Exhibit 10.2

No Stock or other security shall be delivered, and no option or other right to
acquire any stock or other security shall be exercisable, pursuant to this Award
except upon effective registration under the Securities Act of 1933 as amended
and the securities laws of each applicable state or other jurisdiction or upon
acceptance by the Company of an opinion of counsel in such form and by such
counsel as satisfactory to counsel for the Company that such registration is not
required.

ProCentury Corporation
Restricted Stock Award Agreement
for
Restricted Stock
under the
2004 Stock Option and Award Plan

To _________________:1

     Congratulations! ProCentury Corporation is awarding you this Stock Grant of
Restricted Stock pursuant to its 2004 Stock Option and Award Plan (the “Plan)
and your Executive Employment Agreement (“Employment Agreement”). Except to the
extent that reference is made to your Employment Agreement, all capitalized
terms used in this Award Agreement shall have the same meaning as defined in the
Plan. Your Stock Grant is subject to acceptance by your signing of a copy of
this Award Agreement under the heading “Acceptance” and returning the signed
copy before the close of business on _________, 200___.

     The purpose of this Award Agreement is to summarize some of the terms and
conditions of your Stock Grant as well as the shares of Restricted Stock to be
issued. This Award Agreement makes numerous references to the Plan and is
governed by the Plan document except to the extent that reference is made to
your Employment Agreement. You as the Participant may obtain a copy of the
current Plan document at any time by contacting the Company Secretary at

465 Cleveland Avenue
Westerville, OH 43082
(614)-895-2000.

--------------------------------------------------------------------------------

1  The Company entered into this agreement with the individuals listed on Annex
A attached hereto.

 

--------------------------------------------------------------------------------

 

Your Stock Grant

     Your Stock Grant entitles you to receive _________ (___) shares of
Restricted Stock all of which are designated as Performance Vesting Shares. As
soon as you sign and return a signed copy of the Acceptance, certificates
evidencing these shares of Restricted Stock (containing a notation regarding the
restrictions on transfer of these shares discussed below) will be issued in your
name as record holder. Unless and until these shares are forfeited as discussed
below, you will be entitled to all rights and incidents of ownership of these
Restricted Shares, including all dividend and voting rights, from the Date of
Grant. However, until the shares become Vested Shares, you will not be entitled
to offer for sale, sell, pledge, assign, encumber, or otherwise transfer or
dispose of such Unvested Shares or any interest in such shares until
satisfaction of all such restrictions imposed by the Plan or this Award
Agreement.

Vesting of Your Restricted Stock

     Your Performance Vesting Shares are subject to a Performance Vesting
Schedule that requires the Company to achieve an average return on equity of 10%
for the two fiscal years preceding the applicable vesting date (the “ROE
Target”) before a portion of those shares will become Vested Shares. Pursuant to
your Performance Vesting Schedule, 1/4th of the total number of your Performance
Vesting Shares will become Vested Shares on each anniversary of the Date of
Grant, provided (a) your Service with the Company has continued from Date of
Grant until such anniversary date, and (b) the ROE Target has been achieved. The
entire number of your Performance Vesting Shares will become vested, if at all,
if your Service with the Company continues until ______, 200___ (the 4th
anniversary of the Date of Grant) and the ROE Target has been achieved as of
each anniversary date of the Date of Grant through and including _________,
200_.

     In addition and notwithstanding any provision in the Plan to the contrary,
your Unvested Shares will become Vested Shares upon severance of your Service
for any of the following reasons –

•   Death;   •   Disability or Retirement within the meaning of the Plan;   •  
Discharge by the Company other than for Cause within the meaning of your
Employment Agreement;   •   Resignation by you for Good Reason within the
meaning of your Employment Agreement; or   •   Resignation or discharge for any
reason other than Cause upon or after a Change in Control within the meaning of
your Employment Agreement –

whichever is first to occur (constituting a “Date of Vesting” within the meaning
of the Plan).

2

--------------------------------------------------------------------------------

 

     At death, your Vested Shares (including any Unvested Shares that become
Vested Shares will be transferred pursuant to your will or applicable laws of
descent and distribution.

     Until your shares of Restricted Stock become Vested Shares, the
certificates evidencing your shares will contain a notation that these shares
may not be transferred other than by reversion to the Company upon forfeiture as
discussed below, and these certificates will be held by an appropriate officer
of the Company with stock transfer powers signed by you in transferable form as
provided in Section 5.3 of the Plan. If your shares become Vested Shares and all
requirements for withholding of federal, state, local, and foreign taxes are
satisfied, a new certificate without any notation of the foregoing restrictions
will be delivered to you, and each share represented by this new certificate
will no longer constitute a share of Restricted Stock.

Forfeiture of Your Restricted Stock is Not Vested

     If your Service is terminated for any reason other than one constituting a
Date of Vesting described above, you will forfeit all rights and incidents of
ownership in and to all Unvested Shares. In the event of such forfeiture, the
certificates representing those Unvested Shares will be cancelled, and all such
Unvested Shares will revert to the Company.

Taxation

     Unless you make an election under section 83(b) of the Code to be taxed at
the Date of Grant, your Unvested Shares of Restricted Stock will not be taxable
to you until they become Vested Shares, at which time the market value of the
Shares then vesting is subject to the Participant as compensation at ordinary
income rates for the year of the vesting. Any additional appreciation in value
of the Stock realized upon the sale of the stock after you vest is taxable as a
sale of property at capital gains rates. You may elect under section 83(b) of
the Code to be taxed earlier at ordinary income rates so that appreciation
realized thereafter will be taxable at capital gains rates. You are required to
notify the Company if you make such an election under section 83(b). Although
the Company can give you no assurance as to the taxability to you, you may
contact the Company Secretary for further information generally describing the
tax aspects of Restricted Stock.

Miscellaneous

     Your Unvested Shares are not transferable except to the extent they become
vested at your death.

     This Award Agreement and your Restricted Stock are subject to other terms
and conditions set forth in the Plan, including: (i) withholding requirements
for taxes, (ii) immediate forfeiture of all Unvested Shares if your Service is
terminated for Cause, (iii) certain restrictions in the case of a public
offering, and (iv) certain securities law restrictions.

3

--------------------------------------------------------------------------------

 

     One of the restrictions to facilitate any future public offering by the
Company is that by accepting this Award you agree on behalf of yourself and your
heirs, legal representatives, successors, and assigns that in the event of any
underwritten public offering of any Company securities made by the Company
pursuant to an effective registration statement filed under the Securities Act,
neither you nor any such heirs, legal representatives, successors, and assigns
will directly or indirectly sell, offer to sell, solicit an offer to buy, grant
any option to purchase, contract to sell (including, without limitation, any
short sale), or otherwise dispose or offer to dispose of any interest, equitable
or beneficial, in any of such shares for such period of time from and after the
effective date of such registration statement except as provided in the Plan or
pursuant to such public offering.

     Finally, in the case of any conflict with the terms of this Award
Agreement, the terms of the Plan shall prevail and govern except in the case of
any conflict between the terms of the Plan and the terms of your Employment
Agreement shall prevail.

              ProCentury Corporation
 
       

  By:    

       

  Name:   Edward F. Feighan

  Title:   Chairman, President and Chief

      Executive Officer

Acceptance

     The Participant is familiar with the terms of this Award Agreement and the
terms and conditions of the Plan. The Participant understands that this Award
and any Stock granted or issued pursuant hereto are intended to be held for
purposes of investment only and not for further distribution by the Participant.
By signing below, the Participant accepts this Award subject to all of such
terms and conditions and agrees to hold any Stock granted or issued pursuant to
this Award for purposes of investment only and not for further distribution
unless and until the Company advises the Participant such Stock may be
distributed without registration under the Securities Act or such Stock is to be
distributed pursuant to such a registration.

         
Dated:
       

     

      Participant Name

4

--------------------------------------------------------------------------------

 

Annex A

              Participant   Grant Date   Number of Shares  
Edward F. Feighan
  March 22, 2005     19,365            
Christopher C. Timm
  March 22, 2005     18,000            
Charles D. Hamm, Jr.
  March 22, 2005     17,659          

5