Exhibit 10(C)

HARLEYSVILLE GROUP INC.

NON-QUALIFIED DEFERRED COMPENSATION PLAN

AMENDED AND RESTATED AS OF JANUARY 1, 2008

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HARLEYSVILLE GROUP INC.

NON-QUALIFIED DEFERRED COMPENSATION PLAN

AMENDED AND RESTATED AS OF JANUARY 1, 2008

TABLE OF CONTENTS

ARTICLE NO.

TITLE OF ARTICLE

PAGE NO.

ARTICLE I

INTRODUCTION

1 

ARTICLE II

ADMINISTRATION

3 

ARTICLE III

EFFECTIVE DATE

4 

ARTICLE IV

PARTICIPATION

4 

ARTICLE V

DEFERRAL ELECTIONS

4 

ARTICLE VI

PARTICIPANT SUB-ACCOUNT

5 

ARTICLE VII

PAYMENT OF BENEFITS

6 

ARTICLE VIII

AMENDMENT AND TERMINATION

10 

ARTICLE IX

BINDING ARRANGEMENT

10 

ARTICLE X

PROHIBITION OF ALIENATION

10 

ARTICLE XI

GOVERNING LAW

10 

ARTICLE XII

COSTS OF THE PLAN

11 

ARTICLE XIII

NO EMPLOYMENT CONTRACT

11 

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HARLEYSVILLE GROUP INC.

NON-QUALIFIED DEFERRED COMPENSATION PLAN

AMENDED AND RESTATED AS OF JANUARY 1, 2008

ARTICLE I - INTRODUCTION

(A)

PURPOSE OF THE PLAN: Harleysville Group Inc. (the "Company") established the
Plan to provide an administratively convenient arrangement with consistent rules
whereby Participants can: 1) defer base salary and other compensation that
otherwise would be payable currently under the Company's Senior Management
Incentive Plan or any other performance-based compensation plan that includes a
deferral arrangement, 2) be credited with Company contributions under the
Non-Qualified Excess Contribution and Match Program, and 3) achieve earnings
commensurate with the Participant’s investment risk tolerance on compensation
deferred, and, where applicable, amounts credited under the Company's
Non-Qualified Excess Contribution and Match Program. This Plan is intended to be
made a part of each such plan and incorporated by reference in each such plan.
For purposes of ERISA, this Plan is intended to be unfunded and maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees. This amended and restated Plan
document is intended to satisfy the applicable requirements of Section 409A of
the Code.

(B)

DEFINITIONS: When used in the Plan, the following terms shall have the meanings
set forth below. Any term not defined below shall have the same meaning as set
forth in the Retirement Plan.

1.

“Amount(s)” means the Compensation deferred under this Plan plus or minus any
earnings or losses attributable thereto.

2.

“Code” means the Internal Revenue Code of 1986, as amended.

3.

“Committee” means the Harleysville Retirement Savings Plus Plan Administrative
Committee.

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4.

“Company” means Harleysville Group Inc., a Delaware corporation, and any
successor in a reorganization or similar transaction.

5.

“Compensation” means an employee’s base salary and bonus. The term “bonus” shall
include any amounts payable with respect to an employee under the Company’s
Senior Management Incentive Plan or any other plan or arrangement designated by
the Committee, and any successor plan thereto.

6.

“Disabled” means a condition for which a Participant is (i) unable to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months,
(ii) receiving replacement benefits for a period of not less than three (3)
months under the Company’s accident and health plan due to any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
(12) months, or (iii) determined to be totally disabled by the Social Security
Administration or Railroad Retirement Board.

7.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

8.

“Funding Agency” means the vendor(s) selected by the Committee, in its
discretion, to offer investment options under this Plan.

9.

“Grandfathered Participant” means a Participant who commenced receipt of
benefits on or before December 31, 2007.

10.

“Participant(s)” means those employees who have Sub-Accounts in the Plan.

11.

“Plan” means the Harleysville Group Inc. Non-Qualified Deferred Compensation
Plan.

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12.

“Retirement” or “Retires” means a Participant ceasing employment having attained
age 55 and completed 10 Years of Service or age 62 and 5 Years of Service under
the Retirement Plan.

13.

“Retirement Plan” means the Harleysville Group Inc. Retirement Savings Plus
Plan.

14.

“Sub-Account” means the account maintained for each Participant under the Plan
in which Amounts are accumulated.

ARTICLE II - ADMINISTRATION

The Committee shall have responsibility for the implementation and
administration of this Plan. The Committee shall interpret the Plan and shall
establish the rules and regulations governing the Plan’s administration. The
Committee shall have discretion to determine, without limitation, which
employees are eligible to participate in this Plan, and the Amounts payable to
Participants under this Plan. Any decision or action made or taken by the
Committee, arising out of or in connection with the construction,
administration, interpretation, and effect of the Plan and of its rules and
regulations, shall be conclusive and binding upon all Participants and any
person claiming through or under any Participant, unless otherwise determined by
the Compensation and Personnel Development Committee of the Board of Directors
of the Company.

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ARTICLE III - EFFECTIVE DATE

The Plan was originally effective as of January 1, 1994, and was amended and
restated as of November 17, 1999, January 1, 2006, and January 1, 2008.

ARTICLE IV - PARTICIPATION

An officer of the Company in paygrade 20 or over is eligible to be a Participant
in the Plan. All members of management who are entitled to benefits under the
Non-Qualified Excess Contribution and Match Program are eligible to be
Participants in this Plan as well. To defer Compensation under this Plan, each
employee shall indicate in writing that he or she wishes to defer compensation
by December 31 of the calendar year preceding the calendar year in which the
Compensation to be deferred is earned or paid, whichever occurs first.
Notwithstanding the foregoing, a Participant who becomes eligible for the Plan
for the first time shall have 30 days after becoming eligible to participate in
the Plan to elect to become a Participant by deferring Compensation that will be
earned or paid for the current calendar year after the date of such election.
Upon becoming eligible to be a Participant in the Plan, a prospective
Participant will receive a copy of this Plan and any related forms.

ARTICLE V - DEFERRAL ELECTIONS

(A)

A Participant shall specify any amount of Compensation to be deferred. If salary
is deferred, the amount so specified shall be deferred prorata throughout the
specified calendar year.

(B)

A deferral election made pursuant to this Article V shall be irrevocable and may
not be changed at any point during the calendar year.

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(C)

The Committee shall prepare appropriate forms that an eligible employee must
submit to make a deferral election pursuant to this Article V, and may amend
them from time to time as it finds appropriate.

(D)

To the extent that a deferral will be made pursuant to the Senior Management
Incentive Plan or any other performance-based compensation plan, such deferral
shall be made no later than the December 31 of the year immediately preceding
the applicable performance period; provided, however, that in the event an
individual first becomes eligible during the middle of a performance period, the
eligible employee shall make his or her deferral election no later than thirty
(30) days following the date on which he or she becomes eligible.

ARTICLE VI - PARTICIPANT SUB-ACCOUNT

(A)

Cash equal to any amount deferred or contributed pursuant to Article V shall be
set aside by the Company and shall be delivered by the Company to the Funding
Agency for investment in one or more of the investment options selected by the
Committee, as selected by the Participant. The Amounts so delivered,
nevertheless, shall remain part of the general assets of the Company and said
Amounts shall be held by the Funding Agency in the name of Company, which shall
retain full title to them and shall be the owner and beneficiary thereof. The
Amounts shall not be considered as held in trust for Participants and the
Company shall have only a contractual obligation to make payment of the Amounts
credited to a Participant when due. The Amounts shall be subject to the claims
of general creditors of the Company and a Participant shall be only an unsecured
general creditor with regard to any Amounts. The Company shall be responsible
for payment of any taxes due on the Amounts, and the Company shall include all
the income, deductions, and credits pertaining to the Amounts in computing its
taxable income and financial statements.

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(B)

Amounts credited to each Participant shall be placed into a Sub-Account for each
Participant by the Funding Agency and shall be invested by the Participant in
the investment options that the Committee has selected to offer, and in such
increments as permitted from time to time under rules promulgated by the Funding
Agency relating to institutional retirement investments. Although not
guaranteed, it is anticipated that the mutual fund selections and investment
rules of this Plan generally shall follow those applicable to the Retirement
Plan. A Participant shall bear all investment risk, and Sub-Account balances for
Participants shall reflect investment gains and losses. All Participants shall
receive the current Plan rules on investing, which may be changed by the
Committee from time to time and which shall be incorporated by reference and
shall be considered an integral part hereof, provided that such rules shall not
be inconsistent with this Plan. No Participant shall select Company securities
as an investment under the self-directed brokerage account option.

(C)

All Sub-Accounts shall be valued every business day by the Funding Agency. The
value as determined by the Funding Agency shall be final and binding on the
Company and the Participants and their beneficiaries.

(D)

Loans shall not be available from the Sub-Accounts.

ARTICLE VII - PAYMENT OF BENEFITS

(A)

Timing of Payment: Amounts shall commence to be paid to the Participant during
the ninety (90) day period that begins six (6) months following the date the
Participant dies, Retires, becomes Disabled, or otherwise separates from service
with the Company.

(B)

Grandfathered Participant - Form of Payment: A Grandfathered Participant shall
be paid or shall commence to be paid in accordance with the following chart, or
in accordance with the payment schedule elected by such Participant on or before
December 31, 2007, except that in the case of separation from service for other
than Retirement, death, or Disability, any amount payable shall be payable in a
lump sum:

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Participant’s Total

 

Sub-Account Balance

 

at Beginning of Distribution

Payout Period

Under $50,000

Lump Sum

$50,000 to $200,000

5 Annual Installments

$200,000 to $500,000

10 Annual Installments

$500,000 to $1,000,000

15 Annual Installments

over $1,000,000

20 Annual Installments

 

 

(C)

Non-Grandfathered Participants - Form of Payment: All Participants other than
Grandfathered Participants shall be paid in one of the forms specified in the
chart in Section VII(B) above, as elected by the Participant in accordance with
this Section VII(C). Each Participant shall submit his or her election as to the
form of payment to the Committee or its designee by December 31, 2007. Each
employee who first becomes a Participant after December 31, 2007 shall submit
his or her election as to the form of payment at the time of his or her initial
deferral election in accordance with Article V. In the event a Participant does
not make an election in accordance with the foregoing timing rules, the
Participant’s benefit shall be paid as a single lump sum.

A Participant who has separated from service on or before December 31, 2007, but
who has not commenced benefits and has not elected a form of payment by such
date shall receive his or her benefit in accordance with the chart set forth in
Section VII(B); provided, however, that the Participant’s total Sub-Account
balance as of December 31, 2007 shall be used to determine the form of payment.

Notwithstanding the foregoing, if the value of a Participant’s Sub-Account at
the time specified in Section VII(A) is $50,000 or less, the Participant shall
receive such distribution as a single lump sum payment.

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(D)

Notwithstanding the foregoing, each Participant upon first becoming eligible for
the Plan may elect on a one-time irrevocable basis to have the commencement of a
payout period delayed for 5 years.

(E)

Annual Installments shall be equal to the figure developed by dividing the cash
value of the Sub-Account on the January valuation day each year (chosen by the
Committee) by the number of years left in the payout period.

(F)

In the case of a lump sum payment, any reasonable valuation date selected by the
Company shall be binding on the Participant.

(G)

Notwithstanding the foregoing, payouts for all Participants, once commenced,
shall continue in accordance with the payout schedule in existence at
commencement of the payout period.

(H)

Payments shall be made by Company and shall be subject to all applicable
withholding and related taxes.

(I)

In the event of a Participant's death prior to full payment of his or her
Sub-Account, payment thereafter shall be made in accordance with the applicable
form of payment selected by the Participant to the Participant's beneficiary or
contingent beneficiary or, if no beneficiary of the Participant is then living,
then to the Participant's estate in a lump sum. A Participant's beneficiary
and/or contingent beneficiary shall be that person(s) named by the Participant
to be such in the most recent written beneficiary designation executed by the
Participant and submitted to the Committee or its designee on a form acceptable
to the Committee.

(J)

In the event a Participant is judged incompetent, or in the judgment of the
Committee, is unqualified to manage his or her affairs, the Committee may direct
that payment of any amounts due be made to the legal guardian of such
Participant or, if none has been appointed, to his or her spouse or adult child
or any other person or any institution who is caring

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for such Participant; and any payment so made shall to the extent thereof fully
release and discharge the Committee and the Company from any further liability
to the Participant.

(K)

Notwithstanding the foregoing, the Committee may accelerate distribution of
funds to a Participant in the event of an unforeseeable emergency, which shall
be defined as only:

1.

a severe financial hardship to the Participant caused by an illness or accident
of the Participant, the Participant's spouse, or a dependent of the Participant
(as defined in Section 152(a) of the Internal Code);

2.

a loss of the Participant's property due to casualty; or

3.

other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the Participant's control.

Distribution shall not be made to the extent the unforeseeable emergency may be
relieved through reimbursement or compensation from insurance or otherwise by
liquidation of the Participant's assets (to the extent such liquidation would
not itself cause severe financial hardship), or by cessation of deferrals under
the Plan. College tuition or the costs of purchasing a home shall not be
considered unforeseeable emergencies.

The amount withdrawn as a result of an unforeseeable emergency shall be limited
to the amount reasonably needed to satisfy the emergency.

The valuation of the Amounts on account of an unforeseeable emergency shall be
made as of the day the Committee approves the unforeseeable emergency
distribution.

Payments for any reason shall be drawn pro-rata from the investment funds in
which a Participant has directed the investment of his or her Sub-Account. For
the purposes of this Article, a self-directed brokerage account shall be
considered a single investment fund.

(L)

In the event of a "Change in Control," as defined in Section 409A of the Code, a
Participant shall receive immediately, in cash or in kind, the full amount of
the balance of his or her Sub-Account.

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ARTICLE VIII - AMENDMENT AND TERMINATION

The Company reserves the right to modify, amend, alter, or terminate this Plan
at any time and in any way by action of its Compensation and Personnel
Development Committee. If the Plan is terminated, all Amounts credited to a
Participant shall be distributed twelve (12) to twenty-four (24) months
following such termination, in cash or in kind. All existing similar plans will
also be terminated in the event of the termination of this Plan, and no similar
plan will be instituted for at least three (3) years following such termination.

ARTICLE IX - BINDING ARRANGEMENT

This Plan shall be binding upon and inure to the benefit of the Company, its
successors, and each Participant and his or her heirs, executors,
administrators, and legal representatives.

ARTICLE X - PROHIBITION OF ALIENATION

Any Amounts may not be voluntarily or involuntarily assigned, anticipated, or
alienated by the Participant and shall not be subject to attachment, levy, or
encumbrance by a creditor of a Participant. The right of the Participant to a
Sub-Account shall be no greater than the right of any unsecured general creditor
of the Company.

ARTICLE XI - GOVERNING LAW

The place of administration of this Plan shall be conclusively deemed to be
within the Commonwealth of Pennsylvania and the validity, construction,
interpretation, administration, and effect of this Plan, and any of its rules
and regulations, and the rights of any and all persons having or claiming to
have an interest herein or hereunder, shall be governed by, and determined
exclusively and solely in accordance with the laws of the Commonwealth of
Pennsylvania, unless pre-empted by the laws of the Federal Government.

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ARTICLE XII - COSTS OF THE PLAN

The expenses incurred in administering this Plan, including any Committee fees,
taxes payable on earnings in the Sub-Accounts prior to distribution, fees
payable to the funding agency, any charges by the Company's independent
auditors, legal fees, or any other costs, shall be borne by the Company and
shall not be charged against the credits in each sub-account, except that any
fees associated with any investment option shall be paid by a Participant from
funds within his or her Sub-Account or otherwise and all commissions payable for
activity in a self-directed brokerage Sub-Account shall be assessed against that
Sub-Account.

ARTICLE XIII - NO EMPLOYMENT CONTRACT

Neither the establishment of this Plan nor any action taken hereunder shall be
construed as giving a Participant any right to be retained in the employ of the
Company, and all Participants shall remain subject to discharge to the same
extent as if the Plan had never been adopted.

TO RECORD THE ADOPTION OF THIS PLAN, THE COMPANY HAS CAUSED ITS AUTHORIZED
OFFICERS TO AFFIX THE CORPORATE NAME AND SEAL HERETO THIS 5TH DAY OF DECEMBER,
2007.

         

HARLEYSVILLE GROUP INC.

 

 

  

 

 

 

 

By:  

/s/ Michael L. Browne

 

 

Michael L. Browne

President and Chief Executive Officer

 

 

ATTEST:

 

  

 

 

By:  

/s/ Robert A. Kauffman

 

Robert A. Kauffman

Secretary

 

 

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