Exhibit 10.2

EXECUTIVE RETENTION AGREEMENT

This EXECUTIVE RETENTION AGREEMENT (the “Agreement”), made and entered into on
the 25th day of June 2008, is by and between ERIE INDEMNITY COMPANY, a
Pennsylvania corporation with its principal place of business in Erie,
Pennsylvania (the “Company”) and PHILIP A. GARCIA, residing at 786 Stockbridge
Drive, Erie, Pennsylvania 16505 (the “Executive”).

RECITALS:

WHEREAS, the Company is in the process of hiring a new President and Chief
Executive Officer (“President/CEO”); and

WHEREAS, the Executive is a key employee of the Company and currently holds the
position of Executive Vice President and Chief Financial Officer; and

WHEREAS, the Company deems it in its best interest to secure the continued
services of the Executive during the period of the Company’s search for a new
President/CEO and then thereafter during the new President/CEO’s transition into
the Company; and

WHEREAS, the Company and the Executive are parties to an Amended and Restated
Employment Agreement made effective as of December 12, 2005 (the “Employment
Agreement”) and an Amendment and Payment Designation Agreement made effective as
of December 31, 2007 (the “Payment Designation Agreement”); and

WHEREAS, the Company and the Executive each agrees that it is in their
respective best interest to provide for Executive’s continued employment with
the Company through at least the initial transition period for the new
President/CEO on the terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:

1. Effective Date; Payments Conditioned on Releases.

a. This Agreement shall become effective and enforceable upon but not before the
expiration of the revocation period described in Section 6(f) without the
Executive’s revocation of this Agreement (the “Effective Date”).

b. The consideration described in Section 4(a)(i), (iii), (viii), (ix) and
(x) shall not be payable unless and until: (i) this Agreement has become
effective, and (ii) following, and within 30 days after the termination of
Executive’s employment, the Executive (A) executes a second waiver and release
in a form provided by the Company the terms of which will be substantially
similar to those in Section 5 of this Agreement, except that the second waiver
and release shall be effective as of the date of the termination of Executive’s
employment, and (B) a revocation period of at least seven (7) days granted by
the Company for the second waiver and release expires without the Executive’s
revocation of the waiver and release.

c. Provided that this Agreement takes effect as provided in Section 1(a), the
consideration described in Section 4(a)(xi) shall be payable as provided in such
subsection.

2. Retention Agreement.

a. The Executive agrees to remain an employee of the Company in his current
position of Executive Vice President and Chief Financial Officer throughout the
“Retention Period”, which shall begin on the Effective Date of this Agreement
and end on the earliest of:

i. his death or permanent total disability (as defined in the Company’s long
term disability policy or, in the absence of such a policy, by a medical doctor
mutually acceptable to the Executive or his legal representative and the
Company), or

ii. thirty (30) days after the date on which the Company’s Annual Report on Form
10-K for the fiscal year 2008 is filed by the Company with the U.S. Securities
and Exchange Commission (“SEC”), or

iii. the date of termination of Executive’s employment by the Company other than
for “Cause”, as that term is defined in Section 5(d) of the Employment Agreement
(“Cause”), or

iv. the date of Executive’s termination of his employment with the Company for
“Good Reason”, as that term is defined in Section 5(e) of the Employment
Agreement (“Good Reason”), or

v. April 30, 2009.

b. The Company retains the right to terminate the employment of the Executive
with or without Cause.

c. The Executive shall receive such salary, bonuses, incentive payments,
employee benefits, fringe benefits and perquisites while employed by the Company
during the Retention Period as the Company’s Board of Directors shall approve in
its sole and absolute discretion; provided, however, that such salary, bonuses,
incentive payments, employee benefits, fringe benefits and perquisites shall not
be less than the Executive is entitled to under the Employment Agreement and
Payment Designation Agreement as such agreements were in effect immediately
prior to the Effective Date of this Agreement; and provided further, that if the
Executive is employed by the Company through December 31, 2008, or dies or
becomes totally and permanently disabled while employed in 2008, he shall be
entitled to participate in the Company’s 2008 Annual Incentive Plan in
accordance with its terms as evidenced by his individual 2008 award agreement.

d. If the Executive complies with Section 2(a) of this Agreement, and subject to
Section 1 and Section 2(e) and 2(f) of this Agreement, the Executive shall be
entitled at the end of the Retention Period to the payments and other benefits
set forth in Section 4(a) of this Agreement in accordance with any terms and
conditions set forth in Section 4(a).

e. If prior to the end of the Retention Period, the Executive shall voluntarily
terminate his employment with the Company for any reason other than for Good
Reason, or if the Company terminates the Executive’s employment for Cause, he
shall not be entitled to the payments and other benefits set forth in
Section 4(a)(i), (iii), (viii), (ix) and (x) of this Agreement.

f. In addition, if the Executive shall be terminated by the Company for Cause
prior to the end of the Retention Period, he shall not be entitled to the
benefits described in Section 4(a)(iv) and shall be entitled to only fifty
percent (50%) of the payment provided in Section 4(a)(xi).

3. Termination of the Employment Agreement and the Payment Designation
Agreement; Resignation as an Officer and Termination of Employment.

a. The Executive and the Company hereby mutually terminate, revoke and rescind
the Employment Agreement and the Payment Designation Agreement and all rights
and obligations either party has or may be entitled to under the Employment
Agreement and the Payment Designation Agreement, in accordance with Section 5(h)
of the Employment Agreement.

b. The Executive and the Company agree further that the Executive’s status as an
employee and officer of the Company and as an officer and director of each of
the Company’s subsidiaries and related companies will terminate, and he will
separate from service with the Company, effective as of the last day of the
Retention Period.

4. Payments and Other Benefits.

a. In consideration of the execution and performance of this Agreement by the
Executive, and subject to Sections 2(d), 2(e) and 2(f) and the remaining
provisions of this Section 4, the Executive will receive from the Company the
following severance payments and benefits, which include sums of money and
benefits to which the Executive would not otherwise be entitled if the Company
and the Executive did not mutually agree to the termination of his Employment
Agreement and Payment Designation Agreement:

i. The Company shall pay to the Executive, in a lump sum cash payment on the
first day of the seventh (7th) month after the Executive’s termination of
employment with the Company, the sum of One Million Seven Hundred and Fifty
Thousand Dollars ($1,750,000).

ii. The Company shall pay to the Executive, in a lump sum payment on
December 12, 2008, or if the Executive terminates employment with the Company
(other than for Cause) before December 11, 2008, on the first day of the seventh
(7th) month after the date of such termination, his Accrued SERP Benefit and
Additional SERP Benefits (as such terms are defined in Section 8(a)(5) of the
Employment Agreement and used in subparagraph 2(a) of the Payment Designation
Agreement) as required under subparagraph 2(a) of the Payment Designation
Agreement, in full settlement of all of the Executive’s rights with respect to
the Accrued SERP Benefit, Additional SERP Benefits and (except as provided in
Section 4(a)(iii) of this Agreement) any other benefit under or related to the
Supplemental Executive Retirement Plan for Certain Members of the Erie Insurance
Group Retirement Plan for Employees (“SERP”) in which Executive may have had an
expectancy. Such lump sum payment shall be computed in the manner provided in
subparagraph 2(a) of the Payment Designation Agreement. If the Executive is
terminated for Cause before December 11, 2008, his SERP benefits, computed in
the manner prescribed by the SERP without regard to Section 8(a)(5) of the
Employment Agreement and the foregoing provisions of this Section 4(a)(ii),
shall be paid in the form and at the time designated above.

iii. The Company shall pay to the Executive, in a lump sum payment on the first
day of the seventh (7th) month after the Executive’s termination of employment
with the Company, the lump sum value of the additional SERP benefits produced by
crediting the Executive with three (3) additional years of service as provided
in Section 6(a)(4) of the Employment Agreement. This additional lump sum will be
based on the December 12, 2008 accrued benefit with recognition of three
(3) years of additional service (total service limited to thirty (30) years).
The difference between this benefit and the benefit determined without the
additional three (3) years of service will be converted to a lump sum amount
using the age, interest rate and mortality table applicable as of the first day
of the seventh (7th) month after the Executive’s termination of employment with
the Company. The mortality table for payouts in 2009 will be the same as used
for the Company’s qualified pension plan per the Internal Revenue Service’s
Revenue Ruling 2007-67.

iv. The Company shall pay to the appropriate taxing authorities on the
Executive’s behalf a Tax Gross-up with respect to payment of Executive’s SERP
Benefits described in paragraph (ii) of this Section 4(a). For the avoidance of
doubt, the payment described in paragraph (iii) of this Section 4(a) shall not
be eligible for a Tax Gross-up. As used throughout this Agreement, the “Tax
Gross-up” with respect to a particular payment or benefit means (A) the taxes
identified below that are payable by the Executive by reason of such payment or
benefit, computed by applying the highest applicable marginal rate with respect
to each such tax and (B) any such taxes incurred and due and owing with respect
to the amounts paid in (A) above:

  1.   Federal income tax applicable to the Executive for the year of payment
under section 1 of the Internal Revenue Code of 1986, as amended (the “Code”);

2. Pennsylvania state income tax;

3. Local earned income tax;

4. The employee portion of the Pennsylvania unemployment tax; and

5. The employee portion of FICA-HI taxes.

Any Tax Gross-up payable under this Agreement shall be paid during the year in
which the related payment or benefit is paid.

v. The Company shall pay to the Executive, in a lump sum cash payment in January
of the year following the year in which the Executive terminates employment with
the Company, an amount equal to the Executive’s account balance under the
Deferred Compensation Plan of Erie Indemnity Company (the “Deferred Compensation
Plan”) as of December 31, 2004, plus earnings on that portion of the Executive’s
account through the date of payment, computed in accordance with the terms of
the Deferred Compensation Plan.

vi. The Company shall pay to the Executive, in a lump sum cash payment on the
first day of the seventh (7th) month after the Executive’s termination of
employment with the Company, an amount equal to the Executive’s account under
the Deferred Compensation Plan attributable to accruals on and after January 1,
2005, and earnings on that portion of the Executive’s account through the date
of payment, computed in accordance with the terms of the Deferred Compensation
Plan.

vii. The Company shall issue to the Executive 1,185 shares of the Company’s
Class A Common Stock (less applicable deductions) in January 2009, which shares
represent restricted shares awarded to Executive under the Company’s 1997 Long
Term Incentive Plan; provided, however, that if, prior to January 1, 2009, the
Executive voluntarily terminates employment for any reason other than for Good
Reason or the Company terminates Executive’s employment for Cause, the
Executive’s rights under the Company’s 1997 Long Term Incentive Plan shall be
only such as are provided under the terms of that plan.

viii. With respect to the Company’s 2004 Long Term Incentive Plan (“2004 LTIP”):

  (A)   If the Executive remains employed through the Retention Period and the
Retention Period ends before January 1, 2009: (I) the performance period with
respect to awards made to the Executive for the 2006-2008, 2007-2009 and
2008-2010 performance periods shall all be treated as ending on December 31,
2008; (II) the Company shall measure Company performance for each such
performance period against the applicable performance standards and goals and
shall determine the number of the restricted performance shares earned by the
Executive for the performance period, based on such Company performance (the
“earned award”); and (III) the Company shall issue to the Executive shares of
the Company’s Class A Common Stock representing: (1) for the 2006-2008
performance period, 100 percent of the earned award, (2) for the 2007-2009
performance period, 2/3 of the earned award, and (3) for the 2008-2010
performance period 1/3 of the earned award (less, in each case, applicable
deductions).

The Company shall issue such shares in 2009 at the time awards for the 2006-2008
performance period are paid to other 2004 LTIP participants.

(B) If the Executive remains employed through December 31, 2008, or if he is
terminated prior to January 1, 2009 for other than Cause, or if he voluntarily
terminates his employment in 2008 for Good Reason, or if he dies or becomes
totally and permanently disabled in 2008 while employed by the Company: (I) the
performance period with respect to the award made to the Executive for the
2006-2008 performance period shall end on December 31, 2008; (II) the Company
shall measure Company performance against the applicable performance standards
and goals and shall determine the number of the restricted performance shares
earned by the Executive for that performance period, based on such Company
performance (the “earned award”); and (III) the Company shall issue to the
Executive shares of the Company’s Class A Common Stock representing 100 percent
of that earned award (less applicable deductions) at the same time that awards
for the 2006- 2008 performance period are paid to other 2004 LTIP participants.

(C) If the Executive remains employed through the Retention Period and the
Retention Period ends on or after January 1, 2009: (I) the performance period
with respect to awards made to the Executive for the 2007-2009, 2008-2010 and
2009-2011 performance periods shall all be treated as ending on December 31,
2009; (II) the Company shall measure Company performance for each such
performance period against the applicable performance standards and goals and
shall determine the number of the restricted performance             shares
earned by the Executive for the performance period, based on such Company
performance (the “earned award”); and (III) the Company shall issue to the
Executive shares of the Company’s Class A Common Stock representing: (1) for the
2007- 2009 performance period, 100 percent of the earned award, (2) for the
2008-2010 performance period, 2/3 of the earned award, and (3) for the 2009-2011
performance period, 1/3 of the earned award (less, in each case, applicable
deductions).

The Company shall issue such shares in 2010 at the time awards for the 2007-2009
performance period are paid to other 2004 LTIP participants.

(D) If, prior to the end of the Retention Period, the Executive voluntarily
terminates employment for any reason other than for Good Reason or the Company
terminates Executive’s employment for Cause, the Executive’s rights under the
2004 LTIP shall be only such as are provided under the terms of that plan.

(E) The Company’s determination of the number of shares to be issued under
clauses (A), (B) and (C) above shall be in accordance with the terms of the 2004
LTIP and consistent with the Company’s past practices, and shall be final and
binding on all interested parties.

ix. For each of the calendar years 2009, 2010 and 2011, the Company shall
reimburse the Executive for the annual premiums due and paid during such years
(i.e., in 2009 for the 2009-2010 policy year, in 2010 for the 2010-2011 policy
year, and in 2011 for the 2011-2012 policy year) on a Northwestern Mutual Life
Insurance Company policy on the Executive’s life (No. 14-515-647) within thirty
(30) days after receipt of reasonable substantiating documentation from the
Executive, but in any event not later than the end of the calendar year
following the year in which such expense was incurred. In addition, in each such
year the Company shall pay to the appropriate taxing authorities on the
Executive’s behalf an amount equal to the Tax Gross-up (as defined in Section
4(a)(iv) of this Agreement ) with respect to such premium payments. If the
Executive should die or cancel or surrender such policy during the three
(3) year period, no further payments by the Company shall be required. The
Company agrees to use its best efforts to have any restrictive endorsements on
these policies removed not later than December 31, 2009.

x. The Executive shall be entitled to continuing coverage for all purposes
(including eligibility, coverage, vesting and benefit accruals, as applicable),
for a period of three (3) years after the date of the termination of Executive’s
employment hereunder, to the extent not prohibited by law, for the Executive and
the Executive’s eligible dependents under all of the Erie Benefit Plans (as such
term is defined in Section 3(c) of the Employment Agreement) in effect and
applicable to Executive and the Executive’s eligible dependents as of the date
of termination. In the event that the Executive and/or the Executive’s eligible
dependents, because of the Executive’s terminated status, cannot be covered or
fully covered under any or all of the Erie Benefit Plans, the Company shall
continue to provide the Executive and/or the Executive’s eligible dependents
with the same level of such coverage in effect prior to termination, payable
from the general assets of the Company if necessary.

xi. In consideration for the Release required under Section 5 of this Agreement,
the Company shall pay to the Executive, in a lump sum cash payment within five
(5) business days after the end of the Retention Period, the sum of One Hundred
Thousand Dollars ($100,000).

b. In the event of the Executive’s death before payment of the benefits
described in Sections 4(a)(i) and (xi), the Company shall pay the benefits at
the scheduled times to the Philip A. Garcia Revocable Trust, dated October 27,
1995, Philip A. Garcia Trustee, and in the event of the Executive’s death before
payment of the benefit described in Section 4(a)(iii), the Company shall pay the
benefit at the scheduled time to the Executive’s surviving spouse, Diane Garcia.

In the event of the Executive’s death before payment of a benefit described in
any of the other paragraphs of Section 4(a), the Company shall pay the benefit
at the scheduled time to the beneficiary or beneficiaries designated by the
Executive from time-to-time in accordance with the terms of the plan or
arrangement to which the benefit relates; provided, however, that if the
Executive has not designated a beneficiary in accordance with the terms of the
applicable plan or arrangement, or if no designated beneficiary with respect to
the plan or arrangement survives the Executive, the Company shall pay the
benefit to the executor or administrator of the Executive’s estate.

c. All payments under this Section 4, whether or not in cash, shall be subject
to applicable deductions. For the purposes of this Agreement, “applicable
deductions” shall include, but shall not be limited to, any federal, state, or
local taxes determined by the Company to be required to be withheld from amounts
paid to the Executive pursuant to this Agreement or otherwise due from the
Company, and any other amounts that the Company may be legally required to
deduct from his earnings.

d. Except as provided in Section 2(c) or elsewhere in this Agreement, the
Executive agrees that he is not entitled to any other compensation (including,
but not limited to, salary, bonuses or incentive payments), employee benefits,
fringe benefits, perquisites or any other benefit of any kind or description
from the Company, or from or under any employee benefit plan or fringe benefit
plan sponsored by the Company or under the Employment Agreement or Payment
Designation Agreement, other than as described above and other than (i) his
accrued benefits under the Erie Insurance Group Retirement Plan for Employees
and (ii) his accrued benefits under the Erie Insurance Group Employee Savings
Plan. The consideration paid by the Company to the Executive pursuant to this
Agreement shall be in compromise, settlement and full satisfaction of any and
all Claims, as defined in Section 5 of this Agreement, that the Executive has,
or may have, against the Company or other Releasees, as defined in Section 5 of
this Agreement, arising out of the Executive’s employment with the Company or
its affiliates, the termination of such employment and any and all matters
related to the Executive’s employment and termination, or to his Employment
Agreement or Payment Designation Agreement.

5. Executive’s Waiver and Release. Effective as of the Effective Date, the
Executive, for himself, his heirs, successors and assigns and in consideration
of the payments to be made by the Company pursuant to Section 4(a)(xi) of this
Agreement, does hereby forever discharge and release the Company, and its
corporate parents, subsidiaries, affiliated companies, companies with common
management, ownership or control, successors, assigns, insurers and reinsurers,
attorneys, and franchisees, and all of their officers, directors, shareholders,
employees, agents and representatives, in their official and individual
capacities (collectively referred to as “Releasees”), from any and all claims,
demands, causes of action, damages, charges, complaints, grievances, expenses,
compensation and remedies which the Executive now has or may in the future have
on account of or arising out of any matter or thing which has happened,
developed or occurred before the Effective Date (collectively “Claims”),
including, but not limited to, all Claims arising from the Executive’s
employment with the Company or any of its affiliated companies, the termination
of such employment, any and all relationships or dealings between the Executive
and the Company or any of the other Releasees, the termination of any such
relationships and dealings, and any and all other Claims the Executive may have
against the Company or any of the other Releasees, and the Executive hereby
waives any and all such Claims including, all charges or complaints that were or
could have been filed with any court, tribunal or governmental agency, and any
and all Claims not previously alleged, including, but not limited to, any Claims
under the following: (a) Title VII of the Civil Rights Act of 1964, as amended;
(b) the Age Discrimination in Employment Act (ADEA), as amended; (c) the Federal
Employee Retirement Income Security Act of 1974 (ERISA), as amended; (d) the
Americans With Disabilities Act (ADA), as amended; (e) the Consolidated Omnibus
Budget Reconciliation Act of 1985 (COBRA), as amended; (f) Section 806 of the
Sarbanes-Oxley Act of 2002, as amended; (g) any and all statutes of similar
nature or purpose under Pennsylvania law, or the law of any other state,
including, but not limited to, the Pennsylvania Human Relations Act, as amended;
and (h) any federal, state or local law, rule, regulation, constitution,
executive order or guideline of any description, including, but not limited to,
those laws described above, or any rule or principle of equity or common law, or
any Claim of defamation, conversion, interference with a contract or business
relationship, or any other intentional or unintentional tort, or any Claim of
loss of consortium, or any Claim of harassment or retaliation, or breach of
contract or implied contract, or breach of covenant of good faith and fair
dealing, or any whistle-blower Claim. This release, discharge and waiver shall
be hereinafter referred to as the “Release.”

The Executive specifically understands and agrees that the termination of his
employment does not violate or disregard any oral or written promise or
agreement, of any nature whatsoever, express or implied. If any contract or
agreement of employment exists concerning the employment of the Executive by the
Company or the terms and conditions of such employment or the termination of
such employment, whether oral or written, express or implied, that contract or
agreement (including the Employment Agreement and Payment Designation Agreement)
is hereby terminated and is null and void.

The Executive agrees that this Release may be enforced in federal, state or
local court, and before any federal, state or local administrative agency or
body.

This Release does not prohibit the Executive from filing an administrative
charge of alleged employment discrimination, harassment or retaliation under
Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act of 1967, the Americans With Disabilities Act or the Equal Pay Act of 1963;
however, the Executive represents that he has not to date filed or cause to be
filed any such administrative charge, and further agrees that he hereby waives
any right to monetary or other recovery should any federal, state or local
administrative agency pursue any Claim on his behalf and will immediately
request in writing that the Claim or matter on his behalf be withdrawn. Thus by
signing this Agreement, the Executive waives any right he had to obtain a
recovery if an administrative agency pursues a Claim against the Company or any
of the other Releasees based on any action taken by the Company or any of the
other Releasees up to the Effective Date, and that he will have released the
Company and the other Releasees of any and all Claims, and the continuing effect
of any and all Claims of any nature up to the Effective Date. This Release does
not affect any of the Executive’s vested rights under the Erie Insurance Group
Retirement Plan for Employees and the Erie Insurance Group Employee Savings
Plan, nor, with respect to any of the capacities in which the Executive served
the Company or each of its subsidiaries and related companies, or as a trustee
of any employee benefit trusts or other trusts maintained or sponsored by the
Company or each of its subsidiaries and related companies, does it bar any claim
the Executive may have for indemnity in relation to any acts or omissions of the
Executive or a claim for coverage under any applicable insurances, or any claim
relating to enforcement of this Agreement.

6. Additional Terms.

a. Except as otherwise provided in Section 5 or this Section 6, the Executive
agrees not to commence or continue any action or proceeding in any federal,
state or local court, concerning any Claim waived or released in this Agreement.

b. The Executive represents that he has not filed or caused to be filed, and
agrees that he will not file or cause to be filed, any lawsuit of any kind
arising out of or relating to his employment with the Company, the terms and
conditions of that employment, or the termination of his employment.

c. Nothing contained in this Agreement prohibits the Executive from seeking a
determination by a court of competent jurisdiction that the Release is, in whole
or in part, invalid under applicable law. To the extent of such determination,
the Executive may assert Claims or other matters included in the Release,
subject to final determination on appeal.

d. The Executive agrees that he has not sustained any disabling personal injury
and/or occupational disease which has resulted in a loss of wage earning
capacity during his employment with the Company, and that he has no personal
injury and/or occupational disease which has been contributed to, or aggravated
or accelerated in a significant manner by his employment with the Company.

e. The Executive represents and warrants that the Company has encouraged and
advised the Executive in writing, prior to signing this Agreement, to consult
with an attorney of the Executive’s choosing concerning all of the terms of this
Agreement, and the Executive represents and warrants that he has retained
independent legal counsel to advise him concerning entering into this Agreement
and the terms hereof.

f. This Agreement may be revoked by the Executive within seven (7) days after
the date this Agreement is signed by the Executive, by giving notice of
revocation to James J. Tanous, the Executive Vice President, Secretary and
General Counsel of the Company. This Agreement shall not become effective or
enforceable until the revocation period has expired with no revocation.

g. The Executive represents and warrants that the Company has given the
Executive a reasonable period of time, of at least twenty-one (21) days, for the
Executive to consider all the terms of this Agreement and for the purpose of
consulting with an attorney if the Executive so chooses. A copy of a draft of
this Agreement was first given to the Executive on June 5, 2008. If this
Agreement has been executed by the Executive prior to the end of the twenty-one
(21) day period, the Executive represents that he has freely and willingly
elected to do so.

h. This Agreement provides the Executive sums and benefits to which he is not
otherwise entitled as an employee of the Company.

i. Nothing contained in this Agreement is intended to be an admission of any
fault, wrongdoing, or liability on the part of any of the parties hereto, and
nothing contained in this Agreement may be deemed, construed, or treated in any
respect as such an admission. The Company specifically denies any fault,
wrongdoing or liability toward the Executive. This Agreement was reached by the
parties as a mutual compromise of their respective positions, in order to avoid
the costs and inconvenience of litigation and for other reasons deemed good and
sufficient by the respective parties.

7. Non-Disparagement. The Executive shall not disparage the Company or other
Releasees, or its officers, directors or employees in any way orally or in
writing, and the directors and executive and senior officers of the Company
shall likewise not disparage the Executive.

8. Covenants as to Confidential Information and Competitive Conduct. The
Executive hereby acknowledges and agrees as follows: (a) this Section 8 is
necessary for the protection of the legitimate business interests of the
Company, (b) the restrictions contained in this Section 8 with regard to
geographical scope, length of term and types of restricted activities are
reasonable; (c) the Executive has received adequate and valuable consideration
for entering into this Agreement, and (d) the Executive’s expertise and
capabilities are such that his obligations hereunder and the enforcement hereof
by injunction or otherwise will not adversely affect the Executive’s ability to
earn a livelihood.

a. Confidentiality of Information and Nondisclosure. The Executive agrees that
the Executive will not, directly or indirectly, without the express written
approval of the Company, unless directed by applicable legal authority
(including any court of competent jurisdiction, governmental agency having
supervisory authority over the business of the Company or its subsidiaries, or
any legislative or administrative body having supervisory authority over the
business of the Company or its subsidiaries) having jurisdiction over the
Executive, disclose to or use, or knowingly permit to be so disclosed or used,
for the benefit of himself, any person, corporation or other entity other than
the Company, (i) any non-public information concerning any financial, accounting
and tax matters, customer relationships, competitive status, supplier matters,
internal organizational matters, current or future plans, or other business
affairs of or relating to the Company, its subsidiaries or affiliated or related
parties, (ii) any proprietary management, operational, trade, technical or other
secrets or any other proprietary information or other data of the Company, its
subsidiaries or affiliated or related parties, or (iii) any other information
related to the Company, its subsidiaries or affiliated or related parties, or
which the Executive should reasonably believe will be damaging to the Company,
its subsidiaries or affiliated or related parties, which has not been published
and is not generally known outside of the Company. The Executive acknowledges
that all of the foregoing constitutes confidential and proprietary information,
which is the exclusive property of the Company.

b. Restrictive Covenant. For a period of one hundred and twenty (120) days
beginning on the date of the Executive’s termination of employment (the
“Restrictive Period”), the Executive shall not render, directly, or indirectly,
services to any person, firm, corporation, association, or other entity which
conducts the same or similar business as the Company or its subsidiaries at the
date of the Executive’s termination of employment hereunder within the states
and territory in which the Company or its subsidiaries is or are then licensed
and doing business at the date of the Executive’s termination of employment
hereunder without the prior written consent of the Company’s President/CEO,
which may not be unreasonably withheld. In the event the Executive violates any
of the provisions contained in this Section 8 hereof, the Restrictive Period
shall be increased by the period of time from the commencement by the Executive
of any violation until such violation has been cured to the satisfaction of the
Company. The Executive further agrees that at no time during the Restrictive
Period will the Executive attempt to directly or indirectly solicit or hire
employees of the Company or its subsidiaries or induce any of them to terminate
their employment with the Company or its subsidiaries.

c. Company Remedies. The Executive acknowledges and agrees that any breach of
this Section 8 will result in immediate and irreparable harm to the Company, and
that the Company cannot be reasonably or adequately compensated by damages in an
action at law. In the event of a breach by the Executive of the provisions of
this Section 8, the Company shall be entitled, to the extent permitted by law,
immediately to cease to pay or provide the Executive or the Executive’s
dependents any compensation or benefit being, or to be, paid or provided to the
Executive pursuant to this Agreement, and also to obtain immediate injunctive
relief restraining the Executive from conduct in breach of the covenants
contained in this Section 8. Nothing herein shall be construed as prohibiting
the Company from pursuing any other remedies available to it for such breach,
including the recovery of damages from the Executive.

9. Breach of Agreement. The Executive agrees that if he violates any of the
terms of this Agreement, the Company may pursue whatever rights it has under
this Agreement, whether in law or in equity, without affecting the validity and
enforceability of the Release or the second waiver and release contemplated by
Section 1(b) of this Agreement. If the Executive is required to bring any action
to enforce rights or to collect moneys due under this Agreement, the Company
shall pay to the Executive the fees and expenses incurred by the Executive in
bringing and pursuing such action provided that the Executive is successful, in
whole or in part, on the merits or otherwise (including by way of a settlement
involving the payment of money by the Company to the Executive), in such action.
The Company shall pay such fees and expenses in advance of the final disposition
of such action. The Executive agrees to repay to the Company such advances if
the Executive is not ultimately successful, in whole or in part, on the merits
or otherwise, in such action. The Company shall make such payments within thirty
(30) days after receipt of reasonable substantiating documentation from the
Executive but in no event later than the end of the calendar year following the
year in which such fees and expenses were incurred.

10. Company Property, Records, Files and Equipment. The Executive will return
all Company property, records, files, or any other Company owned equipment in
his possession within ten (10) days after the date of Executive’s termination of
employment with the Company.

11. Confidentiality of Agreement. The Executive agrees that (except pursuant to
judicial legal process or any legal action to enforce this Agreement), the
Executive shall keep confidential the terms of this Agreement, and all
performance hereunder, and shall not disclose this information henceforth to
anyone other than the United States Internal Revenue Service; state or local tax
authorities; or the Executive’s family, attorneys and tax advisors, who also
shall be bound by this confidentiality obligation. The foregoing shall not
prohibit or restrict such disclosure as is required by law or may be necessary
for the prosecution of claims relating to the performance or enforcement of this
Agreement or prohibit or restrict the Executive (or the Executive’s counsel)
from responding to any inquiry about the agreements represented in this
Agreement or the underlying facts and circumstances of those agreements by the
Securities and Exchange Commission, the NASDAQ Stock Market or any other
self-regulatory organization. Prior to responding to any such inquiry, the
Executive agrees to provide the Company with as much notice as possible that he
has been requested or compelled to make disclosures and use the Executive’s (or
the Executive’s counsel) best efforts to ensure that if any disclosure occurs,
it does so in a manner designed to maintain the confidentiality of this
Agreement to the fullest extent possible.

12. Ongoing Cooperation. During the period from the date hereof through the end
of the twelfth (12th) month after the Executive’s termination of employment, the
Executive agrees to use his best efforts to assist, advise and cooperate with
the Company if the Company so requests on issues that arose or were in any way
developing during his employment with the Company, subject to Executive’s
availability given his employment obligations, if any, at that time. The
Executive shall furnish such assistance, advice or cooperation to the Company as
the Company shall reasonably request and as is within the Executive’s reasonable
capability. Such assistance, advice and cooperation may include, but shall not
be limited to, the preparation for, or the conduct of, any litigation,
investigation or proceeding involving matters or events which occurred during
the Executive’s employment by the Company as to which the Executive’s knowledge
or testimony may be important to the Company. In connection with the preparation
for, or the conduct of such litigation, investigation or proceeding as described
in the preceding sentence, the Executive shall promptly provide the Company with
any records or other materials in his possession that the Company shall request
in connection with the defense or prosecution of such litigation, investigation
or proceeding. If and to the extent that the Company requests that the Executive
attend a meeting, deposition or trial at any time prior to the end of the
twelfth (12th) month after the date of the Executive’s termination of
employment, the Company shall compensate Executive for his time at the rate of
$750 per day or portion thereof during which Executive complies with such
request. The Company shall also pay or reimburse the Executive for his travel
expenses reasonably incurred in the course of providing such cooperation. The
Company shall make such payment or reimbursement within thirty (30) days of
receipt of reasonable substantiating documentation from the Executive but in no
event later than the end of the calendar year following the year in which such
expenses were incurred.

13. Certain Additional Payments by the Company. Notwithstanding anything in this
Agreement to the contrary, in the event it is determined that any payment or
distribution by the Company to or for the benefit of the Executive, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement, or otherwise, is subject to the excise tax imposed by Section 4999 of
the Code, or any successor provision, on excess parachute payments, as that term
is used and defined in Sections 4999 and 280G of the Code, then the Executive
shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an
amount equal to then current rate of tax under said Section 4999 multiplied by
the total of the amounts so paid or payable, including the Gross-Up Payment,
which are deemed to be a part of an excess parachute payment. Any Gross-Up
Payment shall be made no later than December 31 of the calendar year following
the year in which the Executive remits to the Internal Revenue Service the
excise tax to which the Gross-Up Payment relates.

14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania applicable to
contracts executed in and to be performed in that commonwealth without regard to
its conflicts of laws provisions. Each of the parties hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the Commonwealth of Pennsylvania located in the County of Erie, Pennsylvania,
and of the United States for the Western District of Pennsylvania for any
litigation arising out of or relating to this Agreement or the transactions
contemplated hereby. Each of the parties hereby irrevocably and unconditionally
acknowledges that service of any process, summons, notice or document by United
States registered mail to the respective addresses set forth herein shall be
effective service of process for any litigation brought against a party in any
such court. Any legal action relating to this Agreement shall be brought in the
courts of the Commonwealth of Pennsylvania located in the County of Erie,
Pennsylvania, and of the United States for the Western District of Pennsylvania
and the parties irrevocably and unconditionally waive and will not plead or
claim in any such court that venue is improper or that such litigation has been
brought in an inconvenient forum.

15. Waiver. The waiver by a party hereto of any breach by the other party hereto
of any provision of this Agreement shall not operate or be construed as a waiver
of any other or subsequent breach by a party hereto.

16. Assignment. This Agreement shall be binding upon and inure to the benefit of
the successors and assigns of the Company, and the Company shall be obligated to
require any successor to expressly acknowledge and assume its obligations
hereunder. This Agreement shall inure to the extent provided hereunder to the
benefit of and be enforceable by the Executive or the Executive’s legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. The Executive may not delegate any of the Executive’s
duties, responsibilities, obligations or positions hereunder to any person and
any such purported delegation shall be void and of no force and effect.

17. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

18. Notices. Any notices required or permitted to be given under this Agreement
shall be sufficient if in writing, and if personally delivered or when sent by
first class certified or registered mail, postage prepaid, return receipt
requested — in the case of the Executive, to his principal residence address,
and in the case of the Company, to the address of its principal place of
business as set forth above, to the attention of the Executive Vice President,
Secretary and General Counsel of the Company.

19. Defined Terms.

a. Any compensation or benefit provided hereunder, the payment date of which is
determined with reference to Executive’s termination of employment, shall not be
paid until the applicable period has elapsed after the Executive’s “separation
from service”, within the meaning of Section 409A of the Internal Revenue Code
and the Treasury regulations thereunder.

b. Any other terms not specifically defined herein have the meanings set forth
in the Employment Agreement.

20. Entire Agreement. This Agreement constitutes the entire agreement of the
parties relating to the subject matter hereof, and supersedes any obligations of
the Company and the other Releasees under any previous agreements or
arrangements (including the Employment Agreement and the Payment Designation
Agreement), except as otherwise provided in this Agreement. The provisions of
this Agreement may not be amended, modified, repealed, waived, extended or
discharged except by an agreement in writing signed by the party against whom
enforcement of any amendment, modification, repeal, waiver, extension or
discharge is sought. This Agreement may be executed in one or more counterparts
(including by facsimile signature), all of which shall be considered one and the
same instrument, and shall be fully executed when one or more counterparts have
been signed by and delivered to each party.

21. Headings. The descriptive headings used herein are used for convenience of
reference only and shall not constitute a part of this Agreement.

THE EXECUTIVE HEREBY EXPRESSLY WARRANTS AND REPRESENTS THAT, BEFORE ENTERING
INTO THIS AGREEMENT, HE HAS RECEIVED A REASONABLE PERIOD OF TIME WITHIN WHICH TO
CONSIDER ALL OF THE PROVISIONS CONTAINED IN THIS AGREEMENT, THAT HE HAS FULLY
READ, INFORMED HIMSELF OF AND UNDERSTANDS ALL THE TERMS, CONTENTS, CONDITIONS
AND EFFECTS OF ALL PROVISIONS OF THIS AGREEMENT, AND THAT HE CONSIDERS ALL SUCH
PROVISIONS TO BE SATISFACTORY.

THE EXECUTIVE FURTHER EXPRESSLY WARRANTS AND REPRESENTS THAT NO PROMISE OR
REPRESENTATION OF ANY KIND HAS BEEN MADE, EXCEPT THOSE EXPRESSLY STATED IN THIS
AGREEMENT.

THE EXECUTIVE FURTHER EXPRESSLY WARRANTS AND REPRESENTS THAT HE ENTERS INTO THIS
AGREEMENT KNOWINGLY AND VOLUNTARILY.

[Signature page follows]

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IN WITNESS WHEREOF, the Executive and the Company, by its duly authorized
representative, have signed this Agreement as of the date set forth above.

     
WITNESS:
  THE EXECUTIVE:
/s/ Sheila M. Hirsch
  /s/ Philip A. Garcia
PHILIP A. GARCIA
 
  THE COMPANY:
ATTEST:
  ERIE INDEMNITY COMPANY
/s/ James J. Tanous
James J. Tanous, Secretary
 
By: /s/ John J. Brinling, Jr.
John J. Brinling, Jr., President and CEO

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