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|   | “(i) | By      Executive’s voluntary resignation for other than Good Reason after being      employed for at least 80% of the term of the Agreement (“Service Period”),      upon not less than thirty (30) days prior written notice to PMA Capital,      provided Executive incurs a “separation from service” from PMA Capital,      within the meaning of Section 409A of the Code, on or prior to the      expiration of this Agreement.” |
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|   | (2) | Notwithstanding      the foregoing, the severance payments described in subparagraph 6(b)(1)      which otherwise would be paid during the six (6) month period beginning on      the day following Executive’s separation from service described in      subparagraph 5(d), 5(f), 5(h) or 5(i) shall instead be paid to Executive      in a single lump sum payment on the first business day following the end      of such six (6) month period.  The lump sum payment shall be      adjusted for simple interest that accrues during the initial six (6) month      period following Executive's termination of employment at the interest      rate used to determine lump sum payments under the PMA Capital Corporation      Pension Plan. |
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|   | (3) | Further,      if Executive elects to continue his health insurance benefits under COBRA,      PMA Capital will continue to pay the same monthly subsidy of the premiums      for such insurance continuation as was being paid by PMA Capital before      Executive’s employment terminated, with the remainder of the premium being      deducted from Executive’s severance payments to the extent severance is      paid in installments pursuant to subparagraph 6(b)(1), through the earlier      of the end of two (2) years from the termination date or the date      Executive becomes eligible to receive and/or obtain alternative health      insurance coverage through new employment.  During the six (6)      month period in which Executive’s severance benefits are delayed (as      described in subparagraph 6(b)(2)), PMA Capital shall pay the full premium      for Executive’s continued health insurance benefits, and shall be      reimbursed for the Executive’s portion of such premiums out of the lump      sum severance payment to be made to Executive on the first business day      following the six (6) month period.  It is intended that this      provision of continuation health coverage shall run concurrently with any      period of continuation coverage required under COBRA.  For the      period of health insurance continuation coverage after the expiration of      the COBRA coverage period provided for and used by Executive pursuant to      this provision, Executive shall pay the entire amount of the applicable      insurance premium which shall be withheld from Executive's severance pay      installments.  PMA Capital shall pay Executive a bonus equal to      the amount of each premium paid by Executive after the expiration of the      COBRA coverage period, grossed up for taxes (computed consistent with the      method for computing a Gross Up under Section 7) in the same month in      which the premium is paid. |
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|   | (4) | PMA      Capital’s obligation to provide the severance pay and benefits provided in      this paragraph is conditioned upon Executive signing and not revoking a      valid general release agreement in the form attached hereto as Exhibit      C.  The severance payments and benefits provided for in this |
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|   |   | Agreement      shall be in lieu of and not in addition to any severance pay or benefits      that are payable to Executive upon termination of employment under the PMA      Capital Corporation and PMA Capital Insurance Company Severance Pay Plan      or any other applicable severance plan or severance policy of PMA      Capital.” |
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|   | “(c) | If      Executive’s employment is terminated under subparagraphs 5(b), (c), (d),      (f), (g), (h) or (i) above (and such termination constitutes a “separation      from service” within the meaning of section 409A of the      Code):” |
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|   | (1) | Executive      shall have a fully (100%) vested and nonforfeitable interest in his      “Retirement Benefit” under the EMPP or any successor or replacement plan,      except to the extent his Retirement Benefit is reduced pursuant to the      terms of the EMPP to take into account the twenty-five (25) year service      limit; and |
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|   | (2) | Executive’s      benefit under the PMA Capital Corporation Retirement Savings Excess Plan      shall be increased to the extent necessary so that his aggregate benefit      payable under the EMPP, and PMA Capital Corporation Retirement Savings      Excess Plan (amounts attributable to Retirement Credits only)      (collectively, the Ongoing Pension Arrangements) is not less than the      aggregate benefit that would have been payable under such Ongoing Pension      Arrangements if Executive’s employment had continued through the end of      the calendar quarter that contains the 24-month anniversary following      Executive’s termination date (or, in the case of a termination under      subparagraph 5(g), above, through the end of the calendar quarter      containing the 36-month anniversary following such termination date),      assuming the executive is paid at the same salary rate during such period      as in effect as of his termination of      employment.  Notwithstanding the foregoing, subparagraph 6(c)(2)      shall apply only to the extent that it has the effect of increasing the      present value of the aggregate benefit payable under the Ongoing Pension      Arrangements.  Executive shall be entitled to receive the      increased benefit described in subparagraph 6(c)(2) during the calendar      quarter containing the 24-month anniversary following Executive’s      termination date (or, in the case of a termination under subparagraph      5(c), (d), (f), (g), (h) or (i), above, that occurs within fourteen (14)      months following a Section 409A Change in Control, the first business day      following the 6-month anniversary of Executive’s termination      date).” |
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|   | “(d)(1)     | If      Executive’s employment is terminated under subparagraph 5(g) or if it is      terminated under subparagraph 5(d) within twelve (12) months following a      Section 409A Change in Control (and such termination constitutes a      “separation from service” within the meaning of section 409A of the Code),      then PMA Capital shall pay Executive as described in |
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|   |   | paragraph      6(a) above and as described in Exhibit B, plus it will pay any cash      portion of the annual incentive compensation for the year in which      termination occurs if it is earned because Executive accomplished certain      identifiable tasks as of the date of termination.  With regard      only to payment of the cash portion of the annual incentive compensation      for the year in which termination occurs, it is specifically understood      that objectives related to profitability, revenue growth, stock price and      similar performance measures are not intended to be measured other than at      year end and accordingly will not qualify as identifiable tasks on an      interim basis and these are not eligible for payment of incentive      compensation unless deemed appropriate by the Compensation Committee of      the Board of Directors of PMA Capital in connection with their      consideration of payments as discussed above.  Any cash portion      of the annual incentive compensation payable pursuant to this subparagraph      6(d)(1) shall be paid no later than March 15 of the year following the      year in which the Executive’s employmentterminates.” |
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|   | “(4) | PMA      Capital’s obligation to provide the severance pay and benefits provided in      this paragraph is conditioned upon Executive signing and not revoking a      valid general release agreement in the form attached hereto as Exhibit      C.  The severance payments and benefits provided for in this      Agreement shall be in lieu of and not in addition to any severance pay or      benefits that are payable to Executive upon termination of employment |
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|   |   | under      the PMA Capital Corporation and PMA Capital Insurance Company Severance      Pay Plan or any other applicable severance plan or severance policy of PMA      Capital.” |
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|   | “7. | Excise Taxes.      If the value of any compensation (in whatever form) provided pursuant to      this Agreement (a) is counted as a “parachute payment” within the meaning      of section 28OG of the Code, and the value of all such parachute payments      would be subject to the excise tax imposed by section 4999 of the Code      (the “4999 Excise Tax”), or (b) is treated as “deferred compensation”      within the meaning of section 409A of the Code and is subject to interest      and additional tax under section 409A(a)(1)(B) (the “409A Penalties,” and      together with the 4999 Excise Tax, the “Penalties”), then Executive shall      be entitled to receive from PMA Capital an additional payment (a “Gross-Up      Payment”) in an amount such that after payment by Executive of all taxes      (but not including any interest or penalties imposed with respect to such      taxes), including any Penalty imposed upon the Gross-Up Payment, Executive      retains an amount of the Gross-Up Payment equal to the Penalties imposed      upon such payments.  The Gross-Up Payment shall be paid to the      Executive no later than the end of the calendar year following the      calendar year in which Executive remits the taxes to which such Gross-Up      Payment relates.” |
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|   | “12. | Remedies.  Executive      agrees that if he should breach any of the covenants contained in      paragraphs 8, 9 or 10, irreparable damage would result to PMA Capital and      that damages arising out of such breach may be difficult to      determine.  Executive therefore further agrees that, in addition      to all other remedies provided at law or at equity (including without      limitation damages and an equitable accounting of all earnings, profits      and other benefits arising from any such breach), PMA Capital shall be      entitled as a matter of course to specific performance and temporary and      permanent injunctive relief from any court of competent jurisdiction to      prevent any further breach of any such covenant by Executive, without the      necessity of proving actual damage to PMA Capital by reason of any such      breach, and Executive acknowledges that his employers, employees,      partners, agents or other associates, or any of them, may similarly be      enjoined.  If either party prevails in any lawsuit claiming      breach of paragraphs 8, 9 or 10 of this Agreement, the other party shall      reimburse the prevailing party for its or his expenses incurred in      connection with such a lawsuit, including without limitation attorney’s      fees and costs.  (For purposes of this paragraph, PMA Capital      will be considered to have prevailed in a lawsuit if it is established by      written adjudication that Executive has breached in any material respect      any provision of paragraphs 8, 9 or 10 as written or as modified under      paragraph 11.  Executive will be considered to have prevailed in      a lawsuit if it is established by written adjudication that he did not      breach in any material respect any provision of paragraphs 8, 9 or 10 |
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|   |   | as      written or as modified under paragraph 11).  Any reimbursement      made by PMA Capital pursuant to this paragraph 12 shall be payable as      follows:  (i) the amount of such expenses eligible for      reimbursement in any calendar year shall not affect the expenses eligible      for reimbursement in any other calendar year and (ii) all such      reimbursements must be made on or before the last day of the calendar year      following the calendar year in which the expense was  incurred.” |
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|   | “21. | Arbitration.  In      order to obtain the many benefits of arbitration over court proceedings,      including speed of resolution, lower costs and fees and more flexible      rules of evidence, all disputes between Executive and PMA Capital (except      those relating to unemployment compensation and workers’ compensation and      except as provided in paragraph 12 of this Agreement) arising out of      Executive’s employment or concerning the interpretation or application of      this Agreement or its subject matter (including without limitation those      relating to any claimed violation of any federal, state or local law,      regulation or ordinance, such as Title VII of the Civil Rights Act, the      Age Discrimination in Employment Act, the Americans with Disabilities Act      and their state and local counterparts, if any) shall be resolved      exclusively by binding arbitration in Philadelphia, Pennsylvania pursuant      to the National Rules for the Resolution of Employment Disputes of the      American Arbitration Association, with PMA Capital bearing its own      attorney’s fees and costs and Executive being awarded his reasonable      attorney’s fees and costs so long as the Arbitrator determines that      Executive’s claim(s) or defense(s) (whichever is applicable) is not      frivolous. Any award of attorney’s fees and costs to Executive shall not      affect the award of any attorney’s fees and costs eligible for      reimbursement in any other calendar year and all such reimbursements must      be made on or before the last day of the calendar year following the      calendar year in which the expense was incurred.  The parties      expressly waive their rights to have any such claims resolved by jury      trial.  The arbitration opinion and award shall be final,      binding and enforceable by any court under the Federal Arbitration      Act.” |
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