Document:

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                                 Exhibit 10(W)

                          Reinsurance Pooling Agreement
                              Amended and Restated
                              As of January 1, 2000

                                  By and among

                    State Automobile Mutual Insurance Company
               State Auto Property and Casualty Insurance Company
                            Milbank Insurance Company
                       Midwest Security Insurance Company
                       Farmers Casualty Insurance Company
                          State Auto Insurance Company

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                          REINSURANCE POOLING AGREEMENT
                          -----------------------------
                              AMENDED AND RESTATED
                              --------------------
                              AS OF JANUARY 1, 2000
                              ---------------------

         This Reinsurance Pooling Agreement Amended and Restated effective as of
12:01 a.m., Eastern Standard Time, January 1, 2000 (the "2000 Pooling
Agreement") is by and among State Automobile Mutual Insurance Company, 518 East
Broad Street, Columbus, Ohio (hereinafter referred to as "State Auto Mutual"),
State Auto Property and Casualty Insurance Company, 112 South Main Street,
Greer, South Carolina (hereinafter referred to as "State Auto P&C"), Milbank
Insurance Company, East Highway 12, Milbank, South Dakota (hereinafter referred
to as "Milbank"), Midwest Security Insurance Company, 2700 Midwest Drive,
Onalaska, Wisconsin (hereinafter referred to as "Midwest Security"), Farmers
Casualty Insurance Company, 1300 Woodland Drive, West Des Moines, Iowa
(hereinafter referred to as "Farmers Casualty") and State Auto Insurance
Company, 518 East Broad Street, Columbus, Ohio ("State Auto IC"). (State Auto
Mutual, State Auto P&C, Milbank, Midwest Security, Farmers Casualty and State
Auto IC are herein collectively referred to as the "Pooled Companies" and
individually as a "Pooled Company").

                             BACKGROUND INFORMATION
                             ----------------------

         The Pooled Companies have determined that their business operations
should be conducted by employees of State Auto P&C on behalf of each of the
Pooled Companies and that State Auto Mutual should remain as the agent for each
of the Pooled Companies with respect to collecting and disbursing funds as
required by the Pooled Companies' business operations. These arrangements have
been effected through the Management Agreement dated January 1, 2000 (the "2000
Management Agreement"), as to Midwest Security through the Amended and Restated
Management Agreement dated effective January 1, 2000 (the "2000 Midwest
Management Agreement"), as to Farmers Casualty through the Amended and Restated
Management Agreement dated effective January 1, 2000 (the "2000 Farmers Casualty
Management Agreement") and by means of mutual reinsurance on a percentage basis
as herein provided.

         State Auto Mutual and State Auto P&C originally entered into an
intercompany Reinsurance Agreement effective as of 12:01 a.m., January 1, 1987
(the "Reinsurance Agreement").

         The Reinsurance Agreement has since been amended by an Addendum
effective January 1, 1987, adding insolvency and arbitration provisions; by
Amendment Number 1 effective as of January 1, 1992 amending the pooling
percentages from 20% State Auto P&C - 80% State Auto Mutual to 30% and 70%
respectively; by Amendment Number 2 effective as of January 1, 1991 excluding
post retirement health care benefits liability as a pooled expense and as of
January 1, 1994 excluding post employment benefits liability as a pooled
expense; and by Amendment Number 3 effective as of January 1, 1995 adding
Milbank as a party and adjusting the pooling percentages as follows: State Auto
P&C 35%, State Auto Mutual 55% and Milbank 10% and by an Amended and Restated
Reinsurance Pooling Agreement dated July 1, 1996 (the "7/1/96 Reinsurance
Agreement"), which excluded from the Reinsurance Agreement catastrophic loss
claims and loss adjustment expenses incurred by State Auto Mutual,

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State Auto P&C and Milbank in the amount of $100,000,000 in excess of
$120,000,000 of such losses and loss adjustment expense and the premiums for
such exposure; and by an Amended and Restated Reinsurance Pooling Agreement
effective January 1, 1998 (the "'98 Pooling Agreement") which added Midwest
Security as a party and adjusted the Respective Percentages (as defined below)
to State Auto P&C 37%, State Auto Mutual 52%, Milbank 10%, and Midwest Security
1%; and by a Reinsurance Pooling Agreement Amended and Restated as of January 1,
1999 (hereafter referred to as the "'99 Pooling Agreement") which added Farmers
Casualty as a party and adjusted the Respective Percentages to State Auto
P&C-37%, State Auto Mutual-49%, Milbank-10%, Farmers Casualty-3%, Midwest
Security-1%. In addition to the foregoing amendments to the pooling arrangement
as set forth in the various agreements, each of these agreements and this 2000
Pooling Agreement is subject to the Guaranty Agreement dated as of May 16, 1991
between State Auto Mutual and State Auto P&C (the "Reserve Guaranty Agreement").

         The parties desire to amend and restate the '99 Pooling Agreement as
the 2000 Pooling Agreement, to provide for the continuation of the pooling
arrangement it effects, including the above-described previous amendments and
the additional amendments incorporated herein, which include the following: to
remove from the scope of the 2000 Pooling Agreement the premiums, losses,
underwriting and administrative expenses attributable to State Auto Mutual's
voluntary assumption of reinsurance from third parties which are unaffiliated
with State Auto Mutual, which voluntary assumed reinsurance contracts/treaties
initially commenced on or after January 1, 1999 (this January 1, 1999 and after
voluntary third party assumption reinsurance is hereafter referred to as the
"State Auto Mutual Reinsurance Book"); to add State Auto IC as a new party; to
remove an exclusion for post retirement health care benefits liabilities; and
post employment benefits liabilities and to adjust the Respective Percentages as
set forth below.

                             STATEMENT OF AGREEMENT
                             ----------------------

         In consideration of the mutual covenants set forth herein and INTENDING
TO BE LEGALLY BOUND HEREBY, the parties hereto hereby agree as follows:

         1.       DEFINITIONS: As used in this Agreement:

                  (a) "Net Liabilities" shall mean all direct liabilities plus
                  reinsurance assumed minus reinsurance ceded, except as
                  otherwise expressly excluded below, provided that the parties
                  hereto expressly understand and agree that Net Liabilities
                  excludes any and all liabilities arising out of the State Auto
                  Mutual Reinsurance Book for such reinsurance assumed on and
                  after January 1, 2000.

                  (b) "Net Premiums" shall mean all direct premiums plus
                  reinsurance assumed minus reinsurance ceded, except as
                  otherwise expressly excluded below, provided that the parties
                  hereto expressly understand and agree that Net Premiums
                  excludes any and all premiums arising out of the State Auto

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                  Mutual Reinsurance Book for such reinsurance assumed on and
                  after January 1, 2000.

                  c.       "Respective Percentage" shall be:
                                    As to State Auto IC       1%
                                    As to Farmers Casualty    3%
                                    As to Midwest Security    1%
                                    As to Milbank             10%
                                    As to State Auto P&C      39%
                                    As to State Auto Mutual   46%

         2.       CESSION:

                  (a) STATE AUTO P&C CESSION: State Auto Mutual hereby reinsures
                  and assumes and State Auto P&C hereby cedes and transfers to
                  State Auto Mutual all Net Liabilities incurred under or in
                  connection with all contracts and policies of insurance issued
                  by State Auto P&C outstanding and in force as of and
                  subsequent to 12:01 a.m. Eastern Standard Time, January 1,
                  2000. Such liabilities shall include State Auto P&C's reserves
                  for unearned premiums, outstanding losses and loss expenses
                  (including unreported losses) and all other outstanding
                  underwriting and administrative expenses as evidenced by State
                  Auto P&C's books and records at the close of business on
                  December 31, 1999, but shall not include intercompany
                  balances, liabilities incurred in connection with the
                  investment transactions of State Auto P&C, liabilities for
                  dividends to stockholders declared and unpaid, other
                  liabilities not incurred in connection with underwriting
                  operations and liabilities arising out of the State Auto
                  Mutual Reinsurance Book. It is further agreed State Auto
                  Mutual shall receive the Net Premiums for said contracts and
                  policies.

                  (b) MILBANK CESSION: State Auto Mutual hereby reinsures and
                  assumes and Milbank hereby cedes and transfers to State Auto
                  Mutual all Net Liabilities incurred under or in connection
                  with all contracts and policies of insurance issued by Milbank
                  outstanding and in force as of and subsequent to 12:01 a.m.
                  EST, January 1, 2000. Such liabilities shall include Milbank's
                  reserves for unearned premiums, outstanding losses and loss
                  expenses (including unreported losses) and all other
                  outstanding underwriting and administrative expenses as
                  evidenced by Milbank's books and records at the close of
                  business on December 31, 1999, but shall not include
                  intercompany balances, liabilities incurred in connection with
                  the investment transactions of Milbank, liabilities for
                  dividends to stockholders declared and unpaid, other
                  liabilities not incurred in connection with underwriting
                  operations and liabilities arising out of the State

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                  Auto Mutual Reinsurance Book. It is further agreed that State
                  Auto Mutual shall receive the Net Premiums for said contracts
                  and policies.

                  (c) MIDWEST SECURITY CESSION: State Auto Mutual hereby
                  reinsures and assumes and Midwest Security hereby cedes and
                  transfers to State Auto Mutual all Net Liabilities incurred
                  under or in connection with all contracts and policies of
                  insurance issued by Midwest Security outstanding and in force
                  as of and subsequent to 12:01 a.m. EST, January 1, 2000. Such
                  liabilities shall include Midwest Security's reserves for
                  unearned premiums, outstanding losses and loss expenses
                  (including unreported losses) and all other outstanding
                  underwriting and administrative expenses as evidenced by
                  Midwest Security's books and records at the close of business
                  on December 31, 1999, but shall not include intercompany
                  balances, liabilities incurred in connection with the
                  investment transactions of Midwest Security, liabilities for
                  dividends to stockholders declared and unpaid, other
                  liabilities not incurred in connection with underwriting
                  operations and liabilities arising out of the State Auto
                  Mutual Reinsurance Book. It is further agreed that State Auto
                  Mutual shall receive the Net Premiums for said contracts and
                  policies.

                  (d) FARMERS CASUALTY CESSION: State Auto Mutual hereby
                  reinsures and assumes and Farmers Casualty hereby cedes and
                  transfers to State Auto Mutual all Net Liabilities incurred
                  under or in connection with all contracts and policies of
                  insurance issued by Farmers Casualty outstanding and in force
                  as of and subsequent to 12:01 a.m. EST, January 1, 2000. Such
                  liabilities shall include Farmers Casualty's reserves for
                  unearned premiums, outstanding losses and loss expenses
                  (including unreported losses) and all other outstanding
                  underwriting and administrative expenses as evidenced by
                  Farmers Casualty's books and records at the close of business
                  on December 31, 1999, but shall not include intercompany
                  balances, liabilities incurred in connection with the
                  investment transactions of Farmers Casualty, liabilities for
                  dividends to stockholders declared and unpaid, other
                  liabilities not incurred in connection with underwriting
                  operations and liabilities arising out of the State Auto
                  Mutual Reinsurance Book. It is further agreed that State Auto
                  Mutual shall receive the Net Premiums for said contracts and
                  policies.

                  (e) STATE AUTO IC CESSION: State Auto Mutual hereby reinsures
                  and assumes and State Auto IC hereby cedes and transfers to
                  State Auto Mutual all Net Liabilities incurred under or in
                  connection with all contracts and policies of

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                  insurance issued by State Auto IC outstanding and in force as
                  of and subsequent to 12:01 a.m. EST, January 1, 2000. Such
                  liabilities shall include State Auto IC's reserves for
                  unearned premiums, outstanding losses and loss expenses
                  (including unreported losses) and all other outstanding
                  underwriting and administrative expenses as evidenced by State
                  Auto IC's books and records at the close of business on
                  December 31, 1999, but shall not include intercompany
                  balances, liabilities incurred in connection with the
                  investment transactions of State Auto IC, liabilities for
                  dividends to stockholders declared and unpaid, other
                  liabilities not incurred in connection with underwriting
                  operations and liabilities arising out of the State Auto
                  Mutual Reinsurance Book. It is further agreed that State Auto
                  Mutual shall receive the Net Premiums for said contracts and
                  policies.

         3.       ASSETS TRANSFER TO STATE AUTO MUTUAL:

                  (a) STATE AUTO P&C: In consideration of the agreements herein
                  contained, State Auto P&C hereby agrees that there has been or
                  will be assigned and transferred to State Auto Mutual an
                  amount, in cash or other assets, equal to the aggregate of all
                  liabilities of State Auto P&C assumed by State Auto Mutual
                  under paragraph 2(a) hereof, less a ceding commission equal to
                  the sum of the acquisition expenses associated with the
                  unearned premium reserves which are transferred as provided
                  herein. There have been included among the assets assigned and
                  transferred to State Auto Mutual by State Auto P&C all of the
                  right, title and interest of State Auto P&C in and to all
                  assets relative to the underwriting operations of State Auto
                  P&C, due or that became due, as evidenced by its books and
                  records at the close of business on December 31, 1999, not
                  including investments, accrued investment income, intercompany
                  balances and bank deposits.

                  (b) MILBANK: In consideration of the agreements herein
                  contained, Milbank hereby agrees that there has been or will
                  be assigned and transferred to State Auto Mutual an amount, in
                  cash or other assets, equal to the aggregate of all
                  liabilities of Milbank assumed by State Auto Mutual under
                  paragraph 2(b) hereof, less a ceding commission equal to the
                  sum of the acquisition expenses associated with the unearned
                  premium reserves which are transferred as provided herein.
                  There shall be included among the assets assigned and
                  transferred to State Auto Mutual by Milbank all of the right,
                  title and interest of Milbank in and to all assets relative to
                  the underwriting operations of Milbank due or that

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                  may become due as evidenced by its books and records at the
                  close of business on December 31, 1999 not including
                  investments, accrued investment income, intercompany balances
                  and bank deposits.

                  (c) MIDWEST SECURITY: In consideration of the agreements
                  herein contained, Midwest Security hereby agrees that there
                  has been or will be assigned and transferred to State Auto
                  Mutual an amount, in cash or other assets, equal to the
                  aggregate of all liabilities of Midwest Security assumed by
                  State Auto Mutual under paragraph 2(c) hereof, less a ceding
                  commission equal to the sum of the acquisition expenses
                  associated with the unearned premium reserves which are
                  transferred as provided herein. There shall be included among
                  the assets assigned and transferred to State Auto Mutual by
                  Midwest Security all of the right, title and interest of
                  Midwest Security in and to all assets relative to the
                  underwriting operations of Midwest Security due or that may
                  become due as evidenced by its books and records at the close
                  of business on December 31, 1999, not including investments,
                  accrued investment income, intercompany balances and bank
                  deposits.

                  (d) FARMERS CASUALTY: In consideration of the agreements
                  herein contained, Farmers Casualty hereby agrees that there
                  has been or will be assigned and transferred to State Auto
                  Mutual an amount, in cash or other assets, equal to the
                  aggregate of all liabilities of Farmers Casualty assumed by
                  State Auto Mutual under paragraph 2(d) hereof, less a ceding
                  commission equal to the sum of the acquisition expenses
                  associated with the unearned premium reserves which are
                  transferred as provided herein. There shall be included among
                  the assets assigned and transferred to State Auto Mutual by
                  Farmers Casualty all of the right, title and interest of
                  Farmers Casualty in and to all assets relative to the
                  underwriting operations of Farmers Casualty due or that may
                  become due as evidenced by its books and records at the close
                  of business on December 31, 1999, not including investments,
                  accrued investment income, intercompany balances and bank
                  deposits.

                  (e) State Auto IC: In consideration of the agreements herein
                  contained, State Auto IC hereby agrees that there has been or
                  will be assigned and transferred to State Auto Mutual an
                  amount, in cash or other assets, equal to the aggregate of all
                  liabilities of State Auto IC assumed by State Auto Mutual
                  under paragraph 2(e) hereof, less a ceding commission equal to
                  the sum of the acquisition expenses associated with the
                  unearned premium reserves which are transferred as provided
                  herein. There shall be included

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                  among the assets assigned and transferred to State Auto Mutual
                  by State Auto IC all of the right, title and interest of State
                  Auto IC in and to all assets relative to the underwriting
                  operations of State Auto IC due or that may become due as
                  evidenced by its books and records at the close of business on
                  December 31, 1999, not including investments, accrued
                  investment income, intercompany balances and bank deposits.

         4.       ASSUMPTION OF REINSURANCE:

                  (a) STATE AUTO P&C: State Auto P&C hereby reinsures and
                  assumes and State Auto Mutual hereby cedes and transfers to
                  State Auto P&C its Respective Percentage of all Net
                  Liabilities under all contracts and policies of insurance,
                  (including those ceded by State Auto P&C and reinsured by
                  State Auto Mutual as provided in paragraph 2(a)), on which
                  State Auto Mutual is subject to liability and which are
                  outstanding and in force on or after the effective date
                  hereof.

                  Such liabilities shall include reserves for unearned premiums,
         outstanding losses (including unreported losses) and loss expenses and
         all other underwriting and administrative expenses, but shall not
         include intercompany balances, liabilities for federal income taxes,
         liabilities incurred in connection with investment transactions,
         liabilities for dividends to stockholders declared and unpaid, other
         liabilities not incurred in connection with underwriting operations and
         liabilities arising out of the State Auto Mutual Reinsurance Book.

                  (b) MILBANK: Milbank hereby reinsures and assumes and State
                  Auto Mutual hereby cedes and transfers to Milbank its
                  Respective Percentage of all Net Liabilities under all
                  contracts and policies of insurance, (including those ceded by
                  Milbank and reinsured by State Auto Mutual as provided in
                  paragraph 2(b)), on which State Auto Mutual is subject to
                  liability and which are outstanding and in force on or after
                  the effective date hereof.

                  Such liabilities shall include reserves for unearned premiums,
         outstanding losses (including unreported losses) and loss expenses and
         all other underwriting and administrative expenses, but shall not
         include intercompany balances, liabilities for federal income taxes,
         liabilities incurred in connection with investment transactions,
         liabilities for dividends to stockholders declared and unpaid, other
         liabilities not incurred in connection with underwriting operations and
         liabilities arising out of the State Auto Mutual Reinsurance Book.

                  (c) MIDWEST SECURITY: Midwest Security hereby reinsures and
                  assumes and State Auto Mutual hereby cedes and transfers to
                  Midwest Security its Respective Percentage of all

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                  Net Liabilities under all contracts and policies of insurance,
                  (including those ceded by Midwest Security and reinsured by
                  State Auto Mutual as provided in paragraph 2(c)), on which
                  State Auto Mutual is subject to liability and which are
                  outstanding and in force on or after the effective date
                  hereof.

                  Such liabilities shall include reserves for unearned premiums,
         outstanding losses (including unreported losses) and loss expenses and
         all other underwriting and administrative expenses, but shall not
         include intercompany balances, liabilities for federal income taxes,
         liabilities incurred in connection with investment transactions,
         liabilities for dividends to stockholders declared and unpaid, other
         liabilities not incurred in connection with underwriting operations and
         liabilities arising out of the State Auto Mutual Reinsurance Book.

                  (d) FARMERS CASUALTY: Farmers Casualty hereby reinsures and
                  assumes and State Auto Mutual hereby cedes and transfers to
                  Farmers Casualty its Respective Percentage of all Net
                  Liabilities under all contracts and policies of insurance,
                  (including those ceded by Farmers Casualty and reinsured by
                  State Auto Mutual as provided in paragraph 2(d)), on which
                  State Auto Mutual is subject to liability and which are
                  outstanding and in force on or after the effective date
                  hereof.

                  Such liabilities shall include reserves for unearned premiums,
         outstanding losses (including unreported losses) and loss expenses and
         all other underwriting and administrative expenses, but shall not
         include intercompany balances, liabilities for federal income taxes,
         liabilities incurred in connection with investment transactions,
         liabilities for dividends to stockholders declared and unpaid, other
         liabilities not incurred in connection with underwriting operations and
         liabilities arising out of the State Auto Mutual Reinsurance Book.

                  (e) STATE AUTO IC: State Auto IC hereby reinsures and assumes
                  and State Auto Mutual hereby cedes and transfers to State Auto
                  IC its Respective Percentage of all Net Liabilities under all
                  contracts and policies of insurance, (including those ceded by
                  State Auto IC and reinsured by State Auto Mutual as provided
                  in paragraph 2(e)), on which State Auto Mutual is subject to
                  liability and which are outstanding and in force on or after
                  the effective date hereof.

                  Such liabilities shall include reserves for unearned premiums,
         outstanding losses (including unreported losses) and loss expenses and
         all other underwriting and administrative expenses, but shall not
         include intercompany balances, liabilities for federal income taxes,
         liabilities incurred in connection with investment transactions,
         liabilities for dividends to stockholders declared and unpaid, other
         liabilities not

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         incurred in connection with underwriting operations and liabilities
         arising out of the State Auto Mutual Reinsurance Book.

         5.       ASSET TRANSFER BY STATE AUTO MUTUAL:

                  (a) STATE AUTO P&C: In consideration of the agreements herein
                  contained, State Auto Mutual hereby agrees that there has been
                  or will be assigned and transferred to State Auto P&C an
                  amount, in cash or other assets, equal to the aggregate of all
                  liabilities of State Auto Mutual assumed by State Auto P&C
                  under paragraph 4(a) hereof, less a ceding commission equal to
                  the sum of the acquisition expenses associated with the
                  unearned premium reserves which are transferred as provided
                  herein. There shall be included among the assets assigned and
                  transferred to State Auto P&C by State Auto Mutual all of the
                  right, title and interest of State Auto Mutual in and to all
                  assets relative to the underwriting operations of State Auto
                  Mutual, due or that may become due, as evidenced by its books
                  and records at the close of business on December 31, 1999, not
                  including investments, accrued investment income, intercompany
                  balances and bank deposits.

                  (b) MILBANK: In consideration of the agreements herein
                  contained, State Auto Mutual hereby agrees that there has been
                  or will be assigned and transferred to Milbank an amount, in
                  cash or other assets, equal to the aggregate of all
                  liabilities of State Auto Mutual assumed by Milbank under
                  paragraph 4(b) hereof, less a ceding commission equal to the
                  sum of the acquisition expenses associated with the unearned
                  premium reserves which are transferred as provided herein.
                  There shall be included among the assets assigned and
                  transferred to Milbank by State Auto Mutual all of the right,
                  title and interest of State Auto Mutual in and to all assets
                  relative to the underwriting operations of State Auto Mutual,
                  due or that may become due, as evidenced by its books and
                  records at the close of business on December 31, 1999, not
                  including investments, accrued investment income, intercompany
                  balances and bank deposits.

                  (c) MIDWEST SECURITY: In consideration of the agreements
                  herein contained, State Auto Mutual hereby agrees that there
                  has been or will be assigned and transferred to Midwest
                  Security an amount, in cash or other assets, equal to the
                  aggregate of all liabilities of State Auto Mutual assumed by
                  Midwest Security under paragraph 4(c) hereof, less a ceding
                  commission equal to the sum of the acquisition expenses
                  associated with the unearned premium reserves which are
                  transferred as provided herein. There shall be included among
                  the assets assigned and transferred to Midwest

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                  Security by State Auto Mutual all of the right, title and
                  interest of State Auto Mutual in and to all assets relative to
                  the underwriting operations of State Auto Mutual, due or that
                  may become due, as evidenced by its books and records at the
                  close of business on December 31, 1999, not including
                  investments, accrued investment income, intercompany balances
                  and bank deposits.

                  (d) FARMERS CASUALTY: In consideration of the agreements
                  herein contained, State Auto Mutual hereby agrees that there
                  has been or will be assigned and transferred to Farmers
                  Casualty an amount, in cash or other assets, equal to the
                  aggregate of all liabilities of State Auto Mutual assumed by
                  Farmers Casualty under paragraph 4(d) hereof, less a ceding
                  commission equal to the sum of the acquisition expenses
                  associated with the unearned premium reserves which are
                  transferred as provided herein. There shall be included among
                  the assets assigned and transferred to Farmers Casualty by
                  State Auto Mutual all of the right, title and interest of
                  State Auto Mutual in and to all assets relative to the
                  underwriting operations of State Auto Mutual, due or that may
                  become due, as evidenced by its books and records at the close
                  of business on December 31, 1999, not including investments,
                  accrued investment income, intercompany balances and bank
                  deposits.

                  (e) State Auto IC: In consideration of the agreements herein
                  contained, State Auto Mutual hereby agrees that there has been
                  or will be assigned and transferred to State Auto IC an
                  amount, in cash or other assets, equal to the aggregate of all
                  liabilities of State Auto Mutual assumed by State Auto IC
                  under paragraph 4(e) hereof, less a ceding commission equal to
                  the sum of the acquisition expenses associated with the
                  unearned premium reserves which are transferred as provided
                  herein. There shall be included among the assets assigned and
                  transferred to State Auto IC by State Auto Mutual all of the
                  right, title and interest of State Auto Mutual in and to all
                  assets relative to the underwriting operations of State Auto
                  Mutual, due or that may become due, as evidenced by its books
                  and records at the close of business on December 31, 1999, not
                  including investments, accrued investment income, intercompany
                  balances and bank deposits.

         6.       PREMIUM COLLECTION AND PAYMENT OF LOSSES:

                  As of the effective date of this Agreement and pursuant to the
         terms of the 2000 Management Agreement as amended from time to time,
         the 2000 Midwest Management Agreement, as amended from time to time,
         and the 2000 Farmers Casualty Management Agreement, as amended

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         from time to time, State Auto P&C, Milbank, Midwest Security, Farmers
         Casualty, and State Auto IC hereby authorize and empower State Auto
         Mutual to collect and receive all premiums and to take charge of,
         adjust and administer the payment of all losses with respect to any and
         all contracts and policies of insurance previously or thereafter issued
         by State Auto P&C, Milbank, Midwest Security, Farmers Casualty and
         State Auto IC and to reinsure or terminate all such contracts and
         policies, and in all respects to act as though said contracts and
         policies were issued by State Auto Mutual. State Auto Mutual agrees to
         administer the payment of all losses and loss adjustment expenses in
         connection with such contracts and policies. None of the foregoing is
         intended to affect or impair the direct obligation of State Auto P&C,
         Milbank, Midwest Security, Farmers Casualty and State Auto IC to their
         insureds under policies issued by State Auto P&C, Milbank, Midwest
         Security, Farmers Casualty, and State Auto IC, respectively.

         7.       PREMIUM PAYABLE BY STATE AUTO MUTUAL:

                  (a) STATE AUTO P&C: Commencing with the effective date of this
                  Agreement, State Auto Mutual hereby agrees to pay to State
                  Auto P&C its Respective Percentage of the Net Premiums written
                  by the parties hereto. Similarly, commencing with the
                  effective date of this Agreement, all losses, loss expenses,
                  underwriting expenses, and administrative expenses chargeable
                  to underwriting of the parties hereto (except for losses, loss
                  expenses, underwriting expenses and administrative expenses
                  chargeable to the State Auto Mutual Reinsurance Book),
                  including the policyholder dividends, less all losses and
                  expenses recovered and recoverable under reinsurance ceded to
                  reinsurers other than the parties hereto, (except for
                  catastrophe reinsurance ceded by State Auto Mutual, Farmers
                  Casualty, Midwest Security, Milbank, and State Auto IC to
                  State Auto P&C pursuant to a Property Catastrophe Overlying
                  Excess of Loss Reinsurance Contract dated as of July 1, 1999
                  as amended January 1, 2000 in which State Auto P&C provides
                  catastrophe coverage for the aforesaid companies for
                  $135,000,000 of catastrophe losses and loss expenses in excess
                  of $120,000,000 of such losses and loss expenses incurred by
                  the Pooled Companies) (the "State Auto P&C Catastrophe
                  Assumption Agreement") shall be prorated among the parties on
                  the basis of the Respective Percentage of each. Accounts shall
                  be rendered at quarterly intervals and shall be settled within
                  sixty (60) days thereafter.

                  (b) MILBANK: Commencing with the effective date of this
                  Agreement, State Auto Mutual hereby agrees to pay Milbank its
                  Respective Percentage of the Net Premiums written by the
                  parties hereto. Similarly, commencing with the effective date

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                  of this Agreement, all losses, loss expenses, underwriting
                  expenses, and administrative expenses chargeable to
                  underwriting of the parties hereto (except for losses, loss
                  expenses, underwriting expenses and administrative expenses
                  chargeable to the State Auto Mutual Reinsurance Book),
                  including policyholder dividends, less all losses and expenses
                  recovered and recoverable under reinsurance ceded to
                  reinsurers other than the parties hereto, (except for the
                  State Auto P&C Catastrophe Assumption Agreement) shall be
                  prorated among the parties on the basis of the Respective
                  Percentage of each. Accounts shall be rendered at quarterly
                  intervals and shall be settled within sixty (60) days
                  thereafter.

                  (c) MIDWEST SECURITY: Commencing with the effective date of
                  this Agreement, State Auto Mutual hereby agrees to pay Midwest
                  Security its Respective Percentage of the Net Premiums written
                  by the parties hereto. Similarly, commencing with the
                  effective date of this Agreement, all losses, loss expenses,
                  underwriting expenses, and administrative expenses chargeable
                  to underwriting of the parties hereto (except for losses, loss
                  expenses, underwriting expenses and administrative expenses
                  chargeable to the State Auto Mutual Reinsurance Book),
                  including policyholder dividends, less all losses and expenses
                  recovered and recoverable under reinsurance ceded to
                  reinsurers other than the parties hereto, (except for the
                  State Auto P&C Catastrophe Assumption Agreement) shall be
                  prorated among the parties on the basis of the Respective
                  Percentage of each. Accounts shall be rendered at quarterly
                  intervals and shall be settled within sixty (60) days
                  thereafter.

                  (d) FARMERS CASUALTY: Commencing with the effective date of
                  this Agreement, State Auto Mutual hereby agrees to pay Farmers
                  Casualty its Respective Percentage of the Net Premiums written
                  by the parties hereto. Similarly, commencing with the
                  effective date of this Agreement, all losses, loss expenses,
                  underwriting expenses, and administrative expenses chargeable
                  to underwriting of the parties hereto (except for losses, loss
                  expenses, underwriting expenses and administrative expenses
                  chargeable to the State Auto Mutual Reinsurance Book),
                  including policyholder dividends, less all losses and expenses
                  recovered and recoverable under reinsurance ceded to
                  reinsurers other than the parties hereto, (except for the
                  State Auto P&C Catastrophe Assumption Agreement) shall be
                  prorated among the parties on the basis of the Respective
                  Percentage of each. Accounts shall be rendered at quarterly
                  intervals and shall be settled within sixty (60) days
                  thereafter.

<PAGE>   14

                                                                         Page 13

                  (e) STATE AUTO IC: Commencing with the effective date of this
                  Agreement, State Auto Mutual hereby agrees to pay State Auto
                  IC its Respective Percentage of the Net Premiums written by
                  the parties hereto. Similarly, commencing with the effective
                  date of this Agreement, all losses, loss expenses,
                  underwriting expenses, and administrative expenses chargeable
                  to underwriting of the parties hereto (except for losses, loss
                  expenses, underwriting expenses and administrative expenses
                  chargeable to the State Auto Mutual Reinsurance Book),
                  including policyholder dividends, less all losses and expenses
                  recovered and recoverable under reinsurance ceded to
                  reinsurers other than the parties hereto, (except for the
                  State Auto P&C Catastrophe Assumption Agreement) shall be
                  prorated among the parties on the basis of the Respective
                  Percentage of each. Accounts shall be rendered at quarterly
                  intervals and shall be settled within sixty (60) days
                  thereafter.

         8. OFFSET: It is understood and agreed that, insofar as is practicable
         and consistent with the purposes and intentions of this Agreement, the
         obligations of each company under this Agreement to transfer assets to
         the other company may, in whole or in part, be offset against the
         reciprocal reinsurance obligations of each company to the other company
         so that each company shall deliver hereunder only a net amount of
         assets required under such offset.

         9. GENERAL STATEMENT OF INTENT: It is the purpose and intent of this
         Agreement that:

                  (a) State Auto Mutual shall be liable as a reinsurer to State
                  Auto P&C, Milbank, Midwest Security, Farmers Casualty, and
                  State Auto IC on the policies and contracts of insurance of
                  State Auto P&C, Milbank, Midwest Security, Farmers Casualty
                  and State Auto IC respectively, issued and in force at 12:01
                  a.m., EST, January 1, 2000, or on which there were, at that
                  time, unsettled claims or losses, and on policies and
                  contracts thereafter issued by State Auto P&C, Milbank,
                  Midwest Security, Farmers Casualty and State Auto IC to the
                  extent of State Auto Mutual's Respective Percentage. Premiums,
                  losses, loss expenses, underwriting expenses and
                  administrative expenses chargeable to the State Auto Mutual
                  Reinsurance Book from and after 12:01 a.m. EST January 1, 2000
                  are excluded from the scope of the 2000 Pooling Agreement.

                  (b) State Auto P&C shall be liable as a reinsurer to State
                  Auto Mutual, Milbank, Midwest Security, Farmers Casualty and
                  State Auto IC on the policies and contracts of insurance of
                  State Auto Mutual, Milbank, Midwest Security, Farmers Casualty
                  and State Auto IC, respectively, issued and in force

<PAGE>   15

                                                                         Page 14

                  at 12:01 a.m., EST, January 1, 2000, or on which there were,
                  at that time, unsettled claims or losses, and on policies and
                  contracts thereafter issued by State Auto Mutual, Milbank,
                  Midwest Security, Farmers Casualty and State Auto IC to the
                  extent of State Auto P&C's Respective Percentage. Premiums,
                  losses, loss expenses, underwriting expenses and
                  administrative expenses chargeable to the State Auto Mutual
                  Reinsurance Book from and after 12:01 a.m. EST January 1, 2000
                  are excluded from the scope of the 2000 Pooling Agreement.

                  (c) Milbank shall be liable as a reinsurer to State Auto
                  Mutual, State Auto P&C, Midwest Security, Farmers Casualty and
                  State Auto IC on the policies and contracts of State Auto
                  Mutual, State Auto P&C, Midwest Security, Farmers Casualty and
                  State Auto IC, respectively, issued and in force at 12:01
                  a.m., EST, on January 1, 2000 or on which there were, at that
                  time, unsettled claims or losses and on policies thereafter
                  issued by State Auto Mutual, State Auto P&C, Midwest Security,
                  Farmers Casualty and State Auto IC to the extent of Milbank's
                  Respective Percentage. Premiums, losses, loss expenses,
                  underwriting expenses and administrative expenses chargeable
                  to the State Auto Mutual Reinsurance Book from and after 12:01
                  a.m. EST January 1, 2000 are excluded from the scope of the
                  2000 Pooling Agreement.

                  (d) Midwest Security shall be liable as a reinsurer to State
                  Auto Mutual, State Auto P&C, Milbank, Farmers Casualty and
                  State Auto IC on the policies and contracts of State Auto
                  Mutual, State Auto P&C, Milbank, Farmers Casualty and State
                  Auto IC, respectively, issued and in force at 12:01 a.m., EST,
                  on January 1, 2000 or on which there were, at that time,
                  unsettled claims or losses and on policies thereafter issued
                  by State Auto Mutual, State Auto P&C, Milbank, Farmers
                  Casualty and State Auto IC to the extent of Midwest Security's
                  Respective Percentage. Premiums, losses, loss expenses,
                  underwriting expenses and administrative expenses chargeable
                  to the State Auto Mutual Reinsurance Book from and after 12:01
                  a.m. EST January 1, 2000 are excluded from the scope of the
                  2000 Pooling Agreement.

                  (e) Farmers Casualty shall be liable as a reinsurer to State
                  Auto Mutual, State Auto P&C, Milbank, Midwest Security and
                  State Auto IC on the policies and contracts of State Auto
                  Mutual, State Auto P&C, Milbank, Midwest Security and State
                  Auto IC, respectively, issued and in force at 12:01 a.m., EST,
                  January 1, 2000 or on which there were, at that time,
                  unsettled claims or losses, and on policies and

<PAGE>   16

                                                                         Page 15

                  contracts thereafter issued by State Auto Mutual, State Auto
                  P&C, Milbank, Midwest Security and State Auto IC to the extent
                  of Farmers Casualty's Respective Percentage. Premiums, losses,
                  loss expenses, underwriting expenses and administrative
                  expenses chargeable to the State Auto Mutual Reinsurance Book
                  from and after 12:01 a.m. EST January 1, 2000 are excluded
                  from the scope of the 2000 Pooling Agreement.

                  (f) State Auto IC shall be liable as a reinsurer to State Auto
                  Mutual, State Auto P&C, Milbank, Midwest Security and Farmers
                  Casualty on the policies and contracts of State Auto Mutual,
                  State Auto P&C, Milbank, Midwest Security and Farmers
                  Casualty, respectively, issued and in force at 12:01 a.m.,
                  EST, January 1, 2000 or on which there were, at that time,
                  unsettled claims or losses, and on policies and contracts
                  thereafter issued by State Auto Mutual, State Auto P&C,
                  Milbank, Midwest Security and Farmers Casualty to the extent
                  of State Auto IC's Respective Percentage. Premiums, losses,
                  loss expenses, underwriting expenses and administrative
                  expenses chargeable to the State Auto Mutual Reinsurance Book
                  from and after 12:01 a.m. EST January 1, 2000 are excluded
                  from the scope of the 2000 Pooling Agreement.

                  (g) The parties hereto shall, on and after 12:01 a.m., EST,
                  January 1, 2000, participate on the basis of 46% for State
                  Auto Mutual, 39% for State Auto P&C, 10% for Milbank, 1% for
                  Midwest Security, 3% for Farmers Casualty, and 1% for State
                  Auto IC in all of the underwriting operations of each of the
                  six parties hereto. Premiums, losses, loss expenses,
                  underwriting expenses and administrative expenses chargeable
                  to the State Auto Mutual Reinsurance Book from and after 12:01
                  a.m. EST January 1, 2000 are excluded from the scope of the
                  2000 Pooling Agreement.

         10. LOSSES EXCLUDED: Notwithstanding any of the foregoing, the parties
         hereto understand and agree that this 2000 Pooling Agreement shall not
         apply to catastrophe losses and loss expenses for residential and
         commercial property to the extent such losses and loss expenses are
         covered by the State Auto P&C Catastrophe Assumption Agreement. Once
         the aforesaid $135,000,000 of coverage is exhausted by loss expenses
         and loss payments on behalf of any party hereto, under either the State
         Auto P&C Catastrophe Assumption Agreement or directly, all parties
         understand and agree that catastrophe losses and loss expenses in
         excess of $255,000,000 shall once again be ceded and assumed under the
         terms of the 2000 Pooling Agreement. All premiums attributable to the
         State Auto P&C Catastrophe Assumption Agreement are to be paid to State
         Auto P&C outside of the 2000 Pooling Agreement. All premiums, losses,
         loss expenses, underwriting expenses and administrative expenses
         attributable

<PAGE>   17

                                                                         Page 16

         to the State Auto Mutual Reinsurance Book from and after 12:01 a.m. EST
         January 1, 2000 are outside the 2000 Pooling Agreement. In addition,
         this 2000 Pooling Agreement is subject to the Reserve Guaranty
         Agreement.

         11. LIABILITIES EXCLUDED: In addition to the liabilities set forth in
         paragraphs 2(a), 2(b), 2(c), 2(d), 2(e) and 10 above, this Agreement
         shall not apply to the investment operation or liabilities for federal
         income tax or other liabilities excluded by this Agreement.

         12. "FOLLOW THE FORTUNES": The reinsurance provided by the terms of
         this Agreement shall be subject to the same terms and conditions under
         which the original insurance was concluded, or which may be or may have
         been agreed to during the term of the original insurance contract.

         13. METHODS AND PROCEDURES: The president of State Auto Mutual, State
         Auto P&C, Milbank, Midwest Security, Farmers Casualty and State Auto
         IC, or any officer of any of these companies designated by said
         president, shall determine the methods and procedures, including
         accounting transactions, by which the terms of this Agreement shall be
         performed by and on behalf of the parties hereto.

         14. AMENDMENTS: This Agreement may be modified from time to time, so as
         to adapt its provisions to the varying conditions of the business of
         the Pooled Companies, by a mutual agreement in writing of the parties
         hereto, subject to ratification by the Board of Directors of each party
         and with the approval of the insurance regulatory officials from the
         State of Ohio, the State of South Carolina, the State of South Dakota,
         the State of Wisconsin, and the State of Iowa as required by law.

         15. TERM: This Agreement shall remain in full force and effect until
         canceled by agreement of the parties or by the giving of ninety (90)
         days notice by one of the parties to the other parties and to the
         respective domiciliary insurance department of each of the parties.

         16. INTERPRETATION: Wherever required to give the correct meaning
         throughout this Agreement, the singular shall be interpreted in the
         plural. Clerical errors or errors of involuntary or inadvertent
         omission or commission shall not be interpreted as a discharge of
         liability on behalf of any of the parties to this contract. Such errors
         shall be rectified at the time of discovery or as soon as practicable
         thereafter. Caption headings are for convenience only and are not
         intended to affect the construction of the terms hereof.

         17. INSOLVENCY: The reinsurance made under this Agreement (which the
         parties understand and agree excludes the State Auto Mutual Reinsurance
         Book for such business assumed on and after January 1, 2000) shall be
         payable by the assuming reinsurer on the basis of the liability of the
         ceding insurer under the contract or contracts reinsured without
         diminution because of the insolvency of the ceding insurer. In the
         event of insolvency

<PAGE>   18

                                                                         Page 17

         of the ceding insurer, the liquidator or receiver or statutory
         successor of such insurer shall give written notice to the assuming
         reinsurer of the pendency of a claim against the insolvent ceding
         insurer on the policy or bond reinsured within a reasonable time after
         such claim is filed in the insolvency proceeding; that during the
         pendency of such claim the assuming reinsurer may investigate such
         claim and interpose, at its own expense, in the proceeding where such
         claim is to be adjudicated any defense or defenses which it may deem
         available to the ceding insurer or its liquidator or receiver or
         statutory successors; that the expense thus incurred by the assuming
         reinsurer shall be chargeable, subject to court approval, against the
         insolvent ceding insurer as part of the expense of liquidation to the
         extent of a proportionate share of the benefit which may accrue to the
         ceding insurer solely as a result of the defense undertaken by the
         assuming reinsurer. The reinsurance made effective under this Agreement
         shall be payable by the assuming reinsurer to the ceding insurer or to
         the liquidator, receiver or statutory successor of the ceding insurer.

         18. ARBITRATION: In the event of any dispute hereafter arising with
         respect to this Agreement, State Auto Mutual, State Auto P&C, Milbank,
         Midwest Security, Farmers Casualty and State Auto IC hereby agree that
         such dispute shall, upon the request of the one of the parties, be
         submitted to arbitration. One arbitrator shall be chosen by each party
         and those arbitrators shall then select an umpire who shall hear and
         decide the issues to be arbitrated. If one party fails to name an
         arbitrator within thirty (30) days after receipt of a written request
         to do so, the party initiating the arbitration may choose the
         arbitrators. The decision of the umpire shall be final and binding on
         the parties. Each party shall bear the expense of its arbitrator and
         the cost of the umpire shall be shared equally. The arbitration shall
         take place at Columbus, Ohio or such other location upon which the
         parties may mutually agree.

         19. COUNTERPARTS: The 2000 Pooling Agreement may be executed in two or
         more counterparts, each of which shall be deemed an original and all of
         which shall constitute one and the same instrument.

<PAGE>   19

                                                                         Page 18

         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
         executed as of the date and the year first above written.

Attest                                             State Automobile Mutual
                                                   Insurance Company

/s/ John R. Lowther                   By /s/ Robert H. Moone
--------------------------               ---------------------------------
Secretary                                        President

                                                   State Auto Property and
                                                   Casualty Insurance Company

/s/ John R. Lowther                   By /s/ Robert H. Moone
--------------------------               ---------------------------------
Secretary                                      President

                                                 Milbank Insurance Company

/s/ John R. Lowther                   By /s/ Robert H. Moone
--------------------------               ---------------------------------
Secretary                                      President

                                                 Midwest Security
                                                 Insurance Company

/s/ John R. Lowther                   By /s/ Robert H. Moone
--------------------------               ---------------------------------
Secretary                                      President

                                                 Farmers Casualty
                                                 Insurance Company

/s/ John R. Lowther                   By /s/ Marion D. Houk
--------------------------               ---------------------------------
Assistant Secretary                            President

                                                 State Auto Insurance Company

/s/ John R. Lowther                   By /s/ Robert H. Moone
--------------------------               ---------------------------------
Secretary                                        President<PAGE>   1

                                 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

<PAGE>   2

                       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

<PAGE>   3

                                                                               2

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:

<PAGE>   4

                                                                               3

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.

<PAGE>   5

                                                                               4

         (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

<PAGE>   6

                                                                               5

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.

<PAGE>   7

                                                                               6

         (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

<PAGE>   8

                                                                               7

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

<PAGE>   9

                                                                               8

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:

<PAGE>   10

                                                                               9

                  (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.

<PAGE>   11

                                                                              10

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

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