Document:

exv10w1

Exhibit 10.1

Amended and Restated Executive Employment Agreement

     This Amended and Restated Executive Employment Agreement (this “Agreement”), is made this 31st
day of July, 2008 by and between ProCentury Corporation (the “Company”) and Edward F. Feighan
(“Executive”).

Recitals

     Whereas, the Company and Executive entered into an Executive Employment Agreement on December
15, 2003 (the “Original Agreement”), with certain changes to be effective upon the effective date
(the “Effective Date”) of the registration statement registering under the Securities Act of 1933
the initial public offering (the “Initial Public Offering”) of the common shares of the Company,
pursuant to which Executive desired to be so employed under the terms and conditions therein set
forth for a period through at least the second anniversary of the Effective Date;

     Whereas, the Company and Executive desire to amend and restate the Original Agreement to
comply with the applicable requirements of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and to provide for certain payments upon the occurrence of certain
termination events following a Change in Control (as defined below).

Statement of Agreement

     Now, therefore, in consideration of the mutual promises and covenants hereinafter set forth,
and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Executive agree that the Original Agreement is hereby amended and
restated in its entirety as follows:

SECTION 1.

EMPLOYMENT AND DUTIES

     1.1 Duties and Position. During the term of this Agreement, Executive shall provide services
to the Company in accordance with this Agreement in the capacities of Chief Executive Officer and
President of the Company as well as the Chairman of the Board of Directors of the Company (the
“Board”) and as an executive officer, in the capacities identified on Exhibit A, of one or
more Affiliates (as that term is defined in Section 5.4) of the Company; provided, however, that at
the request of the Board at any time and from time to time, Executive shall serve in such other
capacity or capacities, of at least equal standing and dignity as Chief Executive Officer and
President of the Company as well as the Chairman of the Board and, with respect to any Affiliate of
the Company, of at least equal standing and dignity as the positions identified on Exhibit A; and
provided further that Executive shall serve as chief executive officer of any Affiliate of the
Company that is required to file periodic reports pursuant to section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (“the Exchange Act”) and of any Affiliate that, as a
result of any reorganization involving the Company, is an entity controlling
the Company or the assets or operations that were the Company’s immediately prior to such
reorganization. Executive shall report directly to the Board and shall perform such duties and
responsibilities consistent with his positions as shall be assigned to him by the Board. Executive
shall serve as director of the board of directors of each operating subsidiary that is an Affiliate
controlled by the Company.

 

 

     1.2 Standard of Performance. Executive shall faithfully perform the duties assigned to him
pursuant to this Agreement. Executive agrees to abide by the Company’s rules, regulations, policies
and practices as they are presently in force and as they may be revoked, adopted or modified at any
time and from time to time during the term of this Agreement.

     1.3 Time Devoted to the Company. Executive shall be required to devote substantially full time
and attention to his duties under this Agreement. Subject to the obligations of Executive pursuant
to Section 4.5 hereof and the immediately preceding sentence, Executive may engage in any other
activity, whether for pecuniary gain or not, which does not materially interfere with his
obligations under this Agreement.

SECTION 2.

COMPENSATION AND BENEFITS

     2.1 Base Salary. The Company agrees to pay or cause to be paid to Executive for Executive’s
services during the term of this Agreement an annual base salary at the gross rate prior to all
taxes and other withholdings of not less than $284,000.00. The base salary will be subject to
annual review and may be adjusted from time to time under the direction of the Board (or, if the
Board so directs, its Compensation Committee) considering factors such as Executive’s performance,
compensation of similar executives of similarly sized companies and other pertinent factors (the
“Base Salary”). The Base Salary shall be payable to Executive in accordance with the then current
payment policies of the Company for its employees.

     2.2 Performance Based Incentive Bonus. Executive shall be eligible to receive an annual
performance based cash target incentive award pursuant to and in accordance with the Company’s
performance based incentive compensation plan (the “Incentive Plan”) in an amount equal to 50
percent of the Base Salary (the “Target Incentive Award”). Executive shall earn and be paid the
Target Incentive Award (whether in whole or in part) in accordance with the Incentive Plan, and the
portion of the Target Incentive Award earned by and paid or to be paid to Executive shall be
referred to herein as the “Bonus.” A copy of the Performance Goals as so established under the
Incentive Plan shall be provided to Executive. The Bonus shall be payable as provided in the
Incentive Plan.

     2.3 Stock Options and Restricted Stock. The Company granted to Executive effective as of the
Effective Date non-qualified stock options (to be known as the “IPO Options”) to purchase, and
awards of restricted stock (to be known as the “IPO Restricted Stock”) for, an aggregate number of
shares of the Company’s no par value common stock equal to 0.65 percent of the Shares outstanding
immediately following the Effective Date, with 70 percent of such Shares (rounded to the nearest
100 and being an estimated 36,400 Shares) being in the form of Stock Options and 30 percent of such
Shares (rounded to the nearest 100 and being an estimated 15,600 Shares) being in the form of
Restricted Stock under the Company’s 2004 Stock Option
and Award Plan (the “Stock Option Plan”). The IPO Options have an exercise price equal to the
fair market value of the Shares as determined by the offering price in the Initial Public Offering.
The Shares subject to the IPO Options vest over three years of service and the shares of IPO

2

 

Restricted Stock vest over four years of service after the Effective Date. The grant of the IPO
Options and the IPO Restricted Stock and the exercise of the IPO Options shall be subject to all of
the terms and conditions of the Stock Option Plan. Notwithstanding the forgoing, to the extent not
contrary to applicable law, all of the IPO Options shall become fully vested and remain exercisable
pursuant to their respective terms for the remainder of their respective Exercise Periods, and all
unvested Shares, if any, of the IPO Restricted Stock shall become fully vested, effective upon
termination of Executive’s employment by reason of death, discharge by the Company pursuant to
3.4(a) other than for Cause, resignation by Executive pursuant to Section 3.5(b) for Good Reason,
termination by resignation or discharge for any reason other than Cause upon or after a Change in
Control, or “retirement” or “disability” within the meaning of the Stock Option Plan; and all
options granted after or in addition to the IPO Options, all shares of Restricted Stock awarded
after or in additional to the IPO Restricted Stock, and any and all other awards to Executive
pursuant to the Stock Option Plan shall be subject to such terms and conditions as shall be
determined at the time of any such award under the direction of the Board pursuant to the Stock
Option Plan. The Company shall exercise best efforts to register with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, the issuance of shares of stock issued
pursuant to the Stock Option Plan and to satisfy the current public information requirements of
Rule 144(c) for purpose of allowing Executive to resell such shares.

     2.4 Benefits. In addition to the compensation to be paid under this Agreement, the Company
shall provide to, or for the benefit of, Executive the following employee benefits:

	 	(a)	 	Participation in retirement plans, if any, which are made available from time
to time to the salaried employees of the Company or its Affiliates, to the extent that
Executive is eligible to participate therein pursuant to the terms and conditions of
such plans.
	 
	 	(b)	 	Participation in health, disability and other welfare benefit and insurance
plans, if any, which are made available from time to time to the salaried employees of
the Company or its Affiliates, to the extent that Executive is eligible to participate
therein pursuant to the terms and conditions of such plans.
	 
	 	(c)	 	At the option of Executive, (1) whole life insurance on the life of Executive
in an amount equal to 2.5 times Executive’s Base Salary, the premiums for which shall
be timely paid by the Company for so long as Executive remains employed with the duties
and position described in Section 2.1, provided that Executive is insurable at
reasonable prevailing rates; or (2) additional benefits specified by Executive at an
annual cost to the Company equal to the annual premium that would otherwise be payable
for such life insurance; provided, such amounts do not result in the deferral of
compensation, as determined under Section 409A of the Code. If Executive is not
insurable at reasonable prevailing rates, then the Company shall not be obligated to
provide life insurance coverage pursuant to Section 2.4(c)(1), but shall be obligated
to provide additional benefits pursuant to Section 2.4(c)(2) at an annual cost to the
Company equal to such reasonable
prevailing rates. The beneficiary of the life insurance policy covering the life of
Executive (the “Policy”) shall be Executive’s spouse or such other person(s) as
Executive shall designate in writing to the insurance company. The owner of the

3

 

	 	 	 	Policy shall be the Company. The Company shall not borrow against the cash
surrender value of such Policy nor cause the value thereof to become subject to any
lien. If Executive’s employment is terminated pursuant to Section 3.3, 3.4(a),
3.5(a) or 3.5(b), of this Agreement, or “Qualified Retirement” as defined in the
Incentive Plan, Executive shall have the election, at his option, to require the
Company (1) to assign the Policy to Executive, provided that Executive shall be
responsible for paying or reimbursing the Company for all premiums and other policy
charges which are or become due and payable on or after the date of termination of
Executive’s employment, or (2) to cancel the Policy or to permit it to lapse, and to
pay the cash value of the Policy as of Executive’s date of termination to Executive;
provided, however, that if it is determined by the Company upon the advice of legal
counsel that this election would be an extension of credit in the form of a personal
loan within the meaning of section 13(k) of the Exchange Act, the election provided
in this sentence shall be null and void. The option granted by Section 2.4(c) may
be exercised at one or more times during the term of Executive’s employment, with
Executive having the right to select either the insurance or additional benefit, so
long as the total cost to the Company during each year and in the aggregate does not
exceed the cost that the Company would have realized had Executive elected whole
life insurance at the time of the Effective Date.

	 	(d)	 	Sick leave in accordance with the policies of the Company in effect from time
to time.
	 
	 	(e)	 	Reasonable vacation time consistent with past practice or as otherwise approved
by the President for other officers or by the Board.
	 
	 	(f)	 	Such other benefits as may be approved by the Board or appropriate oversight
committee of the Board on a case-by-case basis for proper business purpose.

     2.5 Reimbursement of Business Expenses. Executive shall be entitled to receive reimbursement
for, or payment of, the legitimate business expenses incurred by Executive on behalf of the Company
in accordance with the Company policy in effect from time to time, including meals, lodging,
transportation and other travel expenses. Reimbursement from the Company for such expenses shall
be made not later than the fifteenth (15th) day of the third month of the calendar year
following the calendar year in which Executive incurred the respective expenses.

SECTION 3.

TERM OF AGREEMENT; TERMINATION

     3.1 Term. This Agreement shall become effective on the date first written above and shall
continue in force until terminated in accordance with this Section 3. Executive’s
employment with the Company pursuant to this Agreement shall terminate concurrently with the
termination of this Agreement.

4

 

     3.2 Termination Upon Death. Executive’s employment under this Agreement shall terminate
automatically upon the death of Executive.

     3.3 Termination by Mutual Agreement. This Agreement may terminate at any time upon the mutual
agreement of the Company and Executive.

     3.4 Termination by the Company.

	 	(a)	 	The Company may terminate Executive’s employment under this Agreement at any
time, without Cause (as defined in Section 3.4(c)), upon thirty (30) days prior written
notice of termination to Executive. The Company, in its sole discretion but without
derogation to any rights of Executive under Section 2, may place Executive on
administrative leave during the thirty (30) day notice period.
	 
	 	(b)	 	The Company may terminate Executive’s Employment under this Agreement with
Cause immediately upon written notice of termination to Executive, unless a later
termination date is specified in the notice.
	 
	 	(c)	 	For the purposes of this Agreement, “Cause” for termination shall exist if
Executive is:
	 
	 	(1)	 	Convicted of, or pleads guilty or nolo contendere to, in a court of competent
jurisdiction, a felony amounting to embezzlement, fraud, theft or other act of
dishonesty harming the Company or any employee, supplier, customer or other person
doing business with the Company;
	 
	 	(2)	 	Convicted of, or pleads guilty or nolo contendere to, in a court of competent
jurisdiction, a felony resulting in death or substantial bodily or psychological harm
to, or other act of moral turpitude harming, any person;
	 
	 	(3)	 	Barred or suspended for a period of more than 60 days by any court or
regulatory agency of competent jurisdiction from performing employment duties for,
engaging in any activities on behalf of, or otherwise being associated with, the
Company;
	 
	 	(4)	 	Found liable by any court of competent jurisdiction for conduct undertaken with
deliberate intent to cause harm or injury, or undertaken with reckless disregard to the
harm or injury that would be caused, to the Company or any employee, supplier, customer
or other person doing business with the Company other than conduct taken pursuant to
advice of legal counsel to the Company; or
	 
	 	(5)	 	Found by the Company pursuant to Section 5.13 to have failed to exercise
reasonable efforts to properly perform any of Executive’s obligations under this
Agreement or any direction of the Board consistent with this Agreement within 10
business days after receipt of written notice specifying each such obligation or
direction to be so perform, provided, however, that the refusal to perform an
obligation or direction should not constitute “Cause” if Executive in good faith
reasonably believes that such obligation or direction is not legal, ethical or moral
and Executive so notifies the Board of his belief.

5

 

     3.5 Termination by Executive.

	 	(a)	 	Executive may terminate his employment under this Agreement at any time without
Good Reason (as defined in Section 3.5(c) below) upon thirty (30) days prior written
notice to the Company. The Company, in its sole discretion but without derogation to
any rights of Executive under Section 2, may place Executive on administrative leave
during the thirty (30) day notice period.
	 
	 	(b)	 	Executive may terminate his employment under this Agreement, upon thirty (30)
days prior written notice to the Company, if his resignation is for Good Reason (as
defined under Section 3.5(c)) and Executive provides prior written notice to the
Company of the existence of the Good Reason condition within a 90-day period following
the initial existence of such condition; provided that Executive shall not resign
pursuant to this Section 3.5(b) if, prior to the expiration of the thirty (30) day cure
period (beginning on the date of Executive’s written notice to the Company of the Good
Reason condition), the Company causes the facts or events giving rise to the Good
Reason for resignation to no longer exist and provides evidence of a form and nature
satisfactory to Executive that such facts or events no longer and will not in the
foreseeable future exist. The Company, in its sole discretion but without derogation to
any rights of Executive under Section 2, may place Executive on administrative leave
during the thirty (30) day cure period. Notwithstanding anything to the contrary
contained herein, Executive shall not be required to perform any act stated in his
written notice of resignation as Good Reason for his resignation for the period
beginning with the giving of such written notice and ending with the effective date of
the termination of his employment.
	 
	 	(c)	 	To be considered a termination for Good Reason under Section 3.5(b),
Executive’s separation from service must occur due to the existence of one or more of
the following conditions arising without the consent of Executive:
	 
	 	(1)	 	Executive ceases to hold the positions and titles of Chief Executive Officer,
President and Chairman of the Board as contemplated by Section 1.1 of this Agreement;
	 
	 	(2)	 	Executive’s authority and responsibility, as contemplated by Section 1.1 of
this Agreement, is materially diminished without his consent;
	 
	 	(3)	 	Executive’s Base Salary is materially reduced;
	 
	 	(4)	 	Any requirement is imposed for Executive to reside or travel outside of the
Columbus, Ohio area, other than on travel reasonably required to carry out Executive’s
obligations under this Agreement and consistent with past practice;

6

 

	 	(5)	 	The Company commits a material breach of this Agreement (other than breaches
which may be covered by some other subsection of this Section 3.5(c)), which breach is
not cured within thirty (30) days after written notice thereof is given by Executive;
or
	 
	 	(6)	 	For as long as he is Chief Executive Officer as contemplated by Section 1.1 of
this Agreement, Executive fails, at the end of any term as director of the Board, to be
nominated by the Board or any nominating committee of the Board for election as
director of the Board for a succeeding term.
	 
	 	(d)	 	A Change in Control shall mean the date on which any one of the following
occurs: (i) any one person, or more than one person acting as a group (as determined
under Code Section 409A and the regulations promulgated thereunder), acquires (or has
acquired during the twelve (12) month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Company possessing 50%
or more of the total voting power of the outstanding stock of the Company; or (ii) a
majority of members of the Board is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the members of the Board
before the date of such appointment or election; or (iii) any one person, or more than
one person acting as a group (as determined under Code Section 409A and the regulations
promulgated thereunder), acquires ownership of stock of the Company that, together with
stock held by such person or group, constitutes more than 50% of the total fair market
value or total voting power of the outstanding stock of the Company; or (iv) any one
person, or more than one person acting as a group (as determined under Code Section
409A and the regulations thereunder), acquires (or has acquired during the twelve (12)
month period ending on the date of the most recent acquisition by such person or
persons) assets from the Company that have a total gross fair market value equal to or
more than 80% of the total gross fair market value of all of the assets of the Company.
For this purpose, “gross fair market value” means the value of the assets of the
Company, or the value of the assets being disposed of, determined without regard to any
liabilities associated with such assets.

     3.6 Compensation Upon Termination. In addition to any employee benefits to which Executive is
entitled pursuant to Section 2.4 and any reimbursement of business expenses pursuant to Section 2.5
(with respect to which Executive and the Company shall reasonably cooperate), Executive shall be
entitled to the following upon termination of Employment under this Agreement:

	 	(a)	 	In the event that the Company discharges Executive pursuant to Section 3.4(b)
for Cause, or Executive resigns (other than for Good Reason) pursuant to Section
3.5(a), Executive shall be entitled to receive and the Company shall cause to be paid
(1) any earned but unpaid Base Salary through the effective date of termination and (2)
any award for which a Bonus was earned under the Incentive Plan for any Performance
Period which ended prior to the effective date of termination but was not theretofore
paid to Executive. All such amounts shall be
paid by the Company in a single sum cash payment within thirty (30) days after the
date of Executive’s discharge or resignation.

7

 

	 	(b)	 	In the event that Executive’s employment is terminated by death, Executive’s
estate or personal representative shall be entitled to receive and the Company shall
cause to be paid (1) any earned but unpaid Base Salary through the date of Executive’s
death; (2) any award for which a Bonus was earned under the Incentive Plan for any
Performance Period which ended prior to the effective date of termination but was not
theretofore paid to Executive; (3) payment of Executive’s then current Base Salary for
the ninety (90) day period following the date of his death; (4) an amount equal to the
Target Incentive Award established for Executive under the Incentive Plan for the then
current Performance Period had Executive’s employment not been terminated and had
Executive satisfied all Performance Goals established with respect to such Performance
Period, multiplied by a fraction the numerator of which is the number of days in the
then current Performance Period under the Incentive Plan occurring prior to and
including the date of Executive’s death, and the denominator of which is the number of
days of the whole Performance Period; and (5) continued benefits (to the same extent
and at the same level as were provided by the Company to Executive’s family members
immediately prior to Executive’s death) under the health insurance plan(s) referenced
in Section 2.4(b), for the ninety (90) day period following the date of Executive’s
death, and, to the extent permitted pursuant to such health insurance plan(s) to comply
with the continuation coverage requirements under Section 4980B of the Code (“COBRA”),
for such longer period as to which Executive’s beneficiaries pay the cost of coverage
thereof. The Company will pay for that portion of the COBRA premiums for the
Continuation Benefits coverage that exceeds the amount Executive paid for coverage
under the Company’s health insurance plan(s) immediately prior to Executive’s death for
the ninety (90) day period following the date of Executive’s death. All such amounts
or benefits (other than the benefits continued pursuant to Section 3.6(b)(5) above,
which shall be payable or made available in accordance with the terms of the applicable
plan) shall be paid or provided by the Company in a single sum cash payment within
thirty (30) days after the date of Executive’s death; provided that the Company has
obtained satisfactory evidence of Executive’s death.
	 
	 	(c)	 	(1) Except as provided in Section 3.6(c)(2) below, in the event that the
Company discharges Executive pursuant to Section 3.4(a) other than for Cause or
Executive resigns pursuant to Section 3.5(b) for Good Reason, Executive shall be
entitled to receive and the Company shall cause to be paid (A) any earned but unpaid
Base Salary through the date of termination; (B) any award for which a Bonus was earned
under the Incentive Plan for any Performance Period which ended prior to the effective
date of termination but was not theretofore paid to Executive; (C) one (1) times
Executive’s then current Base Salary at the date of termination; (D) an amount equal to
the product of (i) the Target Incentive Award established for Executive under the
Incentive Plan for the then

8

 

	 	 	 	current Performance Period had Executive’s employment not been terminated
and had Executive satisfied all Performance Goals established with respect
to such Performance Period, multiplied by (ii) a fraction, the denominator
of which shall be twelve (12) and the numerator of which shall be twelve
(12); and (E) an amount equal to the Company matching contributions that
would have been made to Executive’s account under the Century Surety Company
401(k) Plan (the “401(k) Plan”) for the twelve (12) month period following
Executive’s date of termination based on the deferral rate of Executive and
Company matching contribution formula in effect on Executive’s date of
termination; (F) an amount equal to the annual premium that is paid by the
Company pursuant to Section 2.4(c)(2) for the individual life insurance
policy purchased by Executive and in effect on Executive’s date of
termination; and (G) continued benefits (to the same extent and at the same
benefit level as were provided by the Company to Executive immediately prior
to termination) (for purposes of this paragraph, the “Continuation
Benefits”) under the health insurance plan(s) referenced in Section 2.4(b)
for the twelve (12) month period following the date of Executive’s
termination, and, to the extent permitted pursuant to such health insurance
plan(s) to comply with the continuation coverage requirements under COBRA,
for such longer period as to which Executive or Executive’s beneficiaries
pay the cost of coverage thereof. The Company will pay for that portion of
the COBRA premiums for the Continuation Benefits coverage that exceeds the
amount Executive paid for such coverage under the Company’s health insurance
plan(s) immediately prior to Executive’s termination for the twelve (12)
month period following the date of Executive’s termination. Subject to
Section 3.8, all such amounts (other than the Continuation Benefits, which
shall be payable or made available in accordance with the terms of the
applicable benefit plan) otherwise available under this Section 3.6(c)(1)
shall be paid by the Company in a single sum cash payment within thirty (30)
days after the date of Executive’s discharge or resignation.

	 	(2)	 	Notwithstanding anything to the contrary in Section 3.6(c)(1) above, in the
event that (A) a Change in Control occurs and (B) within the twelve (12) month period
immediately following the date on which the Change in Control occurs, (i) the Company
discharges Executive pursuant to Section 3.4(a) other than for Cause or (ii) Executive
resigns pursuant to Section 3.5(b) for Good Reason, Executive shall be entitled to
receive and the Company shall cause to be paid (a) any earned but unpaid Base Salary
through the date of termination; (b) any award for which a Bonus was earned under the
Incentive Plan for any Performance Period which ended prior to the effective date of
termination but was not theretofore paid to Executive; (c) the product of two (2) times
Executive’s then current Base Salary at the date of termination; (d) the product of two
(2) times the Target Incentive Award established for Executive under the Incentive Plan
for the then current Performance Period had Executive’s employment not been terminated
and had Executive satisfied all Performance Goals established with respect to such
Performance Period; (e) an amount equal to the Company matching contributions

9

 

	 	 	 	that would have been made to Executive’s account under the 401(k) Plan for the
twenty four (24) month period following Executive’s date of termination based on the
deferral rate of Executive and Company matching contribution formula in effect on
Executive’s date of termination; and (f) an amount equal to two (2) times the annual
premium that is paid by the Company pursuant to Section 2.4(c)(2) for the individual
life insurance policy purchased by Executive and in effect on Executive’s date of
termination. In addition, Executive shall be entitled to continued benefits (to the
same extent and at the same benefit level as were provided by the Company to
Executive immediately prior to his termination) (for purposes of this paragraph, the
“Continuation Benefits”) under the health insurance plan(s) referenced in Section
2.4(b) for the twenty-four (24) month period following Executive’s date of
termination. The Continuation Benefits coverage will be provided by the Company’s
group health plans for the maximum COBRA continuation period for which Executive is
eligible and the Company will pay for that portion of the COBRA premiums for the
Continuation Benefits coverage that exceeds the amount Executive paid for coverage
under the Company’s health insurance plan(s) immediately prior to his termination.
At the end of the maximum COBRA continuation period, the Company shall obtain fully
insured individual health insurance policies providing coverage comparable to the
coverage in effect for Executive and his spouse and dependents, if any, under the
Company’s health insurance plan(s) immediately prior to his termination (the
“Individual Polices”). The Company shall reimburse Executive for that portion of
the insurance premiums under the Individual Policies that exceeds the amount
Executive paid for coverage under the Company’s health insurance plan(s) immediately
prior to his termination. The Individual Policy reimbursements shall continue to be
made to Executive for the remainder of the twenty-four (24) month Continuation
Benefits period following expiration of the maximum COBRA continuation period. All
such reimbursements required pursuant to this Section 3.6(c)(2) shall be paid by the
Company as soon as reasonably practicable following Executive’s submission of proof
of such Individual Policy premium payments; provided, however, that all such claims
for reimbursement shall be submitted by Executive and paid by the Company before the
last day of Executive’s taxable year following the taxable year in which the expense
was incurred. Notwithstanding the foregoing provisions of this Section 3.6(c)(2),
if Executive obtains comparable group health insurance coverage from a subsequent
employer, then the Continuation Benefits shall cease to be provided to Executive.
Subject to Section 3.8, all such amounts (other than the Continuation Benefits,
which shall be payable or made available in accordance with the terms of the
applicable benefit plan or insurance policy) otherwise available under this Section
3.6(c)(2) shall be paid by the Company in a single sum cash payment within thirty
(30) days after the date of Executive’s discharge or resignation.

	 	(3)	 	The Company agrees that it will not report the Continuation Benefits under
Section 3.6(c)(1)(G) or Section 3.6(c)(2) as taxable income to Executive and Executive
agrees that he will not include the value of such Continuation Benefits in his adjusted
gross income. If the Continuation Benefits under Section 3.6(c)(1)(G) or Section
3.6(c)(2) or the related reimbursements thereunder cause

10

 

	 	 	 	inclusion of any amount in Executive’s taxable income, the Company shall pay
Executive the amount necessary to wholly offset the federal, state and local income
taxes and any other taxes attributable to the Continuation Benefits and related
reimbursements and the tax reimbursement amount paid pursuant to this sentence by
the earlier of the day such amount is included in Executive’s taxable income by the
Company or the day such taxes are remitted to the taxing authority. The Company
will indemnify Executive from any and all taxes, fines, penalties, interest and fees
assessed by or otherwise owed to the Internal Revenue Service (“IRS”) or other
taxing authorities in the event that the IRS or other taxing authority cause the
Continuation Benefits or related reimbursements provided under Section 3.6(c)(1)(G)
or Section 3.6(c)(2) to be included in Executive’s taxable income, and any expenses,
including reasonable attorney’s fees, incurred in response to an audit or a
proceeding brought by or in the right of the IRS or any other taxing authority
arising out of or as a result of the Continuation Benefits and the related
reimbursements provided under Section 3.6(c)(1)(G) or Section 3.6(c)(2).

	 	(4)	 	If, as a result of a Change in Control, Executive is subject to the excise tax
imposed by Section 4999 of the Code (the “Excise Tax”), the Company shall reimburse
Executive for the amount of such tax, and shall pay Executive such additional amount or
amounts as may be necessary to place Executive in the same financial position after
consideration of any and all potential related state, federal, and other taxes
(including any interest or penalties imposed with respect to such taxes, provided that
Executive properly reports the Excise Tax) that he would have been in if he had not
incurred such Excise Tax liability. The Company shall reimburse Executive for the
amount of any required withholding with respect to the Excise Tax and the taxes thereon
at the time of such withholding, and the remainder of any amount due under this Section
3.6(c)(4) shall be paid by the Company to Executive not later than March 15, 2009.
	 
	 	(d)	 	Except as otherwise provided in Section 3.6(b) or 3.6(c), Executive’s right,
upon and after the termination of his employment under this Agreement pursuant to this
Section 3 or otherwise, to receive any benefit under the plans, if any, in which
Executive is entitled to participate pursuant to Section 2.4 shall be determined under
the provisions of those plans.
	 
	 	(e)	 	Notwithstanding any provision of this Agreement to the contrary, no payment
shall be made or benefit provided under Section 3.6 unless the event triggering the
payment or provision of benefits constitutes a “separation from service” as determined
under Code Section 409A. However, in the event Executive is a “specified employee” (as
determined under Code Section 409A) at the time of the triggering event, then any
payment or benefit that is otherwise due Executive under this Agreement which is
determined to provide for a deferral of compensation pursuant to Code Section 409A
shall not commence being paid or made available to Executive until after six (6) months
from the date of his separation from service and the aggregate amount of payments that
would have been made during such six (6) month period but for the application of this
Section

11

 

	 	 	 	3.6(e) will be paid to Executive in a lump sum at the end of such period. In no
event may Executive, directly or indirectly, designate the calendar year of payment
of any amounts to be paid upon Executive’s termination of employment under this
Agreement. All reimbursements and in-kind benefits provided under this Agreement
shall be made or provided in accordance with the requirements of Code Section 409A
and the regulations issued thereunder.

     3.7 Notices. Any termination of Executive’s employment for which notice of termination is
required to be given pursuant to this Section 3 shall be communicated in a writing which shall
indicate the specific provision in this Section 3 relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination under the provision
so indicated.

     3.8 General Release. Notwithstanding anything in this Section 3 or otherwise to the contrary,
at the election of the Company no amount shall be payable under this Section 3 in excess of (a) any
earned but unpaid Base Salary through the date of Executive’s death; (b) any award under the
Incentive Plan which was earned pursuant to the terms and conditions of such plan prior to the
effective date of termination but was not theretofore paid to Executive, unless Executive (or his
personal representative or trustee of his estate, in the case of his disability or death) executes
a general release of known claims (in form and containing provisions reasonably required by the
Company), provided, however, that any such general release shall be mutual with respect to known
claims of the Company against Executive and known claims of Executive against the Company.

     3.9 No Mitigation. In the event of the termination of Executive’s employment hereunder for any
reason, Executive shall have no obligation to mitigate damages.

SECTION 4.

CONFIDENTIALITY AND NON-COMPETITION

     4.1 Confidential Information. Except as otherwise provided in Section 4.2, the term
“Confidential Information” shall mean all trade secrets and confidential and proprietary
information of the Company, whether in written or oral, tangible or intangible form, including,
without limitation, the following:

	 	(a)	 	The whole or any portion or phase of any data or information relating to the
Company’s processes or techniques relating to its business, whether or not copyrighted,
copyrightable, patented or patentable, (1) which is or has been disclosed to Executive
or about which Executive became or shall become aware of as a consequence of, or
through or during Executive’s employment with the Company; (2) which has value to the
Company; and (3) which is not generally known by others;
	 
	 	(b)	 	Any software, programs, calculations, instructions or other intellectual
property and embodiments thereof of any media, including electro magnetic, and in any
form, including source code and object code, whether or not copyrighted, copyrightable,
patented or patentable;

12

 

	 	(c)	 	Business plans, marketing concepts and marketing and sales information of the
Company;
	 
	 	(d)	 	Financial, pricing and/or credit information regarding the Company or customers
and/or suppliers of the Company;
	 
	 	(e)	 	The names, addresses, policy expiration dates and telephone numbers of
customers, agents and/or suppliers of the Company;
	 
	 	(f)	 	The internal corporate policies and procedures of the Company;
	 
	 	(g)	 	Any information of any nature whatsoever that gives the Company the opportunity
to obtain any advantage over its competitors who do not have access to or use of such
information; and
	 
	 	(h)	 	Any other information designated by the Company as confidential or proprietary
at the time of its disclosure to Executive.

     The term “Confidential Information” also shall include all trade secrets and confidential and
proprietary information of any customer, agent, supplier, or prospective customer, agent or
supplier of the Company, whether in written or oral, tangible or intangible form, which have been
disclosed to the Company pursuant to the Company’s agreement to maintain the confidentiality of
such information.

     4.2 Excluded Information. Notwithstanding anything in Section 4.1 to the contrary, the term
“Confidential Information” shall not include any data or information that (a) is voluntarily
disclosed by the Company or has otherwise become generally known to the insurance industry (except
for such public disclosure that has been made by or through Executive or by a third person with the
knowledge of Executive without authorization by the Company); (b) has been independently developed
and disclosed by parties other than Executive or the Company to the public generally without a
breach of any obligation of confidentiality by any such person running directly or indirectly to
the Company; or (c) otherwise enters the public domain through lawful means.

     4.3 Confidentiality Agreement. Executive agrees and acknowledges that the Confidential
Information is the property of the Company, and that such information is sensitive, confidential
and important and is furnished by the Company to Executive under the terms and conditions of this
Agreement. Executive shall keep the Confidential Information (whether obtained prior to or after
the date of this Agreement) strictly confidential during the term of this Agreement and at all
times thereafter provided, however, that Executive may disclose Confidential Information in the
performance of his employment to the extent that he reasonably believes such disclosure is
necessary or convenient, in his sole discretion, in order to perform his duties.

     4.4 Return of Company Property. Executive agrees that upon termination of this Agreement,
Executive shall immediately surrender to the Company, without request, or, at the Company’s request
and in the Company’s sole discretion, destroy or cause to be destroyed all memoranda, notes,
reports, documents, software and disks and all copies and other reproductions
and extracts thereof, including those prepared by Executive, which are in Executive’s
possession or under his control and which contain or are derived from Confidential Information.

13

 

     4.5 Covenant Not to Compete or Solicit. Executive shall not, directly or indirectly, do any of
the following during the term of this Agreement and for a period of twelve (12) months or, if
longer, the entire period for which Executive is entitled to (i) payments of Base Salary or Target
or other Incentive Awards or (ii) other benefits pursuant to Section 3 other than payments and
benefits pursuant to Section 3.6(c)(2) after a Change in Control:

	 	(a)	 	Be employed by, serve as consultant or independent contractor to, directly or
indirectly beneficially own any equity or similar interest in (except as the holder of
not more than one percent (1%) of the voting securities of any publicly traded entity
or as a shareholder of the Company or any successor thereto), or otherwise engage in,
any property and casualty insurance company business that directly competes with any
insurance company subsidiary of the Company in the continental United States, Canada or
the Bahamas;
	 
	 	(b)	 	Solicit or cause to be solicited, directly or indirectly, any property and
casualty wholesale agents under contract with the Company for any purpose (other than,
during the term of this Agreement, as an employee of the Company on behalf of the
Company), without the prior written consent of the Company, which written consent
specifically refers to this Agreement; or
	 
	 	(c)	 	Solicit or cause to be solicited, directly or indirectly, or in any way be
responsible for, an offer of employment to any employee of the Company by any other
person.

     The restrictions contained in this Section 4.5 shall cease to apply to, and shall not bind,
Executive in the event that the Company fails to timely and completely pay all amounts due and
owing to Executive pursuant to Section 3.6 of this Agreement. For the purposes of the preceding
sentence, the Company will be deemed to have failed to timely and completely pay all amounts due
and owing to Executive pursuant to Section 3.6 if the Company fails (other than as the result of a
prior breach of this Section 4.5 by Executive) to make any such payment to Executive within ten
(10) days of its due date.

     4.6 Additional Covenants. During the term of this Agreement, Executive shall not take
advantage of any Company opportunity without first offering the opportunity with full disclosure of
material facts to the Company and receiving notice that the Company has declined such opportunity.
For this purpose, “Company opportunity” means any opportunity to engage in a business activity: (a)
of which Executive becomes aware (1) by virtue of Executive’s relationship with, or in connection
with performing functions in the business of, or in using facilities or other resources of the
Company; and (2) under circumstances that should reasonably lead Executive to believe that the
person offering the opportunity expects it to be offered to the Company; or (b) which Executive
knows is closely related to a business in which the Company is engaged or expected to engage.

14

 

     4.7 Remedies for Breach. Executive agrees that, in the event of any breach or threatened
breach of any provision of this Section 4 by Executive, the Company shall be entitled to a
temporary restraining order and other temporary or permanent injunctive relief, provided that the
Company has shown irreparable harm. No remedy conferred upon the Company by this Agreement is
intended to be exclusive of any other available remedy or remedies, but each and every such remedy
shall be cumulative and shall be in addition to every other remedy given under this Agreement or
now or hereafter existing at law, in equity or by statute.

     4.8 Reasonableness of Restrictions. Executive agrees and understands that there are
significant business reasons for the restrictions contained in this Agreement and that such
restrictions are reasonable and necessary to protect legitimate business interests of the Company.
Without limiting the generality of the foregoing, Executive agrees and understands that because the
Company may sell its products, technology and services nationally and internationally, the
geographic scope of Executive’s agreement not to compete with the Company is both reasonable and
necessary.

     4.9 Severability. If any provision of this Section 4 is held invalid, illegal or
unenforceable, the remaining provisions shall continue in full force and effect. If any provision
of this Section 4 is for any reason held to be excessively broad as to time, duration, geographic
scope, activity or subject, it shall be construed, by limiting and reducing it, so as to be
enforceable to the extent permitted by applicable law.

     4.10 Scope of Section 4. As used in this Section 4, the term the “Company” shall include all
Affiliates of the Company.

SECTION 5.

MISCELLANEOUS

     5.1 Indemnification. The Company shall indemnify Executive if he was or is a party or is
threatened to be made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (including, without limitation, an action
by or in the right of the Company) by reason of the fact that he is or was a director, officer,
employee or agent of the Company, or is or was serving at the request of the Company as a director,
trustee, officer, employee, partner, joint venturer or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys’ fees and
expenses), judgments, fines and amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company, and, with respect
to any criminal action, suit or proceeding, had no reasonable cause to believe his conduct was
unlawful. No indemnification shall be made in respect of any derivative claim, issue or matter as
to which Executive shall have been adjudged to be liable to the Company unless, and only to the
extent that, the court in which such action, suit or proceeding was brought shall determine upon
application that, despite the adjudication of liability, but in view of all the circumstances of
the case, Executive is fairly and reasonably entitled to indemnity for such expenses. Expenses
(including reasonable attorneys’ fees and expenses) incurred in defending any civil or criminal
action, suit or proceeding referred to in this Section shall be paid by the Company in advance of
the final disposition of such action, suit or proceeding upon receipt of an

15

 

undertaking by or on behalf of Executive to repay such amount, unless it shall ultimately be
determined that he is not entitled to be indemnified by the Company as authorized in this Section.
The indemnification provided by this Section shall not be deemed exclusive of any other rights to
which Executive may be entitled under the common law, the Ohio corporate law or the charter
documents of the Company or any agreement, vote of its shareholders or directors, or otherwise,
both as to action in his official capacity or as to action in another capacity while holding such
office.

     5.2 Key Man Life Insurance; COLI. Executive agrees to cooperate with the Company in connection
with, and consent to the placement of, “key man” or other corporate owned insurance on Executive’s
life by the Company, provided that, except as provided in Section 2.4(c), nothing herein shall
require the Company to obtain or maintain any such insurance on Executive’s life.

     5.3 Breach of Agreement by Company. The Company agrees that, in the event of any breach or
threatened breach of this Agreement by the Company, Executive shall be entitled to any appropriate
remedy in law or in equity. No remedy conferred upon Executive by this Agreement is intended to be
exclusive of any other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this Agreement or now or
hereafter existing at law, in equity or by statute. The Company shall pay all legal expenses
(including reasonable attorney’s fees and expenses) and other damages incurred by Executive as the
result of or in connection with any breach of this Agreement by the Company. The Company is aware
that, following a Change in Control, the Board or a shareholder of the Company may cause or attempt
to cause the Company to refuse to comply with its obligations under this Agreement, or may cause or
attempt to cause the Company to institute, or may institute, litigation seeking to have this
Agreement declared unenforceable, or may take, or attempt to take, other action to deny Executive
the benefits intended under this Agreement. In these circumstances, the purpose of this Agreement
could be frustrated. It is the intent of the Company that Executive not be required to incur the
expenses associated with the enforcement of his rights under this Agreement by litigation or other
legal action because the cost and expense thereof would substantially detract from the benefits
intended to be extended to Executive hereunder, nor be bound to negotiate any settlement of his
rights hereunder under threat of incurring such expenses. Accordingly, (a) if following a Change in
Control (1) Executive concludes that the Company has failed to comply with any of its obligations
under this Agreement or (2) the Company or any other person on behalf of the Company or any
shareholder or Affiliate of the Company takes any action to declare this Agreement void or
unenforceable, or institutes any litigation or other legal action designed to deny, diminish, or
recover from Executive the benefits intended to be provided to Executive hereunder, and (b) if
Executive has complied with all of his obligations under this Agreement, the Company irrevocably
authorizes Executive from time to time to retain counsel of his choice at the expense of the
Company as provided in this 5.3, to represent Executive in connection with the initiation or
defense of any litigation or other legal action, whether by or against the Company or any director,
officer, shareholder or other person affiliated with the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship between the Company and such
counsel, the Company irrevocably consents to Executive’s entering into an attorney-client
relationship with such counsel, and in that connection, the Company and Executive agree that a
confidential relationship shall exist between Executive and such counsel.

16

 

The reasonable fees and expenses of counsel selected from time to time by Executive as
hereinabove provided shall be paid or reimbursed to Executive by the Company on a regular periodic
basis upon presentation by Executive of a statement or statements prepared by such counsel in
accordance with its customary practices (provided that such statements need not contain
descriptions of the services performed). The payment of such fees and expenses shall not be
contingent upon the success of such counsel. Executive shall repay to the Company all such amounts
paid by the Company under this Section, and the Company shall not be obligated to make further
payments hereunder, in connection with a contest originated by Executive if the trier of fact in
such contest determines that Executive’s claim was patently frivolous.

     5.4 Affiliates. As used in this Agreement, an entity shall be deemed to be an Affiliate of
another entity if it controls, is controlled by or is under common control with the other entity,
where “control” means the power to vote not less than ten percent (10%) of the voting securities of
an entity.

     5.5 No Conflict. Executive represents that the performance by Executive of all the terms of
this Agreement, as an Executive of the Company, has not, does not and will not breach any agreement
as to which Executive is or was a party and which requires Executive to keep any information in
confidence or in trust. Executive has not entered into, and will not enter into, any written or
oral agreement in conflict herewith.

     5.6 Notices. Any and all notices required to be given under this Agreement shall be given, and
be deemed given, as follows: (a) by personal delivery which shall be deemed given when delivered;
(b) by U. S. first-class mail, postage prepaid, which shall be deemed given the third (3rd) day
after deposit; or (c) by telecopy (if telecopy number is listed) with confirmation of receipt which
shall be deemed given when sent. Any such notice shall be addressed, if to the Company at its
principal place of business (attn: Chief Financial Officer) and, if to Executive at his most
current home address on record with the Company for payroll and other corporate purposes, unless a
different address for notice purposes is designated by Executive in a written notice complying with
and referring to this Section 5.6.

     5.7 Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Ohio without regard to conflict of law principles.

     5.8 Amendment and Waiver. This Agreement shall not be amended or modified, and none of the
provisions hereof shall be waived, except in a writing signed on behalf of the Company and by
Executive or, in the case of a waiver, on behalf of the party making a waiver. In the event that
any obligation, agreement or covenant contained in this Agreement should be breached by either
party and thereafter waived by the other party, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other breach hereunder.

     5.9 Section Headings. Section headings contained in this Agreement are for convenience only
and shall not be considered in construing any provision hereof.

     5.10 Assignment. This Agreement is personal to Executive and Executive may not assign or
delegate any of his rights or obligations hereunder. Subject to the foregoing, this Agreement shall
inure to the benefit of and be binding upon Executive and the Company and
their respective heirs, administrators, executors, successors and assigns, including
successive as well as immediate heirs, administrators, executors, successors and assigns.

17

 

     5.11 Entire Agreement. This Agreement terminates, cancels and supersedes all previous written
and oral employment agreements or other agreements relating to the relationship of Executive with
the Company entered into between the parties hereto. This Agreement contains the entire
understanding of the parties hereto with respect to the subject matter of this Agreement. Executive
is represented by independent legal counsel or has had the opportunity to retain independent legal
counsel to represent Executive’s interests. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and
no presumption or burden of proof shall arise favoring any party by virtue of authorship of any of
the specific provisions of the Agreement. EXECUTIVE ACKNOWLEDGES THAT, BEFORE PLACING HIS SIGNATURE
HEREUNDER, HE HAS READ ALL OF THE PROVISIONS OF THIS AGREEMENT, AND HAS THIS DAY RECEIVED A COPY
HEREOF.

     5.12 Severability. Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such
invalidity or unenforceability without thereby rendering invalid or unenforceable the remaining
terms and provisions hereof or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.

     5.13 Dispute Resolution.

	 	(a)	 	Notwithstanding any provision herein to the contrary, any determination of (1)
whether Cause for termination or Good Reason for resignation exists and (2) whether
something “materially” affects anything, or is “substantially” or “reasonably” or
“effectively” done, or is “material” or “reasonable,” as such terms are used in this
Agreement, shall be made in the first instance by the Board or one of its appropriate
oversight committees.
	 
	 	(b)	 	Any controversy, claim or dispute arising out of or relating to this Agreement
or the breach, termination, enforceability or validity of this Agreement, including the
determination of the scope or applicability of the agreement to arbitrate set forth in
this Section 5.13(b) and any dispute of any determination by the Company pursuant to
Section 5.13(a), shall be determined exclusively by binding arbitration in the City of
Columbus, Ohio. The arbitration shall be governed by the rules and procedures of the
American Arbitration Association (the “AAA”) under its Commercial Arbitration Rules and
its Supplementary Procedures for Large, Complex Disputes; provided that persons
eligible to be selected as arbitrators shall be limited to attorneys-at-law each of
whom (i) is on the AAA’s Large, Complex Case Panel or a Center for Public Resources
(“CPR”) Panel of Distinguished Neutrals, or has professional credentials comparable to
those of the attorneys listed on such AAA and CPR Panels and (ii) has actively
practiced law (in private or corporate practice or as a member of the judiciary) for at
least 15 years in the State of Ohio concentrating in either general commercial
litigation or general corporate and commercial matters. Any arbitration proceeding
shall be

18

 

	 	 	 	before one arbitrator mutually agreed to by the parties to such proceeding (who
shall have the credentials set forth above) unless the amount in question exceeds
$100,000, in which event, the mediation shall be by a panel of three mediators or,
if the parties are unable to agree to the arbitrator(s) within 15 business days of
the initiation of the arbitration proceedings, then by the AAA. No provision of, nor
the exercise of any rights under, this Section 5.13(b) shall limit the right of any
party to request and obtain from a court of competent jurisdiction in the State of
Ohio, County of Franklin (which shall have exclusive jurisdiction for purposes of
this Section 5.13) before, during or after the pendency of any arbitration,
provisional or ancillary remedies and relief including injunctive or mandatory
relief or the appointment of a receiver. The institution and maintenance of an
action or judicial proceeding for, or pursuit of, provisional or ancillary remedies
shall not constitute a waiver of the right of any party, even if it is the
plaintiff, to submit the dispute to arbitration if such party would otherwise have
such right. Each of the parties hereby submits unconditionally to the exclusive
jurisdiction of the state and federal courts located in the County of Franklin,
State of Ohio for purposes of this provision, waives objection to the venue of any
proceeding in any such court or that any such court provides an inconvenient forum
and consents to the service of process upon it in connection with any proceeding
instituted under this Section 5.13 in the same manner as provided for the giving of
notice under this Agreement. Judgment upon the award rendered may be entered in any
court having jurisdiction. The parties hereby expressly consent to the nonexclusive
jurisdiction of the state and federal courts situated in the County of Franklin,
State of Ohio for this purpose and waive objection to the venue of any proceeding in
such court or that such court provides an inconvenient forum. The arbitrator(s)
shall award recovery of all costs (including attorneys’ fees, administrative fees,
arbitrators’ fees and court costs) to the prevailing party. No arbitrator shall have
power, by award or otherwise, to vary any of the provisions of this Agreement.

     5.14 Code Section 409A Compliance. This Agreement is intended to be operated in compliance
with the provisions of Code Section 409A (including any rulings or regulations promulgated
thereunder). In the event that any provision of this Agreement fails to satisfy the provisions of
Code Section 409A, then such provision shall be void and shall not apply to a payment or benefit
otherwise due Executive, to the extent practicable. In the event that it is determined to not be
feasible to so void a provision of this Agreement as it applies to a payment or benefit due
Executive or Executive’s beneficiary(ies), such provision shall be construed in a manner so as to
comply with the requirements of Code Section 409A. The Company expressly reserves the right to
amend this Agreement, in its sole discretion, to comply with Code Section 409A in the event it
later determines that any provision herein causes this Agreement not to comply with Code Section
409A.

19

 

Signatures

     In Witness Whereof, the parties have executed this Agreement as of the date set forth above.

	 	 	 	 	 	 	 	 	 
	THE COMPANY: 

PROCENTURY CORPORATION	 	 	 	EXECUTIVE:	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Erin E. West
	 	 	 	/s/ Edward F. Feighan	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Erin E. West
	 	 	 	Edward F. Feighan	 	 
	 

	 	Chief Financial Officer	 	 	 	 	 	 

20

 

Exhibit A

Executive’s Positions for Subsidiaries

     Member of the Board of Directors, Chairman of the Board, and Chief Executive Officer of each
subsidiary

21exv10w2

Exhibit 10.2

Amended and Restated Executive Employment Agreement

     This Amended and Restated Executive Employment Agreement (this “Agreement”), is made this 31st
day of July, 2008 by and between ProCentury Corporation (the “Company”) and Christopher J. Timm
(“Executive”).

Recitals

     Whereas, the Company and Executive entered into an Executive Employment Agreement on December
15, 2003 (the “Original Agreement”), with certain changes to be effective upon the effective date
(the “Effective Date”) of the registration statement registering under the Securities Act of 1933
the initial public offering (the “Initial Public Offering”) of the common shares of the Company,
pursuant to which Executive desired to be so employed under the terms and conditions therein set
forth for a period through at least the second anniversary of the Effective Date;

     Whereas, the Company and Executive desire to amend and restate the Original Agreement to
comply with the applicable requirements of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and to provide for certain payments upon the occurrence of certain
termination events following a Change in Control (as defined below).

Statement of Agreement

     Now, therefore, in consideration of the mutual promises and covenants hereinafter set forth,
and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Executive agree that the Original Agreement is hereby amended and
restated in its entirety as follows:

SECTION 1

EMPLOYMENT AND DUTIES

     1.1 Duties and Position. During the term of this Agreement, Executive shall provide services
to the Company in accordance with this Agreement in the capacities of Executive Vice President of
the Company and as an executive officer, in the capacities identified on Exhibit A, of one
or more Affiliates (as that term is defined in Section 5.4) of the Company; provided, however, that
at the request of the Company’s Board of Directors (the “Board”) at any time and from time to time,
Executive shall serve in such other capacity or capacities, of at least equal standing and dignity
as Executive Vice President of the Company and, with respect to any Affiliate of the Company, of at
least equal standing and dignity as the positions identified on Exhibit A; and provided
further that Executive shall serve as executive vice president of any Affiliate that, as a result
of any reorganization involving the Company, is an entity controlling the Company or the assets or
operations that were the Company’s immediately prior to such reorganization. Executive shall report
directly to the Board and shall perform such duties and responsibilities consistent with his
positions as shall be assigned to him by the Board. Executive shall serve as director of the board
of directors of each operating subsidiary that is an Affiliate controlled by the Company.

 

 

     1.2 Standard of Performance. Executive shall faithfully perform the duties assigned to him
pursuant to this Agreement. Executive agrees to abide by the Company’s rules, regulations, policies
and practices as they are presently in force and as they may be revoked, adopted or modified at any
time and from time to time during the term of this Agreement.

     1.3 Time Devoted to the Company. Executive shall be required to devote substantially full
time and attention to his duties under this Agreement. Subject to the obligations of Executive
pursuant to Section 4.5 hereof and the immediately preceding sentence, Executive may engage in any
other activity, whether for pecuniary gain or not, which does not materially interfere with his
obligations under this Agreement.

SECTION 2

COMPENSATION AND BENEFITS

     2.1 Base Salary. The Company agrees to pay or cause to be paid to Executive for Executive’s
services during the term of this Agreement an annual base salary at the gross rate prior to all
taxes and other withholdings of not less than $264,000.00. The base salary will be subject to
annual review and may be adjusted from time to time under the direction of the Board (or, if the
Board so directs, its Compensation Committee) considering factors such as Executive’s performance,
compensation of similar executives of similarly sized companies and other pertinent factors (the
“Base Salary”). The Base Salary shall be payable to Executive in accordance with the then current
payment policies of the Company for its employees.

     2.2 Performance Based Incentive Bonus. Executive shall be eligible to receive an annual
performance based cash target incentive award pursuant to and in accordance with the Company’s
performance based incentive compensation plan (the “Incentive
Plan”) in an amount equal to 50
percent of the Base Salary (the “Target Incentive Award”). Executive shall earn and be paid the
Target Incentive Award (whether in whole or in part) in accordance with the Incentive Plan and the
portion of the Target Incentive Award earned by and paid or to be paid to Executive shall be
referred to herein as the “Bonus.” A copy of the Performance Goals as so established under the
Incentive Plan shall be provided to Executive. The Bonus shall be payable as provided in the
Incentive Plan.

     2.3 Stock Options and Restricted Stock. The Company granted to Executive effective as of the
Effective Date non-qualified stock options (to be known as the “IPO Options”) to purchase, and
awards of restricted stock (to be known as the “IPO Restricted Stock”) for, an aggregate number of
shares of the Company’s no par value common stock equal to 0.65 percent of the Shares outstanding
immediately following the Effective Date, with 70 percent of such Shares (rounded to the nearest
100 and being an estimated 36,400 Shares) being in the form of Stock Options and 30 percent of such
Shares (rounded to the nearest 100 and being an estimated 15,600 Shares) being in the form of
Restricted Stock under the Company’s 2004 Stock Option and Award Plan (the “Stock Option Plan”).
The IPO Options have an exercise price equal to the fair market value of the Shares as determined
by the offering price in the Initial Public Offering. The Shares subject to the IPO Options vest
over three years of service and the shares of IPO Restricted Stock vest over four years of service
after the Effective Date. The grant of the IPO Options and the IPO Restricted Stock and the
exercise of the IPO Options shall be subject to all of the terms and conditions of the Stock Option
Plan. Notwithstanding the forgoing, to the extent not contrary to applicable law, all of the IPO
Options shall become fully vested and

2

 

remain exercisable pursuant to their respective terms for the remainder of their respective
Exercise Periods, and all unvested Shares, if any, of the IPO Restricted Stock shall become fully
vested, effective upon termination of Executive’s employment by reason of death, discharge by the
Company pursuant to 3.4(a) other than for Cause, resignation by Executive pursuant to Section
3.5(b) for Good Reason, termination by resignation or discharge for any reason other than Cause
upon or after a Change in Control, or “retirement” or “disability” within the meaning of the Stock
Option Plan; and all options granted after or in addition to the IPO Options, all shares of
Restricted Stock awarded after or in additional to the IPO Restricted Stock, and any and all other
awards to Executive pursuant to the Stock Option Plan shall be subject to such terms and conditions
as shall be determined at the time of any such award under the direction of the Board pursuant to
the Stock Option Plan. The Company shall exercise best efforts to register with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, the issuance of shares of stock
issued pursuant to the Stock Option Plan and to satisfy the current public information requirements
of Rule 144(c) for purpose of allowing Executive to resell such shares.

     2.4 Benefits. In addition to the compensation to be paid under this Agreement, the Company
shall provide to, or for the benefit of, Executive the following employee benefits:

	 	(a)	 	Participation in retirement plans, if any, which are made available from time
to time to the salaried employees of the Company or its Affiliates, to the extent that
Executive is eligible to participate therein pursuant to the terms and conditions of
such plans.
	 
	 	(b)	 	Participation in health, disability and other welfare benefit and insurance
plans, if any, which are made available from time to time to the salaried employees of
the Company or its Affiliates, to the extent that Executive is eligible to participate
therein pursuant to the terms and conditions of such plans.
	 
	 	(c)	 	At the option of Executive, (1) whole life insurance on the life of Executive
in an amount equal to 2.5 times Executive’s Base Salary, the premiums for which shall
be timely paid by the Company for so long as Executive remains employed with the duties
and position described in Section 2.1, provided that Executive is insurable at
reasonable prevailing rates; or (2) additional benefits specified by Executive at an
annual cost to the Company equal to the annual premium that would otherwise be payable
for such life insurance; provided, such amounts do not result in the deferral of
compensation, as determined under Section 409A of the Code. If Executive is not
insurable at reasonable prevailing rates, then the Company shall not be obligated to
provide life insurance coverage pursuant to Section 2.4(c)(1), but shall be obligated
to provide additional benefits pursuant to Section 2.4(c)(2) at an annual cost to the
Company equal to such reasonable prevailing rates. The beneficiary of the life
insurance policy covering the life of Executive (the “Policy”) shall be Executive’s
spouse or such other person(s) as Executive shall designate in writing to the insurance
company. The owner of the Policy shall be the Company. The Company shall not borrow
against the cash surrender value of such Policy nor cause the value thereof to become
subject to any lien. If Executive’s employment is terminated pursuant to Section 3.3,
3.4(a), 3.5(a) or 3.5(b), of this Agreement, or “Qualified Retirement” as defined in
the

3

 

	 	 	 	Incentive Plan, Executive shall have the election, at his option, to require the
Company (A) to assign the Policy to Executive, provided that Executive shall be
responsible for paying or reimbursing the Company for all premiums and other policy
charges which are or become due and payable, on or after the date of termination of
Executive’s employment, or (B) to cancel the Policy or to permit it to lapse, and to
pay the cash value of the Policy as of Executive’s date of termination to Executive;
provided, however, that if it is determined by the Company upon the advice of legal
counsel that this election would be an extension of credit in the form of a personal
loan within the meaning of section 13(k) of the Exchange Act, the election provided
in this sentence shall be null and void. The option granted by Section 2.4(c) may
be exercised at one or more times during the term of Executive’s employment, with
Executive having the right to select either the insurance or additional benefit, so
long as the total cost to the Company during each year and in the aggregate does not
exceed the cost that the Company would have realized had Executive elected whole
life insurance at the time of the Effective Date.
	 
	 	(d)	 	Sick leave in accordance with the policies of the Company in effect from time
to time.
	 
	 	(e)	 	Reasonable vacation time consistent with past practice or as otherwise approved
by the President or the Board.
	 
	 	(f)	 	Such other benefits as may be approved by the Board or appropriate oversight
committee of the Board on a case-by-case basis for proper business purpose.

     2.5 Reimbursement of Business Expenses. Executive shall be entitled to receive reimbursement
for, or payment of, the legitimate business expenses incurred by Executive on behalf of the Company
in accordance with the Company policy in effect from time to time, including meals, lodging,
transportation and other travel expenses. Reimbursement from the Company for such expenses shall
be made not later than the fifteenth (15th) day of the third month of the calendar year
following the calendar year in which Executive incurred the respective expenses.

SECTION 3

TERM OF AGREEMENT; TERMINATION

     3.1 Term. This Agreement shall become effective on the date first written above and shall
continue in force until terminated in accordance with this Section 3. Executive’s employment with
the Company pursuant to this Agreement shall terminate concurrently with the termination of this
Agreement.

     3.2 Termination Upon Death. Executive’s employment under this Agreement shall terminate
automatically upon the death of Executive.

     3.3 Termination by Mutual Agreement. This Agreement may terminate at any time upon the mutual
agreement of the Company and Executive.

4

 

     3.4 Termination by the Company.

	 	(a)	 	The Company may terminate Executive’s employment under this Agreement at any
time, without Cause (as defined in Section 3.4(c)), upon thirty (30) days prior written
notice of termination to Executive. The Company, in its sole discretion but without
derogation to any rights of Executive under Section 2, may place Executive on
administrative leave during the thirty (30) day notice period.
	 
	 	(b)	 	The Company may terminate Executive’s Employment under this Agreement with
Cause immediately upon written notice of termination to Executive, unless a later
termination date is specified in the notice.
	 
	 	(c)	 	For the purposes of this Agreement, “Cause” for termination shall exist if
Executive is:

	 	(1)	 	Convicted of, or pleads guilty or nolo contendere to, in a
court of competent jurisdiction, a felony amounting to embezzlement, fraud,
theft or other act of dishonesty harming the Company or any employee, supplier,
customer or other person doing business with the Company;
	 
	 	(2)	 	Convicted of, or pleads guilty or nolo contendere to, in a
court of competent jurisdiction, a felony resulting in death or substantial
bodily or psychological harm to, or other act of moral turpitude harming, any
person;
	 
	 	(3)	 	Barred or suspended for a period of more than 60 days by any
court or regulatory agency of competent jurisdiction from performing employment
duties for, engaging in any activities on behalf of, or otherwise being
associated with, the Company;
	 
	 	(4)	 	Found liable by any court of competent jurisdiction for conduct
undertaken with deliberate intent to cause harm or injury, or undertaken with
reckless disregard to the harm or injury that would be caused, to the Company
or any employee, supplier, customer or other person doing business with the
Company other than conduct taken pursuant to advice of legal counsel to the
Company; or
	 
	 	(5)	 	Found by the Company pursuant to Section 5.13 to have failed to
exercise reasonable efforts to properly perform any of Executive’s obligations
under this Agreement or any direction of the Board consistent with this
Agreement within 10 business days after receipt of written notice specifying
each such obligation or direction to be so perform, provided, however, that the
refusal to perform an obligation or direction should not constitute “Cause” if
Executive in good faith reasonably believes that such obligation or direction
is not legal, ethical or moral and Executive so notifies the Board of his
belief.

5

 

     3.5 Termination by Executive.

	 	(a)	 	Executive may terminate his employment under this Agreement at any time without
Good Reason (as defined in Section 3.5(c) below) upon thirty (30) days
prior written notice to the Company. The Company, in its sole discretion but without
derogation to any rights of Executive under Section 2, may place Executive on
administrative leave during the thirty (30) day notice period.
	 
	 	(b)	 	Executive may terminate his employment under this Agreement,
upon fifteen (15)
days prior written notice to the Company, if he resigns for good
reason; provided that Executive shall not resign
pursuant to this Section 3.5(b) if, prior to the expiration of
the fifteen (15) day notice period, the Company causes the facts or events giving rise to the Good Reason
for resignation to no longer exist and provides evidence of a form and nature
satisfactory to Executive that such facts or events no longer and will not in the
foreseeable future exist. The Company, in its sole discretion but without derogation to
any rights of Executive under Section 2, may place Executive on administrative leave
during the fifteen (15) day notice period. Notwithstanding anything to the contrary
contained herein, Executive shall not be required to perform any act stated in his
written notice of resignation as Good Reason for his resignation for the period
beginning with the giving of such written notice and ending with the effective date of
the termination of his employment.
	 
	 	(c)	 	Executive shall be considered to have resigned for good
reason if:

	 	(1)	 	Executive ceases to hold the position and title of Executive
Vice President as contemplated by Section 1.1 of this Agreement;
	 
	 	(2)	 	Executive is assigned, without his consent, authority
or responsibility materially inconsistent with the authority and responsibility, as contemplated by
Section 1.1 of this Agreement, including without limitation any
material diminution of his authority and responsibility or change in
reporting requirements;
	 
	 	(3)	 	Executive’s Base Salary is materially reduced, or there
is any material delay in the payment of Executive's Base Salary, or
there is any material reduction in the nature and amount of
benefits (including benefits under The Incentive Plan or Stock Option
Plan or any successor plans thereto) theretofore provided to
Executive pursuant to Section 2;
	 
	 	(4)	 	Any requirement is imposed for Executive to reside or travel
outside of the Columbus, Ohio area, other than on travel reasonably required to
carry out Executive’s obligations under this Agreement and consistent with past
practice; or
	 
	 	(5)	 	Executive becomes disabled to the extent that he cannot, with
reasonable accommodation, effectively perform the requirements of his
position for a period of three consecutive months (which
determination shall be made by a physician of Executive's choice who
is reasonably acceptable to the Company); or
	 
	 	(6)	 	The Company commits a material breach of this Agreement (other
than breaches which may be covered by some other subsection of this Section
3.5(c)), which breach is not cured within thirty (30) days after written notice
thereof is given by Executive.

6

 

	 	(d)	 	A Change in Control shall mean the date on which any one of the following
occurs: (i) any one person, or more than one person acting as a group (as determined
under Code Section 409A and the regulations promulgated thereunder), acquires (or has
acquired during the twelve (12) month period ending
on the date of the most recent acquisition by such person or persons) ownership of
stock of the Company possessing 50% or more of the total voting power of the
outstanding stock of the Company; or (ii) a majority of members of the Board is
replaced during any 12-month period by directors whose appointment or election is
not endorsed by a majority of the members of the Board before the date of such
appointment or election; or (iii) any one person, or more than one person acting as
a group (as determined under Code Section 409A and the regulations promulgated
thereunder), acquires ownership of stock of the Company that, together with stock
held by such person or group, constitutes more than 50% of the total fair market
value or total voting power of the outstanding stock of the Company; or (iv) any one
person, or more than one person acting as a group (as determined under Code Section
409A and the regulations thereunder), acquires (or has acquired during the twelve
(12) month period ending on the date of the most recent acquisition by such person
or persons) assets from the Company that have a total gross fair market value equal
to or more than 80% of the total gross fair market value of all of the assets of the
Company. For this purpose, “gross fair market value” means the value of the assets
of the Company, or the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets.

     3.6 Compensation Upon Termination. In addition to any employee benefits to which Executive is
entitled pursuant to Section 2.4 and any reimbursement of business expenses pursuant to Section 2.5
(with respect to which Executive and the Company shall reasonably cooperate), Executive shall be
entitled to the following upon termination of Employment under this Agreement:

	 	(a)	 	In the event that the Company discharges Executive pursuant to Section 3.4(b)
for Cause, or Executive resigns (other than for Good Reason) pursuant to Section
3.5(a), Executive shall be entitled to receive and the Company shall cause to be paid
(1) any earned but unpaid Base Salary through the effective date of termination and (2)
any award for which a Bonus was earned under the Incentive Plan for any Performance
Period which ended prior to the effective date of termination but was not theretofore
paid to Executive. All such amounts shall be paid by the Company in a single sum cash
payment within thirty (30) days after the date of Executive’s discharge or resignation.
	 
	 	(b)	 	In the event that Executive’s employment is terminated by death, Executive’s
estate or personal representative shall be entitled to receive and the Company shall
cause to be paid (1) any earned but unpaid Base Salary through the date of Executive’s
death; (2) any award for which a Bonus was earned under the Incentive Plan for any
Performance Period which ended prior to the effective date of termination but was not
theretofore paid to Executive; (3) payment of Executive’s then current Base Salary for
the ninety (90) day period following the date of his death; (4) an amount equal to the
Target Incentive Award established for Executive under the Incentive Plan for the then
current Performance Period

7

 

	 	 	 	had Executive’s employment not been terminated and had
Executive satisfied all Performance Goals established with respect to such Performance
Period, multiplied by a fraction the numerator of which is the number of days in the
then current Performance Period under the Incentive Plan occurring prior to and
including the date of Executive’s death, and the denominator of which is the number
of days of the whole Performance Period; and (5) continued benefits (to the same
extent and at the same level as were provided by the Company to Executive’s family
members immediately prior to Executive’s death) under the health insurance plan(s)
referenced in Section 2.4(b), for the ninety (90) day period following the date of
Executive’s death and, to the extent permitted pursuant to such health insurance
plan(s) to comply with the continuation coverage requirements under Section 4980B of
the Code (“COBRA”), for such longer period as to which Executive’s beneficiaries pay
the cost of coverage thereof. The Company will pay for that portion of the COBRA
premiums for the Continuation Benefits coverage that exceeds the amount Executive
paid for coverage under the Company’s health insurance plan(s) immediately prior to
Executive’s death for the ninety (90) day period following the date of Executive’s
death. All such amounts or benefits (other than the benefits continued pursuant to
Section 3.6(b)(5) above, which shall be payable or made available in accordance with
the terms of the applicable plan) shall be paid or provided by the Company in a
single sum cash payment within thirty (30) days after the date of Executive’s death;
provided that the Company has obtained satisfactory evidence of Executive’s death.

	 	(c)	(1) 	Except as provided in Section 3.6(c)(2) below, in the event that the
Company discharges Executive pursuant to Section 3.4(a) other than for Cause or
Executive resigns pursuant to Section 3.5(b) for Good Reason, Executive shall be
entitled to receive and the Company shall cause to be paid (A) any earned but unpaid
Base Salary through the date of termination; (B) any award for which a Bonus was earned
under the Incentive Plan for any Performance Period which ended prior to the effective
date of termination but was not theretofore paid to Executive; (C) one (1) times
Executive’s then current Base Salary at the date of termination; (D) an amount equal to
the product of (i) the Target Incentive Award established for Executive under the
Incentive Plan for the then current Performance Period had Executive’s employment not
been terminated and had Executive satisfied all Performance Goals established with
respect to such Performance Period, multiplied by (ii) a fraction, the denominator of
which shall be twelve (12) and the numerator of which shall be twelve (12); (E) an
amount equal to the Company matching contributions that would have been made to
Executive’s account under the Century Surety Company 401(k) Plan (the “401(k) Plan”)
for the twelve (12) month period following Executive’s date of termination based on the
deferral rate of Executive and Company matching contribution formula in effect on
Executive’s date of termination; (F) an amount equal to the annual premium that is paid
by the Company pursuant to Section 2.4(c)(2) for the individual life insurance policy
purchased by Executive and in effect on Executive’s date of termination; and (G)
continued benefits (to

8

 

	 	 	 	the same extent and at the same benefit level as were provided
by the Company to Executive immediately prior to termination) (for purposes of this
paragraph, “Continuation Benefits”) under the health insurance plan(s) referenced in
Section 2.4(b), for the twelve (12) month period
following the date of Executive’s termination, and, to the extent permitted
pursuant to such health insurance plan(s) to comply with the continuation
coverage requirements under COBRA, for such longer period as to which
Executive or Executive’s beneficiaries pay the cost of coverage thereof.
The Company will pay for that portion of the COBRA premiums for the
Continuation Benefits coverage that exceeds the amount Executive paid for
such coverage under the Company’s health insurance plan(s) immediately prior
to Executive’s termination for the twelve (12) month period following the
date of Executive’s termination. Subject to Section 3.8, all such amounts
(other than the Continuation Benefits, which shall be payable or made
available in accordance with the terms of the applicable benefit plan)
otherwise available under this Section 3.6(c)(1) shall be paid by the
Company in a single sum cash payment within thirty (30) days after the date
of Executive’s discharge or resignation.
	 
	 	(2)	 	Notwithstanding anything to the contrary in Section 3.6(c)(1)
above, in the event that (A) a Change in Control occurs and (B) within the
twelve (12) month period immediately following the date on which the Change in
Control occurs, (i) the Company discharges Executive pursuant to Section 3.4(a)
other than for Cause or (ii) Executive resigns pursuant to Section 3.5(b) for
Good Reason, Executive shall be entitled to receive and the Company shall cause
to be paid (a) any earned but unpaid Base Salary through the date of
termination; (b) any award for which a Bonus was earned under the Incentive
Plan for any Performance Period which ended prior to the effective date of
termination but was not theretofore paid to Executive; (c) the product of two
(2) times Executive’s then current Base Salary at the date of termination; (d)
the product of two (2) times the Target Incentive Award established for
Executive under the Incentive Plan for the then current Performance Period had
Executive’s employment not been terminated and had Executive satisfied all
Performance Goals established with respect to such Performance Period; (e) an
amount equal to the Company matching contributions that would have been made to
Executive’s account under the 401(k) Plan for the twenty-four (24) month period
following Executive’s date of termination based on the deferral rate of
Executive and Company matching contribution formula in effect on Executive’s
date of termination; and (f) an amount equal to two (2) times the annual
premium that is paid by the Company pursuant to Section 2.4(c)(2) for the
individual life insurance policy purchased by Executive and in effect on
Executive’s date of termination. In addition, Executive shall be entitled to
continued benefits (to the same extent and at the same benefit level as were
provided by the Company to Executive immediately prior to his termination) (for
purposes of this paragraph, the “Continuation Benefits”) under the health
insurance plan(s) referenced in Section 2.4(b) for the twenty-four (24) month
period following Executive’s date of

9

 

	 	 	 	termination. The Continuation Benefits
coverage will be provided by the Company’s group health plans for the maximum
COBRA continuation period for which Executive is eligible and the Company will
pay for that portion of the COBRA premiums for the Continuation Benefits
coverage
that exceeds the amount Executive paid for coverage under the Company’s
health insurance plan(s) immediately prior to his termination. At the end
of the maximum COBRA continuation period, the Company shall obtain fully
insured individual health insurance policies providing coverage comparable
to the coverage in effect for Executive and his spouse and dependents, if
any, under the Company’s health insurance plan(s) immediately prior to his
termination (the “Individual Polices”). The Company shall reimburse
Executive for that portion of the insurance premiums under the Individual
Policies that exceeds the amount Executive paid for coverage under the
Company’s health insurance plan(s) immediately prior to his termination.
The Individual Policy reimbursements shall continue to be made to Executive
for the remainder of the twenty-four (24) month Continuation Benefits period
following expiration of the maximum COBRA continuation period. All such
reimbursements required pursuant to this Section 3.6(c)(2) shall be paid by
the Company as soon as reasonably practicable following Executive’s
submission of proof of such Individual Policy premium payments; provided,
however, that all such claims for reimbursement shall be submitted by
Executive and paid by the Company before the last day of Executive’s taxable
year following the taxable year in which the expense was incurred.
Notwithstanding the foregoing provisions of this Section 3.6(c)(2), if
Executive obtains comparable group health insurance coverage from a
subsequent employer, then the Continuation Benefits shall cease to be
provided to Executive. Subject to Section 3.8, all such amounts (other than
the Continuation Benefits, which shall be payable or made available in
accordance with the terms of the applicable benefit plan or insurance
policy) otherwise available under this Section 3.6(c)(2) shall be paid by
the Company in a single sum cash payment within thirty (30) days after the
date of Executive’s discharge or resignation.
	 
	 	(3)	 	The Company agrees that it will not report the Continuation
Benefits under Section 3.6(c)(1)(G) or Section 3.6(c)(2) as taxable income to
Executive and Executive agrees that he will not include the value of such
Continuation Benefits in his adjusted gross income. If the Continuation
Benefits under Section 3.6(c)(1)(G) or Section 3.6(c)(2) or the related
reimbursements thereunder cause inclusion of any amount in Executive’s taxable
income, the Company shall pay Executive the amount necessary to wholly offset
the federal, state and local income taxes and any other taxes attributable to
the Continuation Benefits and related reimbursements and the tax reimbursement
amount paid pursuant to this sentence by the earlier of the day such amount is
included in Executive’s taxable income by the Company or the day such taxes are
remitted to the taxing authority. The Company will indemnify Executive from
any and all taxes, fines, penalties, interest and fees assessed by or otherwise
owed to the Internal

10

 

	 	 	 	Revenue Service (“IRS”) or other taxing authorities, in
the event that the IRS or other taxing authority cause the Continuation
Benefits or related reimbursements provided under Section 3.6(c)(1)(G) or
Section 3.6(c)(2) to be included in Executive’s taxable income, and any
expenses, including
reasonable attorney’s fees, incurred in response to an audit or a proceeding
brought by or in the right of the IRS or any other taxing authority arising
out of or as a result of the Continuation Benefits and the related
reimbursements provided under Section 3.6(c)(1)(G) or Section 3.6(c)(2).
	 
	 	(4)	 	If, as a result of a Change in Control, Executive is subject to
the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), the
Company shall reimburse Executive for the amount of such tax, and shall pay
Executive such additional amount or amounts as may be necessary to place
Executive in the same financial position after consideration of any and all
potential related state, federal, and other taxes (including any interest or
penalties imposed with respect to such taxes, provided that Executive properly
reports the Excise Tax) that he would have been in if he had not incurred such
Excise Tax liability. The Company shall reimburse Executive for the amount of
any required withholding with respect to the Excise Tax and the taxes thereon
at the time of such withholding, and the remainder of any amount due under this
Section 3.6(c)(4) shall be paid by the Company to Executive no
later than the fifteenth (15) day of March of the calendar year
following the calendar year in which the Excise Tax is imposed.

	 	(d)	 	Except as otherwise provided in Section 3.6(b) or 3.6(c), Executive’s right,
upon and after the termination of his employment under this Agreement pursuant to this
Section 3 or otherwise, to receive any benefit under the plans, if any, in which
Executive is entitled to participate pursuant to Section 2.4 shall be determined under
the provisions of those plans.
	 
	 	(e)	 	Notwithstanding any provision of this Agreement to the contrary, no payment
shall be made or benefit provided under Section 3.6 unless the event triggering the
payment or provision of benefits constitutes a “separation from service” as determined
under Code Section 409A. However, in the event Executive is a “specified employee” (as
determined under Code Section 409A) at the time of the triggering event, then any
payment or benefit that is otherwise due Executive under this Agreement which is
determined to provide for a deferral of compensation pursuant to Code Section 409A
shall not commence being paid or made available to Executive until after six (6) months
from the date of his separation from service and the aggregate amount of payments that
would have been made during such six (6) month period but for the application of this
Section 3.6(e) will be paid to Executive in a lump sum at the end of such period.

     3.7 Notices. Any termination of Executive’s employment for which notice of termination is
required to be given pursuant to this Section 3 shall be communicated in a writing which shall
indicate the specific provision in this Section 3 relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination under the provision
so indicated.

11

 

     3.8 General Release. Notwithstanding anything in this Section 3 or otherwise to the contrary,
at the election of the Company no amount shall be payable under this Section 3 in excess of (a) any
earned but unpaid Base Salary through the date of Executive’s death; (b) any
award under the Incentive Plan which was earned pursuant to the terms and conditions of such
plan prior to the effective date of termination but was not theretofore paid to Executive, unless
Executive (or his personal representative or trustee of his estate, in the case of his disability
or death) executes a general release of known claims (in form and containing provisions reasonably
required by the Company), provided, however, that any such general release shall be mutual with
respect to known claims of the Company against Executive and known claims of Executive against the
Company.

     3.9 No Mitigation. In the event of the termination of Executive’s employment hereunder for
any reason, Executive shall have no obligation to mitigate damages.

SECTION 4

CONFIDENTIALITY AND NON-COMPETITION

     4.1 Confidential Information. Except as otherwise provided in Section 4.2, the term
“Confidential Information” shall mean all trade secrets and confidential and proprietary
information of the Company, whether in written or oral, tangible or intangible form, including,
without limitation, the following:

	 	(a)	 	The whole or any portion or phase of any data or information relating to the
Company’s processes or techniques relating to its business, whether or not copyrighted,
copyrightable, patented or patentable, (1) which is or has been disclosed to Executive
or about which Executive became or shall become aware of as a consequence of, or
through or during Executive’s employment with the Company; (2) which has value to the
Company; and (3) which is not generally known by others;
	 
	 	(b)	 	Any software, programs, calculations, instructions or other intellectual
property and embodiments thereof of any media, including electro magnetic, and in any
form, including source code and object code, whether or not copyrighted, copyrightable,
patented or patentable;
	 
	 	(c)	 	Business plans, marketing concepts and marketing and sales information of the
Company;
	 
	 	(d)	 	Financial, pricing and/or credit information regarding the Company or customers
and/or suppliers of the Company;
	 
	 	(e)	 	The names, addresses, policy expiration dates and telephone numbers of
customers, agents and/or suppliers of the Company;
	 
	 	(f)	 	The internal corporate policies and procedures of the Company;
	 
	 	(g)	 	Any information of any nature whatsoever that gives the Company the opportunity
to obtain any advantage over its competitors who do not have access to or use of such
information; and

12

 

	 	(h)	 	Any other information designated by the Company as confidential or proprietary
at the time of its disclosure to Executive.

The term “Confidential Information” also shall include all trade secrets and confidential and
proprietary information of any customer, agent, supplier, or prospective customer, agent or
supplier of the Company, whether in written or oral, tangible or intangible form, which have been
disclosed to the Company pursuant to the Company’s agreement to maintain the confidentiality of
such information.

     4.2 Excluded Information. Notwithstanding anything in Section 4.1 to the contrary, the term
“Confidential Information” shall not include any data or information that (a) is voluntarily
disclosed by the Company or has otherwise become generally known to the insurance industry (except
for such public disclosure that has been made by or through Executive or by a third person with the
knowledge of Executive without authorization by the Company); (b) has been independently developed
and disclosed by parties other than Executive or the Company to the public generally without a
breach of any obligation of confidentiality by any such person running directly or indirectly to
the Company; or (c) otherwise enters the public domain through lawful means.

     4.3 Confidentiality Agreement. Executive agrees and acknowledges that the Confidential
Information is the property of the Company, and that such information is sensitive, confidential
and important and is furnished by the Company to Executive under the terms and conditions of this
Agreement. Executive shall keep the Confidential Information (whether obtained prior to or after
the date of this Agreement) strictly confidential during the term of this Agreement and at all
times thereafter provided, however, that Executive may disclose Confidential Information in the
performance of his employment to the extent that he reasonably believes such disclosure is
necessary or convenient, in his sole discretion, in order to perform his duties.

     4.4 Return of Company Property. Executive agrees that upon termination of this Agreement,
Executive shall immediately surrender to the Company, without request, or, at the Company’s request
and in the Company’s sole discretion, destroy or cause to be destroyed all memoranda, notes,
reports, documents, software and disks and all copies and other reproductions and extracts thereof,
including those prepared by Executive, which are in Executive’s possession or under his control and
which contain or are derived from Confidential Information.

     4.5 Covenant Not to Compete or Solicit. Executive shall not, directly or indirectly, do any
of the following during the term of this Agreement and for a period of twelve (12) months or, if
longer, the entire period for which Executive is entitled to (i) payments of Base Salary or Target
or other Incentive Awards or (ii) other benefits pursuant to Section 3 other than payments and
benefits pursuant to Section 3.6(c)(2) after a Change in Control:

	 	(a)	 	Be employed by, serve as consultant or independent contractor to, directly or
indirectly beneficially own any equity or similar interest in (except as the holder of
not more than one percent (1%) of the voting securities of any publicly traded entity
or as a shareholder of the Company or any successor thereto), or otherwise engage in,
any property and casualty insurance company business that directly competes with any
insurance company subsidiary of the Company in the continental United States, Canada or
the Bahamas;

13

 

	 	(b)	 	Solicit or cause to be solicited, directly or indirectly, any property and
casualty wholesale agents under contract with the Company for any purpose (other than,
during the term of this Agreement, as an employee of the Company on behalf of the
Company), without the prior written consent of the Company, which written consent
specifically refers to this Agreement; or
	 
	 	(c)	 	Solicit or cause to be solicited, directly or indirectly, or in any way be
responsible for, an offer of employment to any employee of the Company by any other
person.

The restrictions contained in this Section 4.5 shall cease to apply to, and shall not bind,
Executive in the event that the Company fails to timely and completely pay all amounts due and
owing to Executive pursuant to Section 3.6 of this Agreement. For the purposes of the preceding
sentence, the Company will be deemed to have failed to timely and completely pay all amounts due
and owing to Executive pursuant to Section 3.6 if the Company fails (other than as the result of a
prior breach of this Section 4.5 by Executive) to make any such payment to Executive within ten
(10) days of its due date.

     4.6 Additional Covenants. During the term of this Agreement, Executive shall not take
advantage of any Company opportunity without first offering the opportunity with full disclosure of
material facts to the Company and receiving notice that the Company has declined such opportunity.
For this purpose, “Company opportunity” means any opportunity to engage in a business activity: (a)
of which Executive becomes aware (1) by virtue of Executive’s relationship with, or in connection
with performing functions in the business of, or in using facilities or other resources of the
Company; and (2) under circumstances that should reasonably lead Executive to believe that the
person offering the opportunity expects it to be offered to the Company; or (b) which Executive
knows is closely related to a business in which the Company is engaged or expected to engage.

     4.7 Remedies for Breach. Executive agrees that, in the event of any breach or threatened
breach of any provision of this Section 4 by Executive, the Company shall be entitled to a
temporary restraining order and other temporary or permanent injunctive relief, provided that the
Company has shown irreparable harm. No remedy conferred upon the Company by this Agreement is
intended to be exclusive of any other available remedy or remedies, but each and every such remedy
shall be cumulative and shall be in addition to every other remedy given under this Agreement or
now or hereafter existing at law, in equity or by statute.

     4.8 Reasonableness of Restrictions. Executive agrees and understands that there are
significant business reasons for the restrictions contained in this Agreement and that such
restrictions are reasonable and necessary to protect legitimate business interests of the Company.
Without limiting the generality of the foregoing, Executive agrees and understands that because the
Company may sell its products, technology and services nationally and internationally, the
geographic scope of Executive’s agreement not to compete with the Company is both reasonable and
necessary.

     4.9 Severability. If any provision of this Section 4 is held invalid, illegal or
unenforceable, the remaining provisions shall continue in full force and effect. If any provision
of this Section 4 is for any reason held to be excessively broad as to time, duration, geographic
scope, activity or subject, it shall be construed, by limiting and reducing it, so as to be
enforceable to the extent permitted by applicable law.

14

 

     4.10 Scope of Section 4. As used in this Section 4, the term the “Company” shall include all
Affiliates of the Company.

SECTION 5

MISCELLANEOUS

     5.1 Indemnification. The Company shall indemnify Executive if he was or is a party or is
threatened to be made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (including, without limitation, an action
by or in the right of the Company) by reason of the fact that he is or was a director, officer,
employee or agent of the Company, or is or was serving at the request of the Company as a director,
trustee, officer, employee, partner, joint venturer or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys’ fees and
expenses), judgments, fines and amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company, and, with respect
to any criminal action, suit or proceeding, had no reasonable cause to believe his conduct was
unlawful. No indemnification shall be made in respect of any derivative claim, issue or matter as
to which Executive shall have been adjudged to be liable to the Company unless, and only to the
extent that, the court in which such action, suit or proceeding was brought shall determine upon
application that, despite the adjudication of liability, but in view of all the circumstances of
the case, Executive is fairly and reasonably entitled to indemnity for such expenses. Expenses
(including reasonable attorneys’ fees and expenses) incurred in defending any civil or criminal
action, suit or proceeding referred to in this Section shall be paid by the Company in advance of
the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of Executive to repay such amount, unless it shall ultimately be determined that he is not
entitled to be indemnified by the Company as authorized in this Section. The indemnification
provided by this Section shall not be deemed exclusive of any other rights to which Executive may
be entitled under the common law, the Ohio corporate law or the charter documents of the Company or
any agreement, vote of its shareholders or directors, or otherwise, both as to action in his
official capacity or as to action in another capacity while holding such office.

     5.2 Key Man Life Insurance; COLI. Executive agrees to cooperate with the Company in
connection with, and consent to the placement of, “key man” or other corporate owned insurance on
Executive’s life by the Company, provided that, except as provided in Section 2.4(c), nothing
herein shall require the Company to obtain or maintain any such insurance on Executive’s life.

     5.3 Breach of Agreement by Company. The Company agrees that, in the event of any breach or
threatened breach of this Agreement by the Company, Executive shall be entitled to any appropriate
remedy in law or in equity. No remedy conferred upon Executive by this Agreement is intended to be
exclusive of any other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this Agreement or now or
hereafter existing at law, in equity or by statute. The Company

15

 

shall pay all legal expenses
(including reasonable attorney’s fees and expenses) and other damages incurred by Executive as the
result of or in connection with any breach of this Agreement by the Company. The Company is aware
that, following a Change in Control, the
Board or a shareholder of the Company may cause or attempt to cause the Company to refuse to
comply with its obligations under this Agreement, or may cause or attempt to cause the Company to
institute, or may institute, litigation seeking to have this Agreement declared unenforceable, or
may take, or attempt to take, other action to deny Executive the benefits intended under this
Agreement. In these circumstances, the purpose of this Agreement could be frustrated. It is the
intent of the Company that Executive not be required to incur the expenses associated with the
enforcement of his rights under this Agreement by litigation or other legal action because the cost
and expense thereof would substantially detract from the benefits intended to be extended to
Executive hereunder, nor be bound to negotiate any settlement of his rights hereunder under threat
of incurring such expenses. Accordingly, (a) if following a Change in Control (1) Executive
concludes that the Company has failed to comply with any of its obligations under this Agreement or
(2) the Company or any other person on behalf of the Company or any shareholder or Affiliate of the
Company takes any action to declare this Agreement void or unenforceable, or institutes any
litigation or other legal action designed to deny, diminish, or recover from Executive the benefits
intended to be provided to Executive hereunder, and (b) if Executive has complied with all of his
obligations under this Agreement, the Company irrevocably authorizes Executive from time to time to
retain counsel of his choice at the expense of the Company as provided in this 5.3, to represent
Executive in connection with the initiation or defense of any litigation or other legal action,
whether by or against the Company or any director, officer, shareholder or other person affiliated
with the Company, in any jurisdiction. Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel, the Company irrevocably consents to Executive’s
entering into an attorney-client relationship with such counsel, and in that connection, the
Company and Executive agree that a confidential relationship shall exist between Executive and such
counsel. The reasonable fees and expenses of counsel selected from time to time by Executive as
hereinabove provided shall be paid or reimbursed to Executive by the Company on a regular periodic
basis upon presentation by Executive of a statement or statements prepared by such counsel in
accordance with its customary practices (provided that such statements need not contain
descriptions of the services performed). The payment of such fees and expenses shall not be
contingent upon the success of such counsel. Executive shall repay to the Company all such amounts
paid by the Company under this Section, and the Company shall not be obligated to make further
payments hereunder, in connection with a contest originated by Executive if the trier of fact in
such contest determines that Executive’s claim was patently frivolous.

     5.4 Affiliates. As used in this Agreement, an entity shall be deemed to be an Affiliate of
another entity if it controls, is controlled by or is under common control with the other entity,
where “control” means the power to vote not less than ten percent (10%) of the voting securities of
an entity.

     5.5 No Conflict. Executive represents that the performance by Executive of all the terms of
this Agreement, as an Executive of the Company, has not, does not and will not breach any agreement
as to which Executive is or was a party and which requires Executive to keep any information in
confidence or in trust. Executive has not entered into, and will not enter into, any written or
oral agreement in conflict herewith.

16

 

     5.6 Notices. Any and all notices required to be given under this Agreement shall be given,
and be deemed given, as follows: (a) by personal delivery which shall be deemed given when
delivered; (b) by U. S. first-class mail, postage prepaid, which shall be deemed given the
third (3rd) day after deposit; or (c) by telecopy (if telecopy number is listed) with
confirmation of receipt which shall be deemed given when sent. Any such notice shall be addressed,
if to the Company at its principal place of business (attn: President) and, if to Executive at his
most current home address on record with the Company for payroll and other corporate purposes,
unless a different address for notice purposes is designated by Executive in a written notice
complying with and referring to this Section 5.6.

     5.7 Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Ohio without regard to conflict of law principles.

     5.8 Amendment and Waiver. This Agreement shall not be amended or modified, and none of the
provisions hereof shall be waived, except in a writing signed on behalf of the Company and by
Executive or, in the case of a waiver, on behalf of the party making a waiver. In the event that
any obligation, agreement or covenant contained in this Agreement should be breached by either
party and thereafter waived by the other party, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other breach hereunder.

     5.9 Section Headings. Section headings contained in this Agreement are for convenience only
and shall not be considered in construing any provision hereof.

     5.10 Assignment. This Agreement is personal to Executive and Executive may not assign or
delegate any of his rights or obligations hereunder. Subject to the foregoing, this Agreement
shall inure to the benefit of and be binding upon Executive and the Company and their respective
heirs, administrators, executors, successors and assigns, including successive as well as immediate
heirs, administrators, executors, successors and assigns.

     5.11 Entire Agreement. This Agreement terminates, cancels and supersedes all previous written
and oral employment agreements or other agreements relating to the relationship of Executive with
the Company entered into between the parties hereto. This Agreement contains the entire
understanding of the parties hereto with respect to the subject matter of this Agreement. Executive
is represented by independent legal counsel or has had the opportunity to retain independent legal
counsel to represent Executive’s interests. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and
no presumption or burden of proof shall arise favoring any party by virtue of authorship of any of
the specific provisions of the Agreement. EXECUTIVE ACKNOWLEDGES THAT, BEFORE PLACING HIS
SIGNATURE HEREUNDER, HE HAS READ ALL OF THE PROVISIONS OF THIS AGREEMENT, AND HAS THIS DAY RECEIVED
A COPY HEREOF.

     5.12 Severability. Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such
invalidity or unenforceability without thereby rendering invalid or unenforceable the remaining
terms and provisions hereof or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.

17

 

     5.13 Dispute Resolution.

	 	(a)	 	Notwithstanding any provision herein to the contrary, any determination of (1)
whether Cause for termination or Good Reason for resignation exists and (2) whether
something “materially” affects anything, or is “substantially” or “reasonably” or
“effectively” done, or is “material” or “reasonable,” as such terms are used in this
Agreement, shall be made in the first instance by the Board or one of its appropriate
oversight committees.
	 
	 	(b)	 	Any controversy, claim or dispute arising out of or relating to this Agreement
or the breach, termination, enforceability or validity of this Agreement, including the
determination of the scope or applicability of the agreement to arbitrate set forth in
this Section 5.13(b) and any dispute of any determination by the Company pursuant to
Section 5.13(a), shall be determined exclusively by binding arbitration in the City of
Columbus, Ohio. The arbitration shall be governed by the rules and procedures of the
American Arbitration Association (the “AAA”) under its Commercial Arbitration Rules and
its Supplementary Procedures for Large, Complex Disputes; provided that persons
eligible to be selected as arbitrators shall be limited to attorneys-at-law each of
whom (i) is on the AAA’s Large, Complex Case Panel or a Center for Public Resources
(“CPR”) Panel of Distinguished Neutrals, or has professional credentials comparable to
those of the attorneys listed on such AAA and CPR Panels and (ii) has actively
practiced law (in private or corporate practice or as a member of the judiciary) for at
least 15 years in the State of Ohio concentrating in either general commercial
litigation or general corporate and commercial matters. Any arbitration proceeding
shall be before one arbitrator mutually agreed to by the parties to such proceeding
(who shall have the credentials set forth above) unless the amount in question exceeds
$100,000, in which event, the mediation shall be by a panel of three mediators or, if
the parties are unable to agree to the arbitrator(s) within 15 business days of the
initiation of the arbitration proceedings, then by the AAA. No provision of, nor the
exercise of any rights under, this Section 5.13(b) shall limit the right of any party
to request and obtain from a court of competent jurisdiction in the State of Ohio,
County of Franklin (which shall have exclusive jurisdiction for purposes of this
Section 5.13) before, during or after the pendency of any arbitration, provisional or
ancillary remedies and relief including injunctive or mandatory relief or the
appointment of a receiver. The institution and maintenance of an action or judicial
proceeding for, or pursuit of, provisional or ancillary remedies shall not constitute a
waiver of the right of any party, even if it is the plaintiff, to submit the dispute to
arbitration if such party would otherwise have such right. Each of the parties hereby
submits unconditionally to the exclusive jurisdiction of the state and federal courts
located in the County of Franklin, State of Ohio for purposes of this provision, waives
objection to the venue of any proceeding in any such court or that any such court
provides an inconvenient forum and consents to the service of process upon it in
connection with any proceeding instituted under this Section 5.13 in the same manner as
provided for the giving of notice under this Agreement. Judgment upon the award
rendered may be entered in any court having jurisdiction. The parties hereby expressly
consent to the nonexclusive jurisdiction of the state and federal courts situated in
the County of Franklin, State

18

 

	 	 	 	of Ohio for this purpose and waive objection to the venue of any proceeding in such
court or that such court provides an inconvenient forum. The arbitrator(s) shall
award recovery of all costs (including attorneys’ fees, administrative fees,
arbitrators’ fees and court costs) to the prevailing party. No arbitrator shall have
power, by award or otherwise, to vary any of the provisions of this Agreement.

     5.14 Code Section 409A Compliance. This Agreement is intended to be operated in compliance
with the provisions of Code Section 409A (including any rulings or regulations promulgated
thereunder). In the event that any provision of this Agreement fails to satisfy the provisions of
Code Section 409A, then such provision shall be void and shall not apply to a payment or benefit
otherwise due Executive, to the extent practicable. In the event that it is determined to not be
feasible to so void a provision of this Agreement as it applies to a payment or benefit due
Executive or Executive’s beneficiary(ies), such provision shall be construed in a manner so as to
comply with the requirements of Code Section 409A. The Company expressly reserves the right to
amend this Agreement, in its sole discretion, to comply with Code Section 409A in the event it
later determines that any provision herein causes this Agreement not to comply with Code Section
409A.

Signatures

     In Witness Whereof, the parties have executed this Agreement as of the date set forth above.

	 	 	 	 	 	 	 	 	 
	THE COMPANY:	 	 	 	EXECUTIVE:	 	 
	PROCENTURY CORPORATION	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Edward F. Feighan
	 	 	 	/s/ Christopher J. Timm	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Edward F. Feighan

Chairman of the Board, President and Chief

Executive Officer
	 	 	 	Christopher J. Timm	 	 

19

 

Exhibit A

Executive Positions for Subsidiaries

Member of the Board of Directors and President of each subsidiary

20

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}]]