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                                 Exhibit 10(X)

                       Management and Operations Agreement
                              As of January 1, 2000

                                      Among

                    State Automobile Mutual Insurance Company
                        State Auto Financial Corporation
               State Auto Property and Casualty Insurance Company
                      State Auto National Insurance Company
                            Milbank Insurance Company
                          State Auto Insurance Company
                        Stateco Financial Services, Inc.
                       Strategic Insurance Software, Inc.
                    518 Property Management and Leasing, LLC


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                       MANAGEMENT AND OPERATIONS AGREEMENT


         This Management Agreement (the "Agreement") is made as of January 1,
2000 among State Automobile Mutual Insurance Company, an Ohio corporation
("Mutual"), State Auto Financial Corporation, an Ohio corporation ("State Auto
Financial"), State Auto Property and Casualty Insurance Company, a South
Carolina corporation ("State Auto P&C"), State Auto National Insurance Company,
an Ohio corporation ("National"), Milbank Insurance Company, a South Dakota
corporation ("Milbank"), State Auto Insurance Company, an Ohio corporation
("State Auto IC"), Stateco Financial Services, Inc., an Ohio corporation
("Stateco"), Strategic Insurance Software, Inc., an Ohio corporation ("S.I.S."),
and 518 Property Management and Leasing, LLC, an Ohio limited liability company
("518 PML").

                             BACKGROUND INFORMATION

A. Mutual is a property and casualty insurance company. Its wholly owned
subsidiary is Midwest Security Insurance Company ("Midwest Security"), a
Wisconsin domiciled property and casualty insurance company which is a party to
a separate Amended and Restated Management Agreement dated January 1, 2000 with
State Auto P&C and Mutual (the "2000 Midwest Management Agreement"). Mutual also
owns approximately 70% of the outstanding common shares, without par value, of
State Auto Financial.

B. State Auto P&C, Milbank, Stateco, National, and Farmers Casualty Insurance
Company ("Farmers Casualty") are wholly owned subsidiaries of State Auto
Financial. State Auto Financial also indirectly owns 100% of Mid-Plains
Insurance Company ("Mid-Plains"), which is a wholly owned subsidiary of Farmers
Casualty. Both Farmers Casualty and Mid-Plains are party to a separate Amended
and Restated Management Agreement dated January 1, 2000 with State Auto P&C and
Mutual (the "2000 Farmers Casualty Management Agreement"). State Auto Financial
also owns all the issued and outstanding shares of State Auto IC, an Ohio
corporation. State Auto Financial also indirectly owns 518 PML whose sole
members are Stateco and State Auto P&C. State Auto Financial also controls
S.I.S. through its ownership of S.I.S.' common shares. State Auto P&C, National,
State Auto IC, Milbank, Farmers Casualty, and Mid-Plains are property and
casualty insurance companies. Stateco provides investment management services to
Mutual, State Auto P&C, National, Milbank, Midwest Security, Farmers Casualty
and Mid-Plains and State Auto IC. 518 PML is engaged in the business of managing
and leasing real and personal property whose present customers are affiliated
companies. S.I.S. is engaged in the business of writing and servicing agency
management software products, among other software products. It derives revenue
from sales to insurer affiliates, as well as third-party insurers and agents.
For purposes of this Agreement, State Auto Financial, State Auto P&C, Milbank,
National, State Auto IC, Stateco, S.I.S. and 518 PML are hereinafter
collectively referred to as the "State Auto Financial Group." The State Auto
Financial Group and Mutual are hereinafter collectively referred to as the
"State Auto Companies" and individually as a "State Auto Company."

C. The insurance products offered by Mutual, State Auto P&C, National, Milbank,
Midwest Security, Farmers Casualty, Mid-Plains and commencing on and after
January 1, 2000, State Auto IC, are marketed together through independent agents
and it is the intention of the parties to this Agreement to continue such
arrangement. Mutual, State Auto P&C, Milbank, Midwest Security, Farmers Casualty
and State Auto IC participate in a pooling arrangement pursuant to which each of
State Auto P&C, Milbank, Midwest Security, Farmers Casualty, and State Auto IC
cedes all of its insurance business to Mutual and in turn assumes a percentage
of the combined

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business of all those companies. Under the current pooling arrangement, effected
through the Reinsurance Pooling Agreement Amended and Restated as of January 1,
2000 (the "2000 Pooling Agreement") the pool participants and their respective
percentages are: Mutual - 46%, State Auto P&C - 39%, Milbank - 10%, Midwest
Security - 1%, Farmers Casualty - 3%, and State Auto IC- 1%.

D. Since April 1, 1994, there has been in place an Amended and Restated
Management Agreement dated April 1, 1994 (the "94 Management Agreement") to
which State Auto P&C, State Auto Financial, Mutual, Milbank and National are
parties. State Auto P&C has provided executive management services to Mutual,
Milbank and National under the '94 Management Agreement. It has provided the
same services to Midwest Security since January 1, 1997 through a Management
Agreement with Midwest Security and to Farmers Casualty and Mid-Plains since
January 1, 1999 through a Management Agreement with Farmers Casualty and
Mid-Plains. These services have been provided by individuals who are employees
of State Auto P&C. Under these same Agreements, Mutual acted as common paymaster
and provided all other employees and certain facilities these companies required
to operate their businesses.

E. Each of S.I.S., Stateco, and 518 PML (along with State Auto Financial,
collectively the "Service Companies" and individually a "Service Company") was
not a party to the `94 Management Agreement and each paid for the expenses
attributable to its operations through payment of direct expenses and reasonable
allocations for expenses that were other than direct expenses.

F. As of January 1, 2000, all the individuals providing services to any of the
State Auto Companies who heretofore were not employees of State Auto P&C have
become employees of State Auto P&C.

G. State Auto P&C and Mutual have entered into the 2000 Midwest Management
Agreement and the 2000 Farmers Casualty Management Agreement as of January 1,
2000 which effect for Midwest Security, Farmers Casualty and Mid-Plains the
operational changes described below.

H. Mutual, State Auto Financial, National, Milbank, State Auto IC, and the
Service Companies will require substantially all of the services of the
employees of State Auto P&C including without limitation, executive, managerial,
supervisory, administrative, technical, professional, and clerical services
necessary or appropriate in the operation of their respective businesses
(collectively referred to hereafter as "Management and Operations Services") and
each of Mutual, State Auto Financial, National, Milbank, State Auto IC and the
Service Companies will rely on Mutual to provide certain facilities needed to
conduct their respective businesses.

I. With this Agreement, the parties hereto desire to terminate the '94
Management Agreement, replace it with this Agreement, and formalize the
operating relationship with those State Auto Companies that were not previously
a party to any of the foregoing management agreements.

                             STATEMENT OF AGREEMENT

     The parties hereby acknowledge the accuracy of the above Background
Information and in consideration of the mutual covenants set forth herein and
INTENDING TO BE LEGALLY BOUND HEREBY, hereby agree as follows:


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1. TERMINATION: Upon this Agreement becoming effective, the '94 Management
Agreement, is terminated and the relationship among the parties hereto shall be
governed by this Agreement.

2. ENGAGEMENT AND TERM: On the terms and subject to the conditions described in
this Agreement, Mutual, State Auto Financial, Milbank, National, State Auto IC,
S.I.S., Stateco, and 518 PML (collectively, the "Managed Companies",
individually, a "Managed Company") hereby engage State Auto P&C, and State Auto
P&C hereby accepts such engagement, to provide Management and Operations
Services to the Managed Companies as any of such Managed Companies require to
operate its business.

         Any of State Auto P&C's employees may also serve as directors or
officers of any of the State Auto Companies, notwithstanding that such persons
may also be officers or directors of State Auto P&C. State Auto P&C shall also
be entitled to continue using its employees to conduct all of its business
operations, notwithstanding that such persons will be performing services for
other State Auto Companies as well.

         To the extent reasonably possible, the parties shall jointly utilize
State Auto P&C's employees in a cooperative manner and consistent with the
business interests and needs of the State Auto Companies. State Auto P&C shall
direct its employees performing such services for each of the Managed Companies
to use their best efforts to promote the general interests and economic welfare
of each of the Managed Companies to the same extent as such employees provide to
State Auto P&C.

         The term of State Auto P&C's engagement under this Agreement shall
begin on the date of this Agreement and shall end, unless sooner terminated in
accordance with the provisions of Section 10 below, on the tenth anniversary of
this Agreement. This Agreement shall be automatically renewed for successive
ten-year periods upon the same terms and conditions contained in this Agreement,
unless and until terminated as described in Section 10 below.

3. AUTHORITY AND DUTIES OF STATE AUTO P&C: In providing Management and
Operations Services, State Auto P&C, acting through its employees, shall be
responsible for performing all organizational, operational, and management
functions of each of the Managed Companies. State Auto P&C shall use its
reasonable efforts to operate each Managed Company's business efficiently and in
accordance with the reasonable guidelines and policies which may be established
from time to time by the board of directors of each of the Managed Companies.
State Auto P&C shall have all authority necessary to carry out its duties under
this Agreement and shall act as an agent of each of the Managed Companies.
Without limiting the generality of the foregoing, State Auto P&C's duties under
this Agreement shall include the following:

         (a) MANAGEMENT AND ADMINISTRATION OF INSURANCE OPERATIONS - State Auto
P&C shall operate, administer, and manage the day-to-day insurance business
operations of each of the Managed Companies engaged in the insurance business,
in accordance with the underwriting, claims and any other reasonable guidelines
of such companies which may be in effect or established from time to time by the
board of directors of such companies. The management and administration of each
such insurers' business operations by State Auto P&C shall include, without
limitation, appointment and termination of agencies, underwriting of insurance
risks, investigation and settlement of claims and arrangement of reinsurance.
State Auto P&C shall use the same degree of care in acting on behalf of such
insurers as the degree of care it uses in connection the conduct of its
insurance business operations.

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         (b) MANAGEMENT AND ADMINISTRATION OF NON-INSURANCE OPERATIONS OF THE
SERVICE COMPANIES - State Auto P&C through its employees, will perform
Management and Operations Services for each of the other Managed Companies which
are Service Companies in accordance with the policies and guidelines which each
of such companies' board of directors may establish from time to time. State
Auto P&C will use the same degree of care in acting on behalf of these companies
as it uses in connection with the conduct of its own business operations.

         (c) EMPLOYEES - State Auto P&C shall provide each Managed Company with
all executive, managerial, supervisory, administrative, technical, clerical,
professional, and other personnel as may be necessary or desirable for the
operation and administration of each Managed Company's business. State Auto P&C
shall direct its employees, in performing such services for each Managed
Company, to use their best efforts to promote the general interests and economic
welfare of each Managed Company, in the same manner as such employees utilize
when providing service to State Auto P&C.

         (d) EMPLOYEES AND PAYROLL - The employees provided by State Auto P&C to
each Managed Company under this Agreement shall be employed as employees of
State Auto P&C and not of any of the Managed Companies. Notwithstanding the
foregoing, Mutual shall continue to act as the common agent or common paymaster
of all such employees providing services to any State Auto Company. As common
paymaster, Mutual shall be responsible for filing information and tax returns
and issuing tax and other payroll forms and reports with respect to wages paid
to the employees employed by State Auto P&C and provided to each Managed
Company.

4. PROVISION OF FACILITIES AND EXPENSE PAYMENTS - During the term of this
Agreement, Mutual shall provide State Auto P&C and each of the other Managed
Companies with such data processing equipment, office supplies and equipment,
furniture and fixtures, automobiles and such other items of tangible personal
property as each of such Managed Companies may require or desire for the
operation of its business. Utilizing the employees of State Auto P&C, Mutual
shall act as agent for each of the Managed Companies and to the extent necessary
for the purposes of its business, in collecting and disbursing funds due to any
Managed Company, and in paying expenses and other operating costs of the
facilities used by such parties except for those expenses paid directly by any
such Managed Company from its own accounts.

5. BOARD OF DIRECTORS' CONTROL - Except as otherwise provided in this Agreement,
the officers of State Auto P&C and of each of the Managed Companies shall be
subject to the authority of their respective boards of directors. Each Managed
Company and State Auto P&C may appoint or elect as its officers those persons
who hold offices in any other State Auto Company, subject at all times to the
power of each company's respective board of directors to appoint, elect, or
remove its officers in accordance with its respective articles or certificate of
incorporation, code of regulations or by-laws, and other governing documents,
statutes, or rules of law applicable to each respective company.

6. ALLOCATION OF COSTS AND EXPENSES - Except to the extent otherwise allocated
under any other provisions of this Agreement, all out-of-pocket expenses
incurred for goods or services from third-party vendors or other unrelated
parties which are identifiable to a particular State Auto Company, including
without limitation, director's fees, legal fees, audit fees, stock transfer
expenses, travel expenses, stationery, supplies and items of a similar nature,
shall be charged to the State Auto Company for whose benefit such costs or
expenses were incurred. All costs


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and expenses incurred by State Auto P&C for the employees, equipment, facilities
and other items shared by the parties pursuant to this Agreement shall be
allocated among the parties to this Agreement as follows:

         (a) INSURANCE LOSSES, LOSS ADJUSTMENT EXPENSES AND UNDERWRITING
EXPENSES OF MUTUAL, STATE AUTO P&C, MILBANK, AND STATE AUTO IC - All insurance
losses, loss adjustment expenses and underwriting expenses of Mutual, State Auto
P&C, Milbank, State Auto IC (hereafter the "Pooled Companies"), as computed
under the statutory accounting principles used by State Auto P&C from time to
time, including, but not limited to, all related claim adjustment services,
commissions and brokerage expenses, salaries and employee relations and welfare
expenses and all other loss adjustment and other underwriting expenses to be
reflected in the annual statement to be filed with state insurance authorities,
shall be shared by each of the Pooled Companies in accordance with the
provisions of the pooling arrangement as in effect through the 2000 Pooling
Agreement. It is understood and acknowledged that the percentages by which such
losses and expenses are shared under the 2000 Pooling Agreement and other
provisions of the 2000 Pooling Agreement may be changed from time to time under
procedures outlined in the 2000 Pooling Agreement.

         (b) EXPENSES OF STATE AUTO FINANCIAL, STATECO, S.I.S., AND 518 PML, -
The salary expenses attributable to State Auto P&C employees performing services
for the Service Companies shall be reimbursed to State Auto P&C by each of these
companies based on an allocation of the time these individuals spend on behalf
of each of the Service Companies. In addition, each of the Service Companies
shall reimburse State Auto P&C for the expense of services provided to it by
State Auto P&C including, without limitation, payroll taxes, benefits, overhead,
and rent based on a percentage of the aforesaid salary expenses to be determined
annually by State Auto P&C in an amount that reasonably reflects the actual
costs of the aforesaid items.

         (c) INSURANCE LOSSES, LOSS ADJUSTMENT EXPENSES AND UNDERWRITING
EXPENSES OF NATIONAL - All insurance losses, loss adjustment expenses and
underwriting expenses of National, as computed under the statutory accounting
principles used by National from time to time shall be paid by National.
Underwriting expenses include, without limitation, expenses for State Auto P&C
employees providing services on behalf of National for only part of their time,
which expenses shall be allocated to National in proportion to the amount of
time those employees spend on National's behalf in accordance with statutory
accounting principles used by National from time to time.

         (d) PENSION AND BENEFIT EXPENSES - Each of the members of State Auto
Financial Group and Mutual, is designated as a participating company under the
State Auto Insurance Companies Employees' Retirement Plan, and any other
applicable benefit plans provided by any State Auto Company for the employees of
State Auto P&C (the "Plans"). Each of the Pooled Companies share of pension and
benefit expenses under the Plans for employees of State Auto P&C providing
services to each of such insurers shall be allocated and paid pursuant to the
2000 Pooling Agreement and their percentage shares of all obligations of the
Plans' sponsors under the Plans shall equal their percentage shares under the
2000 Pooling Agreement, as changed from time to time. State Auto Financial's,
National's, S.I.S.'s, 518 PML's and Stateco's share of pension and benefit
expenses under the Plans for employees of State Auto P&C shall be allocated to
the respective company based on the percentage of payroll expenses attributable
to each such company.

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         (f) REAL ESTATE EXPENSES - State Auto P&C, State Auto Financial,
National, Stateco, and 518 PML, currently are provided office space by Mutual in
the office located at 518 East Broad Street, Columbus, OH. The amount of rent
Mutual charges State Auto Financial, National, Stateco, and 518 PML shall be
based upon the percentage that the total salaries (including a benefits factor)
paid to individuals performing services for any of such entities bears to the
aggregate of all salaries for State Auto P&C times the total rent expenses for
the State Auto Companies for the location at 518 East Broad Street, Columbus, OH
in accordance with statutory accounting principles. The rent expense incurred by
each of the Pooled Companies for other office locations owned by Mutual
(Cincinnati, OH and Cleveland, OH) is an underwriting expense subject to the
2000 Pooling Agreement.

         Notwithstanding the foregoing allocations to the contrary, if a State
Auto Company which is not currently participating the 2000 Pooling Agreement,
hereafter begins participating in such 2000 Pooling Agreement as amended from
time to time, then expenses subject to the 2000 Pooling Agreement shall be
allocated among that company and the other pooling arrangement participants in
the same manner as expenses are allocated between the Pooled Companies as set
forth above.

7.       SERVICES FEE - The Services Fee shall be determined as follows:

         (a) For the services provided by State Auto P&C hereunder, each Managed
Company that is an insurance company shall pay to State Auto P&C an annual
service fee equal to four percent (4%) times the most recent three-year average
of statutory surplus (or the average of such lesser period that such Managed
Company has filed an annual statutory statement as a subsidiary of Mutual or
State Auto Financial) (statutorily admitted assets less liabilities), less the
carrying value of its subsidiaries as reflected on its annual statutory
financial statement for consolidated subsidiaries which are also Managed
Companies. Such fee shall be payable in not less often than quarterly
installments during the term of this Agreement.

         (b) For the services provided by State Auto P&C, each Managed Company
that is a Service Company shall pay to State Auto P&C an annual service fee
equal to four per cent (4 %) of the three year average (or such shorter period
of such company's existence) of shareholders equity of such company or its
equivalent less the carrying value of any subsidiary reflected on the books of
such Service Company, which subsidiary is also a Managed Company.

         (c) Upon request of either Mutual or State Auto Financial, on behalf of
the State Auto Financial Group, not more often than annually, the amount of the
management fee shall be reviewed to determine whether an adjustment in the
management fee is necessary. Any change to the management fee, other than
changes automatically occurring pursuant to the terms of this Agreement, must be
presented to the Coordinating Committee (defined in 9(b) below), which must
review and evaluate the proposed change and make a recommendation to the boards
of directors of Mutual and State Auto Financial. Any such change presented to
the Coordinating Committee must be approved by the boards of directors of
Mutual, which shall make a determination for Mutual, and State Auto Financial,
which shall make a determination for all members of the State Auto Financial
Group.

         (d) If any Managed Company that is an insurance company (a "Managed
Insurer") does not meet the performance standard (as described below) for any
calendar quarter, then the quarterly service fee payment shall be withheld,
unless such performance standard had been met for the trailing four quarters as
a whole, in which case the quarterly service fee shall

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not be withheld. If any portion of the service fee is withheld pursuant to this
section, it shall be released to State Auto P&C if, based on such Managed
Company's performance for the entire calendar year, the Managed Company's
performance meets the performance standard. The performance standard may be
changed from time to time, provided that any such change shall be approved by
the board of directors of such Managed Company and State Auto P&C after review
and approval by the Coordinating Committee. At the commencement of this
Agreement the performance standard shall be as follows:

                  Payment would be withheld if, for the calendar quarter
                  immediately preceding the then current calendar quarter, a
                  Managed Insurer's statutory combined ratio is equal to or
                  greater than the statutory combined ratio for the property
                  casualty insurance industry for the same period, as published
                  by A. M. Best and Co., excluding the effect of losses arising
                  out of catastrophes numbered by the Insurance Services Office
                  and other extraordinary loss events arising out of
                  circumstances that bear no relation to the performance by
                  employees provided by State Auto P&C and for the calendar
                  quarter for which the management fee is due such Managed
                  Insurer's surplus as regards policyholders shall have
                  decreased by more than 10% from the amount of surplus as
                  regards policyholders as of the end of the previous calendar
                  year.

8. PAYMENTS FOR SERVICES - All amounts due under this Agreement shall be due and
payable by the respective company within fifteen days after request for payment
from the party to be paid.

9. CONFLICTS OF INTEREST - The parties hereby acknowledge that, due to the
common management of Mutual and the State Auto Financial Group, conflicts of
interest may arise with respect to business opportunities available to such
companies. In order to deal with such conflicts of interest on an equitable
basis, the following guidelines shall be used to determine which company may
avail itself of a business opportunity:

         (a) A business opportunity shall not be required to be presented to the
Coordinating Committee, as described in 9(b) below, if: (i) such business
opportunity involves the purchase or sale on the open market of marketable
securities at the market price for that issue or comparable issues; (ii) such
business opportunity involves the new issue of stocks or bonds in a public
offering registered or exempt from registration under the Securities Act of
1933, as amended; (iii) such business opportunity does not fit within the
investment criteria and guidelines, including without limitation debt to equity
mix, of either Mutual or State Auto P&C, or any other party to this Agreement,
established by their respective investment committees; (iv) such business
opportunity involves the underwriting of policies of insurance; (v) State Auto
Financial proposes to purchase securities issued by it; or (vi) in the good
faith judgment of the common officers of Mutual and State Auto Financial on
behalf of the State Auto Financial Group, such business opportunity does not
meet the investment policies or objectives, the underwriting or claims
guidelines, or is inconsistent with the cash flow or tax situation of Mutual or
any member of the State Auto Financial Group.

         (b) All other business opportunities shall be presented to a
Coordinating Committee consisting of two eligible directors of Mutual and two
eligible directors of State Auto Financial (the "Coordinating Committee"), with
the State Auto Financial committee members also representing the interests of
all subsidiaries of State Auto Financial and the Mutual members also
representing the interests of wholly owned subsidiaries of Mutual. In order to
be eligible to serve on the Coordinating Committee, Mutual directors shall not,
during the time of service on

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such committee, also be directors or officers of the companies in the State Auto
Financial Group, and State Auto Financial directors shall not, during the time
of service on such committee, also be directors or officers of Mutual or any
wholly owned subsidiary of Mutual. The Coordinating Committee shall review and
evaluate such business opportunities using such factors as it considers
relevant. Based upon such review and evaluation, such committee shall make a
recommendation to each respective board of directors as to whether or not such
business opportunities should be pursued and if so, by which company. If the
Coordinating Committee is unable to agree upon a recommendation by at least a
majority vote of all of its members, the two directors serving on such committee
from either of Mutual or State Auto Financial shall report that result to the
board of such company on which they serve, along with their recommendation, if
any. The boards of directors of Mutual and of State Auto Financial must then act
on the recommendation of the committee or the committee members after
considering all other factors deemed relevant to them.

         (c) A State Auto Company shall not sell any property or security to, or
purchase any property or security from, any other State Auto Company, if, in the
good faith judgment of the common officers of Mutual and State Auto Financial
such sale or purchase is a material transaction to any State Auto Company which
is a party to the sale or purchase, unless such sale or purchase is presented to
the Coordinating Committee for review and evaluation and approved by the boards
of directors of Mutual and State Auto Financial in the manner provided in the
preceding paragraph (b). Notwithstanding the foregoing, State Auto P&C and
Mutual may sell marketable securities to one another at the market price of such
securities or an approximation thereof.

10. TERMINATION - This Agreement may be terminated prior to the end of the
initial term, or any renewal thereof, as follows:

         (a) By any of the Managed Companies, at its option, at any time after a
"Change in Control" or "Potential Change in Control" (as defined below) of State
Auto Financial.

         (b) At the end of the term then in effect by any of the parties upon
advance written notice to the other parties at least two years prior to the end
of the term then in effect (provided that such termination shall only relate to
the Company giving notice and shall not terminate the Agreement with respect to
any of the other parties unless they also give notice of termination of at least
two years prior to the end of the term then in effect).

         (c) Automatically, with respect to a party, if that party files a
voluntary petition in bankruptcy, applies for or consents to the appointment of
a receiver, makes a general assignment for the benefit of creditors, admits in
writing its inability to pay debts as they mature, files a petition or answer
seeking a reorganization or arrangement with creditors under any insolvency law,
files an answer admitting the material allegations of a petition filed in any
bankruptcy or reorganization proceeding, or if a decree of any court is entered
adjudging the party to be bankrupt or approving a reorganization or arrangement
under any insolvency law (which decree is not set aside within ninety days after
it is entered), (provided that such termination shall only relate to the Company
subject to the foregoing event or action and shall not terminate the Agreement
with respect to any of the other parties unless they also give notice of
termination either within thirty days of the event that causes the automatic
termination for another party).

         For purposes of this section, a "Change in Control" means the happening
of any of the following:

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                  (i) When any "person" as defined in Section 3 (a)(9) of the
         Securities Exchange Act of 1934 (the "Exchange Act") and as used in
         Sections 13(d) and 14(d) thereof, including a "group" as defined in
         Section 13(d) of the Exchange Act, but excluding State Auto Financial
         and any subsidiary and any employee benefit plan sponsored or
         maintained by State Auto Financial or any subsidiary (including any
         trustee or such plan acting as trustee) and excluding Mutual, directly
         or indirectly, becomes the "beneficial owner" (as defined in Rule
         13(d)(3) under the Exchange Act, as amended from time to time), of
         securities of State Auto Financial representing 20% or more of the
         combined voting power of the then outstanding securities;

                  (ii) When, during any period of twenty-four consecutive months
         during the effectiveness of this Agreement, the individuals who, at the
         beginning of such period, constitute the board of directors of State
         Auto Financial (the "Incumbent Directors") cease for any reason other
         than death to constitute at least a majority thereof; provided,
         however, that a director who was not a director at the beginning of
         such twenty-four month period shall be deemed to have satisfied such
         twenty-four month requirement (and be an Incumbent Director) if such
         director was elected by, or on the recommendation of or with the
         approval of, at least two-thirds of the directors who then qualified as
         Incumbent Directors either actually (because they were directors at the
         beginning of such twenty-four month period) or by prior operation of
         this paragraph; or

                  (iii) The occurrence of a transaction requiring shareholder
         approval for the acquisition of State Auto Financial by an entity other
         than Mutual or a subsidiary of State Auto Financial through purchase of
         assets, by merger or otherwise.

         For purposes of this section, a "Potential Change in Control" means the
happening of any one of the following:

                  (i) The approval by shareholders of an Agreement by State Auto
         Financial, the consummation of which would result in a Change in
         Control of State Auto Financial as defined above; or

                  (ii) The acquisition of beneficial ownership, directly or
         indirectly, by any entity, person or group other than State Auto
         Financial or a subsidiary or any employee benefit plan sponsored or
         maintained by State Auto Financial or any subsidiary (including any
         trustee of such plan acting as such trustee) of securities of State
         Auto Financial representing 5% or more of the combined voting power of
         State Auto Financial's outstanding securities and the adoption by the
         board of directors of State Auto Financial of a resolution to the
         effect that a Potential Change in Control of State Auto Financial has
         occurred for purposes of this Agreement.

11. ARBITRATION - Any and all disagreements or controversies arising with
respect to this Agreement, whether during or after the term of State Auto P&C's
engagement under this Agreement, shall be settled by binding arbitration by a
panel of three arbitrators, one selected by Mutual on behalf of any member of
the Mutual Group, one selected by State Auto Financial on behalf of any member
of the State Auto Financial Group, and the third to be selected by the mutual
agreement of the first two arbitrators. The arbitration shall be held, and the
award made, in Franklin County, Ohio, pursuant to the Ohio Arbitration Law (Ohio
Revised Code Chapter 2711 or any law of similar tenor or effect that hereafter
is enacted). All fees of the arbitrators shall be borne equally by the parties
to the arbitration.

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12. COMPLETE AGREEMENT - This document contains the entire agreement between the
parties and supersedes all prior or contemporaneous discussions, negotiations,
representations, or agreements relating to the subject matter, including without
limitation, the 94 Management Agreement and all previous amendments thereto. No
changes to this Agreement shall be made or be binding on any party unless made
in writing and signed by each party to this Agreement.

13. NO THIRD PARTY BENEFIT - This Agreement is intended for the exclusive
benefit of the parties to this Agreement and their respective successors and
assigns, and nothing contained in this Agreement shall be construed as creating
any rights or benefits in or to any third party.

14. CAPTIONS - The captions of the various sections of this Agreement are not
part of the content or context of this Agreement, but are only labels to assist
in locating those sections, and shall be ignored in construing this Agreement.

15. FORCE MAJEURE - Notwithstanding any provision of this Agreement to the
contrary, any party's obligations under this Agreement shall be excused if and
to the extent that any delay or failure to perform such obligations is due to
fire or other casualty, material shortages, strikes or labor disputes, acts of
God, or other causes beyond the reasonable control of such party.

16. AMENDMENTS - This Agreement may be amended by the parties, upon authority of
their officers without specific director approval, if such amendment is solely
for the purpose of clarification and does not change the substance of this
Agreement and the parties have obtained an opinion of legal counsel to that
effect. Additionally, any present or future subsidiary or affiliate of Mutual or
State Auto Financial may be added as a party to this Agreement by an amendment
entered into by Mutual, State Auto Financial and the new party, after approval
of the Coordinating Committee and the directors of each such Company. Except as
otherwise specifically provided in this Agreement, all other amendments to this
Agreement must be presented to the Coordinating Committee and be approved by the
directors of each company pursuant to the procedures set forth in Section 9.

17. SUCCESSORS - No party may assign any of its rights or obligations under this
Agreement without the written consent of all other parties to this Agreement,
which consent may be arbitrarily withheld by any such party. Except as otherwise
provided in this Agreement, this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by and against the respective successors and
assigns of each party to this Agreement.

In Witness whereof, each of the parties hereto has subscribed its name below.


Date: December 30, 1999

                                    STATE AUTOMOBILE MUTUAL INSURANCE COMPANY

                                    By: /s/ Robert H. Moone
                                       --------------------------------------
                                        Robert H. Moone, President


<PAGE>   12

                                                                              11


                              STATE AUTO FINANCIAL CORPORATION

                              By: /s/ Robert H. Moone
                                 ----------------------------------------
                                  Robert H. Moone, President


                              STATE AUTO PROPERTY AND CASUALTY INSURANCE
                              COMPANY

                              By: /s/ Robert H. Moone
                                 ----------------------------------------
                                  Robert H. Moone, President


                              STATE AUTO NATIONAL INSURANCE COMPANY

                              By: /s/ Robert H. Moone
                                 ----------------------------------------
                                  Robert H. Moone, President


                              STATE AUTO INSURANCE COMPANY

                              By: /s/ Robert H. Moone
                                 ----------------------------------------
                                  Robert H. Moone, President


                              STATECO FINANCIAL SERVICES, INC.

                              By: /s/ Robert H. Moone
                                 ----------------------------------------
                                  Robert H. Moone, President


                              MILBANK INSURANCE COMPANY

                              By: /s/ Robert H. Moone
                                 ----------------------------------------
                                  Robert H. Moone, President


                              STRATEGIC INSURANCE SOFTWARE, INC.

                              By: /s/ Robert H. Moone
                                 ----------------------------------------
                                  Robert H. Moone, Vice Chairman


                              518 PROPERTY AND MANAGEMENT LEASING, LLC

                              By: /s/ Robert H. Moone
                                 ----------------------------------------
                                  Robert H. Moone, President