**Exhibit 10.01**

Restrepo Award Agreement 

**STATE AUTO FINANCIAL CORPORATION**

**RESTRICTED STOCK AGREEMENT**

**UNDER THE**

**2009 EQUITY INCENTIVE COMPENSATION PLAN**

This Restricted Stock Agreement (this “***Agreement***”) is made as of March 4, 2010 (the“***Award Date***”). The Compensation Committee of the Board of Directors of State Auto Financial Corporation, an Ohio corporation (the “***Company***”), hereby awards to Robert P. Restrepo, Jr. (“***Mr.Restrepo***”) 17,180 common shares, without par value, of the Company (the “***Restricted Shares***”). The Restricted Shares are awarded pursuant to the terms of the Company’s 2009 Equity Incentive Compensation Plan(the “***Plan***”) and shall be subject to all of the provisions of the Plan, which are hereby incorporated herein by reference, and shall be subject to the following provisions of this Agreement. Capitalized terms used in thisAgreement which are not otherwise defined herein shall have the meanings ascribed to such terms in the Plan. 

§1.    Award of Restricted Shares.    The purchase price for theRestricted Shares shall be zero. Following the execution and delivery of this Agreement by Mr. Restrepo, the Company shall issue the Restricted Shares in Mr. Restrepo’s name and hold them in a restricted share account with theCompany’s transfer agent. 

§2.    Forfeiture.    TheRestricted Shares shall be forfeited to the Company if Mr. Restrepo’s employment with the Company terminates for any reason prior to the third anniversary of the Award Date (the “***Lapse Date***”), or ifMr. Restrepo violates any provision of this Agreement. 

§3.    TransferRestrictions.    None of the Restricted Shares, nor any beneficial interest therein, shall be sold, assigned, pledged or otherwise transferred, voluntarily or involuntarily, prior to the Lapse Date. Thereafter, the RestrictedShares may be transferred only in compliance with all applicable federal and state securities laws. Any transfer or attempted transfer in violation of the foregoing restrictions shall be null and void. 

§4.    Acceptance of Award.    The award of the Restricted Sharesmust be accepted by Mr. Restrepo within 30 days after the Award Date by executing this Agreement. Mr. Restrepo shall not have any rights with respect to the Restricted Shares awarded under this Agreement unless and until Mr. Restrepohas executed this Agreement, delivered a fully executed copy thereof to the Secretary of the Company, and otherwise complied with the applicable terms and conditions of the award of the Restricted Shares. 

§5.    Rights As Shareholder.    Subject to the terms of thisAgreement, on and after the issuance of the Restricted Shares into the restricted share account, Mr. Restrepo shall have all of the rights of a shareholder of the Company with respect to the Restricted Shares, including the right to vote theRestricted Shares and the right to receive any dividends or other distributions with respect to the Restricted Shares, but subject, however, to the restrictions on transfer set forth in this Agreement. Notwithstanding the foregoing, any cashdividends or other cash distributions paid on the Restricted Shares prior to the Lapse Date shall be automatically 

reinvested in common shares of the Company (the “***Dividend Shares***”) pursuant to the terms of the Company’s dividend reinvestment and stock purchase plan and shall beheld in an account with Fidelity, or its successor, under Mr. Restrepo’s name. Until the Lapse Date, the Dividend Shares shall be subject to the restrictions on transfer set forth in §3, above. However, the Dividend Shares shall notbe subject to any risk of forfeiture. 

§6.    Escrow ofShares.    The Restricted Shares shall be held by the Company until the earlier of the Lapse Date or the termination of Mr. Restrepo’s employment with the Company. If the Restricted Shares are forfeited to theCompany under §2, above, then the Company shall cause the Restricted Shares to be transferred to the Company. If the Restricted Shares are not forfeited to the Company, then the Company shall release the restrictions from the Restricted Sharesand re-issue such Shares in accordance with the instructions, if any, of Mr. Restrepo. 

§7.    Tax Consequences.    Mr. Restrepo understands that he(and not the Company) shall be responsible for his own federal, state, local or foreign tax liability and any of his other tax consequences that may arise as a result of the transactions contemplated by this Agreement, including without limitationfiling an election under Section 83(b) of the Internal Revenue Code of 1986, as amended (the “***83(b) Election***”), if he deems it to be appropriate. Mr. Restrepo shall rely solely on the determinations of his taxadvisors or his own determinations, and not on any statements or representations by the Company or any of its agents, with regard to all such tax matters. Mr. Restrepo shall notify the Company in writing if Mr. Restrepo files the 83(b)Election with the Internal Revenue Service within 30 days from the date of his execution of this Agreement. The Company intends, in the event it does not receive from Mr. Restrepo evidence of the 83(b) Election filing by Mr. Restrepo, toclaim a tax deduction for any amount which would be taxable to Mr. Restrepo in the absence of such an election. If the Company is required to withhold or pay any taxes with respect to the issuance or vesting of the Restricted Shares,Mr. Restrepo shall pay to the Company the amount of such required withholding or payment promptly following the Company’s request. 

§8.    Compliance with Securities Laws.    No Restricted Shares shallbe deliverable under this Agreement or the Plan except in compliance with all applicable federal and state securities laws and regulations. The Company may require Mr. Restrepo (a) to represent and warrant to and agree with the Company inwriting that Mr. Restrepo is acquiring the Restricted Shares without a view to distribution thereof, and (b) to make such additional representations, warranties and agreements with respect to the investment intent of Mr. Restrepo asthe Company may reasonably request. 

§9.    Vesting.    Notwithstanding the provisions of the Plan or thisAgreement to the contrary, if Mr. Restrepo’s employment with the Company terminates due to death, disability, involuntary termination without cause or a change of control prior to the Lapse Date, the Restricted Shares shall be fullyvested; provided, however, that the Restricted Shares shall not vest prior to the Lapse Date if such death or disability results from a self-inflicted injury or event, while sane or insane. For purposes of this Agreement, “disability” andinvoluntary “termination without cause” shall be given the meanings provided in Article IV, sections (A) and (E), respectively, of Mr. Restrepo’s Employment Agreement with the Company and others dated March 1, 2009.Further, “change of control” shall be given the meaning provided in Section 2(d) of Mr. Restrepo’s Executive Agreement with the Company and others dated March 1, 2009. 

 

 

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The Restricted Shares shall be subject to such stop-transfer orders andother restrictions as the Company may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Company’s common shares are then listed, and any applicablefederal or state securities laws, and the Company may cause a notation to be put on the Restricted Shares to make appropriate reference to such restrictions. 

 

 

 

STATE AUTO FINANCIAL CORPORATION
By 
/s/ James A. Yano
 James A. Yano, Vice President and General Counsel (*as authorized and approved by the Compensation Committee of the Board of Directors*)
 

Acceptance of Agreement 

Mr. Restrepo hereby: (a) acknowledges receiving a copy of the Plan and represents that Mr. Restrepo isfamiliar with all provisions of the Plan; and (b) accepts this Agreement and the award of the Restricted Shares under this Agreement subject to all terms, provisions, and restrictions of both the Plan and this Agreement. 

 

 

/s/ Robert P. Restrepo, Jr.

ROBERT P. RESTREPO, JR.

Dated as of: March 4, 2010

 

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