ex10_25.htm


    
      

    

    EXHIBIT
10.25

     

    EMPLOYERS
MUTUAL CASUALTY COMPANY

     

    SENIOR
EXECUTIVE LONG TERM INCENTIVE PLAN

     

    The
Senior Executive Long Term Incentive Plan (LTIP) is a bonus program based on
long term Company results that incorporate the criteria and results of the
Senior Executive Compensation Bonus Program on a rolling three year basis for
calculation purposes.

    


    Purpose:

    


    1.  To
provide a motivational tool in the form of compensation to help executives focus
on long term results for specific corporate goals and objectives.

    


    2.  To
maintain a competitive advantage in terms of recruitment and retention of senior
executives.

    


    3.  To
provide a mechanism that encourages adequate notice to the Company from senior
executives regarding their retirement plans.

    


    4.  To
reward superior, long term results.

    


    Eligibility:

    


    All
members of the Policy Committee (with the exception of the President of EMC
National Life Company) will be eligible for the LTIP if they have been eligible
for the Senior Executive Compensation Bonus Program for at least three
years.  All vice presidents of Employers Mutual Casualty Company, not
covered by a separate program, will be eligible for the LTIP if they have been
eligible for the Senior Executive Compensation Bonus Program for the past three
years.  In addition, retiring senior executives will be eligible
during the year of their retirement and the next two years should bonuses be
paid.  Each LTIP bonus will be calculated according to the terms and
conditions of the Program and using each executive’s final status as an officer
and his or her base salary for the most recent year.

    


    General
LTIP Bonus Calculation

    


    The LTIP
uses the results of the latest three years Senior Executive Compensation Bonus
Program calculations, except that no minimums or maximums are applied for the
annual calculations. The results from three years of the Bonus Program are
averaged and multiplied by an adjustment factor determined by the EMCC Executive
Compensation and Stock Option Committee.

    


    
      
        
          
            	
                    Example:

                  	
                    (Year 1) 25% + (Year 2)  35% + (Year
      3)  30%

                  	
                    =
      30% X .50 (adjustment factor) = 15% X Base Salary

                  
	 
      	
                    3

                  	 
      


          

        

      

    

     

    Plan
Administration

     

    
      	
            	
              1.

            	
              An
      executive must be in the position of vice president or above a minimum of
      three years before he/she is eligible for a LTIP bonus
      payment.

            


    

    
      	
            	
              2.

            	
              An
      executive terminating employment prior to the end of a year is not
      eligible for any future LTIP payments reflecting that year’s
      results.

            



      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      	
            	
              3.

            	
              Executives
      retiring, deceased or disabled will continue eligibility based on a
      calculation using subsequent year results and based on their final status
      as an officer according to the
following:

            


    

    
      
        	
                 
      

              	
                A.

              	
                1st
      payment  X  3/3 after last full year of employment
      (Y1)

              


      

    

    
      
        	
                 
      

              	
                B.

              	
                2nd
      payment X 2/3 after year Y1 +
1

              


      

    

    
      
        	
                 
      

              	
                C.

              	
                3rd
      payment X 1/3 after year Y1 +
2

              


      

    

    
      	
            	
              4.

            	
              For
      those retired, deceased or disabled, the LTIP percentage will be applied
      to the final full year of base
salary.

            


    

    
      	
            	
              5.

            	
              If
      retirement notification is provided 360 days or more in advance, the final
      two payments will be multiplied by a factor of
  1.50.

            


    

    
      	
            	
              6.

            	
              If
      retirement notification is provided 180 days or less in advance, the final
      two payments will be multiplied by a factor of
  1.00.

            


    

    
      	
            	
              7.

            	
              For
      notifications between those two time frames, the multiplying factor will
      be prorated.

            


    

    
      	
            	
              8.

            	
              Deductions
      for federal and state income taxes, and FICA, if applicable, will be made
      from each bonus on the basis of IRS
regulations.

            


    

    
      	
            	
              9.

            	
              Amounts
      received under the LTIP may not be deferred into the Board and Executive
      Non-qualified Excess Plan due to IRS
  limitations.

            


    

    
      	
            	
              10.

            	
              The
      Executive Compensation Committee may, at its discretion, adjust the bonus
      calculation due to unusual or extenuating
  circumstances.

            


    

    
      	
            	
              11.

            	
              Final
      calculations for LTIP amounts will be made after “final” A.M. Best
      industry estimates are released in late March or early April, subject to
      Committee discretion.

            


    

    
      	
            	
              12.

            	
              Due
      to the long term nature of the LTIP, beneficiary forms will be necessary
      from each eligible executive.  Failure to submit a beneficiary
      form will result in a default payment according to the
      following:

            


    

    
      	
               
      

            	
              A.

            	
              Spouse.  The
      eligible executive’s surviving spouse, and if no surviving spouse,
      to

            


    

    
      	
               
      

            	
              B.

            	
              Descendants.  The
      eligible executive’s children (including adopted children), in equal
      shares by right of representation (one share for each surviving child and
      one share for each child who predeceases the eligible executive with
      living descendents) and if none to

            


    

    
      	
               
      

            	
              C.

            	
              Parents.  The
      eligible executive’s surviving parents, in equal shares, and if none
      to

            


    

    
      	
               
      

            	
              D.

            	
              Estate.  The
      eligible executive’s estate.

            


    

    
      	
               
      

            	
              13.

            	
              If
      there is a disagreement or misunderstanding regarding the basis for the
      bonus or in the calculation of the amounts, the decision of the Senior
      Executive Compensation and Incentive Stock Option Committee will be
      final.  The Committee may, at its discretion, choose to pay the
      bonus amount earlier than the “final” A.M. Best estimates of industry
      results if those final numbers will have little or no impact on the final
      bonus percentage.

            


    

     

    Effective
Date

     

    The
effective date of the Long Term Incentive Plan will be January 1, 2009, with the
first calculation based on the results of the Senior Executive Compensation
Bonus Plans for 2007, 2008, and 2009.  Only those executives who have
been eligible for the short term bonus plan during those full three years at the
end of 2009 will be eligible for the first payment in 2010.