Exhibit 10.5
DEFERRED COMPENSATION PLAN AND AGREEMENT
     THIS DEFERRED COMPENSATION PLAN AND AGREEMENT (the “Agreement”) is made and
entered into as of December 31, 2010 (the “Effective Date”) between and among
ProAssurance Corporation, a Delaware corporation (“ProAssurance”), and its
subsidiary, ProAssurance Group Services Corporation, an Alabama corporation
(“PGSC”), and Victor T. Adamo, an individual (“Adamo”).
RECITALS:
     Adamo has served as the president and as a director of ProAssurance since
2001. He is currently an “at will” employee of PGSC, which is a subsidiary of
ProAssurance and serves as the employer for certain employees of ProAssurance
and its subsidiaries (collectively the “Companies”). ProAssurance, PGSC and
Adamo are parties to a Release and Severance Compensation Agreement dated as of
January 1, 2008 (the “Severance Agreement”), which extended the term of the
severance benefits first granted to Adamo in 2002. Under the terms of the
Severance Agreement, Adamo may elect to terminate his employment with the
Companies for any reason at any time prior to December 31, 2010, and receive
severance compensation (“Severance Compensation”) from ProAssurance in an amount
equal to the sum of two times Adamo’s current annual base salary and the average
of the annual incentive compensation paid to him for the three calendar years
ended December 31, 2009, 2008 and 2007. Adamo and ProAssurance have had
discussions regarding ProAssurance’s desire for Adamo to continue as a senior
executive of ProAssurance. ProAssurance and Adamo recognize that Adamo is of
retirement age and the continuation of Adamo’s employment in such circumstances
would result in a financial detriment to Adamo because the opportunity for him
to retire and receive Severance Compensation pursuant to the Severance Agreement
will terminate on December 31, 2010.
     As an inducement for Mr. Adamo to continue as a senior executive after
2010, ProAssurance has agreed to pay the Severance Amount pursuant to a deferred
compensation plan to be established for the account of Adamo in consideration
for his agreement to terminate the Severance Agreement and to continue to be
employed by the Companies in a mutually agreeable capacity as an employee at
will. The deferred compensation will be payable to Adamo upon termination of his
employment with the Companies for any reason subject only to the following
conditions: (i) Adamo will execute a release in favor of the Companies as a
condition to payment of the deferred compensation; and (ii) Adamo will agree not
to compete with the Companies during his employment and for a period of three
years after termination of his employment as set forth in Section 8 hereof. The
parties have entered into this Agreement to terminate the Severance Agreement
and to set forth the terms and conditions for the continued employment of Adamo
as a senior executive of ProAssurance and for the payment of deferred
compensation on his termination of employment. It is understood and agreed that
the termination of the Severance Agreement and the payment of the Severance
Amount as deferred compensation hereunder will not accelerate or delay the time
that the Severance Amount would

 

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otherwise be payable under the Severance Agreement because such payment is
triggered only upon Adamo’s termination of employment under the terms of both
the Severance Agreement and this Agreement .
     NOW, THEREFORE, THESE PREMISES CONSIDERED, and in consideration of other
good and valuable consideration, the parties hereby agree as follows:
     1. Termination of Severance Agreement. The Severance Agreement is hereby
terminated and shall have no further force and effect from and after the
Effective Date.
     2. Employment of Adamo. Adamo shall be employed as an executive of
ProAssurance on such terms as shall be established from time to time by the
Chief Executive Officer of ProAssurance; provided that Adamo shall be entitled
to benefits substantially similar to the benefits provided to employees of the
Companies that are similarly situated to Adamo in his then current capacity.
Adamo shall be an “at will” employee of the Companies and ProAssurance may
terminate the employment of Adamo at any time for any reason and Adamo may
terminate his employment at any time for any reason. On any termination of
employment with the Companies, Adamo shall be entitled to the following in
addition to and not in limitation of the Severance Amount (as defined in
Section 3 hereof): (i) accrued and unpaid base salary as of the date of
termination of employment; (ii) accrued vacation and sick leave, if any, as of
the date of termination of employment in accordance with the then current policy
of the Companies; and (iii) vested benefits under the Companies’ employee
benefit plans in which Adamo was a participant on the date of termination of
employment, which vested benefits shall be paid or provided for in accordance
with the terms of said employee benefit plans.
     3. Deferred Compensation; Terms of Payment.
          (a) ProAssurance and Adamo agree to vest and defer the payment of
$1,680,000 (the “Severance Amount”) which represents a mutually agreed reduction
to the Severance Compensation that would be due to Adamo under the Severance
Agreement if Adamo elected to terminate his employment with the Companies on the
Effective Date.
          (b) ProAssurance agrees to defer for the benefit of Adamo the
Severance Amount in consideration of the termination of the Severance Agreement
and the covenant not to compete set forth in Section 8 hereof. Upon the written
request of Adamo, ProAssurance will cause funds in an amount equal to the
Severance Amount to be invested in an investment vehicle that accepts funds to
be paid as nonqualified deferred compensation, in which event the Severance
Amount as herein defined shall be adjusted to reflect the cumulative earnings or
losses on such investment to the date of payment of the Severance Amount.
ProAssurance shall pay Adamo the Severance Amount, as so adjusted, in accordance
with the terms and provisions set forth in Section 3(c) hereof upon termination
of Adamo’s relationship with the Companies as an officer, employee and director.
          (c) Adamo understands and agrees that the payment of the Severance
Amount is subject to and conditioned upon (i) Adamo’s execution of the Release
in the form attached hereto as Exhibit A (the “Release”) and his delivery of the
executed Release to ProAssurance within twenty-two (22) days after termination
of employment with the Companies without

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subsequent revocation of the Release within seven (7) days after Adamo’s
execution of the Release and (ii) Adamo’s execution and delivery of his written
resignation as an officer and director of each of the Companies effective upon
termination. Subject to the foregoing, the Severance Amount shall be payable to
Adamo in good funds in seventy-eight (78) equal installments payable on each
payroll payment date according to the ProAssurance bi-weekly payroll practice
during the Restricted Period (as defined in Section 8 hereof) commencing on the
first payroll payment date that occurs thirty (30) days after Adamo’s
“separation from service” (as defined in 1-409A-3(a)(i) of the Treasury
Regulations); provided that the obligation to pay the Severance Amount to Adamo
shall be subject to termination as herein provided in the event that Adamo
violates the covenants set forth in Section 8 hereof. ProAssurance shall
withhold from any amounts payable under this agreement all federal, state, local
or other income and employment taxes that shall be required.
     4. Payment in the Case of Adamo’s Death.
          (a) Upon a termination of Adamo’s employment due to Adamo’s death, all
amounts payable pursuant to this Agreement, regardless of whether Adamo has
signed a Release, shall be payable to the beneficiary designated in accordance
with Section 4(b) hereof (the “Designated Beneficiary”) subject to and
conditioned upon the execution of the Release by the Designated Beneficiary and
the personal representative of the estate of Adamo within sixty (60) days after
termination of employment without revocation within seven (7) days after the
execution of the Release. Upon the satisfaction of such condition, the payments
due hereunder shall be made to the Designated Beneficiary not later than the
sixty-eighth (68th) day after Adamo’s date of death.
          (b) Upon Adamo’s death after termination of his employment, but prior
to completion of the payments due under Section 3 hereof, all amounts payable to
Adamo pursuant to this Agreement, regardless of whether Adamo has signed a
Release, shall be suspended and shall be payable to the Designated Beneficiary
subject to and conditioned upon the execution of the Release by the Designated
Beneficiary and the personal representative of the estate of Adamo within sixty
(60) days after the date of Adamo’s death without revocation within seven
(7) days after the execution of the Release. Upon the satisfaction of such
condition, the payments due hereunder shall be made to the Designated
Beneficiary not later than the sixty-eighth (68th) day after Adamo’s date of
death.
          (c) Adamo may designate a person as the Designated Beneficiary by
delivery of written notice of designation, executed by Adamo, to ProAssurance
(as provided in Section 11 hereof) in substantially the form attached as
Exhibit B hereto. ProAssurance shall provide timely notice to the Designated
Beneficiary, if any, of the existence of this Agreement and the requirements of
this Section 4. In the event Adamo fails to designate a person as Designated
Beneficiary as herein permitted, the “Designated Beneficiary” for purposes of
this Agreement will be Adamo’s surviving spouse or, if none, Adamo’s estate.
          (d) Upon either the termination of employment on the death of Adamo or
the death of Adamo prior to the completion of the payments due hereunder,
ProAssurance shall promptly notify the Designated Beneficiary of the right to
receive payments hereunder and of the conditions that must be satisfied in order
to receive such payments.

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     5. Certain Additional Tax Considerations.
          (a) Notwithstanding anything in this Agreement to the contrary, if any
portion of a payment or benefit due under Section 3 hereof is deemed
“nonqualified deferred compensation” subject to 409A of the Internal Revenue
Code, as amended (the “Code”), and as of the date of Adamo’s “separation from
service” (as defined in Section 1.409A-3(a)(1) of the Treasury Regulations),
Adamo is a “specified employee” (in accordance with Section 1.409A-1(i) of the
Treasury Regulations), then such portion will be paid (without interest) on the
first business day that is six months after the date of Adamo’s “separation from
service.
          (b) Any reference in this Agreement to a “termination of employment,”
“termination,” “date of termination,” “Termination Date” or similar reference to
a cessation of services shall be interpreted to mean a “Separation from Service”
within the meaning of Section 1.409A-1(h) of the Treasury Regulations. This
Agreement shall be administered and interpreted to maximize the short-term
deferral exception to Section 409A of the Code, and Adamo shall not, directly or
indirectly, designate the taxable year of a payment made under this Agreement.
The portion of any payment under this Agreement that is not a “deferral of
compensation” and is paid within the “short-term deferral period” within the
meaning of Treasury Regulation § 1.409A-1(b)(4) shall be treated as a short-term
deferral and not aggregated with other deferred compensation plans or payments.
Any other portion of the payment that does not meet the short-term deferral
requirement shall, to the maximum extent possible, be deemed to satisfy the
exception from Treasury Regulation § 1.409A-1(b)(9)(iii)(A) for involuntary
separation pay and shall not be aggregated with any other payment. Any amount
that is a short-term deferral within the meaning of Treasury Regulation §
1.409A-1(b)(4), or within the involuntary separation pay limit under Treasury
Regulation § 1.409A-1(b)(9)(iii)(A) shall be treated as a separate payment.
Payment dates provided for in this Agreement shall be deemed to be timely paid
if paid within any additional time for payment following the specified payment
date as is permitted under Section 409A of the Code and the regulations
promulgated thereunder. To the extent that any in-kind payments or
reimbursements provided to Adamo under this Agreement are deemed to constitute
deferred compensation to Adamo, such amounts shall be paid or reimbursed by the
deadline for payment or reimbursement specified in this Agreement but, if not so
specified, reasonably promptly, but not later than December 31 of the year
following the year in which the expense was incurred. The amount of any in-kind
payments or expense reimbursements that constitute deferred compensation in one
year shall not affect the amount of payments or expense reimbursements
constituting deferred compensation that are eligible for payment or
reimbursement in any subsequent year, and Adamo’s right to such payments or
reimbursement of any such expenses shall not be subject to liquidation or
exchange for any other benefit.
          (c) Notwithstanding anything herein to the contrary, this Agreement
shall be interpreted as necessary to comply with the requirements of
Section 409A of the Code.
          (d) ProAssurance has received a memorandum from Burr & Forman LLP
dated December 21, 2010, advising ProAssurance that this Agreement materially
complies with the requirements of Section 409A of the Code and that payments
made in accordance with the terms of this Agreement will not be subject to the
excise tax under Section 409A of the Code. ProAssurance agrees that it will
report the payments or benefits payable under this Agreement as not being
subject to the excise tax under Code Section 409A in accordance with such advice

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except to the extent that changes in the tax laws and interpretations thereof
after the date of this Agreement require a different reporting position with
respect to such payments.
     6. Prohibition on Assignments. No part of the deferred compensation
benefits provided under this Agreement shall be liable for the debts, contracts
or engagements of Adamo or his successors in interest, or be taken in execution
by levy, attachment or garnishment or by any other legal or equitable
proceeding, nor shall any such person have any right to alienate, anticipate,
commute, pledge, encumber or assign any benefit or any interest therein in any
manner whatsoever.
     7. Unfunded Obligations of ProAssurance. The obligations of ProAssurance
under this Agreement will be unfunded and unsecured, and nothing contained
herein shall be construed as providing for assets to be held in trust or escrow
or any other form of segregation of the assets of ProAssurance for the benefit
of Adamo or any other person. The interest of Adamo or any other person
hereunder shall be limited to the right to receive the benefits as set forth
herein. To the extent that Adamo or any other person acquires a right to receive
any benefit under this Agreement, such right shall be no greater than the right
of an unsecured general creditor of ProAssurance. For tax purposes and for
purposes of Title I of ERISA, this Agreement is intended to qualify as an
unfunded plan maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees,
and shall be interpreted accordingly. No action by ProAssurance or its Board of
Directors, or the Administrator under this Agreement (herein defined) shall be
construed as creating a trust, escrow or other secured or segregated fund or
other fiduciary relationship of any kind in favor of Adamo or any Designated
Beneficiary or any other persons otherwise entitled to benefits under this
Agreement. The status of Adamo and any Designated Beneficiary with respect to
any liabilities assumed by ProAssurance hereunder shall be solely that of
unsecured creditors. The Agreement constitutes a promise by ProAssurance to make
benefit payments in the future. Any insurance policy or any other asset acquired
or held by ProAssurance in connection with liabilities assumed by it hereunder,
shall not be deemed to be held under any trust, escrow or other secured or
segregated fund or other fiduciary relationship of any kind for the benefit of
Adamo or any Designated Beneficiary or to be security for the performance of the
obligations of ProAssurance, but shall be and remain a general, unpledged,
unrestricted asset of ProAssurance at all times subject to the claims of general
creditors of ProAssurance.
     8. Non-Competition; Non-Solicitation of Employees. Adamo will not during
his employment with the Companies and will not during the Restricted Period
(herein defined) following termination of his employment:
          (a) become Employed (herein defined) by a Competitor Company (herein
defined) that offers, sells or markets medical professional liability insurance
(herein defined) in a primary market area (herein defined) of an Insurance
Subsidiary (herein defined), except that Adamo may be employed with a Competitor
Company so long as and on the condition that Adamo 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

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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.
     The following terms shall have the meanings set forth below only for
purposes of this Section 8 unless otherwise specifically provided in this
Agreement:
     “Competitor Company” means an insurance company, insurance agency,
business, for profit or not for profit organization (other than the ProAssurance
or any of its subsidiaries) 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 of employment.
     “Restricted Period” means a period of 36 months from the date of
termination of employment with the Companies.
          (b) If Adamo is deemed to have materially breached the non-competition
covenants set forth in Section 8 of this Agreement, ProAssurance may, in
addition to seeking an injunction or any other remedy they may have, withhold or
cancel any remaining payments or benefits due to Adamo pursuant to Section 3(c)
of this Agreement. ProAssurance shall give prior or contemporaneous written
notice of such withholding or cancellation of payments in accordance with
Section 3(c) hereof. If Adamo violates any of these restrictions, ProAssurance
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
ProAssurance.
          (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 Adamo’s
obligations under this Agreement.
     9. Confidentiality. Adamo 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 Adamo may in the future be bound. In the
event that Adamo is at any time not the subject of a separate confidentiality or
nondisclosure agreement with the Companies (or any of them), Adamo expressly
agrees that Adamo shall not use for Adamo’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, 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 (or
any of them) 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. Adamo shall return to ProAssurance
promptly, and in no event later than the date of termination of employment, all
items, documents, lists and other materials belonging to the Companies (or any
of them), 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 Adamo’s possession or control.
     10. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of ProAssurance and Adamo and their respective devisees, heirs,
legal or personal representatives, successors and assigns. Notwithstanding the
foregoing, this Agreement is personal to Adamo and the rights and obligations
hereunder may not be assigned by Adamo without the prior written consent of
ProAssurance.
     11. 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 Adamo:
Victor T. Adamo
          Notice to the Companies:
ProAssurance Corporation
100 Brookwood Place
Birmingham, Alabama 35209
Attention: Chief Executive Officer: cc Secretary

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     12. 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 Adamo 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 Adamo (“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.
     13. 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 12 hereof and may file for
arbitration within sixty (60) days following claimant’s receipt of the
Administrator’s written decision on review under Section 12(c) hereof, or if the
Administrator fails to provide any written decision under Section 12

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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 Birmingham, Alabama. 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, Adamo 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. ProAssurance and
Adamo shall each be responsible for one-half of the arbitration fees and the
arbitrator’s compensation, and each of them shall be responsible for the fees
and expenses of their respective legal counsel.
     14. Termination. This Agreement shall be terminated automatically if:
(i) Adamo fails to execute the Release within twenty-two (22) days after
termination of employment; or (ii) Adamo revokes the Release within seven
(7) days after his execution of the Release. In the event this Agreement is so
terminated, none of the parties shall have any further rights or obligations
hereunder, it being understood that the Severance Amount shall not be payable as
a result of Adamo’s failure to timely execute the Release without revocation.
Notwithstanding the foregoing, if Adamo’s employment is terminated by reason of
his death or if Adamo should die after termination of employment with the
Companies prior to completion of the payment of the Severance Amount and if the
Designated Beneficiary and the personal representative of Adamo’s estate fail to
execute the Release as required in Section 4 hereof or if either of them revokes
the Release within seven (7) days after execution thereof, this Agreement shall
be terminated automatically and no further payments shall be made hereunder on
the sooner of either: (A) sixty-eight (68) days after the date of delivery of
the notice required under Section 4(d) hereof or (B) 180 days after the death of
Adamo.
     15. 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) Neither the provisions of this Agreement nor the severance
benefits provided hereunder shall reduce any amounts otherwise payable, or in
any way diminish Adamo’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 other plan or arrangement,
nor shall it diminish or eliminate any indemnity agreement between Adamo and any
of the Companies or any rights of Adamo under the Companies’ governing documents
or under applicable directors’ and officers’ liability insurance policies.

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          (c) This Agreement sets forth the entire agreement between the parties
with respect to the matters set forth herein and supersedes in their entirety
any prior written or oral agreements or understandings between Adamo 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.
          (d) 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 Adamo with such disclosure concerning this Agreement as may be
required by law or as the Companies may deem appropriate.
          (e) Adamo 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.
          (f) 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.
          (g) This Agreement will be interpreted as a whole according to its
fair terms. It will not be construed strictly for or against either party.
          (h) Except to the extent that federal law controls, this Agreement is
to be construed according to Delaware law.
[Signatures on following page.]

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     IN WITNESS WHEREOF, the parties have duly executed this Agreement on this
30th day of December, 2010.

              ADAMO:
 
            /s/  Victor T. Adamo           Victor T. Adamo
 
            PROASSURANCE CORPORATION
 
       
 
  By:   /s/  W. Stancil Starnes 
 
       
 
           W. Stancil Starnes, Chairman
 
            PROASSURANCE GROUP SERVICES CORPORATION
 
       
 
  By:   /s/  W. Stancil Starnes 
 
       
 
           W. Stancil Starnes, Chairman

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EXHIBIT A
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 Victor
T. Adamo (“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 Deferred Compensation Plan and Agreement
between Companies and Executive, effective as of December 31, 2010
(“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
Amount 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 Compensation 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.

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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, and Executive shall
not have waived in any respect any rights under, (a) any employee benefit plan
subject to the vesting standards imposed by ERISA, (b) the Agreement after the
Date of Termination, including but not limited to Executive’s rights to receive
the Severance Amount, (c) any indemnity agreement between Executive and any of
the Companies, (d) any rights of Executive under the Companies’ governing
documents or (e) any rights of Executive pursuant to applicable directors’ and
officers’ liability insurance policies.
     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: Chief
Executive Officer: cc Secretary, or such other place as the Companies may

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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 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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EXHIBIT B
DESIGNATED BENEFICIARY
     The undersigned hereby designates and appoints ________________________ as
the designated beneficiary to receive the amounts payable upon my death under
the terms and conditions of the Deferred Compensation Plan and Agreement between
ProAssurance Corporation, ProAssurance Group Services Corporation and the
undersigned, dated as of December 31, 2010 (the “Agreement”).
     This designation shall remain effective until it is revoked by delivery to
PRA of a subsequent written designation of beneficiary executed by the
undersigned or by delivery to PRA of written notice of revocation of all prior
designations of beneficiary executed by the undersigned. Delivery shall be made
in accordance with the requirements for notice to the Companies as set forth in
Section 11 of the Agreement.
     Executed by the undersigned on this ____ day of _____________, 20_.

         
 
  EXECUTIVE:    
 
       
 
  Signature    
 
 
 
 
                  Print Name
 
       
Address of Designated Beneficiary:
       
 
       
 
       
 
       
 
       

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