Exhibit 10.15**EMPLOYMENT AND NON-COMPETITION AGREEMENT**This Employment and Non-Competition Agreement (this “Agreement”) is made this 12th day of March,2007 by and between National Interstate Corporation (“NIC”) and Alan R. Spachman (“Spachman”).Recital: As part of the orderly development of NIC’s management structure, NIC has named Spachman,who is the founder of NIC and has served as its President since 1989 and as its Chairman since2004, to the newly created post of Chief Executive Officer (“CEO”), effective January 1, 2007, withthe expectation that, while he is in that post, Spachman will devote a substantial portion of hisefforts to the transition of his duties to his eventual successor as CEO. In connection with suchtransition, this Agreement provides for Spachman’s continuing employment by NIC for up to two yearsafter the appointment of a successor CEO.In consideration of the mutual covenants set forth in this Agreement, NIC and Spachman agree asfollows:1. Employment Term. During the period specified in this Section 1, NIC will employSpachman, and Spachman will be employed by NIC, on the terms and subject to the conditions setforth in this Agreement. The term of Spachman’s employment under this Agreement (the “Term”) willbegin as of January 1, 2007 (the “Effective Date”), and, subject to prior termination as providedin Section 15, will continue through the date that is the first to occur of (a) the secondanniversary of the date (the “Succession Date”) on which an individual other than Spachman isappointed CEO of NIC by the Board, or (b) December 31, 2009; such period shall be referred to inthis Agreement as the “Scheduled Term.” The Term will be divided into two portions, the first ofwhich (the “CEO Portion”) will run from January 1, 2007 through the Succession Date and the secondof which (the “Post-CEO Portion”) will run from the Succession Date through the end of the Term.2. Duties and Responsibilities.(a) During the CEO Portion of the Term, Spachman will serve as the Chief Executive Officer ofNIC, in which capacity he will perform such duties and have such responsibilities, consistentwith his status as CEO, as may be assigned to him by the Board of Directors of NIC from time totime, primarily focusing on strategic opportunities, public company responsibilities, and theimplementation of succession planning through development of a successor to himself as CEO.During the CEO Portion of the Term, Spachman will devote such time to the business of and to thefurtherance of the purposes and objectives of NIC as may be necessary to perform the duties andfulfill the responsibilities mutually agreed upon from time to time as contemplated above.(b) During the Post-CEO Portion of the Term, Spachman will serve as senior advisor, in whichcapacity he will perform such duties and have such responsibilities as may be mutually agreedupon between Spachman and the Board of Directors of NIC from time to time. During the Post-CEOPortion of the Term, Spachman will devote such time to the business of and to the furtherance ofthe purposes and objectives of NIC as may be necessary to perform the duties and fulfill theresponsibilities mutually agreed upon from time to time as contemplated above, and will beentitled to engage in other remunerative activities, including part time employment by anotheremployer. During the Term and until the earlier to occur of (i) an executive of NIC obtainingappropriate licenses in states necessary to maintain continuity of the business of NIC and itssubsidiaries or (ii) December 31, 2007, Spachman will serve certain subsidiaries of NIC in suchexecutive capacities as may be mutually agreed upon from time to time by Spachman and therespective Boards of Directors of such NIC subsidiaries.3. Cash Compensation. Throughout the Term, NIC will pay to Spachman base salary at therate of $330,000 per year together with a guaranteed bonus equal to 100% of base salary. Thecombined total of
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base salary and 100% bonus (aggregating $660,000 per year) will be paid in equalinstallments, subject to applicable withholding and in accordance with NIC’s normal payrollpractice (with a partial installment due at the end of the Term if the end of the Term does notcoincide with the end of a payroll period).4. Pre-2007 Bonuses. In light of the guaranteed bonus to be paid to Spachman during theTerm, he will not be eligible to participate in NIC’s Management Bonus Plan for 2007 or any lateryear and he will not be entitled to any cash payment for any paid time off accruing after December31, 2006. For purposes of determining Spachman’s right to bonuses with respect to 2006 and anyearlier year, Spachman will be deemed to be in the active employ of NIC both throughout the Termand, unless Spachman’s employment under this Agreement is terminated for Cause pursuant to Section15(c), indefinitely thereafter. Accordingly, any bonus payments attributable to 2006 or earlieryear results that would otherwise be paid to Spachman in 2007 or any later year (with the originalrequirement that he be in the active employ of NIC at the scheduled time of the bonus payment) willbe paid to Spachman or to his estate (subject only to the requirement that his employment underthis Agreement not have been terminated for Cause before the scheduled time of the bonus payment).Spachman will be entitled to payment, in 2007, for all accrued but unused paid time off that he hasaccrued through December 31, 2006, but will not be entitled to any cash payment for any paid timeoff accruing after December 31, 2006.5. Stock Options. Spachman holds options, granted under NIC’s Long Term Incentive Plan, tobuy 80,000 Common Shares of NIC, which options are scheduled to vest at the rate of 16,000 per yearon January 1 of each year from 2006 through 2010. (32,000 shares vested as of January 1, 2007.)So long as Spachman is employed under this Agreement, these options will continue to vest inaccordance with the previously established schedule. Upon termination of his employment under thisAgreement for any reason other than termination for Cause pursuant to Section 15(c), all thenunvested options will become fully vested and exercisable as of the date of that termination andSpachman (or his legal representative) will have a period of 90 days following that terminationwithin which to exercise any and all of those option that then remain unexercised. TheCompensation Committee of NIC’s Board of Directors will confirm the approval of these provisions ina letter to be delivered to Spachman not later than 15 days after execution of this Agreement byboth parties.6. Health, Life, and Disability Coverage.(a) NIC will continue to provide to Spachman, throughout the Term, coverage under NIC’s healthinsurance benefits plans, including the Flexible Spending Account program, subject to normaldeductibles, premiums, and co-payments in effect from time to time; except that if Spachmanbecomes eligible for substantially equivalent coverage at substantially equivalent cost fromanother employer at any time during the Post-CEO Portion of the Term, Spachman’s right toparticipate in NIC’s health insurance benefits plans will terminate not later than 90 days afterSpachman becomes eligible for that substantially equivalent coverage. If, upon termination ofhis employment with NIC, Spachman is eligible for continued benefits under COBRA, NIC willprovide him with written notification under separate cover.(b) NIC will continue to provide to Spachman, throughout the Term, the maximum levels ofcoverage available under NIC’s Basic Life Insurance/Accidental Death and Dismemberment Plan.(c) NIC will continue to provide to Spachman, throughout the Term, group short term and longterm disability coverage on substantially the same basis as was provided to him by NIC during2006, except that NIC will not continue coverage to Spachman under the Company’s supplementalLTD program for officers after the next normal expiration date for the policy underlying thatprogram that occurs after January 1, 2007.7. Savings and Profit Sharing Plan. Spachman will continue to be eligible throughout theTerm to participate in NIC’s Savings and Profit Sharing Plan with payroll deductions and ultimatedistributions to
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be made in accordance with the provisions of that plan. Spachman will be eligiblefor NIC 401(k) profit sharing contributions on the same basis as other senior executive officersthroughout the Term.8. Auto, Perquisites, and Office. Throughout the Term, Spachman will be entitled tocontinued use of an automobile (under NIC’s Company Auto Program for Senior Officers), to allstandard officer perquisites, and to reimbursement for dues and fees at one country club, all atsubstantially the same levels as in effect for Spachman during 2006. Throughout the CEO Portion ofthe Term, Spachman will be entitled to the continued use of his current office, secretarialservices, and computer, telephone, and related support. Throughout the Post-CEO Portion of theTerm, Spachman will be entitled to the use of an appropriate office together with secretarialservices and computer, telephone, and related support, comparable to his current office and relatedsupport.9. Reimbursement for Expenses. Subject to such limitations as may be reasonably imposed byNIC from time to time, NIC will reimburse Spachman for reasonable, ordinary, and necessary businessexpenses incurred by him in furtherance of NIC’s business, provided Spachman accounts to NICtherefore in a manner sufficient to substantiate deductions with respect to those expenses by NICfor federal income tax purposes.10. Confidential Information. Notwithstanding any other provision of this Agreement, bothduring and after Spachman’s employment with NIC, Spachman will maintain the confidentiality ofConfidential Information and will refrain from using such Confidential Information (except inconnection with Spachman’s job responsibilities) and disclosing it to anyone other than NIC, itsemployees, and other entities that have a business relationship with NIC and a need for suchConfidential Information. For purposes of this Agreement, “Confidential Information” isinformation of NIC that Spachman would not have acquired but for his employment by NIC and that NICendeavors to keep confidential, including without limitation, and regardless of whether suchinformation is in a tangible medium of expression, accounting information, agency information,broker-marketing information, claims information, customer service information, employeeinformation, financial information, information systems information, underwriting information, andany information provided by a third party to NIC in confidence. At the termination of thisAgreement or otherwise upon NIC’s demand, Spachman will provide to NIC all records containingConfidential Information as well as any copies of it, including handwritten notes made or derivedfrom Confidential Information or records, all of which are the property of NIC.11. Activity Restraints. Subject to the exceptions listed below, Spachman agrees that hewill not, during the Scheduled Term or at any time within 12 months after the Scheduled Term,whether as an individual for his own account, or as an employee, officer, director, significantshareholder, partner, member, agent, independent contractor, or consultant of any person, firm,corporation, or other entity engage in the following activities:(a) Enter into or engage in any business that competes, directly or indirectly, with the NIC;(b) Have any contact, including discussions, negotiations, agreements, or understandings, withany insured, potential insured, agent, broker, or other entity of NIC with which NIC haddiscussions, negotiations, agreements or understandings with at any time during Spachman’semployment relating in any manner to competing insurance products that are identical to,substantially the same as, or an adequate substitute for any insurance products of NIC and thatare, or could reasonably be anticipated to be, marketed or distributed in such a manner and insuch a geographic area as to actually compete with such insurance products of NIC.Nothing in this Agreement shall be construed to prohibit Spachman from engaging in property andcasualty insurance business or businesses that do not conflict, directly or indirectly, with NIC’soperationsor initiatives; provided that, before becoming involved in any type of property and casualtyinsurance business, Spachman must give at least 60 days prior notice of his intention to becomeinvolved with that
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business to NIC management and must give NIC a reasonable opportunity toconsider possible relationships between NIC and the new Spachman venture. Any proposed terms willbe negotiated at arms length between members of senior management of NIC and Spachman, and willthen be subject to approval by a special committee of the Board of Directors that has beenappointed for this purpose (currently consisting of Directors Consolino, Jensen, Larson andSchiavone). Spachman and NIC agree that Spachman engaging in low-value dwelling property insurancewill not conflict, directly or indirectly, with NIC’s operations or initiatives.Attached as Exhibit A is a term sheet outlining the essential terms of an agreement or agreementsto be entered into between Spachman and NIC with respect to Spachman engaging in low-value dwellingproperty insurance in the State of Texas; such terms have been approved by the special committee ofthe board, as well as the Audit Committee pursuant to its Charter responsibilities. NIC andSpachman will enter into a formal agreement or agreements capturing these terms and other customaryterms and conditions, which will be disclosed upon execution as required by applicable law.12. Hiring or Soliciting NIC Employees. Without the prior written consent of NIC’s Boardof Directors, during the Scheduled Term or at any time within 12 months after the ScheduledTerm, Spachman will not, directly or indirectly, hire or solicit for hire any of NIC’s employees towork for Spachman or any entity with which Spachman is associated.13. Remedies. Spachman acknowledges that:(a) The promises in Sections 10, 11 and 12 of this Agreement are reasonably necessary to protectthe goodwill, trade secrets, and other business interests of NIC and will not cause Spachmanundue hardship.(b) Any breach of these promises will cause NIC immediate irreparable harm for which injunctiverelief, including an ex parte temporary restraining order, may be necessary. Injunctive reliefwill not preclude NIC from receiving any other relief to which it might be entitled.(c) The promises in Sections 10, 11 and 12 of this Agreement are of the essence of thisAgreement. They must be construed as independent of any other provision of this Agreement andthe existence of any claim or cause of action of Spachman against NIC, whether predicated onthis Agreement or otherwise, will not constitute a defense to the enforcement by NIC of thesepromises.14. Construction of Agreement. Spachman’s promises in Sections 10, 11, and 12 of thisAgreement are separate and independent. If any of these promises is declared invalid orunenforceable by any court, Spachman’s remaining promises and obligations shall remain in fullforce and effect. If any of the provisions contained in Sections 10, 11 and 12 of this Agreementare held to be unenforceable due to the duration or other aspect of the scope of those provisions,the parties agree that a court has the power to and should reduce the duration or scope of thatprovision and enforce the provision in its reduced form.     Sections 10 through 13 shall survive termination of this Agreement or termination ofemployment before the end of the Scheduled Term.15. Termination of Employment.(a) At Expiration of Term. If employment is not earlier terminated, Spachman’semployment under this Agreement will terminate at the close of business on the last day of theScheduled Term that is specified in Section 1.(b) Death or Disability. Spachman’s employment under this Agreement will terminateimmediately upon Spachman’s death. NIC may terminate Spachman’s employment hereunderimmediately upon
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giving notice of termination if Spachman is disabled, by reason of physical ormental impairment, to such an extent that he has been unable to substantially perform his dutiesunder this Agreement for an aggregate of 90 days (whether business or non-business days andwhether or not consecutive) during any period of twelve consecutive calendar months.(c) For Cause. NIC may terminate Spachman’s employment under this Agreement for “Cause”if, before the end of the Scheduled Term:(i) Spachman is convicted of a felony (other than felonious operation of a motor vehicle);(ii) Spachman commits an act or series of acts of dishonesty or willful misconduct that is,or could be materially injurious to NIC in the course of his employment that are materiallyinimical to the best interests of NIC and, if the act or acts are capable of being cured,Spachman fails to cure or take all reasonable steps to cure within 30 days of notice fromthe Board of Directors to Spachman;(iii) Spachman continues to violate his obligations under either or both of Sections 11 and12 of this Agreement after the Board of Directors has advised him in writing to cease thoseactivities; or(iv) Other than for disability, Spachman abandons or consistently fails to attempt toperform his duties and responsibilities under this Agreement at any time during the Term, ineither event, for 30 consecutive days after Spachman’s receipt of written notice from theBoard of Directors.(d) For Good Reason. Spachman may terminate his employment under this Agreement for“Good Reason” if, before the end of the Scheduled Term:(i) NIC materially breaches its obligations under this Agreement and, if the breach iscurable, NIC fails to cure or take all reasonable steps to cure within 30 days of noticefrom Spachman to the Board of Directors;(ii) NIC undergoes a Change in Control (as that term is defined in NIC’s Long Term IncentivePlan as in effect on January 1, 2007); or(iii) NIC appoints an individual other than Spachman to serve as CEO and the appointment isnot made by supermajority action of the Board of Directors of NIC. For purposes of thisAgreement, a supermajority action of the Board of Directors of NIC is an action that isaffirmatively approved by members of the Board who comprise at least 75% of the fullauthorized number of members of the Board at the time the action is taken.16. Payments Upon Termination.(a) Upon Termination Without Cause or For Good Reason. If Spachman’s employment underthis Agreement is terminated before the end of the Scheduled Term by NIC without Cause or bySpachman for Good Reason, NIC will pay and provide to Spachman all compensation and benefits towhich he would be entitled under this Agreement had he lived and continued in the employ of NICunder this Agreement throughout the end of the Scheduled Term.(b) Upon Death or Disability. In the event of Spachman’s disability (as described inSection 15(b) or death, but only if he is not then in breach of Sections 10 and 11, any paymentsremaining under Sections 3 and 4 will be made to him in the case of disability or his estate inthe event of his death.The provisions of Section 5 will remain in effect in the event of disability or death. Paymentswill be made on the same schedule called for in those Sections.
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(c) Upon Any Other Termination*.*Upon any termination of Spachman’s employment beforethe end of the Scheduled Term other than a termination (i) by NIC without Cause, (ii) bySpachman for Good Reason, or (iii) due to Spachman’s death or disability, NIC will pay toSpachman all unpaid cash compensation accrued through the effective date of termination but willnot be obligated to make any further payment or to provide any further benefit to Spachman underthis Agreement.17. Arbitration.(a) Procedures. Except as otherwise provided in Section 17(d) with respect toinjunctive relief, any controversy, claim, or dispute arising out of or relating to thisAgreement, or the breach of any provision of this Agreement or relating to Spachman’semployment, will be submitted to binding arbitration in Cleveland, Ohio in accordance with theEmployment Arbitration Rules of the American Arbitration Association. The arbitration will beconducted by a single arbitrator selected from the list of arbitrators maintained by theAmerican Arbitration Association under its Employment Program or any successor program asfollows: (i) the American Arbitration Association (at the request of either or both parties)will provide a list of the names of seven disinterested potential arbitrators, (ii) NIC willdelete one name from the list, (iii) Spachman will delete one name from the shortened list, (iv)the procedure in (ii) and (iii) will be repeated alternately until only the name of onepotential arbitrator remains on the list and that potential arbitrator will be the arbitrator.If either NIC or Spachman fails to cooperate reasonably in the selection of a single arbitrator,the other of them may request that the American Arbitration Association name as the arbitratorany one of the potential arbitrators (as selected by the party making the request) stillremaining on the original list of seven at the time of the failure to cooperate. The decisionby the arbitrator will be final and binding on the parties to this Agreement. Judgment upon thedecision rendered by the arbitrator may be entered in any court having appropriate jurisdiction.(b) Fees and Expenses. The expenses of the arbitration and any related proceedings ofthe type referred to in Section 17(d) (other than the legal fees and expenses incurred bySpachman in connection with the arbitration and related proceedings) will be paid by NIC. Thereasonable legal fees and expenses incurred by Spachman in connection with the arbitration andrelated proceedings will also be paid by NIC unless the arbitrator rules that Spachman had noreasonable grounds for the position propounded by him in the arbitration (which determinationneed not be made simply because Spachman fails to succeed in the arbitration and relatedproceedings).(c) Interest. If the arbitrator determines that NIC has failed to timely pay any amountor provide any benefit to Spachman, Spachman will be entitled to receive, in addition to thepayment or benefit itself, interest on the unpaid amount or on the value of the benefit notprovided at a rate to be determined by the arbitrator from the date on which the payment orbenefit should have been made or provided to the date on which the payment or benefit is made orprovided.(d) Injunctive Relief. Any party to a dispute, claim, or controversy described inSection 17(a) will be entitled to apply to any court of competent jurisdiction for injunctiverelief at any time before the arbitrator has been appointed and has affirmatively accepted theobligation to determine the extent to which injunctive relief should be continued or granted.Any injunctive relief granted by a court of competent jurisdiction will be subject tomodification or termination by the arbitrator once the arbitrator has affirmatively acceptedthat obligation.18. Notices. Any notice, request or instruction to be given hereunder by either party tothe other will be in writing and will be deemed to have been given (a) when it is delivered inperson to Spachman or to the individual to whose attention notices to NIC are to be given, as thecase may be, or (b) the first businessday after it is sent by nationally recognized overnight courier, addressed as provided below, or tosuch other addresses as may be designated by written notice to the other party:
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       If to NIC: National Interstate Corporation    3250 Interstate Drive    Richfield, OH 44286    Attention: General Counsel       If to Spachman: Alan R. Spachman    c/o Glenmede Trust Company    25823 Science Park Drive, Suite 110    Beachwood, OH 44122    Attention: Frank Harding, Managing Director19. Assignment and Binding Effect. The obligations of the parties hereunder may not beassigned or transferred, except upon the written consent of the other party hereto; except that NICmay assign the benefit of this Agreement to any of its affiliates. This Agreement will be bindingupon and inure to the benefit of Spachman and NIC and their permitted assigns.20. Entire Agreement. This Agreement supersedes all prior agreements between the partiesrelating to the subject matter discussed herein, specifically including the Confidentiality andNon-Competition Agreement between Spachman and NIC dated January 4, 1995, and constitutes theentire Agreement between the parties as respects the rights and duties of the parties to thisAgreement with respect to that subject matter. There are no other promises or obligations relatingto those rights and duties except as contained in this Agreement.21. Governing Law, Venue. The provisions of this Agreement will be governed by andconstrued in accordance with the laws of the State of Ohio applicable to contracts made in and tobe performed exclusively within that State, notwithstanding any conflict of law provision to thecontrary. Subject to the mandatory arbitration provisions of Section 17, the parties consent tovenue and personal jurisdiction over them in the courts of the State of Ohio and federal courtssitting in the State of Ohio, for purposes of construing and enforcing this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.      NATIONAL INTERSTATE CORPORATION