive becomes eligible for substantially similar
coverage under a subsequent employer’s group health plan; and
               (iv) Outplacement services that are customary to Executive’s
position.
          (c) Subject to the delivery of the executed Release by Executive, the
Severance Benefits described in subparagraphs (i) and (ii) of either Section
3(a) or 3(b) hereof, which ever is applicable, shall be paid in cash or good
funds in equal monthly installments during the Restricted Period (as defined in
Section 7 hereof) commencing no later than the fifteenth day of the calendar
month that occurs not less than seven (7) days after the execution of the
Release and ending on the first day of the last full calendar month in the
Restricted Period; provided that the obligation of the Companies to pay such
Severance Benefits to the Executive shall be subject to termination as herein
provided in the event the Executive violates the covenants under Section 7
hereof. The Companies shall withhold from any amounts payable under this
Agreement all federal, state, city or other income and employment taxes that
shall be required. Notwithstanding the foregoing, if the Executive is a
“specified employee” within the meaning of Code Section 409A(a)(2)(b)(i), the
payment schedule for Severance Benefits shall be modified or adjusted to provide
that no payments shall be made until the expiration of six (6) months following
the Date of Termination. In the event that payments are so delayed, a lump sum
payment of the accumulated unpaid amounts attributable to the six (6) month
period shall be made to Executive on the first day of the seventh month
following the Date of Termination. This six month delay shall not apply to any
Severance Benefits which are not subject to the requirements of Section 409A of
the Code by reason of their being separation pay upon an involuntary separation
from service and their meeting the requirements and limitations of the
regulations under the above referenced Code section. In no event shall the
aggregate amount of Severance Benefits be reduced as a result of such
modification or adjustment.
          (d) The outplacement services included in the Severance Benefits shall
be provided to the Executive promptly after the execution of the Release but not
later than the end of the calendar year following the year in which the Date of
Termination occurred.
          (e) The Executive shall be entitled to the following in addition to
and not in limitation of the Severance Benefits: (i) accrued and unpaid base
salary as of the Date of Termination; (ii) accrued vacation and sick leave, if
any, on Date of Termination in accordance with the then current policy or plan
of the Companies with respect to terminated employees generally; and
(iii) vested benefits under the Companies’ employee benefit plans in which the
Executive was a participant on Date of Termination, which vested benefits shall
be paid or provided for in accordance with the terms of said employee benefit
plans.
          (f) The Executive shall not be entitled to receive Severance Benefits
if employment with the Companies is terminated by reason of death or Disability
of Executive; or by reason of termination of employment by the Executive without
Good Reason (herein defined); or by reason of termination of employment by the
Companies with Cause.
          (g) The Executive shall be under no duty or obligation to seek or
accept other employment and shall not be required to mitigate the amount of the
Severance Benefits provided under the Agreement by seeking employment or
otherwise; provided, however, that the

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Executive shall be required to notify the Companies if the Executive becomes
covered by a health or dental care program providing substantially similar
coverage, at which time health or dental care continuation coverage provided
under this Agreement shall cease.
     4. Parachute Payment Tax Reimbursement.
          (a) If any payment or benefit within the meaning of Section 280G(b)(2)
of the Code to Executive for his benefit paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise in connection
with, or arising out of, Executive’s employment with the Companies or a Change
of Control (a “Payment” or “Payments”) will 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 such
interest and penalties are collectively referred to as the “Excise Tax”), then
the Executive will be entitled to receive an additional payment (a “Gross Up
Payment”). The amount of the Gross Up Payment will be such that after payment by
the Executive of all taxes (including any interest or penalties, other than
interest and penalties imposed by reason of the Executive’s failure to file a
timely tax return or pay taxes shown due on his return, imposed with respect to
such taxes and the Excise Tax), including any 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. The Executive shall be deemed to pay
federal income taxes at the highest marginal rate of federal income taxation in
the calendar year for which the Excise Tax is to be paid.
          (b) An initial determination as to whether a Gross Up Payment is
required pursuant to this Agreement and the amount of such Gross Up Payment
shall be made by the Compensation Committee or the Board of Directors of
ProAssurance. In making such determination, the value of any noncash benefits or
any deferred payment or benefit shall be determined in accordance with the
principles set forth in Sections 280G(d)(3) and (4) of the Code. ProAssurance
shall provide the determination (“Determination”) together with detailed
supporting calculations and documentation to the Executive within a reasonable
time after the Date of Termination but not later than March 15 in the calendar
year following the year in which the Date of Termination occurred. If
ProAssurance determines that no Excise Tax is payable by the Executive with
respect to a Payment or Payments, it shall furnish the Executive with an opinion
of its income tax accountant or tax counsel to the effect that no Excise Tax
will be imposed with respect to any Payment or Payments. Within ten days of the
delivery of the Determination to the Executive, the Executive shall have the
right to dispute the Determination. The Gross Up Payment, if any, as determined
pursuant to this Section 4(b) shall be paid by the Companies to the Executive
within 20 days of the receipt of the Determination. The existence of the Dispute
shall not in any way affect the Executive’s right to receive Gross Up Payments
in accordance with the Determination. Upon the final resolution of a Dispute,
the Companies shall promptly pay the Executive any additional amount required by
such resolution. If there is no Dispute, the Determination shall be binding,
final and conclusive upon the Companies and the Executive.
     5. Good Reason for Termination. In the event that Executive desires to
terminate employment with the Companies for Good Reason, the Executive must
provide the Companies with written notice no later than 45 calendar days after
the Executive knows or should have known that Good Reason has occurred.
Following the Executive’s notice, the Companies shall

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have 45 calendar days to rectify the circumstances causing the Good Reason. If
the Companies fail to rectify the event(s) causing the Good Reason within the
45 day period after the Executive’s notice, or if any of the Companies delivers
to the Executive written notice stating that the circumstances cannot or shall
not be rectified, the Executive shall be entitled to assert Good Reason and
terminate employment on or before 90 days after the delivery of the Executive’s
notice. Should Executive fail to provide the required notice in a timely manner,
Good Reason shall not be deemed to have occurred as a result of that event. The
term of this Agreement shall not be deemed to have expired during the notice
period, however, as long as the Executive has provided notice within the term.
     6. Cause. If the Executive’s employment relationship with the Companies is
terminated by the Companies for Cause, the Executive shall not be eligible for
Severance Benefits and all rights of the Executive and obligations of the
Companies under this Agreement shall expire. Any termination of the Executive’s
employment by the Companies for Cause shall be communicated by a notice of
termination to the Executive. The notice of termination shall be a written
notice indicating the specific termination provision of this Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under
this provision. In the event the Executive disputes the basis for termination
for Cause, Executive may elect to bypass the claims procedure set forth in
Section 11 hereof and file for settlement of the dispute in arbitration as
provided in Section 12 hereof, in which event the Date of Termination shall be
deemed to occur on the date determined by the arbitrator; provided that if the
arbitrator rules in favor of the Executive, the time for the execution of the
Release under Sections 3(a) or 3(b) hereof, whichever is applicable, shall be
extended until sixty (60) days after the decision by the arbitrator, and in such
event, the Executive shall be paid Severance Benefits after the execution of the
Release as provided in Section 3(c) hereof and shall be reimbursed for any COBRA
premiums that were paid by Executive in the interim period (but not exceeding
the maximum period specified under Section 3(a) or 3(b) hereof, whichever is
applicable) between the termination of employment for COBRA purposes and the
Date of Termination as determined by the arbitrator .
     7. Non-Competition; Nonsolicitation of Employee. The Executive will not
during the Restricted Period (herein defined):
          (a) become Employed by a Competitor Company that offers, sells or
markets medical professional liability insurance in a primary market area of an
Insurance Subsidiary, except that Executive may be employed with a Competitor
Company so long as and on the condition that the Executive does not participate
in the medical professional liability insurance business of the Competitor
Company; or
          (b) solicit or induce any employees of the Companies to leave such
employment or accept employment with any other person or entity, or solicit or
induce any insurance agent of an Insurance Subsidiary to offer, sell or market
medical professional liability insurance for a Competitor Company in a primary
market area of an Insurance Subsidiary.
          For purposes of this Section 7 only, the following terms shall have
the meanings set forth below:

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          “Companies” has the meaning set forth in the initial paragraph of this
Agreement.
          “Competitor Company” means an insurance company, insurance agency,
business, for profit or not for profit organization (other than the Companies)
that provides, or offers to provide medical professional liability insurance to
health care providers.
          “Employed” includes activities as an owner, proprietor, employee,
agent, solicitor, partner, member, manager, principal, shareholder (owning more
than 1% of the outstanding stock), consultant, officer, director or independent
contractor.
          “Health care providers” means physicians, dentists, podiatrists,
physician assistants, nurse practitioners, other individual health care
providers and hospital and other institutional health care providers.
          “Insurance Subsidiary” means any direct or indirect subsidiary of
ProAssurance that offers medical professional liability insurance or non-risk
bearing products and services related to underwriting, claims or risk
management, or indemnification for medical professional liability.
          “Medical professional liability insurance” means medical malpractice
insurance and reinsurance, and equivalent services such as administration of
self-insured trusts, claims management services and risk management services for
health care providers. “Medical professional liability insurance” does not
include services provided as an employee of a health care provider if such
services are rendered solely for the purpose of servicing medical professional
liability risk of the employer or that of its employees.
          “Primary market area” means any state in which the Insurance
Subsidiaries derived more than $15 million in aggregate revenues from the sale
of medical professional liability insurance and non-risk bearing medical
professional liability services or products to health care providers in the most
recent complete fiscal year prior to the Date of Termination.
          “Restricted Period” means a period of twelve (12) months from the Date
of Termination; provided that in the event Severance Benefits are due to be paid
to the Executive under Section 3(b) hereof, the Restricted Period shall be
extended and shall mean a period of twenty-four (24) months from Date of
Termination.
          (b) If the Executive is deemed to have materially breached the
non-competition covenants set forth in Section 7 of this Agreement, the
Companies may, in addition to seeking an injunction or any other remedy they may
have, withhold or cancel any remaining payments or benefits due to the Executive
pursuant to Section 3 of this Agreement. The Companies shall give prior or
contemporaneous written notice of such withholding or cancellation of payments
in accordance with Section 3 hereof. If the Executive violates any of these
restrictions, the Companies shall be further entitled to an immediate
preliminary and permanent injunctive relief, without bond, in addition to any
other remedy which may be available to the Companies.
          (c) Both parties agree that the restrictions in this Agreement are
fair and reasonable in all respects, including the geographic and temporal
restrictions, and that the

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benefits described in this Agreement, to the extent any separate or special
consideration is necessary, are fully sufficient consideration for the
Executive’s obligations under this Agreement.
     8. Confidentiality. Executive will remain obligated under any
confidentiality or nondisclosure agreement with or policy of the Companies (or
any of them) that is currently in effect or to which the Executive may in the
future be bound. In the event that the Executive is at any time not the subject
of a separate confidentiality or nondisclosure agreement with the Companies (or
any of them), Executive expressly agrees that Executive shall not use for the
Executive’s personal benefit, or disclose, communicate or divulge to, or use for
the direct or indirect benefit of any person, firm, association or company any
confidential or competitive material or information of the Companies or their
subsidiaries, including without limitation, any information regarding insureds
or other customers, actual or prospective, and the contents of their files;
marketing, underwriting or financial plans or analyses which is not a matter of
public record; claims practices or analyses which are not matters of public
record; pending or past litigation in which the Companies have been involved and
which is not a matter of public record; and all other strategic plans, analyses
of operations, computer programs, personnel information and other proprietary
information with respect to the Companies which are not matters of public
record. Executive shall return to the Companies promptly, and in no event later
than the Date of Termination, all items, documents, lists and other materials
belonging to the Companies or their subsidiaries, including but not limited to,
credit, debit or service cards, all documents, computer tapes, or other business
records or information, keys and all other items in the Executive’s possession
or control.
     9. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Companies and Executive and their respective devisees,
heirs, legal or personal representatives, successors and assigns.
Notwithstanding the foregoing, this Agreement is personal to the Executive and
the rights and obligations hereunder may not be assigned by Executive without
the prior written consent of ProAssurance.
     10. Notice. For 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 by hand or commercial courier or
mailed by certified or registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses as set forth below or to such
other address as one party may have furnished to the other in writing in
accordance herewith.
            Notice to the Executive:
                    [Executive]

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                  Notice to the Companies:    
 
           
 
      ProAssurance Corporation   Street Address:
 
      Mailing Address:   100 Brookwood Place
 
      P. O. Box 590009   Birmingham, Alabama 35209
 
      Birmingham, Alabama 35259-0009    
 
      Attention: President: cc Secretary    

     11. Claims Procedure.
          (a) The administrator for purposes of this Agreement shall be
ProAssurance (“Administrator”), whose address is 100 Brookwood Place,
Birmingham, Alabama 35209; Telephone: (205) 877-4400. The “Named Fiduciary” as
defined in Section 402(a) (2) or ERISA, also shall be ProAssurance. ProAssurance
shall have the right to designate one or more employees of the Companies as the
Administrator and the Named Fiduciary at any time, and to change the address and
telephone number of the same. ProAssurance shall give the Executive written
notice of any change in the Administrator and Named Fiduciary, or in the address
or telephone number of the same.
          (b) The Administrator shall make all determinations as to the right of
any person to receive benefits under the Agreement. Any denial by the
Administrator of a claim for benefits by the Executive (“the claimant”) shall be
stated in writing by the Administrator and delivered or mailed to the claimant
within ten (10) days after receipt of the claim, unless special circumstances
require an extension of time for processing the claim. If such an extension is
required, written notice of the extension shall be furnished to the claimant
prior to the termination of the initial 10-day period. In no event shall such
extension exceed a period of ten (10) days from the end of the initial period.
Any notice of denial shall set forth the specific reasons for the denial,
specific reference to pertinent provisions of this Agreement upon which the
denial is based, a description of any additional material or information
necessary for the claimant to perfect the claim, with an explanation of why such
material or information is necessary, and any explanation of claim review
procedures, written to the best of the Administrator’s ability in a manner that
may be understood without legal or actuarial counsel.
          (c) A claimant whose claim for benefits has been wholly or partially
denied by the Administrator may request, within ten (10) days following the
receipt of such denial, in a writing addressed to the Administrator, a review of
such denial. The claimant shall be entitled to submit such issues or comments in
writing or otherwise, as the claimant shall consider relevant to a determination
of the claim, and the claimant may include a request for a hearing in person
before the Administrator. Prior to submitting the request, the claimant shall be
entitled to review such documents as the Administrator shall agree are pertinent
to the claim. The claimant may, at all stages of review, be represented by
counsel, legal or otherwise, of the claimant’s choice. All requests for review
shall be promptly resolved. The Administrator’s decision with respect to any
such review shall be set forth in writing and shall be mailed to the claimant
not later than ten (10) days following receipt by the Administrator of the
claimant’s request unless special circumstances, such as the need to hold a
hearing, require an extension of time for processing, in which case the
Administrator’s decision shall be so mailed not later than twenty (20) days
after receipt of such request.

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     12. Arbitration. The parties to this Agreement agree that final and binding
arbitration shall be the sole recourse to settle any claim or controversy
arising out of or relating to a breach or the interpretation of this Agreement,
except as either party may be seeking injunctive relief. Either party may file
for arbitration. A claimant seeking relief on a claim for benefits, however,
must first follow the procedure in Section 11 hereof and may file for
arbitration within sixty (60) days following claimant’s receipt of the
Administrator’s written decision on review under Section 11(c) hereof, or if the
Administrator fails to provide any written decision under Section 11 hereof,
within 60 days of the date on which such written decision was required to be
delivered to the claimant as therein provided. The arbitration shall be held at
a mutually agreeable location, and shall be subject to and in accordance with
the arbitration rules then in effect of the American Arbitration Association;
provided that if the location cannot be agreed upon the arbitration shall be
held in either Birmingham, Alabama, or Chicago, Illinois, whichever location is
closer to the principal office where the Executive was employed on the Date of
Termination. The arbitrator may award any and all remedies allowable by the
cause of action subject to the arbitration, but the arbitrator’s sole authority
shall be to interpret and apply the provisions of this Agreement. In reaching
its decision the arbitrator shall have no authority to change or modify any
provision of this Agreement or other written agreement between the parties. The
arbitrator shall have the power to compel the attendance of witnesses at the
hearing. Any court having jurisdiction may enter a judgment based upon such
arbitration. All decisions of the arbitrator shall be final and binding on the
parties without appeal to any court. Upon execution of this Agreement, the
Executive shall be deemed to have waived any right to commence litigation
proceedings regarding this Agreement outside of arbitration or injunctive relief
without the express consent of ProAssurance. The Companies shall pay all
arbitration fees and the arbitrator’s compensation. If the Executive prevails in
the arbitration proceeding, the arbitrator may require the Companies to
reimburse the Executive for the reasonable fees and expenses of Executive’s
personal counsel for his or her professional services rendered to the Executive
in connection with the enforcement of this Agreement.
     13. Miscellaneous.
          (a) Except insofar as this provision may be contrary to applicable
law, no sale, transfer, alienation, assignment, pledge, collateralization or
attachment of any benefits under this Agreement shall be valid or recognized by
the Companies.
          (b) This Agreement is an unfunded deferred compensation arrangement
for a member of a select group of the Companies’ management and any exemptions
under ERISA, as applicable to such arrangement, shall be applicable to this
Agreement. Nothing in this Agreement shall require or be deemed to require the
Companies or any of them to segregate, earmark or otherwise set aside any funds
or other assets to provide for any payments made or required to be made
hereunder.
          (c) It is understood acknowledged and agreed that Executive is and
will be an “at will’” employee of the Companies. Nothing in this Agreement shall
be deemed to create an employment agreement between the Executive and the
Companies or any of them providing for Executive’s employment for any fixed
duration, nor shall it be deemed to modify or undercut the Executive’s at will
employment status with the Companies.

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          (d) It is understood and agreed by the Companies and Executive that
the terms of this Agreement relating to the payment of Severance Benefits are
intended to comply in all respects with the requirements of Code Section 409A.
For purposes of determining whether Severance Benefits may be payable to an
Executive in compliance with Code Section 409A, the Executive’s employment will
be considered as having been terminated for purposes of this Agreement if the
parties reasonably anticipate either (i) that Executive will no longer perform
any services for the Companies or (ii) that the level of bona fide services
performed for the Companies (whether as an employee or independent contractor)
will permanently decrease to no more than 20% of the average level of bona fide
services performed by Executive over the immediately preceding 36-month period
(or the full period of services to the Companies if Executive has been providing
services to the Companies for less than 36 months).
          (e) Neither the provisions of this Agreement nor the severance
benefits provided hereunder shall reduce any amounts otherwise payable, or in
any way diminish the Executive’s rights as an employee of the Companies, whether
existing now or hereafter, under any benefit, incentive, retirement, stock
option, stock bonus or stock purchase plan, or any employment agreement or other
plan or arrangement.
          (f) This Agreement sets forth the entire agreement between the parties
with respect to the matters set forth herein and supercedes in their entirety
any prior written or oral agreements or understandings between Executive and the
Companies regarding the subject matter of this Agreement This Agreement may not
be modified or amended except by written agreement intended as such and signed
by all parties.
          (g) The Companies, from time to time, shall provide government
agencies with such reports concerning this Agreement as may be required by law,
and shall provide Executive with such disclosure concerning this Agreement as
may be required by law or as the Companies may deem appropriate.
          (h) Executive and the Companies respectively acknowledge that each of
them has read and understand this Agreement, that they have each had adequate
time to consider this Agreement and discuss it with each of their attorneys and
advisors, that each of them understands the consequences of entering into this
Agreement, that each of them is knowingly and voluntarily entering into this
Agreement, and that they are each competent to enter into this Agreement.
          (i) If any provision of this Agreement is determined to be
unenforceable, at the discretion of ProAssurance the remainder of this Agreement
shall not be affected but each remaining provision shall continue to be valid
and effective and shall be modified so that it is enforceable to the fullest
extent permitted by law. Moreover, in the event this Agreement is determined to
be unenforceable against any of the Companies, it shall continue to be valid and
enforceable against the other Companies.
          (j) This Agreement will be interpreted as a whole according to its
fair terms. It will not be construed strictly for or against either party.
          (k) Except to the extent that federal law controls, this Agreement is
to be construed according to Delaware law.

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[Signatures on following page.]

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          IN WITNESS WHEREOF, the parties have duly executed this Agreement on
this ___day of                     , 2008.

                  EXECUTIVE:    
 
                     
 
                PROASSURANCE CORPORATION    
 
           
 
  By:        
 
     
 
   
 
                PROASSURANCE GROUP SERVICES CORPORATION    
 
           
 
  By:        
 
           

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RELEASE IN CONJUNCTION WITH SEVERANCE COMPENSATION
          This Release of Claims (“Release”) is between ProAssurance Corporation
(“ProAssurance”), for itself and for its subsidiaries and any successor company
that has assumed the Agreement to which this Release was an attachment (all such
organizations being referred to in this Release as the “Companies”) and
                                         (“Executive”).
          The Companies and Executive have agreed to terminate their employment
relationship. To effect an orderly termination, the Executive, and the Companies
are entering into this Release.
     1. Executive hereby waives any and all rights Executive may otherwise have
to continued employment with or re-employment by the Companies or any parent,
subsidiary or affiliate of Companies.
     2. Effective with the Date of Termination, Executive is relieved of all
duties and obligations to the Companies, except as provided in this Release or
any applicable provisions of the Release and Severance Compensation Agreement
between Companies and Executive, effective as of January 1, 2008 (“Agreement”),
which survive termination of the employment relationship. Unless otherwise
specifically defined herein, capitalized terms shall have the meaning attributed
to them in the Agreement.
     3. Executive agrees that this Release, the Agreement, and the Severance
Benefits provided under the Agreement are confidential and shall not be
disclosed or published directly or indirectly to third persons, except as
necessary to enforce its terms, by Executive or to Executive’s immediate family
upon their agreement not to disclose the fact or terms of this Release, or to
Executive’s attorney, financial consultant or accountant, except that Executive
and the Companies may disclose, as necessary, (i) the fact that Executive has
terminated Executive’s employment with the Companies and (ii) the terms of this
Agreement and Severance Benefits as required under the securities laws and
regulations and the listing requirements of any stock exchange or national
market system and as otherwise required by law.
     4. Any fringe benefits that Executive has received or currently is
receiving from the Companies or its affiliates shall cease effective with the
Date of Termination, except as otherwise provided for in this Release, in the
Agreement or by law.
     5. The parties agree that the terms contained and payments provided for in
the Agreement are compensation for and in full consideration of Employee’s
release of claims under this Release, and Executive’s confidentiality,
non-compete, non-solicitation and non-disclosure agreements contained in the
Agreement.
     6. The Executive shall be under no duty or obligation to seek or accept
other employment and shall not be required to mitigate the amount of the
Severance Benefits (as defined and provided under the Agreement) by seeking
employment or otherwise, provided, however, that the Executive shall be required
to notify the Companies if the Executive becomes covered by a health or dental
care program providing substantially similar coverage, at which time health or
dental care continuation coverage provided under the Agreement shall cease.

 

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     7. Executive waives, releases, and forever discharges the Companies and
each of their direct or indirect parents, subsidiaries, affiliates, and any
partnerships, joint ventures or other entities involving or related to any of
the Companies, their parents, subsidiaries or affiliates, and all present or
former employees, officers, agents, directors, successors, assigns and attorneys
of any of these corporations, persons or entities (all collectively referred to
in this Release as the “Released”) from any and all claims, charges, suits,
causes of action, demands, expenses and compensation whatsoever, known or
unknown, direct or indirect, on account of or growing out of Executive’s
employment with and termination from the Companies, or relationship or
termination of such relationship with any of the Released, or arising out of
related events occurring through the date on which this Release is executed.
This includes, but is not limited to, claims for breach of any employment
contract; handbook or manual; any express or implied contract; any tort;
continued employment; loss of wages or benefits; attorney fees; employment
discrimination arising under any federal, state, or local civil rights or
anti-discrimination statute, including specifically any claims Executive may
have under the federal Age Discrimination in Employment Act, as amended, 29 USC
§§ 621, et seq.; emotional distress; harassment; defamation; libel; slander; and
all other types of claims or causes of action whatsoever arising under any other
state or federal statute or common law of the United States. Notwithstanding
anything in this Release to the contrary, nothing in this Release shall be
construed to waive, release or discharge the Companies from making any payments
or providing any benefits to Executive in accordance with the terms of the
Agreement after the Date of Termination
     8. The Executive does not waive or release any rights or claims that may
arise under the federal Age Discrimination in Employment Act, as amended, after
the date on which this Release is executed by the Executive.
     9. The Executive acknowledges and agrees that Executive has been advised in
writing by this Release, and otherwise, to CONSULT WITH AN ATTORNEY before
Executive executes this Release.
     10. The Executive agrees that Executive received a copy of this Release
prior to executing the Agreement, that this Release incorporates the Companies’
FINAL OFFER; that Executive has been given a period of at least twenty-two
(22) calendar days within which to consider this Release and its terms and to
consult with an attorney should Executive so elect.
     11. The Executive shall have seven (7) calendar days following Executive’s
execution of this Release to revoke this Release. Any revocation of this Release
shall be made in writing by the Executive and shall be received on or before the
time of close of business on the seventh calendar day following the date of the
Employee’s execution of this Release at ProAssurance’s address at 100 Brookwood
Place, P. O. Box 590009, Birmingham, Alabama 35259-0009, Attention: President:
cc Secretary, or such other place as the Companies may notify Executive in
writing. This Release shall not become effective or enforceable until the eighth
(8th) calendar day following the Executive’s execution of this Release.
     12. Executive and the Companies acknowledge that they have read and
understand this Release, that they have had adequate time to consider this
Release and discuss it with their attorneys and advisors, that they understand
the consequences of entering into this Release, that

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they are knowingly and voluntarily entering into this Release, and that they are
competent to enter into this Release.
     13. This Release shall benefit and be binding upon the parties and their
respective directors, officers, employees, agents, heirs, successors, assigns,
devisees and legal or personal representatives.
     14. This Release, along with the attached Agreement, sets forth the entire
agreement between the parties at the time and date these documents are executed,
and fully supersedes any and all prior agreements or understandings between them
pertaining to the subject matter in this Release. This Release may not be
modified or amended except by a written agreement intended as such, and signed
by all parties.
     15. Except to the extent that federal law controls, this Release is to be
construed according to the law of the state of Delaware.
     16. If any provision of this Release is determined to be unenforceable, at
the discretion of ProAssurance the remainder of this Release shall not be
affected but each remaining provision or portion shall continue to be valid and
effective and shall be modified so that it is enforceable to the fullest extent
permitted by law.
     17. To signify their agreement to the terms of this Release, the parties
have executed it on the date set forth opposite their signatures, or those of
their authorized agents, which follow.

                                  EXECUTIVE    
 
                   
Dated:
                                     
 
                                PROASSURANCE CORPORATION    
 
                   
Dated:
          By:        
 
                   
 
          Its:        
 
                   

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