EX-10.1



 





Exhibit 10.1




AMENDMENT NO. 2 TO AGREEMENT AND PLAN OF MERGER




     THIS AMENDMENT NO. 2 TO AGREEMENT AND PLAN OF MERGER (“Amendment”) is made as of August 2,
2006 among GREAT AMERICAN FINANCIAL RESOURCES, INC., a Delaware corporation (“Parent”), PROJECT
GARDEN ACQUISITION INC., a Delaware corporation (“Acquisition Sub”), and CERES GROUP, INC., a
Delaware corporation (the “Company”).



R E C I T A L S:




     WHEREAS, Parent, Acquisition Sub and the Company are parties to the Agreement and Plan of Merger
dated as of May 1, 2006 and amended as of May 12, 2006 (the “Merger Agreement”); and,



     WHEREAS, the parties hereto desire to amend Section 2.2 of the Merger Agreement in certain
respects, all on the terms and conditions hereinafter set forth;



     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained
hereinafter, the parties hereto do hereby agree as follows:



     1. Amendment to Section 2.2 of the Merger Agreement. Section 2.2 of the Merger Agreement is
hereby amended in its entirety to read as follows:




	 	 	“At the Effective Time, the Certificate of Incorporation of the Surviving
Corporation shall be amended and restated in its entirety to read as the Certificate
of Incorporation of Acquisition Sub (the “Acquisition Sub Certificate of
Incorporation”), until thereafter changed or amended as provided therein or by
Applicable Law, except that Article I thereof shall be amended to read as follows:
‘The name of the corporation is CERES GROUP, INC. (the “Corporation”).’; Article IV
thereof shall be amended to read as follows: ‘The total number of shares of stock
which the Corporation shall have authority to issue is Fifty Million (50,000,000)
and all of such shares shall be of the par value of $.01 per share.’; and an Article
VI thereof relating to indemnification and limitation of liability of directors
shall be added to so that the Certificate of Incorporation of the Surviving
Corporation shall be in the form attached hereto as Exhibit A.





     2. Miscellaneous. Except as expressly amended by this Amendment, the Merger Agreement shall
remain in full force and effect as originally executed and delivered by the parties. Sections 8.4
through 8.10 and Section 8.12 of the Merger Agreement are hereby incorporated by reference in this
Amendment, with “Amendment” to be inserted for “Agreement” in each instance.



 









 





     IN WITNESS WHEREOF, the parties hereto have set their respective hands as of the date and year
first above written.



	 	 	 	 	 	 
	 	 	GREAT AMERICAN FINANCIAL RESOURCES, INC.
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark F. Muething
	 

	 	 	 	 
	 

	 	 	 	Name: Mark F. Muething
	 

	 	 	 	Title: Executive Vice President
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	PROJECT GARDEN ACQUISITION INC.
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark F. Muething
	 

	 	 	 	 
	 

	 	 	 	Name: Mark F. Muething
	 

	 	 	 	Title: President
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	CERES GROUP, INC.
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Thomas J. Kilian
	 

	 	 	 	 
	 

	 	 	 	Name: Thomas J. Kilian
	 

	 	 	 	Title: President and Chief Executive Officer






 









 






Exhibit A




AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

CERES GROUP, INC.




*****




     The Certificate of Incorporation of Ceres Group, Inc. was originally filed on October 22,
1998, file number 2953971. This Amended and Restated Certificate of Incorporation is being filed
pursuant to Sections 245 and 242 of the General Corporation Law of the State of Delaware.




	 	I.	 	The name of the corporation is CERES GROUP, INC. (the “Corporation”).






	 	II.	 	The address of its registered office in the State of Delaware is Corporation Trust
Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of
its registered agent at such address is The Corporation Trust Company.






	 	III.	 	The nature of the business or purposes to be conducted or promoted by the Corporation
is to engage in any lawful act or activity for which corporations may be organized under
the General Corporation Law of Delaware.






	 	IV.	 	The total number of shares of stock which the Corporation shall have authority to issue
is Fifty Million (50,000,000) and all of such shares shall be of the par value of $.01 per
share.






	 	V.	 	The Board of Directors is authorized to make, alter or repeal the by-laws of the
Corporation. Election of directors need not be by written ballot.






	 	VI.	 	Indemnification Rights and Limitation of Director Liability.





          (a) Indemnification Rights. (1) To the maximum extent permitted under the Delaware General
Corporation Law, the Corporation shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in the right of the
Corporation) by reason of the fact that such person is or was a director, officer or employee of
the Corporation, or is or was serving at the request of the Corporation as a director, officer or
employee of another corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or proceeding.




     (2) To the maximum extent permitted under the Delaware General Corporation Law, the
Corporation shall indemnify any person who was or is a party or is threatened to be made a party



 









 







to any threatened, pending or completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that such person is or was a director,
officer or employee of the Corporation, or is or was serving at the request of the Corporation as a
director, officer or employee of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by such
person in connection with the defense or settlement of such action or suit.



          (b) Advancement of Expenses. (1) To the maximum extent permitted under the Delaware General
Corporation Law, the Corporation shall pay all expenses (including attorneys’ fees) actually and
reasonably incurred by any person by reason of the fact that such person is or was a director of
the Corporation in defending any civil, criminal, administrative or investigative action, suit or
proceeding in advance of the final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf of such person to repay such amount if it is ultimately determined
that he is not entitled to be indemnified by the Corporation as authorized by the Delaware General
Corporation Law.




     (2) To the maximum extent permitted under the Delaware General Corporation Law, the
Corporation shall pay all expenses (including attorneys’ fees) actually and reasonably incurred by
any person by reason of the fact that such person is or was an officer of the Corporation in
defending any civil, criminal, administrative or investigative action, suit or proceeding (other
than an action by the Corporation on its own behalf, it being understood that such an action does
not include any derivative suit instituted by a stockholder of the Corporation) in advance of the
final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf
of such person to repay such amount if it is ultimately determined that he is not entitled to be
indemnified by the Corporation as authorized by the Delaware General Corporation Law.



          (c) Limitation on Liability of Directors. To the maximum extent permitted under the Delaware
General Corporation Law, a director of the Corporation shall not be liable to the Corporation or
its stockholders for monetary damages for the breach of his or her fiduciary duty as a director.




          (d) Nonexclusivity and Benefit. The indemnification rights granted pursuant to this Article
VI shall not be exclusive of other indemnification rights, if any, granted to such person and shall
inure to the benefit of the heirs and legal representatives of such person.




          (e) Effect of Repeal, Amendment or Termination. To the maximum extent permitted under the
Delaware General Corporation Law, no repeal of or restrictive amendment of this Article VI and no
repeal, restrictive amendment or termination of effectiveness of any law authorizing this Article
VI shall apply to or affect adversely any right or protection of any director, officer or employee
of the Corporation, for or with respect to any acts or omissions of such person occurring prior to
such repeal, amendment or termination of effectiveness.




* * * * *