Exhibit 10.3

 

UNITED FIRE & CASUALTY COMPANY

NONQUALIFIED DEFERRED COMPENSATION PLAN

 

This United Fire & Casualty Company Nonqualified Deferred Compensation Plan (the
Plan) is adopted by United Fire & Casualty Company (the Employer) for certain of
its executive employees, and amends and restates, subject to the provisions in
the following paragraph, the United Fire & Casualty Company Executive
Supplemental Retirement and Deferred Compensation Plan previously adopted by the
Employer effective January 1, 1995, as amended ("Previous Plan"). This amended
and restated Plan is effective as of January 1, 2007. The Plan is intended to
provide certain employees with supplemental retirement income and to offer those
employees an opportunity to elect to defer the receipt of compensation in order
to provide termination of employment and related benefits taxable pursuant to
Section 451 of the Internal Revenue Code of 1986, as amended (the Code). The
Plan is intended to be a top-hat plan (i.e., an unfunded deferred compensation
plan maintained for a select group of management or highly compensated
employees) under Sections 201(2), 301(a)(3), and 401(a)(1) of the Employee
Retirement Income Security Act of 1974 (ERISA).

 

This amended and restated Plan is intended to bring the Previous Plan into
compliance with the provisions of §409A of the Internal Revenue Code, as
amended, and all notices, rulings and regulations issued or applicable with
respect to §409A. Except as may be otherwise specifically provided herein,
nothing in this amended and restated Plan shall be interpreted or construed to
enhance an existing benefit or right under the Previous Plan, or add a new
benefit or right to the Previous Plan. To the extent that any provision of this
Plan would constitute a "material modification" (within the meaning of §409A) of
the Previous Plan, such provision shall, except as specifically provided herein,
be deemed ineffective, and the remainder of the Plan shall be construed in such
a manner that no existing benefit or right under the Previous Plan is enhanced ,
and no new benefit or right is added to the Previous Plan.

 

 

ARTICLE I - DEFINITIONS

 

1.1       "Account" means the balance credited to a Participant's or
Beneficiary's Plan account, including contributions, interest, income, gains,
and losses (to the extent realized as determined by the Employer, in its
discretion) credited thereto. A Participant's or Beneficiary's Account shall be
determined as of the date of reference.

 

1.2       "Beneficiary" means any person or persons so designated in accordance
with the provisions of Article VII.

 

1.3       "Code" means the Internal Revenue Code of 1986 and the regulations
thereunder, as amended from time to time.

 

1.4       "Compensation" means the total current cash remuneration paid by the
Employer to an Eligible Employee with respect to his or her service for the
Employer (as determined by the Employer).

 

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1.5       "Disability" means a medically determinable physical or mental
impairment of a Participant which renders the Participant unable to engage in
any substantial gainful activity, and is expected to result in death, or
expected to last for a continuous period of not less than 12 months. A
Participant shall also be considered disabled if he is, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death, or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than 3 months under an accident and health plan covering employees of the
Employer. The disability of a Participant shall be determined by a physician
chosen by the Employer.

 

1.6       "Effective Date" means the effective date of the Plan, which shall be
January 1, 2007.

 

1.7       "Eligible Employee" means, for any Plan Year (or applicable portion
thereof), a person employed by the Employer who is determined by the Employer to
be a member of a select group of management or highly compensated employees and
who is designated by the Employer to be an Eligible Employee under the Plan. By
November 1 of each year, the Employer shall notify those individuals, if any,
who will be Eligible Employees for the next Plan Year. If the Employer
determines that an individual first becomes an Eligible Employee during a Plan
Year, the Employer shall notify such individual of its determination and of the
date during the Plan Year on which the individual shall first become an Eligible
Employee.

 

1.8       "Employer" means United Fire & Casualty Company and its successors and
assigns unless otherwise herein provided, or any other corporation or business
organization that, with the consent of United Fire & Casualty Company or its
successors or assigns, assumes the Employer's obligations hereunder, or any
other corporation or business organization that agrees, with the consent of
United Fire & Casualty Company, to become a party to the Plan.

 

1.9       "Entry Date" with respect to an Eligible Employee means the first day
of the pay period following the date on which the Eligible Employee elects to
participate in the Plan. If an individual first becomes an Eligible Employee
during a Plan Year, they must make an election to participate in the Plan as
provided herein within thirty (30) days after they first become an Eligible
Employee. Such deferral election shall apply only to services performed after
the election is made.

 

1.10     "Participant" means any person so designated in accordance with the
provisions of Article II, including, where appropriate according to the context
of the Plan, any former employee who is or may become (or whose Beneficiaries
may become) eligible to receive a benefit under the Plan.

 

1.11     "Participant Enrollment and Election Form" means the form or forms on
which a Participant elects to defer Compensation hereunder and on which the
Participant makes certain other designations as required thereon.

 

 

1.12

"Plan" means this United Fire & Casualty Company Nonqualified Deferred

 

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Compensation Plan, as amended from time to time.

 

1.13     "Plan Year" means the twelve (12) month period ending on December 31 of
each year during which the Plan is in effect.

 

1.14     "Valuation Date" means the December 31 of each Plan Year and any other
date that the Employer, in its sole discretion, designates as a Valuation Date.

 

 

ARTICLE II - ELIGIBILITY AND PARTICIPATION

 

2.1        Requirements. Every Eligible Employee on the Effective Date shall be
eligible to become a Participant on the Effective Date. Every other Eligible
Employee shall be eligible to become a Participant on the first Entry Date
occurring on or after the date on which he or she becomes an Eligible Employee.
No individual shall become a Participant, however, if he or she is not an
Eligible Employee on the date his or her participation is to begin.
Participation in the Plan is voluntary. In order to participate, an otherwise
Eligible Employee must make written application in such manner as may be
required by Section 3.1 and by the Employer and must agree to make Compensation
Deferrals as provided in Article III.

 

2.2        Reemployment. If a Participant whose employment with the Employer is
terminated is subsequently reemployed, he or she shall become a Participant
again in accordance with the provisions of Section 2.1.

 

2.3        Change of Employment Category. During any period in which a
Participant remains in the employ of the Employer, but ceases to be an Eligible
Employee, he or she shall not be eligible to make Compensation Deferrals
hereunder.

 

ARTICLE III - DEFERRALS, CONTRIBUTIONS AND CREDITS

 

3.1        Compensation Deferrals. In accordance with rules established by the
Employer, a Participant may elect to defer Compensation that is due to be earned
and that would otherwise be paid to the Participant, in a lump sum or in any
fixed periodic dollar amounts designated by the Participant. Amounts so deferred
will be considered a Participant's "Compensation Deferrals." Ordinarily, a
Participant shall make such an election with respect to a coming twelve (12)
month Plan Year during the period beginning on the November 1 and ending on the
December 31 of the prior Plan Year or during such other period established by
the Employer.

 

Compensation Deferrals shall be made through regular payroll deductions or
through an election by the Participant to defer the payment of Performance-Based
Compensation that is not yet payable to him or her at the time of the election.
The Participant may, in accordance with regulations issued by the Treasury
Department, reduce or revoke his or her payroll deduction Compensation Deferral
amount as of, and by written notice delivered to the Employer at least thirty
(30) days prior to, the beginning of any regular payroll period, with such
reduction being first effective for Compensation to be earned in that payroll
period. Once made, a Compensation Deferral

 

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payroll deduction election shall continue in force indefinitely, until changed
by the Participant on a subsequent Participant Enrollment and Election Form
provided by the Employer. Compensation Deferrals shall be deducted by the
Employer from the pay of a deferring Participant and shall be credited to the
Account of the deferring Participant.

 

3.2        Performance-Based Compensation Deferrals. As used in this Plan,
"Performance-Based Compensation" shall have the meaning set forth in Section
409A(a)(4)(B)(iii) of the Internal Revenue Code, as amended. In the case of any
Performance-Based Compensation based on services performed over a period of at
least 12 months, a Participant shall make an election to defer some or all of
such Performance-Based Compensation with respect to a coming twelve (12) month
Plan Year during the period beginning on November 1 and ending on the latest of
the following dates: a) December 31 of the prior Plan Year; or, b) to the extent
it would not be considered a material modification of the Previous Plan, no
later than six (6) months before the end of the coming twelve (12) month Plan
Year; or c) during such other period established by the Employer.

 

3.3        Contributions and Credits to Accounts. There shall be established and
maintained by the Employer a separate Plan Account in the name of each
Participant which shall be credited or debited with: (a) amounts equal to the
Participant's Compensation Deferrals, (b) amounts equal to the Participant's
Performance-Based Compensation Deferrals, (c) an amount of interest each Plan
Year beginning in the first Plan Year of the Participant's participation and
ending the Plan Year prior to the Plan Year in which the Participant terminates
employment equal to a percentage to be determined by the Company's Chief
Executive Officer from time to time, and (d) any income, gains, or losses (to
the extent realized, based upon fair market value of the Account's assets, as
determined by the Employer, in its discretion) attributable or allocable to (a),
(b) and (c). The Employer shall have the discretion to allocate such income,
gains, or losses among Plan Accounts pursuant to such allocation rules as the
Employer deems to be reasonable and administratively practicable.

 

ARTICLE IV - ALLOCATION OF FUNDS

 

4.1        Allocation of Earnings or Losses on Accounts. The Participant's Plan
Account will be credited or debited with income, gains or losses as follows: As
of each Valuation Date, an amount equal to the net increase or decrease in
realizable net asset value or credited interest, as applicable (as determined by
the Employer), since the preceding Valuation Date shall be allocated among all
Participants' Accounts in accordance with the ratio that the portion of the
Account of each Participant bears to the aggregate of all Participant Accounts.

 

4.2        Accounting for Distributions. As of the date of any distribution
hereunder, the distribution to a Participant or his or her Beneficiary or
Beneficiaries shall be charged to such Participant's Account.

 

4.3        Separate Accounts. A separate account under the Plan shall be
established and maintained by the Employer to reflect the Account for each
Participant with subaccounts, if appropriate, to show separately the earnings
and losses credited or debited to such Account.

 

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4.4        Interim Valuations. If it is determined by the Employer that the
value of the Participant Accounts as of any date on which distributions are to
be made differs materially from the value of the Participant Accounts on the
prior Valuation Date upon which the distribution is to be based, the Employer,
in its discretion, shall have the right to designate any date in the interim as
a Valuation Date for the purpose of revaluing the Participant Accounts so that
the Account from which the distribution is being made will, prior to the
distribution, reflect its share of such material difference in value.

 

ARTICLE V - ENTITLEMENT TO BENEFITS

 

5.1        Employment Termination Benefit. Employer agrees that it shall pay
each Participant the Employment Termination Benefit, Disability Benefit or Death
Benefit described in Article VI below, upon the Participant's retirement, death
or Disability at the time, and in the form and manner hereafter provided. The
Employer will withhold from payments under this Plan any monies necessary to
comply with federal or state employment and income tax withholding regulations.
At the time of payment to the Participant or the Participant’s designated
beneficiary hereunder, the Participant or the Participant’s designated
beneficiary shall cease to have any further claim or interest under this Plan.
Any payments due under this Plan will be paid by the Employer from its general
assets.

 

5.2        Reemployment of Recipient. If a Participant receiving an Employment
Termination Benefit or Disability Benefit as provided in Article VI is
reemployed by the Employer, the remaining distributions due to the Participant
shall be suspended until such time as the Participant (or his or her
Beneficiary) once again becomes eligible to receive such benefits, at which time
such distributions shall re-commence, subject to the limitations and conditions
contained in this Plan.

 

 

ARTICLE VI --- DISTRIBUTION OF BENEFITS

 

6.1        Employment Termination Benefit. Upon a Participant's termination of
employment with the Employer, and in accordance with the method of payment
provided under Section 6.4, the Participant shall receive an Employment
Termination Benefit equal to a percentage of the entire value of the
Participant's Account based on the number of years the Participant has been
employed by the Employer according to the following schedule:

 

 

Years of Employment

Percentage

 

 

Less than 5 years

40%

 

At least 5 years

70%

 

At least 10 years

100%

 

 

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Notwithstanding the foregoing, the applicable percentage for a Participant who
terminates employment after reaching age 59½ shall be 100%. Under the Previous
Plan, if a Participant terminated employment with the Employer for any reason
prior to reaching age 59 ½, all retirement benefits under the Plan were
forfeited. The above schedule modifies the forfeiture of such benefits based on
the Employee’s years of employment with Employer. In accordance with Treas. Reg.
§1.409A-6(a)(4), the Employer acknowledges and agrees that this change is
specifically subject to Section 409A of the Code, but nothing else herein shall
be deemed to make any of the benefits provided under the Previous Agreement
subject to Section 409A.

 

6.2        Death Benefit. If a Participant dies before terminating his or her
employment with the Employer and before the commencement of payments to the
Participant hereunder, the entire value of the Participant's Account shall be
paid, as provided in Section 6.4, to the person or persons designated in
accordance with Section 7.1, as though the Participant had terminated employment
after 25 years of employment with Employer. Upon the death of a Participant
after payments hereunder have begun but before he or she has received all
payments to which he or she is entitled under the Plan, the remaining benefit
payments shall be paid to the person or persons designated in accordance with
Section 7.1, in the manner in which such benefits were payable to the
Participant unless, to the extent allowed by this Plan and applicable law, the
Beneficiary elects a more rapid form or schedule of distribution.

 

6.3        Disability Benefit. If a Participant becomes disabled before
terminating his or her employment with the Employer and before the commencement
of payments to the Participant hereunder, the entire value of the Participant's
Account shall be paid, as provided in Section 6.4, to the Participant, as though
the Participant had terminated employment after 25 years of employment with
Employer.

 

 

6.4

Method of Payment.

 

 

(a)

Cash Payments. All payments under the Plan shall be made in cash.

 

(b)       Timing and Manner of Payment. Unless otherwise elected by a
Participant in accordance with subsection (c) below, if a Participant becomes
entitled to receive an employment termination benefit, death benefit or
disability benefit, such benefit shall be paid by the Employer to the
Participant in equal monthly installments over a period of ten (10) years,
commencing on the first day of the first month following the Employee’s
termination of employment, death or disability. If an Employee dies before
receiving their entire employment termination benefit or disability benefit, any
unpaid installments of such benefits will continue to be paid to the Employee’s
designated beneficiary in the same manner.

 

(c)       Changes to Timing and Manner of Payment. A Participant may change the
timing of their distribution of any benefits under the Plan to delay the
payment, provided that: 1) such election may not take effect until at least
twelve (12) months after the election is made; 2) in the case of an election
related to a payment that is not

 

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the result of the Participant's death or disability, the first payment for which
such election is made is deferred for a period of not less than five (5) years
from the date such payment would otherwise have been made; and 3) any election
with respect to a distribution to be made at a specified time as specified under
the Plan at the date of deferral of such compensation may not be made less than
twelve (12) months prior to the date of the first scheduled payment. In no event
may the timing or schedule of any benefits payable hereunder be accelerated
except as may be provided in regulations issued by the Treasury Department.

 

(d)       If the whole or any part of any benefit under this Plan is to be paid
in installments, the total to be so paid shall continue to be held by Employer
pursuant to Section 4.1 under such procedures as the Employer may establish, in
which case, subject to the limitations of Article VI, any income, gain, or loss
attributable thereto (to the extent realized, as determined by the Employer, in
its discretion) shall be reflected in the installment payments, in such
equitable manner as the Employer shall determine. The actual amounts distributed
to a Participant may be less than, equal to, or greater than the aggregate
amount of the Participant's Compensation Deferrals and Performance-Based
Compensation Deferrals. Notwithstanding any of the foregoing, with respect to
any "Specified Employee", (i.e., a "key employee" as defined in Section 416(i)
of the Internal Revenue Code, as amended, without regard to paragraph (5)
thereof), a distribution of benefits hereunder may not be made before the date
that is six (6) months after the date of separation from service, or if earlier,
the date of death of such Specified Employee.

 

6.5        Payment of Benefit Upon Change in Control. If there is a change in
the ownership or effective control of the Employer, or a change in the ownership
of a substantial portion of the assets of the Employer, within the meaning of
Section 409A of the Code and the regulations issued thereunder, all benefits
under this Agreement shall immediately become one hundred percent (100%) vested
and nonforfeitable. In such event, the Employer shall pay to the Employee an
amount equal to Employee’s Retirement Benefit in the same manner as if the
Employee had completed 25 years of employment with Employer as of the effective
date of such change in control or ownership. Under the Previous Plan there was
no provision for payment of benefits upon a change in control. In accordance
with Treas. Reg. §1.409A-6(a)(4), the Employer acknowledges and agrees that the
addition of this provision is specifically subject to Section 409A of the Code,
but nothing else herein shall be deemed to make any of the benefits provided
under the Previous Agreement subject to Section 409A.

 

ARTICLE VII - BENEFICIARIES; PARTICIPANT DATA

 

7.1        Designation of 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

 

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Employer, and will be effective only when filed in writing with the Employer
during the Participant's lifetime. In the absence of a valid Beneficiary
designation, or if, at the time any benefit payment is due to a Beneficiary,
there is no living Beneficiary validly named by the Participant, the Employer
shall pay any such benefit payment to the Participant's spouse, if then living,
but otherwise to the Participant's then living descendants, if any, per stirpes,
but, if none, to the Participant's estate. In determining the existence or
identity of anyone entitled to a benefit payment, the Employer 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 Employer, in its sole discretion, may
distribute such payment 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 Employer deems to be appropriate.

 

7.2        Information to be Furnished by Participants and Beneficiaries,
Inability to Locate Participants or Beneficiaries. Any communication, statement,
or notice addressed to a Participant or to a Beneficiary at his or her last post
office address as shown on the Employer's records shall be binding on the
Participant or Beneficiary for all purposes of the Plan. The Employer shall not
be obliged to search for any Participant or Beneficiary beyond the sending of a
registered letter to such last known address. If the Employer notifies any
Participant or Beneficiary that he or she is entitled to an amount under the
Plan and the Participant or Beneficiary fails to claim such amount or make his
or her location known to the Employer within three (3) years thereafter, then,
except as otherwise required by law, if the location of one or more of the next
of kin of the Participant is known to the Employer, the Employer may direct
distribution of such amount to any one or more or all of such next of kin, and
in such proportions as the Employer determines. If the location of none of the
foregoing persons can be determined, the Employer shall have the right to direct
that the amount payable shall be deemed to be a forfeiture, except that the
dollar amount of the forfeiture, unadjusted for gains or losses in the interim,
shall be paid by the Employer if a claim for the benefit subsequently is made by
the Participant or the Beneficiary to whom it was payable. If a benefit payable
to an unlocated Participant or Beneficiary is subject to escheat pursuant to
applicable state law, the Employer shall not be liable to any person for any
payment made in accordance with such law.

 

ARTICLE VIII - ADMINISTRATION

 

8.1        Administrative Authority. Except as otherwise specifically provided
herein, the Employer shall have the sole responsibility for and the sole control
of the operation and administration of the Plan and shall have the power and
authority to take all action and to make all decisions and interpretations that
may be necessary or appropriate in order to administer and operate the Plan,
including, without limiting the generality of the foregoing, the power, duty,
and responsibility to:

 

 

(a)

Resolve and determine all disputes or questions arising under the Plan,
including the power to determine the rights of Eligible Employees, Participants,
and Beneficiaries, and their respective benefits, and to remedy any ambiguities,
inconsistencies, or

 

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omissions in the Plan.

 

 

(b)

Adopt such rules of procedure and regulations as in its opinion may be necessary
for the proper and efficient administration of the Plan and as are consistent
with the Plan.

 

 

(c)

Implement the Plan in accordance with its terms and the rules and regulations
adopted as above.

 

 

(d)

Make determinations with respect to the eligibility of any Eligible Employee as
a Participant and make determinations concerning the crediting and distribution
of Plan Accounts.

 

 

(e)

Appoint any persons or firms, or otherwise act to secure spe­cialized advice or
assistance, as it deems necessary or desirable in connection with the
administration and operation of the Plan, and the Employer shall be entitled to
rely conclusively upon, and shall be fully protected in any action or omission
taken by it in good faith reliance upon, the advice or opinion of such firms or
persons. The Employer shall have the power and authority to delegate from time
to time by written instrument all or any part of its duties, powers, or
responsibilities under the Plan, both ministerial and discretionary, as it deems
appropriate, to any person or committee, and in the same manner to revoke any
such delegation of duties, powers, or responsibilities. Any action of such
person or committee in the exercise of such delegated duties, powers, or
responsibilities shall have the same force and effect for all purposes hereunder
as if such action had been taken by the Employer. Further, the Employer may
authorize one or more persons to execute any certificate or document on behalf
of the Employer, in which event any person notified by the Employer of such
authorization shall be entitled to accept and conclusively rely upon any such
certificate or document exe­cuted by such person as representing action by the
Employer until such third person shall have been notified of the revocation of
such authority.

 

8.2        Uniformity of Discretionary Acts. Whenever in the administration or
operation of the Plan discretionary actions by the Employer are required or
permitted, such actions shall be consistently and uniformly applied to all
persons similarly situated, and no such action shall be taken that shall
discriminate in favor of any particular person or group of persons.

 

8.3        Litigation. Except as may be otherwise required by law, in any action
or judicial proceeding affecting the Plan, no Participant or Beneficiary shall
be entitled to any notice or service of process, and any final judgment entered
in such action shall be binding on all persons interested in, or claiming under,
the Plan.

 

8.4        Payment of Administrative Expenses. All expenses incurred in the
administration and operation of the Plan, including any taxes payable by the
Employer in respect of the Plan, shall be paid by the Employer.

 

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8.5        Claims Procedure. Any person claiming a benefit under the Plan (a
Claimant) shall present the claim, in writing, to the Employer, and the Employer
shall respond in writing. If the claim is denied, the written notice of denial
shall state, in a manner calculated to be understood by the Claimant:

 

 

(a)

The specific reason or reasons for the denial, with specific references to the
Plan provisions on which the denial is based;

 

 

(b)

A description of any additional material or information necessary for the
Claimant to perfect his or her claim and an explanation of why such material or
information is necessary; and

 

 

(c)

An explanation of the Plan's claims review procedure.

 

The written notice denying or granting the Claimant's claim shall be provided to
the Claimant within ninety (90) days after the Employer's 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 by the Employer to the Claimant within the initial ninety (90) day
period and in no event shall such an extension exceed a period of ninety (90)
days from the end of the initial ninety (90) day period. Any extension notice
shall indicate the special circumstances requiring the extension and the date on
which the Employer expects to render a decision on the claim. Any claim not
granted or denied within the period noted above shall be deemed to have been
denied.

 

Any Claimant whose claim is denied or deemed to have been denied under the
preceding sentence (or such Claimant's authorized representative) may, within
sixty (60) days after the Claimant's receipt of notice of the denial or after
the date of the deemed denial, request a review of the denial by notice given,
in writing, to the Employer. Upon such a request for review, the claim shall be
reviewed by the Employer (or its designated representative), which may, but
shall not be required to, grant the Claimant a hearing. In connection with the
review, the Claimant may have representation, may examine pertinent documents,
and may submit issues and comments in writing.

 

The decision on review normally shall be made within sixty (60) days of the
Employer's receipt of the request for review. If an extension of time is
required due to special circumstances, the Claimant shall be notified, in
writing, by the Employer, and the time limit for the decision on review shall be
extended to one hundred twenty (120) days. The decision on review shall be in
writing and shall state, in a manner calculated to be understood by the
Claimant, the specific reasons for the decision and shall include references to
the relevant Plan provisions on which the decision is based. The written
decision on review shall be given to the Claimant within the sixty (60) day (or,
if applicable, the one hundred twenty (120) day) time limit discussed above. If
the decision on review is not communicated to the Claimant within the sixty (60)
day (or, if applicable, the one hundred twenty (120) day) period discussed
above, the claim shall be deemed to have been denied upon review. All decisions
on review shall be final and binding with respect to all concerned parties.

 

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ARTICLE IX - AMENDMENT

 

9.1        Right to Amend. The Employer, by written instrument executed by the
Employer, shall have the right to amend the Plan, at any time and with respect
to any provisions hereof, and all parties hereto or claiming any interest
hereunder shall be bound by such amendment; provided, however, that no such
amendment shall deprive a Participant or a Beneficiary of a right accrued
hereunder prior to the date of the amendment.

 

9.2        Amendments to Ensure Proper Characterization of Plan. Notwithstanding
the provisions of Section 9.1, the Plan may be amended by the Employer at any
time, retroactively if required, if found necessary, in the opinion of the
Employer, in order to ensure that the Plan is characterized as a top-hat plan of
deferred compensation maintained for a select group of management or highly
compensated employees as described under ERISA Sections 201(2), 301(a)(3), and
401(a)(1) and to conform the Plan to the provisions and requirements of any
applicable law (including ERISA and the Code). No such amendment shall be
considered prejudicial to any interest of a Participant or a Beneficiary
hereunder.

 

ARTICLE X - TERMINATION

 

10. 1     Employer's Right to Terminate or Suspend Plan. The Employer reserves
the right, at any time, to terminate the Plan and/or its obligation to make
further credits to Plan accounts. The Employer also reserves the right, at any
time, to suspend the operation of the Plan for a fixed or indeterminate period
of time.

 

10.2      Automatic Termination of Plan. The Plan automatically shall terminate
upon the dissolution of the Employer or upon its merger into or consolidation
with any other corporation or business organization if there is a failure by the
surviving corporation or business organization to adopt specifically and agree
to continue the Plan.

 

10.3      Suspension of Deferrals. In the event of a suspension of the Plan, the
Employer shall continue all aspects of the Plan, other than Compensation
Deferrals and Employer contribution credits under Article III, during the period
of the suspension, in which event payments hereunder will continue to be made
during the period of the suspension in accordance with Articles V and VI.

 

10.4      Allocation and Distribution. This Section shall become operative upon
a complete termination of the Plan. The provisions of this Section also shall
become operative in the event of a partial termination of the Plan, as
determined by the Employer, but only with respect to that portion of the Plan
attributable to the Participants to whom the partial termination is applicable.
Upon the effective date of any such event, notwithstanding any other provisions
of the Plan, (i) no persons who were not previously Participants shall be
eligible to become Participants, and (ii) the value of the interest of all
Participants and Beneficiaries shall be determined and, after deduction of
estimated expenses in liquidating and, if applicable, paying Plan benefits, paid
to them as soon as is practicable after such termination.

 

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10.5      Successor to Employer. Any corporation or other business organization
that is a successor to the Employer by reason of a consolidation, merger, or
purchase of substantially all of the assets of the Employer shall have the right
to become a party to the Plan by adopting the same by resolution of the entity's
board of directors or other appropriate governing body. If, within ninety (90)
days from the effective date of such consolidation, merger, or sale of assets,
such new entity does not become a party to this Plan, as above provided, the
Plan automatically shall be terminated, and the provisions of Section 10.4 shall
become operative.

 

ARTICLE XI - MISCELLANEOUS

 

11.1      Limitations on Liability of Employer. Neither the establishment of the
Plan or any modification thereof, nor the creation of any account under the
Plan, nor the payment of any benefits under the Plan shall be construed as
giving to any Participant or other person any legal or equitable right against
the Employer or any officer or employer thereof, except as provided by law or by
any Plan provision. The Employer does not in any way guarantee any Participant's
Account from loss or depreciation. In no event shall the Employer, or any
successor, employee, officer, director, or stockholder of the Employer, be
liable to any person on account of any claim arising by reason of the provisions
of the Plan or of any instrument or instruments implementing its provisions, or
for the failure of any Participant, Beneficiary, or other person to be entitled
to any particular tax consequences with respect to the Plan, or any credit or
distribution hereunder.

 

11.2      Construction. If any provision of the Plan is held to be illegal or
void, such illegality or invalidity shall not affect the remaining provisions of
the Plan, but shall be fully severable, and the Plan shall be construed and
enforced as if said illegal or invalid provision had never been inserted herein.
For all purposes of the Plan, where the context admits, the singular shall
include the plural, and the plural shall include the singular. Headings of
Articles and Sections herein are inserted only for convenience of reference and
are not to be considered in the construction of the Plan. The laws of the state
of Iowa shall govern, control, and determine all questions of law arising with
respect to the Plan and the interpretation and validity of its respective
provisions, except where those laws are preempted by the laws of the United
States. Participation under the Plan will not give any Participant the right to
be retained in the service of the Employer nor any right or claim to any benefit
under the Plan unless such right or claim has specifically accrued hereunder.
The Plan is intended to be and at all times shall be interpreted and
administered so as to qualify as an unfunded deferred compensation plan, and no
provision of the Plan shall be interpreted so as to give any individual any
right in any assets of the Employer which right is greater than the rights of a
general unsecured creditor of the Employer.

 

11.3      Spendthrift Provision. No amount payable to a Participant or a
Beneficiary under the Plan will, except as otherwise specifically provided by
law, be subject in any manner to anticipation, alienation, attachment,
garnishment, sale, transfer, assignment (either at law or in equity), levy,
execution, pledge, encumbrance, charge, or any other legal or equitable process,
and any attempt to do so will be void; nor will any benefit be in any manner
liable for or subject to the debts, contracts, liabilities, engagements, or
torts of the person entitled thereto. Further, the

 

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withholding of taxes from Plan benefit payments; the recovery under the Plan of
overpayments of benefits previously made to a Participant or Beneficiary; if
applicable, the transfer of benefit rights from the Plan to another plan; or the
direct deposit of benefit payments to an account in a banking institution (if
not actually part of an arrangement constituting an assignment or alienation)
shall not be construed as an assignment or alienation. If any Participant's or
Beneficiary's benefits hereunder are garnished or attached by order of any
court, the Employer may bring an action or a declaratory judgment in a court of
competent jurisdiction to determine the proper recipient of the benefits to be
paid under the Plan. During the pendency of said action, any benefits that
become payable shall be held as credits to the Participant's or Beneficiary's
Account or, if the Employer prefers, paid into the court as they become payable,
to be distributed by the court to the recipient as the court deems proper at the
close of said action.

 

IN WITNESS WHEREOF, the Employer has caused the Plan to be executed this 17th
day of August, 2007.

 

UNITED FIRE & CASUALTY COMPANY

 

 

By: /s/ Randy A. Ramlo

 

 

Print Name: Randy A. Ramlo

 

 

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