Exhibit 10.72

State Auto Financial Corporation

Supplemental Executive Retirement Plan

Effective January 1, 2007

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TABLE OF CONTENTS

 

          Page

1

  

INTRODUCTION

   2

2

  

DEFINITIONS AND GENERAL PROVISIONS

   3

3

  

PLAN PARTICIPATION

   6

4

  

BENEFITS PAYABLE

   7

5

  

CHANGE OF CONTROL

   12

6

  

PLAN ADMINISTRATION

   13

7

  

MISCELLANEOUS PROVISIONS

   14

 

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Supplemental Executive Retirement Plan

 

1

INTRODUCTION

State Auto Financial Corporation (the “Company”), hereby adopts this State Auto
Financial Corporation Supplemental Executive Retirement Plan (the “Plan”) to
read in its entirety as set forth in this document, effective January 1, 2007.
The Plan is established by the Company for the benefit of a select group of
management and highly compensated employees of the Company.

The purpose of the Plan is to supplement benefits payable to, and on behalf of,
covered employees by the State Auto Insurance Companies Employees’ Retirement
Plan (the “Retirement Plan”) and the State Auto Insurance Companies Capital
Accumulation Plan (the “CAP”), both tax-qualified retirement plans maintained by
the Company, and not otherwise provided by the Supplemental Retirement Plan for
Executive Employees of State Auto Insurance Company (the “Supplemental
Retirement Plan”) or the State Auto Property & Casualty Insurance Company
Amended and Restated Incentive Deferred Compensation Plan (the “IDC Plan”). In
general, the Plan provides covered employees with additional benefits they would
have earned or accumulated under the Pension Plan and/or the CAP, by reason of
their Company-related employment, in the absence of the annual compensation,
contribution and maximum benefit limits imposed by Sections 401(a)(17), 401(k),
401(m), 402(g) and 415 of the Internal Revenue Code of 1986, as amended (the
“Code”) and which are not otherwise provided by the Supplemental Retirement Plan
and/or the IDC Plan.

The Plan is intended to constitute an unfunded deferred compensation plan for a
select group of management or highly compensated employees, within the meaning
of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”). The Plan is also intended to comply
with the requirements of The American Jobs Creation Act of 2004 and Code
Section 409A and the regulations and guidance issued thereunder.

 

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Supplemental Executive Retirement Plan

 

2

DEFINITIONS AND GENERAL PROVISIONS

The terms defined in this Article shall have the meanings set forth below unless
the context clearly requires another meaning. When the defined meaning is
intended, the term is capitalized:

 

2.1

“Adjusted Annual Compensation” means a Covered Employee’s total annual cash
compensation (i.e., base pay plus any amounts paid as short-term or long-term
incentive compensation or bonuses) paid in the Covered Employee’s tax year, but
determined without regard to any limitations imposed by reason of
Section 401(a)(17) of the Code on the maximum amount that may recognized as
annual compensation.

 

2.2

“Approved Leave of Absence” means any absence from work granted by the Company
and recognized by the Plan Administrator under uniform rules.

 

2.3

“Beneficiary” means any person or persons so designated in accordance with the
provisions of Article 4.

 

2.4

“CAP” means the document entitled State Auto Insurance Companies Capital
Accumulation Plan, as the same may be amended and restated from time to time.

 

2.5

“Change of Control” means a change in the ownership or effective control of the
Company, or in the ownership of a substantial portion of the assets of the
Company determined in accordance with Code Section 409A and the regulations
thereunder and any applicable guidance issued with respect to Code Section 409A
by the Treasury Department or the Internal Revenue Service.

 

2.6

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

 

2.7

“Company” means State Auto Financial Corporation and its related entities,
subsidiaries and affiliates, including State Automobile Mutual Insurance
Company, or any successor thereto.

 

2.8

“Covered Employee” means any employee who is among a select group of management
or highly compensated employees (within the meaning of Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA) of the Company (i) whose retirement benefits
under the Retirement Plan are limited by reason of Code Sections 401(a)(17)
and/or 415, (ii) whose benefits under the CAP are limited by reason of Code
Sections 401(a)(17), 401(k), 401(m), 402(g) and/or 415, and (iii) who is
designated by the Plan Administrator as eligible to participate in the Plan.

 

2.9

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

 

2.10

“IDC Plan” means the non-qualified deferred compensation plan document entitled
State Auto Property and Casualty Insurance Company Amended and Restated
Incentive Deferred Compensation Plan, as the same may be amended and restated
from time to time.

 

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Supplemental Executive Retirement Plan

 

2.11

“Participant” means any Covered Employee who meets the eligibility requirements
for participation in the Plan as set forth in Article 3 and who has an accrued
Plan Benefit.

 

2.12

“Plan” means the State Auto Financial Corporation Supplemental Executive
Retirement Plan, as set forth herein, and as the same may be amended from time
to time.

 

2.13

“Plan Administrator” means the Compensation Committee (the “Committee”) of the
Board of Directors of State Auto Financial Corporation or such other authorized
officers or officer of the Company to whom the power to administer the Plan has
been delegated by the Committee.

 

2.14

“Plan Benefit” means the benefits payable under the Plan to or on behalf of a
Participant.

 

2.15

“Plan Year” means the fiscal year of the Plan, which is the twelve
consecutive-month period beginning January 1 and ending December 31.

 

2.16

“Retirement Plan” means the document entitled State Auto Insurance Companies
Employees’ Retirement Plan, as the same may be amended and restated from time to
time.

 

2.17

“Separation from Service” or “Separate from Service” means a Participant’s
termination from employment with the Company on account of such Participant’s
death, retirement, or other such termination of employment. A Participant will
not be deemed to have experienced a Separation from Service if such Participant
is on military leave, sick leave, or other bona fide Approved Leave of Absence,
to the extent such leave does not exceed a period of six months or, if longer,
such longer period of time as is protected by either statute or contract. A
Participant will not be deemed to have experienced a Separation from Service if
such Participant continues to provide “significant services” to the Company
(whether as an employee or independent contractor). For purposes of the
preceding sentence, a Participant will be considered to provide “significant
services” if such Participant provides continuing services that average more
than 20% of the services provided by such Participant to the Company during the
immediately preceding three full calendar years of employment (or, if less, the
period of employment).

 

2.18

“Service” means the years and months of employment (including an Approved Leave
of Absence, if any) with the Company, where any partial month shall constitute a
complete month. Such years and months shall be calculated from the Participant’s
date of employment to the Participant’s termination date. Notwithstanding the
foregoing, if a Participant is absent from work due to any reason other than
quit, discharge, retirement or death, the period up to the first anniversary of
the first day of such absence (or up to the date of quit, discharge, retirement
or death, if earlier), shall be counted as Service for all purposes under the
Plan.

 

2.19

“Supplemental Retirement Plan” means the document entitled Supplemental
Retirement Plan for Executive Employees of State Auto Insurance Companies, as
the same may be amended and restated from time to time.

 

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Supplemental Executive Retirement Plan

 

2.20

“Total Cash Compensation” means a three-year final average of the Participant’s
Adjusted Annual Compensation.

 

2.21

“Totally Disabled” or “Total Disability” means “Disabled” as such term is
defined in Code Section 409A(a)(2)(C).

 

2.22

Whenever appropriate, words used herein in the singular may be read as the
plural and the plural may be read as the singular. Unless otherwise clear from
the context, words used herein in the masculine shall also be deemed to include
the feminine.

 

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Supplemental Executive Retirement Plan

 

3

PLAN PARTICIPATION

An individual must be a Covered Employee in order to participate in the Plan.
Once a Covered Employee becomes a Participant, such individual shall continue to
be a Participant until such individual ceases: (i) to be described as a Covered
Employee, and (ii) to have any vested interest in the Plan (as a result of
distributions made to such Participant or his/her Beneficiary, if applicable, or
otherwise).

 

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Supplemental Executive Retirement Plan

 

4

BENEFITS PAYABLE

 

4.1

Amount and Payment of Benefits. A Participant shall be entitled to receive the
benefits described in this Article 4, payable as described herein.

 

4.2

Amount of Plan Benefit. The Plan Benefit shall be calculated as follows:

Plan Benefit = SERP Target minus (A + B + C + D), where:

SERP Target = 50% x the Participant’s Total Cash Compensation x (Z/20);

Z = the Participant’s Service with the Company at age 65, to a maximum of 20.0
years;

A = the benefits payable under the Retirement Plan at age 65;

B = the benefits payable under the CAP at age 65 which are attributable to
Company matching contributions only;

C = the benefits payable under the IDC Plan at age 65, if any, which are
attributable to excess Company matching contributions only; and

D = the benefits payable under the Supplemental Retirement Plan at age 65, if
any.

The benefits calculated above for A, B, C and D shall be in the form of a single
life annuity paid at age 65.

Notwithstanding the foregoing, if the current Chief Executive Officer of the
Company terminates employment with the Company at any time after the effective
date of this Plan, the value of Z in the formula above shall be increased by up
to three years (not to exceed maximum credit available at age 65) for each
Participant in the Plan who remains actively employed with the Company for a
period of two years after the current Chief Executive Officer terminates such
employment; provided, however, that such increase shall not apply to any
Participant holding the title of Chief Executive Officer, or any Participant
named as Chief Executive Officer. Further, if a Participant dies or becomes
Totally Disabled at any time during the two-year service period after the
current Chief Executive Officer terminates his employment, such increase in the
years of service shall apply to the Participant; provided, however, that the
increase in years of service shall not apply if the Participant’s employment
terminates due to death or disability which results from a self-inflicted injury
or event, while sane or insane.

 

4.3

Vesting of Plan Benefits. Except as otherwise provided in Article 5, a
Participant’s Plan Benefit shall vest after the completion of five consecutive
years of Service.

 

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Supplemental Executive Retirement Plan

 

4.4

Payment of Plan Benefits.

 

 

(a)

General Timing and Form of Payment Rules. Unless a Participant elects another
time and/or form of payment, as of the later of the date the Participant
commences participation in the Plan or within 30 days after such date, on the
distribution election form provided by the Plan Administrator to the
Participant, the Participant’s vested Plan Benefit will be funded by a single
life annuity payable at age 65. Notwithstanding the foregoing sentence, no
payment shall be made until the Participant has a Separation from Service.

 

 

(b)

Alternate Time and Form of Distribution. Subject to Sections 4.4(a) and 4.4(c)
of the Plan, a Participant may elect one of the following alternate forms of
distribution:

 

 

(i)

Single lump sum distribution;

 

 

(ii)

Joint and survivor annuity with a 50% annuity benefit to the beneficiary;

 

 

(iii)

Joint and survivor annuity with a 100% annuity benefit to the beneficiary;

 

 

(iv)

Monthly installments paid for 120 months. The calculation of such monthly
benefit payments shall be made by using the actuarial factors in the Retirement
Plan for determining actuarial equivalency of various forms of benefit payment.

Any election to change the timing and/or form of benefit distribution from the
Plan shall apply to all Plan Benefits available under the Plan.

 

 

(c)

Change in the Time or Form of Payment. Prior to the date a Participant commences
payment of his/her vested Plan Benefit as elected under Section 4.4(a) or
Section 4.4(b), the Participant may delay the timing of payment and/or change
the form of payment in accordance with the following restrictions:

 

 

(i)

A Participant may not elect a new date or form of payment that would result in
the acceleration of the time or schedule of any payment of the Participant’s
vested Plan Benefit, except as provided in guidance and/or regulations issued by
the Secretary of the Treasury;

 

 

(ii)

The election may not take effect until at least 12 months after the date on
which the election is made;

 

 

(iii)

Except with respect to payments made on account of death or Total Disability,
the first payment with respect to such election shall be deferred for at least
five years from the date payment would otherwise have been made, or in the case
of a life annuity or installment payments treated as a single payment, five
years from the date the first amount was scheduled to be paid; and

 

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Supplemental Executive Retirement Plan

 

 

(iv)

If the Participant elected to receive payment at a specified time, the new
election must be made at least 12 months before the date of the payment
scheduled to be paid, or in the case of a life annuity or installment payments
treated as a single payment, 12 months prior to the date the first amount was
scheduled to be paid.

 

4.5

Exceptions to the General Timing and Distribution Rules.

 

 

(a)

Distributions to Key Employees. A Participant who is a “specified employee” (as
defined in Code Section 409A and the regulations thereunder) and is entitled to
a distribution due to a Separation from Service may not receive a distribution
under the Plan until a date that is at least six months after the date of
his/her Separation from Service. If the Participant elects payment in the form
of an annuity or installments, such payment form is treated as a single payment
(as opposed to separate and individual payments) and the first payment shall be
paid according to the six-month delay rule as described above.

 

 

(b)

Domestic Relations Order. A payment of all or part of a Participant’s vested
Plan Benefit may be made to a spouse, former spouse or other dependent under the
terms of a qualified domestic relations order (as defined in Code
Section 414(p)(1)(B)). The Plan Administrator shall determine whether a payment
should be made pursuant to the terms of a qualified domestic relations order and
the time and form of such payment.

 

 

(c)

Conflict of Interest. A payment of all or part of a Participant’s vested Plan
Benefit may be made if necessary to comply with a certificate of divestiture (as
defined in Code Section 1043(b)(2)).

 

 

(d)

Employment Taxes. A Participant may receive a payment of his/her vested Plan
Benefit before the date set forth in Section 4.4(a) to the extent necessary to
pay the Federal Insurance Contributions Act (“FICA”) tax imposed under Code
Sections 3101 and 3121(v)(2) on amounts deferred under the Plan (the “FICA
Amount”). In addition, a Participant may receive a payment of his/her vested
Plan Benefit before the payment date under Section 4.4(a) or Section 4.4(c), as
applicable, to pay the income tax at source on wages imposed under Code
Section 3401 on the FICA Amount, and to pay the additional income tax at source
on wages attributable to the pyramiding Code Section 3401 wages and taxes. The
payment under this Section 4.5(e) shall not exceed the aggregate of the FICA
Amount and the income tax withholding related to such FICA Amount.

 

 

(e)

Delay of Payment. A payment of benefits otherwise payable in accordance with
Section 4.4(a) or Section 4.4(b), as applicable, will be delayed to a date after
the payment date under any of the following circumstances:

 

 

(i)

where the Company reasonably anticipates that its deduction with respect to such
payment otherwise would be limited or eliminated by Code Section 162(m);
provided, however, that payment will be made or

 

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commence at the earliest date at which the Company reasonably anticipates that
the deduction of the payment of the amount will not be limited or eliminated by
Code Section 162(m) or the calendar year in which the Participant Separates from
Service;

 

 

(ii)

where the Company reasonably anticipates that the making of such payment will
violate a term of a loan agreement or other similar contract to which the
Company is a party, and such violation will cause material harm to the Company;
provided, however, that payment will be made or commence at the earliest date at
which the Company reasonably anticipates that the making of the payment will not
cause material harm to the Company;

 

 

(iii)

where the Company reasonably anticipates that the making of such payment will
violate federal securities laws or other applicable law within the meaning of
Code Section 409A and the regulations thereunder; provided, however, that
payment will be made or commence at the earliest date at which the Company
reasonably anticipates that the making of the payment will not cause such
violation; or

 

 

(iv)

upon such other events and conditions as the Commissioner of the Internal
Revenue Service may prescribe in generally applicable guidance published in the
Code.

 

 

(f)

Payments upon Income Inclusion Under Code Section 409A; Plan Termination. The
Plan shall permit the payment of vested Plan Benefits to a Participant prior to
the Participant’s payment date under Section 4.4(a) or Section 4.4(c), as
applicable:

 

 

(i)

if the Plan fails to meet the requirements of Code Section 409A and the
regulations thereunder, but only to the extent that such payment does not exceed
the amount required to be included in the Participant’s income as a result of
the failure to comply with the requirements of Code Section 409A and the
regulations thereunder; or

 

 

(ii)

upon the termination of the Plan requiring the complete distribution of all
vested Plan Benefits.

 

 

(g)

Disputed Payments. In the event of a genuine dispute regarding the amount or
timing of payments under the Plan, a delay in the payment of Plan Benefits shall
not cause a violation of Code Section 409A to the extent such delay satisfies
the conditions set forth in Code Section 409A and the regulations thereunder.

 

4.6

Death Benefit. If a Participant dies prior to the commencement of the
distribution of his/her vested Plan Benefit, the actuarial equivalent present
value of the Participant’s vested Plan Benefit will be paid per the
Participant’s prior election to his/her Beneficiary as soon as administratively
possible after the Participant’s death. The actuarial

 

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Supplemental Executive Retirement Plan

 

 

equivalent present value shall be determined by using the applicable interest
rate and applicable mortality table identified in Code Section 417(e)(3).

 

4.7

Disability Benefit. If a Participant becomes Totally Disabled prior to the
commencement of the distribution of his/her vested Plan Benefit, the actuarial
equivalent present value of the Participant’s vested Plan Benefit will be paid
per the Participant’s prior election as soon as administratively possible after
his/her Total Disability. The actuarial equivalent present value shall be
determined by using the applicable interest rate and applicable mortality table
identified in Code Section 417(e)(3).

 

4.8

Beneficiaries. Each Participant from time to time may designate any person or
persons (who may be named contingently or successively) to receive such benefits
as may be payable under the Plan upon or after the Participant’s death, and such
designation may be changed from time to time by the Participant by filing a new
designation. Each designation will revoke all prior designations by the same
Participant, shall be in a form prescribed by the Plan Administrator, and will
be effective only when filed in writing with the Plan Administrator or its
designee during the Participant’s lifetime.

In the absence of a valid Beneficiary designation, or if, at the time any
benefit payment is due a Beneficiary, there is no living Beneficiary validly
named by the Participant, then any such benefit payment shall be made to the
Participant’s spouse, if then living, but, if none, to the Participant’s estate.
In determining the existence or identity of anyone entitled to a benefit
payment, the Plan Administrator may rely conclusively upon information supplied
by the Participant’s personal representative, executor, or administrator. If a
question arises as to the existence or identity of anyone entitled to receive a
benefit payment as aforesaid, or if a dispute arises with respect to any such
payment, then, notwithstanding the foregoing, the Plan Administrator, in its
sole discretion, may cause such payment to be made to the Participant’s estate
without liability for any tax or other consequences that might flow therefrom or
may take such other action as the Plan Administrator deems to be appropriate.

 

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5

CHANGE OF CONTROL

 

5.1

Vesting. Upon a Change of Control, all Participants shall become vested in their
right to receive Plan Benefits.

 

5.2

Termination and Amendment of the Plan. After a Change of Control, the Plan may
not be terminated without the written consent of any person affected by the
termination until all accrued Plan Benefits are paid out, and no amendments may
be made to the Plan without the written consent of any person affected by the
amendment, unless such amendment enhances the Plan Benefits of the Participants.

 

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Supplemental Executive Retirement Plan

 

6

PLAN ADMINISTRATION

The Plan shall be administered by the Plan Administrator. The Plan Administrator
shall have full power and authority to interpret, construe and administer the
Plan, and the Plan Administrator’s interpretation and construction thereof and
actions thereunder, including any valuation of a Participant’s benefits and the
determination of the amount or recipient of payments to be made with respect
thereto, shall be binding and conclusive on all persons for all purposes. No
trustee, employee or agent of the Plan Administrator or the Company shall be
liable to any person for any actions taken or omitted in connection with the
interpretation and administration of this Plan. The Plan Administrator shall be
entitled to rely conclusively on all tables, valuations, certificates, opinions
and reports furnished by any actuary, accountant, counsel or other person
employed or engaged by the Plan Administrator or the Company with respect to
this Plan.

Without limiting the generality of the foregoing, and subject to the provisions
of the Plan, the Plan Administrator shall have discretionary authority to
(i) interpret the Plan, (ii) determine all questions relating to the rights and
status of Participants and their Plan Benefits, and (iii) make such rules and
regulations for the administration of the Plan as are not inconsistent with its
express terms and provisions.

 

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Supplemental Executive Retirement Plan

 

7

MISCELLANEOUS PROVISIONS

 

7.1

ERISA and Governing Law. The Plan is a combination of an excess benefit plan, as
defined in Sections 3(36) and 4(b)(5) of ERISA, and an unfunded deferred
compensation plan for a select group of management or highly compensated
employees, as defined in Section 201(2), 301(a)(3) and 401(a)(1) of ERISA. None
of the statutory rights and protections conferred on Participants by ERISA are
conferred under the terms of this Plan, except as expressly noted or required by
operation of law. To the extent not superseded by federal law, the laws of the
State of Ohio shall control in any and all matters relating to the Plan.

 

7.2

Claims and Appeals Procedure. Any Participant or any other person claiming a
Plan Benefit under a deceased Participant, such as a Beneficiary, may submit a
written application or request to the Plan Administrator for the payment of any
Plan Benefit asserted to be due to him/her under the Plan. Such application or
request shall set forth the nature of the claim and such other information as
the Plan Administrator may reasonably request. Promptly after the receipt of any
application or request, the Plan Administrator shall determine whether or not
the Participant or Beneficiary is entitled to a Plan Benefit hereunder, and if
so, the amount thereof and shall notify the claimant of its findings.

If a claim is wholly or partially denied, the Plan Administrator shall notify
the Participant or Beneficiary in writing within 90 days after receipt of the
claim by the Plan Administrator, unless special circumstances require an
extension of time. If such an extension of time is required, written notice of
the extension shall be furnished to the Participant or Beneficiary prior to the
end of the initial 90-day period. In no event shall the extension exceed a
period of 90 days from the end of the initial period.

If an application or request for Benefits is denied, in whole or in part, the
Participant or Beneficiary shall have the right to request the review of his/her
claim by submitting a written request to the Plan Administrator within 60 days
of the receipt of the initial denial issued by the Plan Administrator. Such
request for review may contain any additional information and comments as the
Participant or Beneficiary may wish to present. Within 60 days of the receipt of
the appeal request, the Plan Administrator shall reconsider the Participant’s or
Beneficiary’s application. Notice of the Plan Administrator’s final
determination shall be furnished to the Participant or Beneficiary in writing,
and such determination shall be binding and conclusive on all parties.

 

7.3

Benefits Are Nonassignable. No Plan Benefit may be pledged, assigned,
anticipated or alienated in any way by any Participant or Beneficiary or
personal representative of the foregoing. Moreover, no Participant, Beneficiary
or personal representative of the foregoing shall have any right to cause
benefits otherwise payable under this Plan to be accelerated or paid on any
basis or in any form other than on the bases and in the forms provided for under
Article 4 hereof.

 

7.4

Amendment of Plan. The Plan Administrator hereby reserves the right and power to
amend the Plan, in whole or in part, at any time and from time to time;
provided,

 

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however, that in no event shall the Plan Administrator have the right to
eliminate or reduce any Plan Benefit which has already become vested prior to
such amendment, or to accelerate the obligation to make payments to any person
not otherwise currently entitled to payments under the Plan, unless otherwise
specifically so determined by the Plan Administrator and permitted by applicable
law. All actions pursuant to this Section shall be set forth in a written
instrument executed by the Plan Administrator. Notwithstanding anything in the
Plan to the contrary, the Plan may be amended at any time, if necessary, to
conform or comply with provisions or requirements of the Code or any applicable
laws.

 

7.5

No Guarantee of Employment. Nothing contained herein shall be construed as a
contract of employment between the Company and any employee, or as a right of
any employee to continue in the employment of the Company, or as a limitation of
the right of the Company to discharge any of its employees, with or without
cause, at any time.

 

7.6

Severability. If any provision of this Plan shall be held illegal or invalid for
any reason, said illegality or invalidity shall not affect the remaining
provisions hereof; instead, each provision shall be fully severable and the Plan
shall be construed and enforced as if said illegal or invalid provision had
never been included herein.

 

7.7

Facility of Payments. Whenever, in the opinion of the Plan Administrator, a
person entitled to receive any payment, or installment thereof, is under a legal
disability or is unable to manage his/her financial affairs, the Plan
Administrator shall have the discretionary authority to direct payments to such
person’s legal representative or to a relative or friend of such person for
his/her benefit; alternatively, the Plan Administrator may in its discretion
apply the payment for the benefit of such person in such manner as the Plan
Administrator deems advisable. Any such payment or application of benefits made
in good faith in accordance with the provisions of this Section shall be a
complete discharge of any liability of the Company and the Plan Administrator
with respect to such payment or application of benefits.

 

7.8

Funding. All benefits under the Plan are unfunded and the Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets in order to assure the payment of any amounts under the
Plan; provided, however, that in order to provide a source of payment for its
obligations under the Plan, the Company may establish a trust fund. The right of
a Participant or his/her Beneficiary to receive a distribution hereunder shall
be an unsecured claim against the general assets of the Company, and neither the
Participant nor his/her Beneficiary shall have any rights in or against any
amounts credited under the Plan or any other specific assets of the Company.

 

7.9

Taxes. The Company shall be entitled to withhold any taxes from any distribution
hereunder or from other compensation then payable, as it believes necessary,
appropriate, or required under relevant law.

 

7.10

Payments Not Salary for Certain Purposes. Any amounts payable under the Plan
shall not be considered salary or other compensation to the Participant for the
purpose of

 

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Supplemental Executive Retirement Plan

 

 

computing benefits to which a Participant may be entitled under any retirement
plan or other arrangement of the Company for the benefit of its employees.

 

7.11

Section 409A. The Plan is intended to be operated in compliance with the
requirements of Code Section 409A. The Plan shall be construed in a manner so as
to comply with the requirements of Code Section 409A.

IN WITNESS WHEREOF, the Company acting by and through its duly authorized
officer, hereby adopts this Supplemental Executive Retirement Plan this 4th day
of October, 2007.

 

STATE AUTO FINANCIAL CORPORATION

By:

 

/s/ Robert P. Restrepo, Jr.

Title:

 

Chairman, President and Chief Executive Officer

 

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