PMA CAPITAL CORPORATION
EXECUTIVEDEFERRED COMPENSATION PLAN(As Amended and
Restated Effective January 1, 2000)

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TABLE OF CONTENTS

`PAGE

PREAMBLE..........................................................................................................1

ARTICLE I - DEFINITIONS...........................................................................................1
   1.1    Administrator...........................................................................................1
   1.2    Affiliated Employer.....................................................................................1
   1.3    Annual Distribution Period..............................................................................1
   1.4    Beneficiary.............................................................................................2
   1.5    Board of Directors......................................................................................2
   1.6    Change of Control.......................................................................................2
   1.7    Code....................................................................................................2
   1.8    Compensation............................................................................................2
   1.9    Credit..................................................................................................2
   1.10   Deferral Agreement......................................................................................2
   1.11   Deferred Benefit Account................................................................................2
   1.12   Determination Date......................................................................................2
   1.13   Early Retirement Date...................................................................................2
   1.14   Education Account.......................................................................................2
   1.15   Eligible Dependent......................................................................................3
   1.16   Eligible Employee.......................................................................................3
   1.17   Employment Termination Date.............................................................................3
   1.18   Enrollment Period.......................................................................................3
   1.19   ERISA...................................................................................................3
   1.20   Executive Deferral Contribution.........................................................................3
   1.21   Fixed Period Benefit Account............................................................................3
   1.22   Investment Fund or Fund.................................................................................3
   1.23   Matching Contribution...................................................................................3
   1.24   Normal Retirement Date..................................................................................3
   1.25   Participant.............................................................................................3
   1.26   Participating Company...................................................................................3
   1.27   Plan....................................................................................................3
   1.28   Plan Sponsor............................................................................................4
   1.29   Plan Year...............................................................................................4
   1.30   Restatement Effective Date..............................................................................4
   1.31   Retirement Account......................................................................................4
   1.32   Unforeseen Financial Emergency..........................................................................4
   1.33   Vested..................................................................................................4

ARTICLE II - PARTICIPATION........................................................................................4
   2.1    Commencement of Participation...........................................................................4
   2.2    Procedure for and Effect of Admission...................................................................4

ARTICLE III - PLAN CONTRIBUTIONS..................................................................................4
   3.1    Executive Deferral Contribution.........................................................................4
   3.2    Rules Governing Executive Deferral Contributions........................................................5
   3.3    No Matching Contribution................................................................................5

ARTICLE IV - PARTICIPANTS' ACCOUNTS...............................................................................5
   4.1    Establishment of Accounts...............................................................................5
   4.2    Executive Benefit Allocation............................................................................5
   4.3    Irrevocable Allocation..................................................................................5
   4.4    Allocation among Investment Funds.......................................................................6
   4.5    Administration of Investments...........................................................................6
   4.6    Valuation of Deferred Benefit Accounts..................................................................6
   4.7    Suballocation within Deferred Benefit Accounts..........................................................6
   4.8    Investment Obligation of the Plan Sponsor...............................................................6

ARTICLE V - VESTING...............................................................................................7
   5.1    Vesting Schedule........................................................................................7

ARTICLE VI - BENEFITS.............................................................................................7
   6.1    Normal Payment of Benefits..............................................................................7
   6.2    Special Payment of Benefits.............................................................................9
   6.3    Reduction of Amount of Benefit Payment in Certain Cases.................................................9

ARTICLE VII - ADMINISTRATION OF THE PLAN.........................................................................10
   7.1    Administrator..........................................................................................10
   7.2    Committee Action.......................................................................................10
   7.3    Powers and Duties of the Administrator.................................................................11
   7.4    Decisions of Administrator.............................................................................12
   7.5    Expenses...............................................................................................12
   7.6    Eligibility to Participate.............................................................................12
   7.7    Insurance and Indemnification for Liability............................................................12
   7.8    Agent for Service of Legal Process.....................................................................12
   7.9    Delegation of Responsibility...........................................................................12
   7.10   Claims Procedure.......................................................................................12

ARTICLE VIII - AMENDMENT AND TERMINATION.........................................................................14
   8.1    Amendment or Termination...............................................................................14

ARTICLE IX - MISCELLANEOUS.......................................................................................14
   9.1    Funding................................................................................................14
   9.2    Status of Employment...................................................................................14
   9.2    Payments to Minors and Incompetents....................................................................14
   9.4    Inalienability of Benefits.............................................................................14
   9.5    Governing Law..........................................................................................15
   9.6    Severability...........................................................................................15
   9.7    Required Information to Administrator..................................................................15
   9.8    Income and Payroll Tax Withholding.....................................................................15
   9.9    Application of Plan....................................................................................15
   9.10   No Effect on Other Benefits............................................................................15
   9.11   Inurement..............................................................................................15
   9.12   Notice.................................................................................................16
   9.13   Captions...............................................................................................16
   9.14   Acceleration of Payments...............................................................................16
   9.15   Reporting and Disclosure Requirements..................................................................16
   9.16   Gender and Number......................................................................................16

ARTICLE X - ADOPTION BY AFFILIATED EMPLOYERS.....................................................................16
   10.1   Adoption of Plan.......................................................................................16
   10.2   Withdrawal from Plan...................................................................................17
   10.3   Application of Withdrawal Provisions...................................................................17
   10.4   Plan Sponsor Appointed Agent of Participating Companies................................................17

APPENDIX A - LIST OF PARTICIPATING COMPANIES.....................................................................18

PLAN EXHIBIT A - PLAN ADOPTION AGREEMENT.........................................................................19

PLAN ADOPTION AGREEMENT - PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE COMPANY

PLAN ADOPTION AGREEMENT - PMA CAPITAL INSURANCE COMPANY

PLAN ADOPTION AGREEMENT - CALIBER ONE INDEMNITY COMPANY

PLAN ADOPTION AGREEMENT - CALIBER ONE MANAGEMENT COMPANY, INC.

PLAN ADOPTION AGREEMENT - PMA MANAGEMENT CORP.

PLAN ADOPTION AGREEMENT - PMA RE MANAGEMENT COMPANY`

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PMA CAPITAL CORPORATION
EXECUTIVEDEFERRED COMPENSATION PLAN(As Amended and Restated Effective January 1, 2000)

PREAMBLE

WHEREAS,
PMA CAPITAL CORPORATION, a Pennsylvania corporation (the Plan Sponsor)
(then known as the Pennsylvania Manufacturers Corporation) and certain of its affiliated
employers adopted the PMA CAPITAL CORPORATION EXECUTIVE DEFERRED COMPENSATION PLAN
(the Plan) (then known as the PMC Executive Deferred Compensation Plan)
originally effective February 1, 1988, to permit their eligible executives to defer
receipt of a portion of their annual compensation, provided such executives are members of
a select group of management and highly compensated employees within the meaning of
Section 201(2) of the Employee Retirement Income Security Act of 1974, as amended
(ERISA); and

WHEREAS,
the Plan Sponsors Board of Directors has reserved the right, in Article VIII of the
Plan, to amend the Plan, provided that no amendment may reduce a participants
benefit accrued as of the date of the amendment and further provided that written notice
of such amendment is given to each participant and the beneficiary of any deceased
participant; and

WHEREAS,
the Plan has been amended and restated several times, most recently effective January 1
1999; and

WHEREAS,the Plan Sponsor desires to provide that the termination of a participants
employment by a Participating Company before his/her normal retirement date shall not
constitute a participants Employment Termination Date for purposes of Article VI of
the Plan if such participant is immediately thereafter employed by PMA Foundation or by
one of its affiliates;

NOW
THEREFORE, the Plan Sponsor hereby amends and restates the Plan, effective January
1, 2000, as follows:

ARTICLE I - DEFINITIONS

The
following words and phrases shall have the following  meanings  unless a different
 meaning is clearly required by the context:

1.1
Administrator means the committee (hereinafter referred to as Committee)
appointed by the President of the Plan Sponsor to serve as the Administrator of the Plan.
If no such committee is appointed, the Plan Sponsor shall be the Administrator of the
Plan.

1.2
Affiliated Employer means a member of a group of employers, of which the Plan Sponsor is
a member and which group constitutes:

| | (a)
          A controlled group of corporations (as defined in Section 414(b) of the Code);
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| | (b)
          Trades or businesses (whether or not incorporated) which are under common
          control (as defined in Section 414(c) of the Code);
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| | (c)
          Trades or businesses (whether or not incorporated) which constitute an
          affiliated service group (as defined in Section 414(m) of the Code); or
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| | (d)
          Any other entity required to be aggregated with the Plan Sponsor pursuant to
          Section 414(o) of the Code and the Treasury regulations thereunder.
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1.3
Annual Distribution Period means the first 60 days of a Plan Year.

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1.4
Beneficiary means the individual, trust or other entity, designated in writing by a
Participant, on a form filed with the Administrator, to receive payments in the event of
the Participants death. In the event there is no designated beneficiary under the
Plan, the beneficiary shall be (a) the Participants surviving spouse, or (b) if
there is no surviving spouse, the Participants beneficiary under the Plan Sponsors
group term life insurance program, or (c) if neither (a) nor (b) is applicable, the
executors and/or administrators of the Participants estate.

1.5
Board of Directors means the Board of Directors of the Plan Sponsor, as from time to time
constituted, or any committee thereof which is authorized to act on behalf of the Board
of Directors.

1.6
Change of Control means a change of control of the Plan Sponsor of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A promulgated under the
Securities Exchange Act of 1934, as amended (the Exchange Act), or Item 1(a)
of a Current Report on Form 8-K or any successor rule, whether or not the Plan Sponsor is
then subject to such reporting requirements; provided that, without limitation, such a
Change of Control shall be deemed to have occurred if:

| | (a)
          Any person (as such term is used in Sections 13(d) and 14(d) of the
          Exchange Act) is or first becomes the beneficial owner (as
          determined for purposes of Regulation 13D-G under the Exchange Act as currently
          in effect), directly or indirectly, in a transaction or series of transactions,
          of securities of the Plan Sponsor representing more than 50% of the voting
power           of the Plan Sponsors voting capital stock (the Voting Stock);
          or
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| | (b)
          The consummation of a merger, or other business combination after which the
          holders of the Voting Stock do not collectively own 50% or more of the voting
          capital stock of the entity surviving such merger or other business
combination,           or the sale, lease, exchange or other transfer in a transaction or
series of           transactions of all or substantially all of the assets of the Plan
Sponsor; or
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| | (c)
          At any time individuals who were either nominated for election by the Plan
          Sponsors Board of Directors or were elected by the Plan Sponsors
          Board of Directors cease for any reason to constitute at least a majority of
the           Plan Sponsors Board of Directors.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

1.7
Code means the Internal Revenue Code of 1986, as amended. Reference to a specific Section
of the Code shall include such Section, any valid regulation promulgated thereunder, and
any comparable provision of any future legislation amending, supplementing or superseding
such Section.

1.8
Compensation means a Participants salary and any incentive pay, before reduction for
employee contributions under this or any other nonqualified savings plan, a savings plan
qualified under Section 401(k) of the Code or a cafeteria plan qualified under Section
125 of the Code and before reduction for qualified transportation fringes described in
Prop. Treas. Reg. § 1.132-9, Q and A-11 etseq.

1.9
Credit means additions to a Deferred Benefit Account.

1.10
Deferral Agreement means a written agreement between a Participant and the Participating
Company that employs him/her, whereby the Participant agrees to defer a portion of
his/her Compensation and the Participating Company agrees to provide benefits under the
Plan.

1.11
Deferred Benefit Account means a bookkeeping account that is credited with a Participants
Executive Deferral Contributions and, for Plan Years before January 1, 1999, Matching
Contributions.

1.12
Determination Date means March 31, June 30, September 30 and December 31 of each Plan
Year.

1.13
Early Retirement Date means Early Retirement Date as such term is defined in
the Pension Plan or in the PMA Foundation Pension Plan, as applicable.

1.14
Education Account means a Deferred Benefit Account established for an Eligible Dependent
of a Participant pursuant to Section 4.1.

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1.15
Eligible Dependent means a dependent of a Participant for federal income tax purposes who
is less than 16 years old at the time that an Education Account is first established for
him/her hereunder. An Eligible Dependent for whom an Education Account is established
shall remain an Eligible Dependent until he/she attains age 18.

1.16
Eligible Employee means an officer of a Participating Company, provided such officer is a
member of a select group of management and highly compensated employees within the
meaning of Section 201(2) of ERISA.

1.17
Employment Termination Date means the date on which the Participants status as an
employee of any Participating Company and, if such Participant terminates employment with
the Participating Companies before his/her Normal Retirement Date and is immediately
thereafter employed by PMA Foundation or one of its affiliates, the Participants
Employment Termination Date means, solely for purposes of Article VI, the date on which
the Participants status as an employee of PMA Foundation or any of its affiliates
terminates. The intent of the foregoing is that, if a Participant terminates employment
with the Participating Companies before his/her Normal Retirement Date and is immediately
thereafter employed by PMA Foundation or one of its affiliates, such termination shall
not constitute such Participants Employment Termination Date for purposes of
Article VI but rather the termination of such Participants employment with PMA
Foundation and its affiliates shall constitute such Participants Employment
Termination Date. However, if such Participants employment with the Participating
Companies terminates on or after his/her Normal Retirement Date, his/her termination of
employment with the Participating Companies shall constitute his/her Employment
Termination Date for purposes of Article VI even if such Participant is immediately
thereafter employed by PMA Foundation or one of its affiliates.

1.18
Enrollment Period means, for a calendar year, the 60 day period ending on the December
14th immediately preceding such calendar year.

1.19
ERISA means the Employee Retirement Income Security Act of 1974, as amended. Reference to
a specific Section of ERISA shall include such Section, any valid regulation promulgated
thereunder, and any comparable provision of any future legislation amending,
supplementing or superseding such Section.

1.20
Executive Deferral Contribution means the Plan contribution described in Section 3.1.

1.21
Fixed Period Benefit Account means a Deferred Benefit Account established pursuant
to Section 4.1.

1.22
Investment Fundor Fund means any of the mutual funds which comprise The Vanguard Group of
Investment Companies, other than a fund offered only to participants in tax-qualified
retirement plans or a tax-advantaged fund except as otherwise restricted by the
Administrator.

1.23
Matching Contribution means a Participating Companys contribution to the Plan for a
Plan Year before 1999.

1.24
Normal Retirement Date means Normal Retirement Date as such term is defined
in the Pension Plan or in the PMA Foundation Pension Plan, as applicable.

1.25
Participant means an Eligible Employee who has met the conditions for participation
contained in Article II. An individual who ceases to be an Eligible Employee shall
nonetheless remain a Participant for purposes of benefit payments only, until all amounts
due him/her under the Plan have been paid.

1.26
Participating Company means the Plan Sponsor and each of its Affiliated Employers which,
upon the approval of the Board of Directors, has agreed to participate in this Plan in
accordance with the provisions of Article X. Each Participating Company is listed on
Appendix A.

1.27
Plan means the PMA CAPITAL CORPORATION EXECUTIVE DEFERRED COMPENSATION PLAN, as set forth
in this document and as it may be amended from time to time.

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1.28
Plan Sponsor means PMA Capital Corporation, a Pennsylvania corporation.

1.29
Plan Year means the calendar year.

1.30
Restatement Effective Date means January 1, 2000. The original effective date of
the Plan was February 1, 1988.

1.31
Retirement Account means a Deferred Benefit Account established pursuant to Section
4.1.

1.32
Unforeseen Financial Emergency means a Participants severe financial hardship due
to an unforeseeable emergency resulting from a sudden and unexpected illness or accident
of the Participant, or, a sudden and unexpected illness or accident of a dependent (as
defined by Section 152(a) of the Code) of the Participant, or loss of the Participants
property due to casualty, or other similar and extraordinary unforeseeable circumstances
arising as a result of events beyond the control of the Participant. A need to send the
Participants child to college or a desire to purchase a home is not an
unforeseeable emergency. No Unforeseen Financial Emergency shall be deemed to exist to
the extent that the financial hardship is or may be relieved (a) through reimbursement or
compensation by insurance or otherwise, (b) by borrowing from commercial sources on
reasonable commercial terms to the extent that this borrowing would not itself cause a
severe financial hardship, (c) by cessation of deferrals under the Plan, or (d) by
liquidation of the Participants other assets (including assets of the Participants
spouse and minor children that are reasonably available to the Participant) to the extent
that this liquidation would not itself cause severe financial hardship. For the purposes
of the preceding sentence, the Participants resources shall be deemed to include
those assets of his or her spouse and minor children that are reasonably available to the
Participant; however, property held for the Participants child under an irrevocable
trust or under a Uniform Gifts to Minors Act custodianship or Uniform Transfers to Minors
Act custodianship shall not be treated as a resource of the Participant. The
Administrator shall determine whether the circumstances of the Participant constitute an
unforeseeable emergency and thus an Unforeseen Financial Emergency within the meaning of
this Section. Following a uniform procedure, the Administrators determination shall
consider any facts or conditions deemed necessary or advisable by the Administrator, and
the Participant shall be required to submit any evidence of the Participants
circumstances that the Administrator requires. The determination as to whether the
Participants circumstances are a case of an Unforeseen Financial Emergency shall be
based on the facts of each case; provided however, that all determinations as to an
Unforeseen Financial Emergency shall be uniformly and consistently made according to the
provisions of this Section for all Participants in similar circumstances.

1.33
Vested means the balance in a Participants Deferred Benefit Accounts to which the
Participant has a nonforfeitable right, as determined under Section 5.1.

ARTICLE II - PARTICIPATION

2.1
Commencement of Participation. Each employee who is a Participant in the Plan on January
1, 2000, shall remain a Participant. Each other employee shall become eligible to
participate in the Plan when he/she becomes an Eligible Employee.

2.2
Procedure for and Effect of Admission. An Eligible Employee shall become a Participant
once he/she has completed such forms and provided such data as are reasonably required by
the Administrator. By becoming a Participant, an Eligible Employee shall for all purposes
be deemed conclusively to have assented to the provisions of this Plan and all amendments
hereto.

ARTICLE III - PLAN
CONTRIBUTIONS

3.1
Executive Deferral Contribution. Subject to the provisions of Section 3.2, a Participant
may authorize the Participating Company that employs him/her to reduce his/her
Compensation by any fixed dollar amount and to have a corresponding amount credited to
his/her Deferred Benefit Accounts, in accordance with Section 4.2. Such deferral election
shall be made prior to the date on which the Participant performs services with respect
to which the Compensation is earned. A Participant may make a separate election to reduce
the amount of incentive pay paid to him/her by any percent of such incentive pay awarded.

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3.2
Rules Governing Executive Deferral Contributions.

| | (a)
          The minimum amount of salary that a Participant may elect to defer for a Plan
          Year is $1,000.
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| | (b)
          A Participant may elect any Annual Distribution Period with respect to a Fixed
          Period Benefit Account, which is at least twenty-four months after the
          Enrollment Period in which the Annual Distribution Period is elected.
          Notwithstanding the prior sentence, an individual who first becomes a
          Participant after the first day of a Plan Year may make an election under
          Section 3.1 effective as of the payroll period coincident with or next
following           the date such election is received by the Administrator and may
further elect           any Annual Distribution Period that is at least the second Annual
Distribution           Period following the date on which the individual became a
Participant.
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| | (c)
          The amount of Compensation that a Participant elects to defer shall be credited
          to the Participants Deferred Benefit Accounts on or about the date on
          which the Participant is paid the nondeferred portion of the Compensation which
          is the source of the deferral.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)
          A Participants election to defer Compensation is irrevocable once the
          Enrollment Period ends and shall remain in effect until the earlier of the
          Participants Employment Termination Date, or the end of the Plan Year for
          which the deferral is effective; provided, however, that once during the Plan
          Year the Participant may modify his/her election to change the amount of
          Compensation he/she elects to defer for the remainder of the Plan Year, such
          change to be effective for the pay period which is at least two months after
the           date it is received by the Plan Administrator.
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| | (e)
          Notwithstanding any provision to the contrary, once payments commence to be
made           pursuant to Section 6.1(b), a Participant may not allocate credits to the
          Education Account with respect to which such payments are made.
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3.3
No Matching Contribution. No Participating Company shall make a Matching Contribution to
the Plan for any Plan Year beginning after 1998.

ARTICLE IV - PARTICIPANTS ACCOUNTS

4.1
Establishment of Accounts. One or more of the following Deferred Benefit
Accounts shall be established with respect to each Participant:

| | (a)
        Retirement Account;
| | -------------------------------

| | (b)
        Education Account; and
| | ----------------------------------

| | (c)
        Fixed Period Benefit Account.
| | -----------------------------------------

All
contributions on behalf of a Participant shall be credited to the appropriate Deferred
Benefit Accounts, in accordance with Section 4.2.

4.2
Executive Benefit Allocation. A Participant's Deferral Agreement shall
contain a written statement specifying the allocation of his/her anticipated Credits.

4.3
Irrevocable Allocation. A Participants election to allocate anticipated Credits
shall remain in effect until the earlier of his/her Employment Termination Date or the
end of the Plan Year for which the election is effective; provided, however, that a
Participant may modify his/her election to allocate Credits at any time he/she would be
permitted to change the amount of Compensation he/she elects to defer for subsequent
calendar quarters pursuant to Section 3.2(d) and subject to the limitations provided in
Section 3.2(d).

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4.4
Allocation among Investment Funds.

| | (a) General.
Except as provided in Section 4.4(b), a Participant may direct that the Credits be
valued, in accordance with Section 4.6, as if the balance credited to the account were
invested in one or more Investment Funds. The Participant may select up to six (or such
greater number as the Administrator may determine) Investment Funds in multiples of one
percent (or such other percentage as the Administrator may determine). A Participant may
make a separate selection with respect to each of his/her Deferred Benefit Accounts, but
overall the Participant may not have investments in more than six (or such greater number
as the Administrator may determine) Investment Funds.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) Deferred
Incentive Pay. A Participants election regarding the allocation among investment
options for valuation purposes in connection with a deferral of incentive pay under the
PMA Capital Corporation Annual Incentive Plan shall be irrevocable, shall remain in
effect until payment of the deferred incentive pay and may not at any time be modified.
This provision shall be administered in accordance with Section 162(m) of the Code and
Treas. Reg. § 1.162-27(e)(2)(iii)(B).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4.5
Administration of Investments. The investment gain or loss with respect to Credits on
behalf of a Participant shall continue to be determined in the manner selected by the
Participant pursuant to Section 4.4. If any Participant fails to file a designation,
under either Section 4.4(a) or 4.4(b), he/she shall be deemed to have elected to continue
to follow the investment designation, if any, in effect for the immediately preceding
Plan Year as to all amounts deferred under this Plan. A designation filed by a
Participant changing his/her Investment Funds, to the extent permitted under Section
4.4(a), shall apply to either future contributions, amounts already accumulated in
his/her Deferred Benefit Accounts, or both. A Participant may change his/her investment
selection under Section 4.4(a) no more than once each calendar quarter.

4.6
Valuation of Deferred Benefit Accounts. The Deferred Benefit Accounts of each Participant
shall be valued daily based upon the performance of the Investment Fund or Funds selected
by the Participant. Such valuation shall reflect the net asset value expressed per share
of each designated Investment Fund. The fair market value of an Investment Fund shall be
determined by the Administrator. Each Deferred Benefit Account shall be valued
separately. A valuation summary shall be prepared on each Determination Date.

4.7
Suballocation within Deferred Benefit Accounts.

| | (a)
In the event a Participant allocates a portion of his/her anticipated Credits to an
Education Account, the Participant may further allocate among subaccounts on behalf of
any Eligible Dependent. In the absence of such suballocation, all Credits to the
Participants Education Account shall be equally allocated among the Participants
Eligible Dependents.
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| | (b)
In the event a Participant allocates a portion of his/her anticipated Credits to a Fixed
Period Benefit Account, the Participant may further allocate among subaccounts
differentiated by benefit distribution dates.
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| | (c)
Notwithstanding the foregoing, at any point in time a Participant may not have more than
a total of five Accounts and subaccounts.
| | --------------------------------------------------------------------------------------------------------------------------------------

4.8
Investment Obligation of the Plan Sponsor. Benefits are payable as they become due
irrespective of any actual investments the Plan Sponsor may make to meet its obligations.
Neither the Plan Sponsor, nor any trustee (in the event the Plan Sponsor elects to use a
grantor trust to accumulate funds) shall be obligated to purchase or maintain any asset,
and any reference to investments or Investment Funds is solely for the purpose of
computing the value of benefits. To the extent a Participant or any person acquires a
right to receive payments from the Plan Sponsor under this Plan, such right shall be no
greater than the right of any unsecured creditor of the Plan Sponsor. Neither this Plan
nor any action taken pursuant to the terms of this Plan shall be considered to create a
fiduciary relationship between the Plan Sponsor and the Participants or any other persons
or to establish a trust in which the assets are beyond the claims of any unsecured
creditor of the Plan Sponsor.

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ARTICLE V - VESTING

5.1
Vesting Schedule. A Participant shall, subject to Section 6.2(b), at all times have a
fully Vested interest with respect to the Executive Deferral Contributions to his/her
Deferred Benefit Accounts. A Participant shall also have shall, subject to Section
6.2(b), a fully Vested interest in the Matching Contributions previously made to his/her
Deferred Benefit Accounts as of January 1, 1999.

ARTICLE VI - BENEFITS

6.1
Normal Payment of Benefits. Except as provided in Section 6.2, a Participant's
benefits shall be paid as follows:

| | (a)
Retirement Account. Upon a Participants Employment Termination Date on or after
attaining his/her Early Retirement Date while in the employment of a Participating
Company or of PMA Foundation or an affiliate of PMA Foundation, as applicable, the Plan
Sponsor shall pay such Participant a benefit either:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (1)
          In an amount equal to the balance in the Participants Retirement Account
          in two installments:
| | ----------------------------------------------------------------------------------------------------------------------

| | (i)
          The first installment, in an amount equal to 50% of the balance in the
          Retirement Account, shall be paid within 60 days following his/her Employment
          Termination Date; and
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)
          The second installment, in an amount equal to the remaining balance in the
          Retirement Account, shall be paid during the first Annual Distribution Period
          following the date on which the first installment was paid; or
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2)
          If the Participant makes an irrevocable election at least 90 days prior to the
          Plan Year in which his/her Employment Termination Date occurs, in the following
          five annual installments:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i)
          During the first Annual Distribution Period following the Participants
          Employment Termination Date, an amount equal to 20% of the balance in the
          Participants Retirement Account;
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)
          During the second Annual Distribution Period following the Participants
          Employment Termination Date, an amount equal to 25% of the then balance in the
          Participants Retirement Account;
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)
          During the third Annual Distribution Period following the Participants
          Employment Termination Date, an amount equal to 33% of the then balance in the
          Participants Retirement Account;
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iv)
          During the fourth Annual Distribution Period following the Participants
          Employment Termination Date, an amount equal to 50% of the then balance in the
          Participants Retirement Account; and
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (v)
          During the fifth Annual Distribution Period following the Participants
          Employment Termination Date, an amount equal to the then remaining balance in
          the Participants Retirement Account.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)
Education Account. If a Participant who has established a subaccount in his/her Education
Account for an Eligible Dependent remains continuously employed by a Participating
Company or by PMA Foundation or one of its affiliates until January 1st of the year in
which the Eligible Dependent reaches an age set forth below, the Plan Sponsor shall pay
to the Participant during the Annual Distribution Period for that year a benefit
determined as follows:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-7-

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| | Age Eligible DependentWill Attain During Year | Percent of EligibleDependents Subaccount
| | --------------------------------------------- | -----------------------------------------
| | 18                                            | 25 %                                     
| | 19                                            | 33 %                                     
| | 20                                            | 50 %                                     
| | 21                                            | remainder                                

| | In
the event an Eligible Dependent, with respect to whom an Education Account is maintained,
dies prior to the payment of the balance to the credit of such Education Account, then
the Plan Sponsor shall pay an amount equal to the remaining balance to the credit of such
Education Account to the Participant within a reasonable time following receipt of proof
of such death.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) Fixed
Period Benefit Account. As long as the Participant remains continuously employed by the
Participating Company or by PMA Foundation or one of its affiliates, the Plan Sponsor
shall pay to the Participant an amount equal to the balance in the Participants
Fixed Period Benefit Account in accordance with the pre-existing distribution schedule
applicable thereto.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) Benefit
upon Termination of Employment or Following Death.
| | --------------------------------------------------------------

| | (1) Benefit
upon Termination of Employment. Upon a Participants Employment Termination Date
other than as set forth above in Section 6.1(a), the Plan Sponsor shall pay to the
Participant an amount equal to the balance in the Participants Deferred Benefit
Accounts in two installments:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i)
  The first installment, in an amount equal to 50% of the balance in the
Deferred Benefit Accounts, shall be paid within 60 days following his/her
Employment Termination Date; and
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)
  The second installment, in an amount equal to the then remaining balance in the
Deferred Benefit Accounts, shall be paid during the first Annual Distribution Period
following the date on which the first installment was paid.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | For
purposes of this Section 6.1(d)(1), a Participant who has been out of work for twenty-six
weeks due to short-term disability shall be deemed to have terminated his or her
employment on the last day of the twenty-six week period and such last day shall be
deemed to be such Participants Employment Termination Date.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2)
Benefit Following Death. Upon a Participants date of death, the Administrator shall
reduce the balance in the Participants Retirement Account by the amount that the
Participant has previously received or shall receive pursuant to Section 6.1(a).
Thereafter, the Plan Sponsor shall pay to the Participants Beneficiary a single sum
payment, in cash, equal to the remaining balance in the Participants Deferred
Benefit Accounts. Payment under this Section 6.1(d)(2) shall be made as soon as
practicable following the receipt by the Plan Sponsor of acceptable proof of the
Participants death.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e)
Earnings where Installment Payments Are Made. Where any benefit is paid in annual
installments, the undistributed balance credited to the Account during the period of the
installment payments and ending on the date of the last installment payment shall be
credited with investment earnings or debited with investment losses in accordance with
Section 4.6.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-8-

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6.2
Special Payment of Benefits.

| | (a)Payment in Event of Unforeseen Financial Emergency. A Participant may request an
accelerated payment of some or all of his/her benefit under the Plan to meet an
Unforeseen Financial Emergency.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (1)
The request must be made in writing and filed with the Administrator and must be
supported by evidence of the Unforeseen Financial Emergency. It must also specify the
Deferred Benefit Accounts from which the benefit is to be paid.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2)
The Administrator shall have sole and absolute discretion to grant or deny the Participants
request. If the request is granted, the accelerated payment shall not be more than the
amount deemed necessary by the Administrator to meet the Unforeseen Financial Emergency.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3)
Payments under this Section 6.2(a) shall reduce the remaining benefits to, or related to,
the Participant under this Plan.
| | ------------------------------------------------------------------------------------------------------------------------------

| | (b)Reduced Benefit upon Request. A Participant may elect in writing at any time to receive
an immediate distribution of a reduced benefit under the Plan. The Participant shall
specify in his/her election the Deferred Benefit Accounts from which the benefit shall be
paid.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (1)
Except as otherwise provided in Section 6.2(b)(2), the amount of the benefit shall equal
the amount requested by the Participant, reduced by the lesser of 10% of the amount the
Participant requested or $50,000.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2)
If the Participants election under this Section 6.2(b) is made within 60 days
following a Change of Control, the amount of the benefit shall equal the amount requested
by the Participant, reduced by the lesser of 5% of the amount the Participant requested
or $25,000.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3)
Upon receipt of a Participants election, the Administrator shall (i) reduce the
balance of the Participants Deferred Benefit Accounts by the full amount that the
Participant has requested, and (ii) direct the Plan Sponsor to pay the Participant the
reduced benefit. The amount by which the benefit is reduced shall be automatically
forfeited without any further action or consent of the Participant.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)Change of Control where Installment Payments Being Made. In the event installment
payments are being made to a Participant under Section 6.1 and a Change of Control of the
Plan Sponsor occurs prior to the Participants receiving all installment payments
under Section 6.1, any undistributed balance credited to the Participants Deferred
Benefit Accounts shall be paid by the Plan Sponsor in a single sum payment, in cash, to
the Participant as soon as practicable following the Change of Control.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6.3
Reduction of Amount of Benefit Payment in Certain Cases.

| | (a)
Reduction of Benefit Payments. Notwithstanding any provision of the Plan to the contrary,
the Administrator shall cause any payment under this Plan to a Participant who is a Covered
Employee, as defined below, to be reduced to the extent that such Participants
scheduled distribution under the Plan, when added to such Participants estimated
Applicable Employee Remuneration, as defined below, from the Plan Sponsor and
any other Participating Company for the taxable year would exceed the Code Section
162(m) Deduction Limitation, as defined below. The amount of any scheduled
distribution, which is not paid to the Participant under this Section 6.3(a) shall be
transferred to the Participants Retirement Account and distributed in accordance
with Section 6.1(a).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-9-

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| | (b) Definitions.
| | ----------------

| | (1) Covered
Employee. The term Covered Employee means an executive officer of the Plan
Sponsor or other Participating Company designated by the Plan Administrator to be a Covered
Employee.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) Code
Section 162(m) Deduction Limitation. The term Code Section 162(m) Deduction
Limitation means the Applicable Employee Remuneration of any Covered Employee for
the taxable year that exceeds $1,000,000 or any comparable limit specified in any future
legislation amending, supplementing or superseding Code Section 162(m).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) Applicable
Employee Remuneration. The term Applicable Employee Remuneration, except as
otherwise provided below, means, with respect to any Covered Employee for any taxable
year, the aggregate amount allowable as a deduction under Chapter 1 of Subtitle A of the
Code for such taxable year (determined without regard to section 162(m) of the Code) for
Remuneration, as defined below, for services performed by such Covered
Employee (whether or not during the taxable year). The term Applicable Employee
Remuneration shall not include:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i)
  Any Remuneration payable on a commission basis solely on account of income
generated directly by the individual performance of the individual to whom such
Remuneration is payable.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)
  Any Remuneration that is qualified performance based compensation under
Code Section 162(m).
| | -----------------------------------------------------------------------------------------------------

| | (iii)
  Any Remuneration payable under a written binding contract which was in effect on
February 17, 1993, and which was not modified thereafter in any material respect before
such Remuneration is paid.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) Remuneration.
The term Remuneration includes any remuneration (including benefits) in any
medium other than cash, but shall not include 
| | -----------------------------------------------------------------------------------------------------------------------------------------------

| | (i)
  Any payment referred to in so much of Code section 3121(a)(5) as precedes
subparagraph (E) thereof, and
| | -------------------------------------------------------------------------------------------------------------

| | (ii)
  Any benefit provided to or on behalf of an employee if at the time such benefit is
provided it is reasonable to believe that the employee will be able to exclude such
benefit from gross income under Chapter 1 of Subtitle A of the Code.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | For
purposes of (i) above, Code section 3121(a)(5) shall be applied without regard to Code
section 3121(v)(1).
| | --------------------------------------------------------------------------------------------------------------

ARTICLE VII - ADMINISTRATION
OF THE PLAN

7.1
Administrator. The Committee appointed by the President of the Plan Sponsor is hereby
designated as the administrator of the Plan. If no Committee is appointed by the Plan
Sponsor as the Administrator, the Plan Sponsor shall be the Administrator of the Plan.
The Administrator shall have the authority to control and manage the operation and
administration of the Plan. The President of the Plan Sponsor may appoint another person
to be the Administrator at any time. The President of the Plan Sponsor may also remove an
Administrator and fill any vacancy which may arise.

7.2
Committee Action. If a Committee is appointed as Administrator, the following
rules apply:

-10-

---

| | (a)
On all matters within the jurisdiction of the Committee, the decision of a majority of
the members of the Committee shall govern and control. The Committee may take action
either at a meeting or in writing without a meeting, provided that in the latter instance
all members of the Committee shall have been advised of the action contemplated and that
the written instrument evidencing the action shall be signed by a majority of the members.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)
The President of the Plan Sponsor shall appoint the Chair of the Committee. The Committee
may appoint, either from among its members or otherwise, a secretary who shall keep a
record of all meetings and actions taken by the Committee. Either the Chair of the
Committee or any member of the Committee designated by the Chair shall execute any
certificate, instrument or other written direction on behalf of the Committee. Any action
taken on matters within the discretion of the Committee shall be final and conclusive as
to the parties thereto and as to all Participants or Beneficiaries claiming any right
under the Plan.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.3
Powers and Duties of the Administrator. The Administrator shall have all powers necessary
to supervise the administration of the Plan and to control its operation in accordance
with its terms, including, without limiting the generality of the foregoing, the power to:

| | (a)
Appoint, retain, and terminate such persons as it deems necessary or advisable to assist
in the administration of the Plan or to render advice with respect to the
responsibilities of the Administrator under the Plan, including accountants, attorneys
and physicians;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)
Make use of the services of the employees of the Participating Company in administrative
matters;
| | -----------------------------------------------------------------------------------------------------

| | (c)
Obtain and act on the basis of all valuations, certificates, opinions and reports
furnished by the persons described in (a) or (b) above;
| | ---------------------------------------------------------------------------------------------------------------------------------------------

| | (d)
Review the manner in which benefit claims and other aspects of the Plan administration
have been handled by the employees of the Participating Company;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e)
Determine all benefits and resolve all questions pertaining to the administration and
interpretation of the Plan provisions, either by rules of general applicability or by
particular decisions; to the maximum extent permitted by law, all interpretations of the
Plan and other decisions of the Administrator shall be conclusive and binding on all
parties;
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f)
Adopt such forms, rules and regulations as it shall deem necessary or appropriate for the
administration of the Plan and the conduct of its affairs, provided that any such forms,
rules and regulations shall not be inconsistent with the provisions of the Plan;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g)
Remedy any inequity from incorrect information received or communicated or from
administrative error;
| | ---------------------------------------------------------------------------------------------------------

| | (h)
Commence or defend any litigation arising from the operation of the Plan in any legal or
administrative proceeding;
| | -----------------------------------------------------------------------------------------------------------------------

| | (i)
To determine all considerations affecting the eligibility of any Eligible Employee to
become a Participant or remain a Participant in the Plan;
| | ---------------------------------------------------------------------------------------------------------------------------------------------------

| | (j)
To determine the status and rights of Participants and their Eligible Dependents and
Beneficiaries:
| | -------------------------------------------------------------------------------------------------------

| | (k)
Direct the Plan Sponsor to pay benefits under the Plan, and to give such other directions
and instructions as may be necessary for the proper administration of the Plan; and
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-11-

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| | (l)
Be responsible for the preparation, filing and disclosure on behalf of the Plan of such
documents and reports as are required by any applicable federal or state law.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.4
Decisions of Administrator. All decisions of the Administrator, and any action taken by
it in respect of the Plan shall be conclusive and binding on all persons, subject to the
claims and appeal procedure described in Section 7.10 hereof.

7.5
Expenses. All expenses incident to the operation and administration of the Plan
reasonably incurred, including, without limitation by way of specification, the fees and
expenses of attorneys and advisors, and for such other professional, technical and
clerical assistance as may be required, shall be paid by the Plan Sponsor.

7.6
Eligibility to Participate. No member of the Administrator who is also an officer shall
be precluded from participating in the Plan if otherwise eligible, but he or she shall
not be entitled, as a member of the Administrator, to act or pass upon any matters
pertaining specifically to his or her own benefit under the Plan.

7.7
Insurance and Indemnification for Liability. The rules relating to the insurance and
indemnification for liability are as follows:

| | (a)
Insurance. The Plan Sponsor may, in its discretion, obtain, pay for, and keep current a
policy or policies of insurance, insuring members of the Administrator and other
employees to whom any responsibility with respect to administration of the Plan has been
delegated against any and all liabilities, costs and expenses incurred by such persons as
a result of any act, or omission to act, in connection with the performance of their
duties, responsibilities and obligations under the Plan and any applicable Federal or
state law.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)
Indemnity. If the Plan Sponsor does not obtain, pay for, and keep current the type of
insurance policy or policies referred to in Section 7.7(a) above, or if such insurance is
provided but any of the members of the Administrator or other employees referred to in
Section 7.7(a) above incur any costs or expenses which are not covered under such
policies, then, in either event, the Plan Sponsor shall, to the extent permitted by law,
indemnify and hold harmless such parties against any and all costs, expenses and
liabilities incurred by such parties in performing their duties and responsibilities
under this Plan, provided such party or parties were acting in good faith within what was
reasonably believed to have been in the best interests of the Plan and its Participants.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.8
Agent for Service of Legal Process. The name and address of the person designated as the
agent for service of legal process are:

Plan Administrator 
PMA Capital Corporation 
1735 Market Street, 27th Floor
Philadelphia, PA 19103

7.9
Delegation of Responsibility. The Administrator may designate a committee of one or more
persons to carry out any of the responsibilities or functions assigned or allocated to
the Administrator under the Plan. Each reference to the Administrator in this Plan shall
include the Administrator as well as any person to whom the Administrator may have
delegated the performance of a particular function or responsibility under this Section
7.9.

7.10
Claims Procedure.

| | (a)
Claim for Benefits. All claims for benefits under the Plan shall be made in
writing and shall be signed by the applicant. Claims shall be submitted to a
representative designated by the Administrator and hereinafter referred to as
the Claims Coordinator.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Each
claim hereunder shall be acted on and approved or disapproved by the Claims Coordinator
within 60 days following the receipt by the Claims Coordinator of the information
necessary to process the claim.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-12-

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| | In
the event the Claims Coordinator denies a claim for benefits, in whole or in part, the
Claims Coordinator shall notify the applicant in writing of the denial of the claim and
notify such applicant of his or her right to a review of the Claims Coordinators
decision by the Administrator. Such notice by the Claims Coordinator shall also set
forth, in a manner calculated to be understood by the applicant, the specific reason for
such denial, the specific Plan provisions on which the denial is based, a description of
any additional material or information necessary to perfect the claim, with an
explanation of why such material or information is necessary, and an explanation of the
Plans claims review procedure as set forth in this Section 7.10.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | If
no action is taken by the Claims Coordinator on an applicants claim within 60 days
after receipt by the Claim Coordinator, such application shall be deemed to be denied for
purposes of the following appeals procedure.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) Appeals
Procedure. Any applicant whose claim for benefits is denied in whole or in part (Claimant)
may appeal from such denial to the Administrator for a review of the decision by the
Administrator. Such appeal must be made within six months after the Claimant has received
written notice of the denial as provided above in Section 7.10(a). An appeal must be
submitted in writing within such period and must:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (1)
  Request a review by the Administrator of the claim for benefits under the Plan;
| | -------------------------------------------------------------------------------------

| | (2)
  Set forth all of the grounds upon which the Claimants request for review is
based and any facts in support thereof; and
| | ------------------------------------------------------------------------------------------------------------------------------

| | (3)
  Set forth any issues or comments which the Claimant deems pertinent to the appeal.
| | ----------------------------------------------------------------------------------------

| | The
Administrator shall regularly review appeals by Claimants. The Administrator shall act
upon each appeal within 60 days after receipt thereof unless special circumstances
require an extension of the time for processing the Claimants request for review.
If such an extension of time for processing is required, written notice of the extension
shall be forwarded to the Claimant prior to the commencement of the extension. In no
event shall such extension exceed a period of 120 days after the request for review is
received by the Administrator.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Administrator shall make a full and fair review of each appeal and any written materials
submitted by the Claimant and/or the Participating Company in connection therewith. The
Administrator may require the Claimant and/or the Participating Company to submit such
additional facts, documents or other evidence as the Administrator in its discretion
deems necessary or advisable in making its review. The Claimant shall be given the
opportunity to review pertinent documents or materials upon submission of a written
request to the Administrator, provided the Administrator finds the requested documents or
materials are pertinent to the appeal.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
the basis of its review, the Administrator shall make an independent determination of the
Claimants eligibility for benefits under the Plan. The decision of the
Administrator on any claim for benefits shall be final and conclusive upon all parties
thereto.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the event the Administrator denies an appeal, in whole or in part, the Administrator
shall give written notice of the decision to the Claimant, which notice shall set forth,
in a manner calculated to be understood by the Claimant, the specific reasons for such
denial and which shall make specific reference to the pertinent Plan provisions on which
the Administrators decision was based.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)
Compliance with Regulations. It is intended that the claims procedure of this
Plan be administered in accordance with the claims procedure regulations of the
Department of Labor set forth in 29 CFR § 2560.503-1.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-13-

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ARTICLE VIII - AMENDMENT AND
TERMINATION

8.1
Amendment or Termination.

| | (a)
The Board of Directors shall have the right to alter, amend, modify, restate or terminate
the Plan, or any part thereof, through the adoption of a written resolution when in its
absolute discretion, it determines such action to be advisable; provided, however, that
no such action by the Board of Directors shall reduce the amount credited to any Account
at the time of the adoption of the amendment, modification or restatement and no such
amendment, modification or restatement or termination may occur as a result of a Change
of Control, within two years after a Change of Control, or as part of any plan to effect
a Change of Control. Each amendment shall be set forth in a written instrument.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)
In the event of termination, the Plan Sponsor, at its option, may pay each Participant an
amount equal to the total amount credited to the Participants Accounts in a single
sum payment of cash or, in the alternative, pay such amount in accordance with the
provisions of Article VI. Termination of the Plan shall not serve to reduce the amount
credited to a Participants Accounts on the date of termination. Moreover, no such
termination may occur as a result of a Change of Control, within two years after a Change
of Control, or as part of any plan to effect a Change of Control.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ARTICLE IX - MISCELLANEOUS

9.1
Funding. Nothing contained in this Plan and no action taken pursuant to this Plan will
create or be construed to create or require a funded arrangement or any kind of fiduciary
duty between the Plan Sponsor and/or the Administrator and a Participant. Benefits
payable under this Plan to a Participant or Beneficiary, if applicable, shall be paid
directly by each Plan Sponsor from a grantor trust (the Trust) within the
meaning of Section 671 of the Code, to the extent that such benefits are not paid from
the general assets of the Plan Sponsor. The Trust must be an irrevocable grantor trust,
the assets of which are subject to the claims of the general creditors of the Plan
Sponsor in the event of its insolvency, defined for the purposes of this provision as the
Plan Sponsors inability to pay its debts as they become due or that the Plan
Sponsor is subject to a pending proceeding under the United States Bankruptcy Code.
Except as to any amounts paid or payable to the Trust, the Plan Sponsor shall not be
obligated to set aside, earmark or escrow any funds or other assets to satisfy its
obligations under this Plan, and the Participant and his or her Beneficiary shall not
have any property interest in any specific assets of the Plan Sponsor other than an
unsecured right to receive payments from the Plan Sponsor as provided herein. To the
extent any person acquires a right hereunder, such right(s) shall be no greater than
those of a general, unsecured creditor of the Plan Sponsor. In the event that the amounts
accumulated in the Trust are not sufficient to pay the benefits payable under this Plan,
such benefits shall be paid directly from the general assets of the Plan Sponsor.

9.2
Status of Employment. Neither the establishment or maintenance of the Plan, nor any
action of the Plan Sponsor or any Participating Company or the Administrator shall be
held or construed to confer upon any individual any right to be continued as an officer
or other employee nor, upon dismissal, any right or interest in any assets of the Plan
Sponsor or a Participating Company nor to affect any Participants right to
terminate his/her employment at any time.

9.3
Payments to Minors and Incompetents. If a Participant or Beneficiary or Eligible
Dependent entitled to receive any benefits hereunder is a minor or is deemed by the
Administrator or is adjudged to be legally incapable of giving a valid receipt and
discharge for such benefits, they will be paid to the duly appointed guardian of such
minor or incompetent or to such other legally appointed person as the Administrator may
designate. Such payment shall, to the extent made, be deemed a complete discharge of any
liability for such payment under the Plan.

9.4
Inalienability of Benefits.

| | (a)
Benefits payable under the Plan are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment,
execution, or levy of any kind, whether voluntary or involuntary. Any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise
dispose of any right to benefits under the Plan shall be void. Neither the Plan Sponsor
nor any other Participating Company shall in any manner be liable for, or subject to, the
debts, contracts, liabilities, engagements or torts of any person entitled to benefits
under the Plan.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-14-

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| | (b)
Notwithstanding Section 9.4(a), if a Participant is indebted to the Plan Sponsor or any
other Participating Company at any time when payments are to be made by the Plan Sponsor
to the Participant under the provisions of the Plan, the Plan Sponsor shall have the
right to reduce the amount of payment to be made to the Participant (or the Participants
Beneficiary or Eligible Dependent) to the extent of such indebtedness. Any election by
the Plan Sponsor not to reduce such payment shall not constitute a waiver of its claim
for such indebtedness.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9.5
Governing Law. Except to the extent preempted by Federal law, the Plan shall be governed
by and construed in accordance with the internal laws of the Commonwealth of Pennsylvania.

9.6
Severability. In case any provision of this Plan shall be held illegal or invalid for any
reason, such illegality or invalidity shall not affect the remaining provisions of the
Plan, and the Plan shall be construed and enforced as if such illegal and invalid
provisions had never been set forth.

9.7
Required Information to Administrator. Each Participant will furnish to the Administrator
such information as the Administrator considers necessary or desirable for purposes of
administering the Plan, and the provisions of the Plan respecting any payments thereunder
are conditional upon the Participants furnishing promptly such true, full and
complete information as the Administrator may request. The Administrator, in its sole
discretion, may request a Participant to submit proof of his/her age. The Administrator
will, if such proof of age is not submitted when requested, use as conclusive evidence
thereof such information as is deemed by it to be reliable, regardless of the lack of
proof. Any notice or information which, according to the terms of the Plan or the rules
of the Administrator, must be filed with the Administrator, shall be deemed so filed if
addressed and either delivered in person or mailed to and received by the Administrator
at the following address:

Plan Administrator
PMA Capital Corporation
1735 Market Street, 27th Floor
Philadelphia, PA 19103

Failure on the part of the Participant or
Beneficiary or Eligible Dependent to comply with any such request within a reasonable
period of time shall be sufficient grounds for delay in the payment of benefits under the
Plan until such information or proof is received by the Administrator.

9.8
Income and Payroll Tax Withholding. To the extent required by the laws in effect at the
time payments are made under this Plan, the Plan Sponsor shall withhold from such
deferred compensation payments any taxes required to be withheld for federal, state or
local tax purposes.

9.9
Application of Plan. The Plan, as set forth herein, shall apply to any Participant
terminating employment on or after the Restatement Effective Date.

9.10
No Effect on Other Benefits. No amount credited under this Plan shall be deemed part of
the total compensation for the purpose of computing benefits to which a Participant may
be entitled under any pension plan or other supplemental compensation arrangement, unless
such plan or arrangement specifically provides to the contrary. The amounts payable to
the Participant hereunder will be in addition to any benefits paid or payable to the
Participant under any other pension, disability, annuity or retirement plan or policy
whatsoever. Nothing herein contained will in any manner modify, impair or affect any
existing or future rights of the Participant to participate in any other employee
benefits plan or receive benefits in accordance with such plan or to participate in any
current or future pension plan of a Participating Company or any supplemental arrangement
which constitutes a part of the Participating Companys regular compensation
structure.

9.11
Inurement. The Plan shall be binding upon, and shall inure to, the benefit of the
Participating Company and its successors and assigns, and the Participant and the
Participants Beneficiaries, Eligible Dependents, successors, heirs, executors and
administrators.

-15-

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9.12
Notice. Any notices or elections required or permitted to be given or made under this
Plan will be sufficient if in writing and if sent by first class, postage paid mail to
the Participants last known address as shown on the Participating Companys
personnel records or to the principal office of the Participating Company, as the case
may be. The date of such mailing shall be deemed the date of notice, consent or demand.
Either party may change the address to which notice is to be sent by giving notice of the
change of address in the manner aforesaid.

9.13
Captions. The captions contained in and the table of contents prefixed to the Plan are
inserted only as a matter of convenience and for ease of reference in no way define,
limit, enlarge or describe the scope or intent of this Plan or in any way affect the Plan
or the construction of any provision thereof.

9.14
Acceleration of Payments. Notwithstanding any other provision of the Plan, if the
Administrator determines, based on a change in the tax or revenue laws of the United
States of America, a published ruling or similar announcement issued by the Internal
Revenue Service, a regulation issued by the Secretary of the Treasury or his/her
delegate, a decision by a court of competent jurisdiction involving a Participant, or a
closing agreement involving a Participant made under Section 7121 of the Code that is
approved by the Commissioner, that such Participant or Beneficiary or Eligible Dependent
has recognized or will recognize income for federal income tax purposes with respect to
benefits that are or will be payable to the Participant under the Plan before they
otherwise would be paid to the Participant or the Beneficiary or Eligible Dependent (as
applicable), upon the request of the Participant or Beneficiary or Eligible Dependent,
the Administrator shall immediately make distribution to the Participant or Beneficiary
or Eligible Dependent of the amount so taxable.

9.15
Reporting and Disclosure Requirements. In order to comply with the requirements
of Title I of ERISA, the Administrator shall:

| | (a)
File a statement with the Secretary of Labor that includes the name and address of the
employer, the employer identification number assigned by the Internal Revenue Service, a
declaration that the employer maintains the Plan primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated employees
and a statement of the number of such plans and the number of employees in each; and
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)
Provide plan documents, if any, to the Secretary of Labor upon request as required by
Section 104(a)(1) of ERISA. It is intended that this provision comply with the
requirements of 29 CFR § 2520.104-23.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

This
method of compliance is available to the Plan only so long as the Plan is maintained by
an employer primarily for the purpose of providing deferred compensation for a select
group of management or highly compensated employees and for which benefits are paid as
needed solely from the general assets of the employer or are provided exclusively through
insurance contracts or policies, the premiums for which are paid directly by the employer
from its general assets, issued by an insurance company or similar organization which is
qualified to do business in any State, or both.

9.16
Gender and Number. Whenever any words are used herein in any specific gender, they shall
be construed as though they were used in any other applicable gender. The singular form,
whenever used herein, shall mean or include the plural form where applicable and
viceversa.

ARTICLE X - ADOPTION BY
AFFILIATED EMPLOYERS

10.1
Adoption of Plan. The following rules shall apply with respect to the adoption of
the Plan:

| | (a)
Adoption by Affiliated Employers. The terms of this Plan may be adopted by any
Affiliated Employer, provided:
| | -----------------------------------------------------------------------------------------------------------------

| | (1)
The Board of Directors consents to such adoption by an appropriate written resolution;
| | ------------------------------------------------------------------------------------------

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| | (2)
The board of directors of the Affiliated Employer adopts this Plan by an appropriate
written resolution which defines the Eligible Employees;
| | -------------------------------------------------------------------------------------------------------------------------------------------------

| | (3)
The Affiliated Employer executes a Plan Adoption Agreement in the form attached hereto as
Plan Exhibit A, applicable to the Eligible Employees of such Affiliated Employer. The
Affiliated Employer may elect in such Adoption Agreement to have special provisions apply
with respect to the Eligible Employees of the Affiliated Employer which differ from the
provisions of the Plan applicable to other Eligible Employees; and
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4)
The Affiliated Employer executes such other documents as may be required to make such
Affiliated Employer a party to the Plan as a Participating Company.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)Effect of Adoption. An Affiliated Employer which adopts the Plan and the Trust Agreement
is thereafter a Participating Company with respect to its Eligible Employees.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10.2
Withdrawal from Plan. Any Participating Company may at any time withdraw from the Plan
upon giving the Board of Directors at least 30 days prior written notice of its intention
to withdraw.

10.3
Application of Withdrawal Provisions. The withdrawal provisions contained in Section 10.2
shall be applicable only if the withdrawing Participating Company continues to cover its
Participants under a plan similar to this Plan. Otherwise, the termination provisions of
the Plan shall apply.

10.4
Plan Sponsor Appointed Agent of Participating Companies. As a condition precedent to the
adoption of the Plan, each Affiliated Employer must appoint the Board of Directors as its
agent to exercise on its behalf all of the power and authority conferred upon the Plan
Sponsor by the Plan, including, without limitation, the power to amend or to terminate
the Plan.

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