Exhibit 10









Exhibit 10.1




 




THE SEIBELS BRUCE

GROUP, INC.




STOCK OWNERSHIP BONUS

PROGRAM




 




1.             PURPOSE OF THE PROGRAM




 




This Program

shall be known as The Seibels Bruce Group, Inc. Stock Ownership Bonus

Program.  The purpose of the Program is

to motivate the Company’s managers and align their interests with those of the

Company and its shareholders. 

Satisfaction of these guidelines is necessary in order to be awarded

Bonus Compensation.




 




2.             DEFINITIONS




 




2.1                                 Definitions.  Wherever the following capitalized terms are

used in this Program they shall have the meanings specified below.




 




a.                                       “Annual

Guideline Target” means the number of shares of Common Stock that a Participant

is required to acquire and hold under the Ownership Guidelines at the end of a

particular Program Year, determined as a percentage of the Cumulative Guideline

Target applicable to the Participant (with the number of shares rounded to the

nearest whole share).




b.                                      “Annual

Strategic Plan” means, for any Program Year, the projected Net Income target

for the Company, as approved by the Board.




c.                                       “Base

Salary” means the annual base salary of the Participant as in effect on the

last day of any applicable Program Year.




d.                                      “Board”

means the Board of Directors of the Company.




e.                                       “Bonus

Compensation” means, for any Program Year, for any Manager that is

participating in the Program, any annual bonus amount designated by the

Committee for purposes of the Program that is earned by such Manager during the

Program Year under the Program (and payable in the following Program Year).




f.                                         “Committee”

means the Compensation Committee of the Board.




g.                                      “Common

Stock” means the common stock of the Company, par value $1.00 per share.




h.                                      “Company”

means The Seibels Bruce Group, Inc., a South Carolina corporation.




i.                                          “Cumulative

Guideline Target” means the aggregate Fair Market Value of the Common Stock

that the Participant is required to acquire and hold under the Ownership

Guidelines at the end of the time period applicable under the Ownership

Guidelines for satisfaction of all requirement thereunder (with the number of

shares rounded to the nearest whole share)




j.                                          “Effective

Date” means the Effective Date of this Program, as defined in Section 6.1

hereof.




k.                                       “Employee”

means any person who the Committee determines to be an employee of the Company

or any Subsidiary.




l.                                          “Fair

Market Value” of a share of Common Stock as of a given date means the average

closing sales price of the Common Stock on the Over the Counter Board as

reflected on the composite index on the 10 trading days immediately preceding

the date as of which Fair Market Value is to be determined.  If the Common Stock is not listed on the

Over the Counter Board on the date as of which Fair Market Value is to be

determined, the Committee shall determine if good faith the Fair Market Value

in whatever manner it considers appropriate.




m.                                    “Manager”

means an Employee who the Chief Executive Officer, in his sole discretion,

determines to be a manager of the Company or any Subsidiary eligible to

participate in the Program.




n.                                      “Net

Income” means, for any applicable Program Year, the aggregate of all amounts

which, in accordance with generally accepted accounting principles, would be

included as net income (or net loss) on a consolidated statement of income of

the Company and its subsidiaries, including a reserve for Bonus Compensation,

for such period.




o.                                      “Ownership

Guidelines” means the stock ownership guidelines for Managers of the Company

adopted by the Committee for purposes of the Program, as may be amended by the

Committee from time to time.  The

Ownership Guidelines, as currently in effect, are attached hereto as Exhibit A.




p.                                      “Participant”

means a Manager who is eligible to receive Bonus Compensation.




q.                                      “Program”

means The Seibels Bruce Group, Inc., Stock Ownership Bonus Program as set forth

herein, as it may be amended from time to time.




r.                                         “Program

Year” shall mean any calendar year in which the Program is in effect.




s.                                       “Subsidiary”

means an entity that is wholly owned, directly or indirectly, by the Company,

or any other affiliate of the Company that is so designated, from time to time,

by the Committee.




 





























 




3.             ADMINISTRATION OF THE PROGRAM




 




3.1                                 Committee

Members.  The Program will be

administered by the Committee.  The

Committee may exercise such powers and authority as may be necessary or

appropriate for the Committee to carry out its functions as described in the

Program.  No member of the Committee

will be liable for any action or determination made in good faith by the

Committee with respect to the Program.




3.2                                 Committee

Authority.  The Committee has

discretionary authority to interpret the Program, to make all factual

determinations under the Program, and to determine the terms and provisions of

the Bonus Compensation.  The Committee

has authority to prescribe, amend, and rescind rules and regulations relating

to the Program.  All interpretations,

determinations, and actions by the Committee will be final, conclusive, and

binding upon all parties.




3.3                                 Discretionary

Adjustments.  The Committee retains

the discretion to make adjustments from time to time in the Ownership

Guidelines and the degree of achievement of the Ownership Guidelines that is

applicable to any Participant.  The

basis for making such an adjustment shall include, but shall not be limited to

(i) unforeseen circumstances or unusual events that result in less than full

Bonus Compensation being paid for a Program Year and (ii) financial or other

personal hardship where fairness and equity would warrant adjustments.




 




4.             PARTICIPATION




 




4.1                                 Participation.  The Chief Executive Officer, in his

discretion, will select members of management that are eligible to participate

in the Program.  Any participant who has

not achieved his Cumulative Guideline Target as of the end of any Program Year

in accordance with the Ownership Guidelines will not be eligible to receive

Bonus Compensation for such Program Year.




4.2                                 Bonus

Compensation Program.  The Bonus

Compensation Program will pay Bonus Compensation to Managers to the extent that

the Company’s Net Income for any applicable Program Year exceeds the Annual

Strategic Plan.  Of the Net Income in

excess of the Annual Strategic Plan, one-half of that amount will be placed in

a profit sharing pool.  The Chief

Executive Officer will receive Bonus Compensation equal to twenty-five percent of

the aggregate bonus pool or 125% of his Base Salary whichever is less.  The Committee hereby delegates such

authority as is necessary for the Chief Executive Officer to distribute the

remainder of the profit sharing pool as Bonus Compensation to the Managers as

determined in his sole discretion.  No

Participant will receive Bonus Compensation greater than 125% of his or her

base salary.  All Bonus Compensation

will be subject to applicable tax and other withholding, and the Bonus

Compensation after such withholdings will be paid in cash.  All Bonus Compensation for any applicable

Program Year will be paid in March following such Program Year.  To receive Bonus Compensation, Participants

must be employed on the date Bonus Compensation is paid.  The Chief Executive Officer will determine

the exact date of payment of Bonus Compensation after giving consideration to

payroll periods and finality of the prior years’ financial statements as first

published by the Company for the applicable Program Year.




 




5.             GENERAL PROVISIONS




 




5.1                                 No

Assignment or Transfer; Beneficiaries. 

Awards under the Program shall not be assignable or transferable, unless

otherwise allowed by the Committee in its sole discretion.




5.2                                 Employment

or Service.  Nothing in the Program,

shall confer upon any Participant the right to continue in the capacity in

which he is employed by or otherwise serves the Company or any Subsidiary.




5.3                                 Tax

Withholding.  The Participant shall

be responsible for payment of any federal, state and local taxes or similar

charges required by law to be withheld from any Bonus Compensation, which shall

be paid by the Participant at the time that taxable income is recognized with

respect to the Bonus Compensation.




5.4                                 Program

Binding on Successors.  The Program

shall be binding upon the Company, its successors and assigns, and the

Participants, his heirs, administrators, estate, permitted transferees and

beneficiaries.




5.5                                 Construction

and Interpretation.  Whenever used

herein, nouns in the singular shall include the plural, and the masculine

pronoun shall include the feminine gender. 

Headings of Articles and Sections hereof are inserted for convenience

and reference and constitute no part of the Program.




5.6                                 Severability.  If any provision of the Program shall be

determined to be illegal or unenforceable by any court of law in any

jurisdiction, the remaining provisions hereof and thereof shall be severable

and enforceable in any other jurisdiction.




5.7                                 Governing

Law.  The validity and construction

of this Program shall be governed by the laws of the State of South Carolina.




 




6.             EFFECTIVE DATE, AMENDMENT AND TERMINATION




 




5.8                                 Effective

Date.  The Effective Date of the

Program shall be the date of adoption of the Program by the Board.




5.9                                 Amendment

and Termination.  The Board may from

time to time and in any respect, amend or modify or terminate the Program.




 




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Appendix A




 




THE SEIBELS BRUCE

GROUP, INC.




STOCK OWNERSHIP

GUIDELINES




 




1.             PREAMBLE




 




The following

sets forth the Stock Ownership Guidelines that have been established by The

Seibels Bruce Group, Inc., (the “Company”) for managers of the Company that are

eligible to participate in The Seibels Bruce Group, Inc. Stock Ownership Bonus

Program (the “Program”).  The purpose of

the Program is to provide an incentive to the Company’s managers and align

their interests with those of the Company and its shareholders.  The Ownership Guidelines operate together

with, and are made a part of, the Program to provide a means of acquiring and

retaining such stock ownership.




 




2.             DEFINITIONS




 




The following

capitalized terms as used herein shall have the meanings specified below.  All other capitalized terms used herein,

unless expressly defined, shall have the meanings ascribed to them in the

Program.




 




(a)              “Guideline

Period” means the seven-year period commencing on either (a) January 1, 2002,

or (b) January 1st of the year in which Participation begins,

whichever is sooner.




(b)             “Guideline

Stock” means, for any Participant, (a) Common Stock registered in the name of

the Participant, or beneficially owned by the Participant, or (b) Common Stock

allocable to the Participant’s individual account under the South Carolina

Insurance Company Employees’ Profit-Sharing Savings Plan.




 




3.             CUMULATIVE GUIDELINE TARGETS




 




Participants

of the Program are required to hold shares of Guideline Stock having an

aggregate Fair Market Value equal to the Cumulative Guideline Target for such

participant as of the end of the Guideline Period, and at the end of each calendar

year thereafter.  The Cumulative

Guideline Target equals 100% of the Participant’s Base Salary.




 




4.             ANNUAL GUIDELINE TARGETS




 




Participants

are required to hold shares of the Guideline Stock having an aggregate Fair

Market Value equal to the Annual Guideline Target as of the end of each Program

Year during the Guideline Period.  For

purposes hereof, only Guideline Stock that satisfies the Holding Period shall

be considered in determining whether the Annual Guideline Target has been

satisfied.




 




The Annual

Guideline Targets for Participants are as follows:




 




	

  End of

  Program Year


  	

   


  	

  Annual Guideline Target


  
	

  First Year

  of Eligibility to Participate


  	

   


  	

  None


  
	

  1


  	

   


  	

  10% of

  Cumulative Target


  
	

  2


  	

   


  	

  25% of

  Cumulative Target


  
	

  3


  	

   


  	

  45% of

  Cumulative Target


  
	

  4


  	

   


  	

  65% of

  Cumulative Target


  
	

  5


  	

   


  	

  80% of

  Cumulative Target


  
	

  6


  	

   


  	

  100% of

  Cumulative Target


  





 




5.             AMENDMENTS AND ADJUSTMENTS




 




The Committee

reserves the right to amend or modify the Ownership Guidelines set forth herein

at any time and in whatever manner they deem appropriate, without requirement

of notice to or consent from any affected Participant.  The Committee has the discretionary

authority to make adjustments to the Ownership Guidelines as applied to

individual Participants for purposes of the Program.




 




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