Document:

exv10w1

 

«Grant_Number»

PHILADELPHIA INSURANCE COMPANIES

PERFORMANCE SHARE AWARD AGREEMENT

     THIS PERFORMANCE SHARE AWARD (the “Award”) is hereby granted as of «Grant_Date» (the “Grant
Date”) by Philadelphia Consolidated Holding Corp., a Pennsylvania corporation (the “Company”), to
«First_Name» «Last_Name» (the “Grantee”) pursuant to the Company’s Amended and Restated Employees’
Stock Incentive and Performance Based Compensation Plan (the “Plan”), and subject to the terms and
conditions set forth therein and as set out in this Award Agreement. Capitalized terms used herein
shall, unless otherwise required by the context, have the meaning ascribed to such terms in the
Plan.

                    By action of the Committee, and subject to the terms of the Plan, the Grantee is hereby
granted shares of the Company’s Common Stock, no par value, as indicated below (the “Stock”),
subject to the Plan and to the restrictions and risks of forfeiture as set forth in this Award
Agreement.

                    NOW, THEREFORE, in consideration of the promises and the mutual covenants contained in this
Agreement, the parties agree as follows:

W I T N E S S E T H

     1. Definitions. As used herein, the following terms shall have the meanings set forth below:

          (a) “Cliff Vesting Date” means [INSERT THE DATE AS OF WHICH THE AWARD VESTS BY REASON OF
PERFORMANCE OR IS FORFEITED].

          (b) “Date of Grant” means the Effective Date as indicated above.

          (c) “Restriction Period” with respect to any Stock subject to this Award Agreement, means the
period from the Date of Grant up to the Cliff Vesting Date.

     2. Grant. The Company grants to the Grantee upon the terms and conditions set forth in this
Award Agreement «M__Shares» shares of the Company’s Common Stock. This Award is given upon the
following terms and conditions:

          (a) Subject to the terms and conditions set forth herein and in the Plan, Grantee shall not be
permitted to sell, transfer, pledge or assign any Restricted Stock during such shares’ Restricted
Period.

          (b) Subject to the terms and conditions set forth herein and in the Plan, the restrictions on
the Stock subject to this Award Agreement imposed hereunder or pursuant to the Plan shall lapse on
the Cliff Vesting Date but only to the extent determined by reference to the performance vesting
schedule set forth on Annex 1, hereto; provided, however, that the Stock subject to this Award
shall be forfeited in its entirety, and shall not therefore become vested as of the Cliff Vesting
Date to any extent if the Grantee’s employment with the Company terminates for any reason prior to
the Cliff Vesting Date.

          (c) Any stock that is forfeited prior to the Cliff Vesting Date by reason of the Grantee’s
termination of employment, or that is forfeited as of the Cliff Vesting Date by reason of not
having become vested pursuant to the vesting schedule set forth on Annex 1, shall be reacquired by
the Company without consideration.

 

 

          (d) Except for the restrictions specified herein and in the Plan, the Grantee shall have all
of the rights of a shareholder with respect to the Stock subject to this Award, including the right
to vote such Stock to the same extent that such shares could be voted if they were not subject to
the restrictions set forth in this Award Agreement.

          (e) Any dividends payable with respect to the Stock subject to this Award shall be distributed
to the Grantee at the same time and in the same manner as dividends are distributed to any other
holder of the Company’s Common Stock. Any dividends that are in the nature of extraordinary
dividends or that are in the form of a distribution of securities, shall be held in escrow and
shall be subject to the same restrictions and the same provisions for vesting and forfeiture as are
applicable under the terms of this Award Agreement and the Plan to the Stock with respect to which
such dividends were issued.

     3. Legends. Certificates representing the Stock subject to this Award Agreement shall bear
such legends as the Company shall deem appropriate to reflect any restrictions on transfer imposed
under the Award Agreement, pursuant to the terms of the Plan, or by reason of applicable federal or
state securities laws.

     4. Delivery of Shares. Upon the Cliff Vesting Date, the Company shall notify Grantee of the
extent, if any, to which the Stock subject to this Award Agreement has become vested and/or
forfeited, as the case may be, and with respect to the portion, if any, that has become vested,
shall, without payment from Grantee for such Restricted Stock, upon such Grantee’s request deliver
a certificate for such Restricted Stock without any legend or restrictions, except for such
restrictions as may be imposed by the Committee, in its sole judgment, by reason of applicable
federal or state securities laws; provided that no certificates for shares will be delivered to
Grantee (or to his or her personal representative, heir or legatee) until appropriate arrangements
have been made with the Company for the withholding of any taxes which may be due with respect to
such Stock. The Company may condition delivery of certificates for shares of Stock upon the prior
receipt from Grantee of any undertakings which it may determine are required to assure that the
certificates are being issued in compliance with federal and state securities laws. Prior to the
Cliff Vesting Date, the Committee may require the Grantee to deliver to the Company a stock power
endorsed in blank relating to the shares of Common Stock subject to the Award in order to
facilitate the reacquisition of the Stock by the Company in the event of a forfeiture, or may hold
the certificates representing the Stock subject to this Award Agreement until the end of the
Restriction Period.

     5. Status of Stock. The Stock subject to this Award is intended to constitute property
subject to a substantial risk of forfeiture during the Restriction Period, and subject to federal
income tax in accordance with Section 83 of the Code. Section 83 generally provides that Grantee
will recognize compensation income with respect to the Stock only to the extent it becomes vested
on the applicable Vesting Date or Dates in an amount equal to the then fair market value of the
Stock. Alternatively, Grantee may elect, pursuant to Section 83(b) of the Code, to recognize
compensation income for all or any part of the Stock subject to this Award as of the date the Award
is granted to the Grantee in an amount equal to the fair market value of the Stock subject to the
election. Such election must be made within 30 days of the date the Award is granted, and the
Grantee is required to notify the Company immediately if such an election is made. Grantee should
consult his or her tax advisors to determine whether a Section 83(b) election is appropriate.

     6. Employment. Nothing in the Plan or in this Agreement shall confer upon the Grantee any
right to be continued as an employee of the Company or interfere in any way with the right of the
Company to remove the Grantee as an employee at any time for any cause.

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     7. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of any
successor of the Company, but except as provided above, the Award granted shall not be assigned or
otherwise disposed of by the Grantee.

     8. The Plan. This Award is subject to the terms and conditions of the Plan. In the event of
a conflict between the Plan and this Agreement, the terms of the Plan shall control.

     IN WITNESS WHEREOF, this Award Agreement has been executed on this «Witness_Day» day of
«Witness_Month», 2007.

	 	 	 	 	 
	 	PHILADELPHIA CONSOLIDATED HOLDING CORP.

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 
	 	ACKNOWLEDGED

	 	 	 
	 	GRANTEE
	 	 	 
	 	 	 
	 	 	 
	 

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EMPLOYMENT AGREEMENT

     THIS AGREEMENT is made and entered into effective January 1, 2007, by and between Maguire
Insurance Agency, Inc., a Pennsylvania corporation (“Employer”), and James J. Maguire, Jr.
(“Employee”) for the purposes herein stated.

Background of Agreement

     Employee desires to continue in the employ of the Employer, and desires certain protections
and benefits; and

     Employee is currently employed pursuant to an employment agreement with an expiration date of
May 31, 2007, which Employee and Employer desire to mutually terminate, with no liability on the
part of either of them arising out of such termination;

     Employee and the Employer deem it to be in their respective best interests to enter into an
agreement providing for compensation and benefits for Employee pursuant to the terms stated in this
Agreement; and

     The Employer desires to place reasonable restraints upon Employee’s ability to compete with
the Employer during a specified period immediately following Employee’s termination from
employment;

     Accordingly, in consideration of the mutual promises and agreements contained herein, the
parties hereto agree to the following:

     1. Employment. The Employer agrees to continue Employee in its employ, and Employee
agrees to remain in the employ of the Employer, for the Term of Employment set forth in this
Agreement, subject to the terms and conditions set forth below. The existing employment agreement
governing Employee’s employment with an expiration date of May 31, 2007 is hereby mutually
terminated by Employee and Employer with no liability on the part of either of them arising out of
the termination.

     2. Definitions. The following terms when used herein shall have the meanings given
below:

          (a) “Affiliate” means any party controlled by, under the control of, or under common control
with, Employer or PCHC. “PCHC” means Philadelphia Consolidated Holding Corp., a Pennsylvania
corporation.

          (b) “Agreement and General Release” means a general release of claims against the Employer in
a form acceptable to the Employer and as described in Subsection 6(a).

          (c) “Base Compensation” means the annual base salary of Employee, exclusive of any bonus,
insurance, or other fringe benefits and perquisites.

 

 

          (d) “Board” means the Board of Directors of PCHC.

          (e) “Bonus” means the bonus the Employee earns under any plan, policy, procedure or otherwise
of Employer which is set forth in a written instrument specifying such bonus (or the manner in
which the bonus will be determined) delivered by Employer to Employee. Notwithstanding the
foregoing, after a Hostile Change in Control, said term means the total amount of all bonuses paid
to the Employee under any plan, policy, procedure or otherwise, during the twelve month period
immediately preceding the Hostile Change in Control.

          (f) “Cause” means, as determined in the sole discretion of the Executive Committee of PCHC,
commission of any of the following listed conduct by Employee: a felony or any crime involving
moral turpitude (whether or not related to Employee’s employment), incompetence or gross
negligence, unsatisfactory performance of a substantial nature, drug or alcohol use which
interferes with Employee’s job performance, insubordination, willful misconduct, violation of any
express directive or regulation established by the Employer from time to time regarding the conduct
of its business, misrepresentations by Employee related to this Agreement, any violation by
Employee of the terms and conditions of this Agreement not cured within ten days after written
notice thereof is given by the Employer to Employee, acceptance of employment with another Employer
(other than employment with a Successor or a purchaser of assets from the Employer), and/or
performing work for another Employer, as an employee, consultant or in any other capacity, while
still an employee of the Employer and any other act, omission or circumstance which, under
applicable law, would result in a termination by the Employer of Employee’s employment hereunder to
be deemed to be a termination for cause. Following a Hostile Change in Control, Employee may be
terminated with Cause only after the Employer provides Employee with written notice of and ninety
(90) days to cure the deficiency. Any involuntary termination shall be deemed to be without Cause
if the involuntary termination occurs within 12 months of any Hostile Change in Control.

          (g) “Executive Committee” means the Executive Committee of PCHC as determined by the Board,
except that in the case of a Hostile Change in Control, said term means the Executive Committee of
PCHC as it was last constituted prior to the Change in Control. No member of the Executive
Committee shall participate in a decision regarding himself or herself. If a decision must be made
with regard to one of the members of the Executive Committee, the Compensation Committee of PCHC
will make the determination, except that in the event of a Hostile Change in Control, the
determination shall be made by the members of the Compensation Committee as it was last constituted
prior to the Hostile Change in Control.

          (h) “Effective Date” means the date upon which this Agreement becomes effective, as set forth
in Section 4 below.

          (i) “Good Reason” means either (A) a material change in Employee’s duties that is both
inconsistent with an executive position and results in a reduction of compensation and/or benefits
(or any change in Executive’s duties after a Hostile Change of Control), or (B) a material
reduction in Employee’s Base Compensation (or any reduction in Employee’s Base Compensation, Target
Total Cash Compensation, benefits or perquisites after a Hostile Change of Control). In addition
(except in the case of a Hostile Change in Control), Employee must provide Employer with written
notice of the act or omission that Employee believes constitutes

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Good Reason within fifteen (15) days of the date the Employee knows or should have known of
the event, the Employer has sixty (60) days after such written notice is given to cure such act or
omission, and in no event shall a resignation be deemed to be a resignation for Good Reason unless
Employee resigns within fifteen (15) days after the expiration of the Employer’s cure period, if
the Employer has failed to cure the act or omission asserted to be Good Reason for Employee’s
resignation within such sixty day cure period. In the case of a Hostile Change in Control, in no
event shall a resignation be deemed to be a resignation for Good Reason unless Employee resigns
within twelve (12) weeks of the occurrence of the act or omission that Employee asserts is Good
Reason for Employee’s resignation; but Employee is not required to provide advance notice to the
Employer or an opportunity to cure.

          (j) “Hostile Change in Control” means the individuals who are Continuing Directors cease to
constitute a majority of the members of the Board (“Continuing Directors” for this purpose are the
members of the Board on the date of this Agreement, provided that any person who becomes a member
of the Board subsequent to such date whose election or nomination for election is supported by
two-thirds of those directors who were Continuing Directors at that time of the election or
nomination shall be deemed to be a Continuing Director).

          (k) “Successors” means any entity that acquires at least fifty (50) percent of the shares of
outstanding stock, and/or fifty percent (50%) of the assets, of the Employer or PCHC (whether
direct or indirect, by purchase, merger, consolidation or otherwise).

          (l) “Target Bonus” means the target bonus amount the Employee is eligible to earn under the
Philadelphia Insurance Companies 2007 Cash Bonus Plan, as amended, after said plan becomes
effective, or any other successor or other written bonus plans that become effective from time to
time. Notwithstanding the foregoing, after a Hostile Change in Control, said term means the total
amount of all Bonuses paid to the Employee under any plan, policy, procedure or otherwise, during
the twelve month period immediately preceding the Hostile Change in Control.

          (m) “Term of Employment” shall have the meaning set forth in Section 4 below.

          (n) “Target Total Cash Compensation” means Employee’s Base Compensation plus Target Bonus

     3. Position and Responsibilities.

          (a) During the Term of this Agreement, Employee agrees to serve the Employer as President and
CEO. This in no way prevents Employer, in its sole discretion, from promoting or transferring
Employee to a different executive position or assigning Employee different executive duties during
the Term of Employment so long as there is no reduction of compensation and/or benefits to
Employee.

          (b) Throughout the Term of this Agreement, Employee shall devote Employee’s entire working
time, energy, attention, skill and best efforts to the affairs of the Employer and its Affiliates
and to the performance of Employee’s duties hereunder in a manner which will faithfully and
diligently further the business and interests of the Employer.

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     4. Term of Employment. This Agreement shall be effective on January 1, 2007 (the
“Effective Date”) and Employee’s term of employment under this Agreement shall expire, in the
absence of a Hostile Change in Control, on the fifth anniversary of such date (the “Expiration
Date”). In the event of a Hostile Change in Control, this Agreement shall be automatically
extended for a period of three years, commencing upon the expiration date set forth in the
immediately preceding sentence. The applicable period referred to above is referred to herein as
the “Term of Employment.”

     5. Compensation and Benefits. During the Term of Employment, Employee shall be
eligible for the following, in return for all services rendered by Employee to the Employer during
the period of employment, subject to the provisions of Section 6, as applicable:

          (a) Base Compensation. Upon the effective date of this Agreement, Employee shall
receive Base Compensation at the annual rate of Five Hundred and Fifty Thousand Dollars
($550,000.00) subject to periodic reviews and possible increases in the sole discretion of the
Employer. Employee’s Base Compensation shall be payable in accordance with the Employer’s regular
payroll practices in effect from time to time.

          (b) Benefits. Employee shall be entitled to all group health, disability, life
insurance and any other perquisites as are made available to Employee from time to time by action
of the Compensation Committee and/or Board of Directors of PCHC. Any benefits under any bonus
plan, deferred compensation plan, stock option plan or other incentive plan will be paid or made
available based upon the plan documents and any agreements specific to those plans.

          (c) Business Expenses. Employee shall be reimbursed reasonable and necessary expenses
related to Employee’s employment by the Employer in accordance with, and subject to, the Employer’s
regular policies from time to time in effect regarding reimbursement of expenses and the
documentation required.

     6. Termination of Employment. The following provisions shall govern in the event that
Employee’s employment is terminated by the Employer or by Employee during the Term of Employment,
except as provided in Section 8, if applicable:

          (a) Discharge Without Cause or Resignation for Good Reason. In the event of discharge
without Cause or resignation for Good Reason, Employee shall receive (or in the case of Subsection
6(a)(iii) have paid on Employee’s behalf) from the Employer, provided (unless waived by the
Employer) Employee executes and returns to the Employer within the time specified by the Employer
(without subsequent revocation) an Agreement and General Release as described in Subsection 2(b)
above (except that Employee shall not be obligated to do so following a Hostile Change in Control):

               (i) Employee’s current Base Compensation and Target Bonus for twenty-four (24) months paid
either, as determined in the Employer’s sole discretion, periodically in accordance with the
Employer’s regular payroll practices then in effect or in a lump sum;

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               (ii) Any earned but not paid deferred compensation and/or bonus for service during the prior
year, subject to the terms, conditions and restrictions specified in the relevant plan documents;
and

               (iii) The “designated portion” of the premiums with regard to Employee’s continued
participation in group health and dental plans pursuant to COBRA for eighteen (18) months, provided
Employee pays his or her co-payment on a timely basis. For purpose of this provision, the
“designated portion” means the portion of the premium which the Employer paid at the time
Employee’s employment terminated.

                      Executive shall receive the payments and benefits described in Section 6(a) if and only if (i)
Executive duly executes and returns to the Employer (and does not revoke if a revocation period is
included in the sole discretion of the Employer) an Agreement and General Release, setting forth
terms satisfactory to the Employer in its sole discretion, including but not limited to (a) a
general release of the Employer and any other persons or entities designed by the Employer of any
and all claims arising out of Employee’s employment or cessation with the Employer other than any
claims for payments and benefits set forth in Section 6(a), and (b) provisions requiring Employee
not to disparage the Employer, not use or disclose information deemed confidential by the Employer
and to reasonably cooperate with the Employer in transitioning business matters and handling claims
and litigation; and (ii) Employee complies with his obligations under this Agreement (including but
not limited to under Section 7) and the Agreement and General Release.

          (b) Discharge With Cause, Resignation Without Good Reason, Discharge in Connection With
Disability or Death. Employee shall not be eligible for any payments or benefits for the
period subsequent to his separation in any of the following circumstances: (A) Employee is
discharged with Cause; (B) Employee resigns without Good Reason; (C) Employee is discharged due to
Employee’s inability or failure to perform satisfactorily the essential functions of Employee’s
position for six (6) months due to disability; or (D) Employee’s death. In the event of discharge
with Cause, resignation without Good Reason or discharge in connection with death or disability,
Employee shall receive:

               (i) All Base Compensation for work performed and benefits accrued during the period prior to
Employee’s separation from the Employer;

               (ii) Any earned and not paid deferred compensation and/or bonus for service during the prior
year, subject to the terms, conditions and restrictions specified in the relevant plan documents;
and

               (iii) In the event of Employee’s disability or death, any disability or life insurance
payments to which Employee or Employee’s estate or beneficiaries may be entitled pursuant to the
applicable plan documents relating to any group disability or life insurance plans in which
Employee participated prior to Employee’s separation.

          (c) Notice of Termination. Any termination by the Employer or by Employee shall be
communicated by written Notice of Termination to the other party given in accordance with Section
16 below. Such Notice of Termination shall indicate the specific termination

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provision(s) in this Agreement relied upon and specify the effective date of the termination
if other than the date such Notice of Termination is given (which effective date shall be not more
than thirty (30) calendar days thereafter).

          (d) Notwithstanding any provisions of this Agreement to the contrary, in the event any payment
otherwise required to be made under the Agreement, whether upon termination of employment, or for
any other reason, would constitute a payment of nonqualified deferred compensation, such payment
shall be made in a time and manner such that no amount will be required to be included in
Employee’s income by reason of a failure to comply with the requirements of Sections 409A(a)(2),
(3) and (4) of the Internal Revenue Code of 1986, as amended (the “Code”) (such payment, therefore,
being included in Employee’s income at the time of actual receipt pursuant to other applicable
provisions of the Code). This Section 6(d) shall apply to such payments and to such extent as
necessary so as to avoid imposition of tax or additions to tax pursuant to Code Section 409A(a)(1).
If, for example, it is determined that payments otherwise required to be made pursuant to Section
6(a) upon termination of employment would violate Code Section 409A(a)(2)(B) (requiring that
deferred compensation benefits payable to a key employee of a public Employer upon separation from
service be delayed until a date that is at least six months after the date of separation), then no
payment under Section 6(a) will be payable until six months and one day after Employee’s
termination of employment with the Employer.

     7. Restrictive Covenants and Confidentiality.

          (a) During Employee’s employment with the Employer and for two (2) years following Employee’s
separation from the Employer for any reason (whether initiated by the Employer or Employee),
Employee shall not:

               (i) Directly or indirectly engage in any business activity (as a principal, partner, director,
officer, agent, employee, consultant, owner, independent contractor or otherwise) or be financially
interested in any business or commercial activity in which the Employer is engaged or with which
the Employer competes or, with respect to the period following Employee’s termination of
employment, Employer was engaged or with which the Employer competed at the time of or within one
(1) year prior to Employee’s termination, including but not limited to the property and casualty or
personal lines insurance businesses (hereinafter collectively “Competitive Businesses”) anywhere in
the United States of America (including the District of Columbia, the Commonwealth of Puerto Rico
and its possessions and territories), and Canada (without prior written approval of the Employer).
This provision is not intended to prohibit Employee from holding or purchasing less than 1% of the
stock of any public Employer.

               (ii) Directly or indirectly, (i) solicit, induce or encourage any person, firm, corporation or
other entity who or which is a Customer, distributor or supplier of the Employer to terminate or
reduce its business or relationship with the Employer; (ii) solicit or assist any individual or
entity in the solicitation of business from, or performance of work for, any Customer or
Prospective Customer of the Employer; (iii) perform any work or services for any Customer of the
Employer, or (iv) solicit, employ or establish a business relationship with, or encourage or assist
any individual or entity to solicit, employ or establish a business

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relationship with, any individual who was employed by the Employer during the preceding six
month period. For the purposes of this Section 7(a)(ii) only, the terms: (A) “Customer” shall mean
those persons or entities for which the Employer performed services or to which it has sold or
otherwise provided any product during the last two (2) years of Employee’s employment with the
Employer; and (B) “Prospective Customer” shall mean all persons or entities whose name appeared on
a prospect list or who received a sales pitch from the Employer in the last two (2) years of
Employee’s employment with the Employer.

          (b) During Employee’s employment with the Employer and at all times thereafter, Employee shall
not use for his personal benefit, or disclose, communicate or divulge to, or use for the direct or
indirect benefit of, any person, firm, association or Employer other than the Employer, any
confidential information of the Employer which Employee acquires in the course of Employee’s
employment, which is not otherwise lawfully known by and readily available to the general public.
This confidential information includes, but is not limited to: business, development, marketing,
legal and accounting methods, policies, plans, procedures, strategies and techniques; research and
development projects and results; referral sources; trade secrets or other knowledge or processes
of or developed by the Employer; names and addresses of employees, agents, brokers and customers;
any data on or relating to past, present or prospective customers, including customer lists,
customer policies and endorsements. Employee agrees that such information is confidential and
constitutes the exclusive property of the Employer, and Employee agrees that, immediately upon
Employee’s termination, whether by Employee, or by the Employer, Employee will deliver to the
Employer, all correspondence, documents, books, records, lists and other writings relating to the
Employer’s business, retaining no copies.

          (c) The term “Employer,” as used in this Section 7 and in Sections 2(b) and 11 and the last
paragraph of Section 6(a), shall include as well all Affiliates of Employer and PCHC.

          (d) Employee acknowledges and agrees that the provisions of this Section 7 are reasonable with
respect to their duration, scope and geographical area. In particular, Employee acknowledges that
the geographic scope of the Employer’s business makes reasonable the geographic restrictions of
this Agreement. If the period of time or scope of any restriction set forth in this Agreement
should be adjudged unreasonable by any court of competent jurisdiction, then the period of time
shall be reduced by such number of months or the scope of the restrictions shall be construed or
modified, or both, by the court so that such restrictions may be enforceable for such time and in
the manner to the fullest extent adjudged to be reasonable. If Employee violates any of the
restrictions contained in Section 7, then the period of the restriction shall not run in Employee’s
favor from the time of the commencement of any such violation until such time as such violation
shall be cured by Employee.

          (e) Employee agrees that if Employee breaches or threaten to breach any of the provisions of
this Section 7 or Section 11, the Employer will have available, in addition to any other right or
remedy available, the right to obtain injunctive and equitable relief of any type from a court of
competent jurisdiction, including but not limited to restraining such breach or threatened breach
and to specific performance of any such provision of this Agreement. Employee further agrees that
no bond or other security shall be required in obtaining such

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	equitable relief and Employee hereby consents to the issuance of such injunction and to the
ordering of specific performance.

          (f) Notwithstanding anything to the contrary contained in this Section 7 or any other
provisions of the Agreement, Employee shall not be bound by any of the provisions of Section 7(a)
following a Hostile Change in Control.

     8. Hostile Change in Control. In the event of a Hostile Change in Control:

          (a) Section 6 shall apply, except as set forth in Section 8(b) below.

          (b) Enhanced Severance Package in the Event of Hostile Change in Control. In the
event that Employee, at any time after a Hostile Change in Control, is discharged without Cause and
for reasons unrelated to his disability or death, or resigns for Good Reason, Employee shall
receive the payments and other benefits specified in Section 6(a) regardless of whether Employee
executes (and does not revoke) an Agreement and General Release with the following exception: The
period specified in Section 6(a)(i) above during which Employee shall receive his Base Compensation
and Target Bonus shall be thirty-six (36) months.

          (c) Notwithstanding any other provision of this Agreement, if the aggregate present value of
the “parachute payments” to the Employees described in Section 8(b), determined under Section
280G(b) of the Internal Revenue Code of 1986, as amended (the “Code”) would be, but for this
Section 8(c), at least three times the “base amount” determined under such Section 280G, then the
parachute payments otherwise payable under this Agreement (and any other amount payable hereunder
or any other severance plan, program, policy or obligation of the Employer) shall be reduced so
that the aggregate present value of the parachute payments to Employee determined under Section
280G, does not exceed 2.99 times the base amount, if possible; provided, however, that if the
aggregate present value of such parachute payments exceeds 110% of 2.99 times the Employee’s base
amount, the employer shall make an additional payment to the Employee equal to an amount that is
sufficient to pay the Employee’s excise taxes payable with respect to such parachute payments under
Code Section 4999 net after all taxes (including excise taxes) on such additional payment (so that
the Employee is left, on a net, after-tax basis, in the same position as the Employee would have
been if no portion of the payments to the Employee were subject to excise tax under Code Section
4999). In no event, however, shall any benefit provided hereunder be reduced to the extent such
benefit is specifically excluded from treatment under Section 280G of the Code as a “parachute
payment” or as an “excess parachute payment.” Any decisions regarding the requirement or
implementation of such reductions shall be made by the then current tax counsel and accounting firm
retained by the Employer provided, however, that in the event of a Hostile Change of Control, said
decisions shall be made by the tax counsel and accounting firm retained by the Employer immediately
prior to the Hostile Change of Control.

     9. Ineligibility for Participation in Other Employer Severance Plans. In the event
that Employee becomes entitled to the severance benefits set forth in Section 6 above, Employee
shall be ineligible for (and deemed to have waived his right to receive) payments under any other
severance plan, program or arrangement maintained by the Employer.

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     10. Arbitration. In order to obtain the many benefits of arbitration over court
proceedings, including speed of resolution, lower costs and fees and more flexible rules of
evidence, Employee agrees that all disputes (except those relating to unemployment compensation or
workers compensation, and except as provided in Section 7(e) above) arising out of Employee’s
employment or concerning the interpretation or application of this Agreement or its subject matter
(including without limitation those relating to workplace discrimination and/or harassment on any
basis, whatsoever, including but not limited to age, race, sex, religion, national origin,
disability or perceived disability, as well as any claimed violation of any federal, state or local
law, regulation or ordinance, such as Title VII of the Civil Rights Act, the Age Discrimination in
Employment Act, the Americans with Disabilities Act and their state and local counterparts, if any,
including but not limited to any claims of retaliation thereunder) shall be resolved exclusively by
binding arbitration at a location in reasonable proximity to Employee’s last place of employment
with the Employer, pursuant to the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association. The parties expressly waive their rights to have any such claim
resolved by jury trial. The Employer shall bear the cost of the Arbitrator’s fee. The Employer
shall initially bear its filing fees, as well as Employee’s filing fees in excess of $75.00 upon
Employee’s written request to the Employer’s Senior Vice President of Operations. The decision, in
the Arbitrator’s discretion, may award all or some of my or the Employer’s attorneys fees and
costs, including filing fees, in addition to any such awards required by law. Arbitration must be
demanded within three hundred (300) days of the time when the demanding party knows or should know
of the events giving rise to the claim. The decision of the Arbitrator shall be in writing and set
forth the findings and conclusions upon which the decision is based. Notwithstanding the
foregoing, the requirement to arbitrate does not apply to the filing of a claim with a federal,
state or local administrative agency. The decision of the Arbitrator shall be final and binding
and may be enforced under the terms of the Federal Arbitration Act (9 U.S.C. Section 1 et seq.),
but may in addition be set aside or modified by a reviewing court in the event of a material error
of law. Judgment upon the award may be entered, confirmed and enforced in any federal or state
court of competent jurisdiction.

     11. Employer Property.

          (a) All Employer information, including without limitation, data processing reports, analyses,
invoices, and/or any other materials or data of any kind furnished to Employee by the Employer or
developed by Employee on behalf of the Employer, or at the Employer’s direction or for the
Employer’s use, or otherwise in connection with Employee’s employment hereunder, are and shall
remain the sole and confidential property of the Employer, except to the extent such information
has been publicly disclosed voluntarily by the Employer.

          (b) Employee agrees that, at the time of leaving the employ of the Employer, or earlier upon
request, Employee shall deliver to the Employer (and will not keep in his possession or control or
deliver to anyone else) any and all records, data, notes, reports, information, proposals, lists,
correspondence, emails, specifications, drawings, blueprints, sketches, materials, other documents
(including but not limited to on computer discs or drives) of any aforementioned items either
developed by Employee pursuant to Employee’s employment with the Employer or otherwise relating to
the business of the Employer, retaining neither copies nor excerpts thereof. Employee also agrees
that, at the time of leaving the employ of the Employer, or earlier upon request, Employee shall
deliver to the Employer all Employer property

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in Employee’s possession, including cell phones, computers, computer discs, drives and other
equipment.

     12. Income Tax Withholding. The Employer may withhold from any payments made under
this Agreement all Federal, State, City or other taxes and withholdings as shall be required
pursuant to any law or governmental regulation or ruling.

     13. No Restrictions on Employee’s Employment By Employer. Employee represents to
Employer that: (i) there are no restrictions, agreements or understandings whatsoever to which
Employee is a party and no laws or regulations of which Employee is aware which would or may
prevent or make unlawful his employment by the Employer; (ii) his execution of this Agreement and
his employment hereunder shall not constitute a breach of any contract, agreement or understanding,
oral or written, to which Employee is a party or by which Employee is bound; and (iii) Employee is
free and able to execute this Agreement and to enter into employment with the Employer. Employee
has listed in Appendix A to this Agreement and provided the Employer with a copy of any agreement
with a prior employer or any other agreement that restricts Employee’s right to use confidential
information and/or to engage in any business activity.

     14. Entire Understanding. This Agreement contains the entire understanding between
the Employer, and Employee superceding all others with respect to the subject matter hereof, and
there are no other agreements, understandings, representations or warranties among the parties.

     15. Severability. If any term or provision of this Agreement or application thereof
to anyone or under any circumstances is adjudicated to be invalid or unenforceable by an arbitrator
or court of competent jurisdiction, the provision shall be stricken from this Agreement and such
invalidity or unenforceability shall not affect any other provision or application of this
Agreement which can be given effect without the invalid or unenforceable provision or application
and shall not invalidate or render unenforceable such provision or application in any other
jurisdiction.

     16. Notices. All notices hereunder shall be sufficient upon receipt for all purposes
hereunder if in writing and delivered personally, sent by documented overnight delivery service or,
to the extent receipt is confirmed, telecopy, telefax or other documented transmission service to
the appropriate address or number as set forth below:

	 	(a)	 	If to the Employee:

	 
	 	 	 	James J. Maguire, Jr.

328 Skippack Pike

Fort Washington, PA 19034

or at such other address as Employee may designate by written notice to the Employer as specified
below.

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	 	(b)	 	If to the Employer:

	 
	 	 	 	Philadelphia Consolidated Holding Corp.

One Bala Plaza

Bala Cynwyd, PA

Attention: Deborah A. Sutton, SVP, Operations and HR

or at such other address and to the attention of such other person as the Employer may designate by
written notice to Employee as specified above.

     17. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of Employee, Employee’s heirs and legal representatives, and to the Employer, and its
Successors and assigns. PCHC and its Affiliates are third party beneficiaries of this Agreement.

     18. Assignment and Succession. The Employer may assign this Agreement (i) in
connection with any sale or merger (whether a sale or merger of stock or assets or otherwise) of
the Employer or all or any portion of the business of the Employer, or (ii) to any Affiliate of
Employer. Employee expressly consents to the assignment of the Agreement, including, but not
limited to the restrictions which apply subsequent to the termination of Employee’s employment, to
any new owner of, or successor to or assignee of, Employer or any Affiliate of Employer in
connection with any such transaction. Employee’s rights and obligations hereunder are personal and
may not be assigned by Employee. This Agreement shall inure to the benefit of and be enforceable by
Employee’s heirs, beneficiaries and/or legal representatives.

     19. Counterparts and Prerequisites to Binding Effect of Agreement. This Agreement may
be executed in one or more counterparts, all of which shall be considered one and the same
agreement, and shall be effective when one or more counterparts have been signed by each of the
parties and delivered to the other party.

     20. Amendments and Waivers. This Agreement may not be modified or amended except by
an instrument or instruments in writing signed by the party against whom enforcement of any
modification or amendment is sought. A party hereto may, only by an instrument in writing, waive
compliance by the other party hereto with any term or provision of the Agreement on the part of
such other party hereto to be performed or complied with. The waiver by any party hereto of a
breach of any term or provision of the Agreement shall not be construed as a waiver of any
subsequent breach.

     21. Governing Law. This Agreement is executed in and shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania without reference to the
choice of law principles thereof.

     22. Jurisdiction and Venue. The courts of Montgomery County, Pennsylvania and the
United States District Court for the Eastern District of Pennsylvania shall have exclusive
jurisdiction and venue with respect to any action to enforce this Agreement which is not subject to
arbitration.

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     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have duly executed and
delivered, in Pennsylvania, this Agreement.

	 	 	 	 	 
	 	MAGUIRE INSURANCE AGENCY, INC.

 	 
	 	By:  	Craig P. Keller
 	 
	 	 	Title: EVP, Secretary, Treasurer & CFO 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	I UNDERSTAND AND AGREE

TO BE BOUND

	 	James J. Maguire, Jr.               2/20/07
	 	Employee                                 DATE 	 
	 	 	 
	 	 	 
	 	 	 

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APPENDIX A

 

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