Document:

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                                                                    EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

      This employment Agreement ("Agreement") made effective as of the 1st day
of October, 1993, by and between North Pointe Financial Services, Inc., a
Michigan corporation, having its principal place of business at 28819 Franklin
Road, Suite 300, Southfield, Michigan 48034, and herein referred to as "NPFS"
and James G. Petcoff, herein referred to as the "Executive."

                                    RECITALS

      WHEREAS, the Executive has served in various executive capacities for NPFS
and various affiliates since 1986, including that of President, Chief Executive
Officer, Chairman of the Board, and as a Director; and

      WHEREAS, NPFS recognizes that the Executive's contribution to the
betterment and continued success of NPFS has been substantial, and NPFS believes
it to be important to its future prosperity and to its general interest to
obtain assurance concerning the continuation of the Executive's employment and
to provide the Executive with reasonable remuneration arrangements; and

      WHEREAS, the parties wish to enter into this written Employment Agreement
to clearly define and clarify the terms of Executive's employment as President,
Chief Executive Officer, and Chairman of the Board of NPFS.

      NOW, THEREFORE, the parties agree as follows:

      1. Employment. NPFS hereby employs the Executive and the Executive hereby
accepts employment as President, Chief Executive Officer, and Chairman of the
Board of NPFS on the terms and conditions hereinafter set forth.

      2. Term of Employment. The term of employment hereunder shall commence
effective as of October 1, 1993 and shall continue for a term of five (5) years.
The term shall be automatically extended for an additional one-year period,
unless 90 days prior to that date, either the Executive or NPFS gives written
notice to the other that the term is not to be extended. The term

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during which this Agreement is in effect may hereinafter be referred to as the
"Contract Term." Notwithstanding the foregoing, this Agreement may be terminated
prior to expiration of its term as hereinafter provided in paragraph 6.

      3. Duties of Executive. The Executive shall, during the Contract Term,
perform those tasks and discharge those duties of his positions set forth in
paragraph 1, as well as similar duties for subsidiaries of NPFS, including North
Pointe Insurance Company. The duties of those positions may be more particularly
set forth from time to time by the Board of Directors. The Executive shall
report to the Board of Directors.

      4. Compensation. The Executive initially shall receive an annual base
salary of $400,000 for his services as NPFS's President, Chief Executive Office,
and Chairman of the Board.

      It is agreed by the parties hereto that the Executive's base salary shall
be reviewed by the Board of Directors of NPFS from time to time, but not less
than once each year, and may be increased or decreased based upon performance,
generally prevailing property and casualty insurance industry compensation
practices and other relevant factors deemed reasonable by the Board of
Directors. The Board may also award bonus compensation to the Executive from
time to time, on the basis of performance and profitability of NPFS and its
subsidiaries and other relevant factors, in its sole discretion.

      5. Benefits. During the Contract Term the Executive shall be entitled to
participate at the highest level in all of NPFS's employee benefit plans or
arrangements (including but not limited to life insurance plans, all surgical,
medical, dental and hospital expense benefit plans, long-term disability plans,
retirement-income plans and profit sharing plans) that are in effect during the
Contract Term and to receive benefits thereunder on a basis consistent with the
overall administration of the plans.

      (a) Vacation and Sick Leave. The Executive shall be entitled to six (6)
weeks of

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vacation per year and sick leave in accordance with NPFS's policy with respect
thereto.

      (b) Reimbursement of Business Expenses. It is acknowledged by NPFS that
entertainment of various business associates is of benefit to the company and is
an essential part of Executive's duties and responsibilities. NPFS shall
reimburse the Executive for all reasonable business expenses incurred by the
Executive in conducting the business of NPFS, including expenditures for dining
and athletic clubs, monthly dues for one country club, entertainment, gifts and
travel, provided that the Executive furnishes to NPFS adequate records and other
documentary evidence required by federal and state statutes and regulations
issued by the appropriate taxing authorities for the substantiation of each such
expenditure as an income tax deduction. Notwithstanding any other provisions in
this contract, in the event any of the expenditures described above are not a
proper income tax deduction to NPFS, the cost of such items shall be deemed
additional compensation under this contract and shall not reduce any other
salary or bonus payment hereunder.

      (c) Perquisites.

          (i) Also included in potential reimbursable expenses for purposes of
subparagraph 5(b) are expenditures for travel to seminars, board meetings,
conventions and other similar events, civic clubs and related expenditures with
respect thereto including dues and meals. Amounts reimbursed to the Executive
for such business expenses are not to be considered taxable compensation to the
Executive, but are expenditures by NPFS for the convenience and benefit of NPFS.

          (ii) NPFS shall provide Executive use of an automobile or make the
monthly payments on an Executive-owned or leased automobile. NPFS shall also pay
for fuel, insurance, maintenance and repairs with respect to the business use of
such automobile. The Executive's monthly automobile allowance may be increased
from time to time as mutually agreed upon by the parties.

          (iii) NPFS shall also reimburse the Executive for all fees and dues
related to membership in professional organizations, as from time to time
approved by NPFS's Board of

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Directors, and all expenses related to such memberships.

          (iv) Other Benefits. NPFS may from time to time provide and pay other
fringe benefits to the Executive and the Executive shall be entitled to
participate during the Contract Term in any other benefit plans that may be made
available to executive personnel of NPFS generally after the commencement of the
Contract Term.

      6. Termination of Agreement.

      (a) Automatic Termination. The Agreement shall terminate immediately on
the occurrence of either of the following events:

          (i) The death of the Executive.

          (ii) The Executive has been adjudicated by a court of competent
jurisdiction to be insane, incompetent and/or unable to manage his affairs
properly.

      (b) Discretionary Termination. In the event any of the following occurs,
NPFS shall have the right to terminate this Agreement immediately upon giving
the Executive advance written notice of such termination:

          (i) The breach of any of the terms of this Agreement by the Executive.

          (ii) The continuous neglect by the Executive of his employment duties.

          (iii) The Executive commits any acts of gross negligence; dishonesty;
embezzlement; fraud; misrepresentation; intentional disclosure of confidential
information related to the business of NPFS that would be detrimental to NPFS if
disclosed; or habitual illegal substance abuse or drunkenness.

      (c) Suspension of Agreement. In the event the Executive, as a result of a
physical or mental disability, has been unable to perform his duties under this
Agreement on a full time basis for a period of six (6) consecutive months, NPFS
may suspend this Agreement upon giving the Executive thirty (30) days advance
written notice of such suspension unless, prior to expiration of such

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thirty (30) day period the Executive resumes performance of his duties on a full
time basis. During a period when this Agreement is suspended, NPFS shall pay
Executive one-half (1/2) of his base salary, less any disability payments from
insurance for which NPFS has paid premiums.

      (d) Compensation Upon Termination. In the event of the termination of this
Agreement for any of the reasons set forth above in subparagraph 6(b), the
Executive shall be entitled to the base salary earned by him prior to the date
of termination as provided for in this Agreement computed pro rata up to and
including the date of termination.

      (e) Liquidated Damages Upon Termination of Employment by NPFS Without
Cause. Notwithstanding any other provision in this Agreement to the contrary,
NPFS may terminate this Agreement upon giving to the Executive thirty (30) days
advance written notice of such termination. In the event NPFS terminates this
Agreement pursuant to paragraph 6(a) or 6(e), NPFS shall pay to the Executive
or, in the event of the Executive's death or legal incompetence, to the
Executive's estate, a monthly sum equal to the highest monthly rate of base
salary paid to the Executive during the last full prior calendar year pursuant
to paragraph 4 of this Agreement. If such termination shall have occurred prior
to the last day of the Contract Term, such payments shall continue until the
last day of the last full calendar month of the full Contract Term, or until
Executive reaches 70 years of age, whichever occurs first. In addition, if this
Agreement is terminated pursuant to paragraph 6(e), Executive shall also be
entitled to payment in an amount equal to three (3) times his merit bonus(es)
for the last previous full calendar year.

      (f) Termination by Executive for Cause. In the event NPFS fails to make
any payment of base salary to the Executive within thirty (30) days after such
payment is due, the Executive may terminate this Agreement, upon giving to NPFS
thirty (30) days advance written notice of such termination; provided, however,
the Executive shall not be entitled to terminate this Agreement pursuant to this
subparagraph 6(f) if NPFS makes such overdue payment to the Executive prior to
expiration of

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the thirty day notice period. Any notice given to NPFS pursuant to this
subparagraph 6(f) shall indicate the reason for termination and the amount of
the overdue payment.

         In the event this Agreement is terminated pursuant to this subparagraph
6(f), the Executive shall be entitled to his base salary as provided for in this
Agreement for the remaining Contract Term plus an amount equal to three (3)
times his merit bonus(es) for the last previous full calendar year.

      7. Nondisclosure of Confidential Information. The Executive agrees that
during the Contract Term, and at all times thereafter, any data, figures,
projections, estimates, customer lists, tax records, personnel histories and
records, information regarding sales, information regarding properties and any
other information regarding the business, operations, properties or personnel of
NPFS or its subsidiaries (collectively referred to herein as the "Confidential
Information") disclosed to or acquired by the Executive shall be held in
confidence and treated as proprietary to NPFS, and the Executive agrees not to
use or disclose any Confidential Information without the prior written consent
of NPFS; provided, however, that no such prior written consent shall be required
for the disclosure and use by the Executive of Confidential Information to
promote and advance the business interests of NPFS (including disclosure of
information reasonably requested by underwriters) or in response to any lawful
process of a court or government agency, whether state, federal or local, such
as a subpoena, summons, proceeding, which requires the Executive's response,
whether sworn or unsworn, or when a response is otherwise required by applicable
law.

      8. Change in Control.

      (a) In the event (i) NPFS merges into or consolidates with another entity,
or is subject in any way to a transfer of a substantial amount of its assets,
resulting in the assets, business or operations of NPFS being controlled by an
entity or individual other than NPFS (a "Change of Ownership"), or there occurs
any "Change in Control" (as defined below) of NPFS and (ii) there is

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a significant change in the nature and scope of the duties and powers of the
Executive, as outlined in paragraph 3, or the Executive reasonably determines
that, as a result of the occurrence of one or more of the events described in
this subparagraph, he is unable to exercise or perform the powers, functions or
duties as set forth in this Agreement or the Executive has "good reason" to
terminate, as that term is defined in subparagraph 8(c), then the Executive
shall be entitled, upon giving thirty (30) days advance written notice to NPFS,
to terminate this Agreement and shall within ninety (90) days after the
effective date of such termination, receive a lump sum amount equal to his base
salary for thirty-six (36) months at the rate in effect on the date such notice
is given to NPFS. The Executive shall also be entitled to an amount equal to
three (3) times his merit bonus(es) for the last previous full calendar year.

      (b) A "Change of Control" shall be deemed to have taken place if (i) a
third person, including a group of individuals or entities, becomes the
beneficial owner of shares of NPFS having forty (40%) percent or more of the
total number of votes that may be cast for the election of directors of NPFS, or
(ii) as a result of, or in connection with any cash tender or exchange offer,
merger, consolidation or other business combination, or sale of assets, or any
combination of the foregoing events, the persons who are directors of NPFS
before the occurrence of such event or events cease to constitute fifty (50%)
percent of the Board of Directors of NPFS.

      (c) For purposes of paragraph 8(a) the Executive shall be deemed to have
"good reason" to terminate his employment with NPFS pursuant to paragraph 8(a)
if any of the following events occur without the Executive's express written
consent:

          (i) The assignment to the Executive of any duties materially
inconsistent with the Executive's position, duties, responsibilities, and status
with NPFS or its affiliates immediately prior to the Change in Control or Change
of Ownership;

          (ii) A material change in the Executive's reporting responsibilities,
titles or offices as in effect immediately prior to the Change in Control or
Change of Ownership, or any

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removal of the Executive from or any failure to re-elect the Executive to such
office, unless such removal or failure to elect is for cause.

          (iii) A reduction in base salary under the Executive's wage and salary
program in effect immediately prior to the Change in Control or Change of
Ownership.

          (iv) A failure by NPFS to continue any incentive programs for
executives applicable to the Executive immediately prior to the Change in
Control or Change of Ownership, the effect of which failure would be to
materially reduce the incentive compensation which would be payable to the
Executive but for discontinuance of such programs.

          (v) The Executive is requested to relocate his office to a location
more than one hundred (100) miles from its location immediately prior to the
Change in Control or Change of Ownership.

          (vi) In the event the Executive consents to any relocation of his
office and such relocation necessitates the Executive moving from his then
current residence (the "Prior Residence"), the failure of NPFS to pay or
reimburse the Executive for all reasonable moving expenses incurred with respect
to moving into a new residence and to indemnify the Executive against any loss
incurred by the Executive in the sale of his Prior Residence which loss shall be
the amount, if any, by which the actual sales price of the Prior Residence is
exceeded by the higher of the Executive's aggregate investment in such prior
Residence or the fair market value of the Prior Residence as established by an
independent appraiser designated by the Executive and acceptable to NPFS.

          (vii) Failure of NPFS to continue in effect any benefit or
compensation plan or arrangement in which the Executive was participating
immediately preceding the Change in Control or Change in Ownership, or the
taking of any action by NPFS not required by law which would adversely affect
the Executive's participation in or materially reduce Executive's benefits from
such a plan.

      9. Termination Payment Maximum. If any payments under this Agreement, when

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aggregated with any other NPFS (and subsidiary) payments to the Executive from
other policies, plans and agreements of NPFS (and subsidiaries) that are deemed
to constitute "golden parachute" payments (as defined in Section 280G of the
Internal Revenue Code of 1986, as amended) ("Code") exceed the maximum amount of
golden parachute compensation under Sections 280G and 4999 of the Code that may
be paid without tax penalties to the Executive and the loss or partial loss of
the compensation tax deduction to NPFS (and its affiliates), then the Executive
shall specify which of his NPFS payments shall be reduced until his aggregate
golden parachute compensation reaches the highest amount permissible without
triggering tax penalties to the Executive and the loss or partial loss of the
compensation tax deduction to NPFS under Code Sections 280G and 4999. Provided,
however, that when the Executive designates which of his NPFS golden parachute
payments shall be reduced to meet the limitations under Code Section 280G and
4999, no change in the timing of the payments shall be made without the consent
of NPFS.

      10. Non-Competition Obligations. NPFS and the Executive covenant and agree
that the Executive shall not, for the longer of (i) 12 months from the date of
termination of this Agreement or (ii) the period during which the Executive
receives payments under this Agreement plus the 12 months immediately following
expiration of such period, engage, directly or indirectly, in the development of
a liquor liability insurance product or service, nor will the Executive render
services similar or reasonably related to those which he rendered as an employee
of NPFS or any of its subsidiaries, as a sole proprietor, partner, employee,
consultant, independent contractor or in any capacity within any state within
which NPFS or any subsidiary thereof sells property and casualty insurance
coverages or services.

      11. Settlement of Controversy and Expenses.

      (a) Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Oakland County,
Michigan, in accordance with

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the Arbitration Rules of the American Arbitration Association then in effect.
The arbitrator shall be chosen mutually by the parties and shall not have
jurisdiction or authority to change, add to or subtract from any of the
provisions of this Agreement. The arbitration decision shall be final and
binding and judgment may be entered on the arbitrator's award in any court
having jurisdiction. In the event the parties cannot decide on an arbitrator,
the American Arbitration Association shall empanel three arbitrators as it shall
select in accordance with its then applicable rules who shall hear the
controversy and decide all issues by majority vote.

      (b) In the event proceedings are brought to enforce any provision in the
Agreement and the Executive prevails, then he shall be entitled to recover from
NPFS his reasonable costs and expenses of the proceeding, including reasonable
fees and disbursement of counsel and what would otherwise be the Executive's
portion of the costs of arbitration. If NPFS prevails, then each party shall be
responsible for his/its respective costs, expenses and attorney fees and the
costs of arbitration shall be divided equally. In the event it is determined
that the Executive is entitled to compensation, legal fees and expenses
hereunder, he also shall be entitled to interest thereon, payable to him at the
prime rate of interest of National Bank of Detroit, as in effect from time to
time during the period from the date such amounts should have been paid to the
date of actual payment. For purposes of determining the date when legal fees and
expenses are payable, such amounts are not due until thirty (30) days after
notification to NPFS of such amounts.

      12. Successors; Binding Agreement.

      (a) NPFS shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of NPFS, by agreement in form and substance satisfactory
to the Executive, to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that NPFS would be required to perform this
Agreement if no such succession had taken place. As used in this Agreement,
"NPFS"

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shall mean NPFS as hereinbefore defined, and any successor to its business
and/or assets as aforesaid, which successor executes and delivers the agreement
provided for in this Section 12 or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law.

      (b) This Agreement and all rights of the Executive hereunder shall inure
to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

      13. Notices. Any notices to be given hereunder by either party to the
other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the parties at the following addresses, but each
party may change his address by written notice in accordance with this
paragraph. Notices delivered personally shall be deemed communicated as of
actual receipt; notices mailed by certified or registered mail shall be deemed
communicated as of actual receipt; notices mailed first class shall be deemed
communicated as of two (2) days after mailing:

                  To NPFS:        28819 Franklin Road, Suite 300
                                  Southfield, MI 48034
                                  Attn: Stephen C. June
                                        General Counsel and Secretary

                  To Executive:   James G. Petcoff
                                  4523 Rivers Edge Drive
                                  Troy, MI 48098

      14. Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the employment of the Executive by NPFS and contains all of the covenants and
agreements between the parties with respect to such employment in any manner
whatsoever. Each party to this Agreement acknowledges that no representations,
inducements, promises, or agreements, orally or otherwise, have been made by any
party or anyone acting on behalf of any party which are not embodied herein, and
that no other

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agreement, statement or promise not contained in this Agreement shall be valid
or binding. No modification of this Agreement shall be enforceable unless it is
in writing signed by both parties hereto. This Agreement is not assignable by
Executive and shall be governed by and construed in accordance with the laws of
Michigan.

      15. Opportunity for Review. Executive acknowledges that he has had an
opportunity to consult with counsel separate from that of Company's prior to
execution of this Agreement.

      16. Partial Invalidity. If any provision in this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.

      IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of October 1, 1993.

                                        "NPFS"
                                        NORTH POINTE FINANCIAL SERVICES, INC.,
                                        a Michigan corporation

                                        By: /s/ Stephen C. June
                                            -----------------------------------
                                                STEPHEN C. JUNE
                                                Secretary

                                        "EXECUTIVE"

                                        /s/ James G. Petcoff
                                        ---------------------------------------
                                        JAMES G. PETCOFF

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                                                                    EXHIBIT 10.3

                        AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AGREEMENT entered into as of the 25th day of June, 1998, by and between
North Pointe Financial Services, Inc., a corporation incorporated under the laws
of Michigan ("NPFS"), James G. Petcoff ("Executive") and Queensway Financial
Holdings Limited, a corporation incorporated under the laws of Ontario
("Queensway").

W I T N E S S E T H :

WHEREAS, NPFS and the Executive entered into an employment agreement made as of
the 1st day of October, 1993 (the "Agreement"):

AND WHEREAS the parties hereto wish to amend the Agreement.

NOW, THEREFORE, the parties agree as follows:

1.    Section 2 of the Agreement shall be amended to provide that the term of
      employment shall be for a term of five (5) years from June 25, 1998.

2.    Queensway hereby guarantees to the Executive all of the obligations of
      NPFS under the Agreement including without limitation payment of all
      amounts payable thereunder when due

3.    The Executive waives his rights with respect to his ability to terminate
      the Agreement pursuant to Section 8 as a result of the change of control
      of NPFS that has occurred in connection with its entry into an Agreement
      and Plan of Merger with North Pointe Acquisition Corp.

4.    Section 1C of the Agreement shall be deleted.

5.    Section 4.2 of the Agreement and Plan of Merger shall be deemed to be
      added to the Agreement.

6.    It is acknowledged that the salary of the Executive during the term of his
      employment shall not be less than $400,000 per annum.

7.    Section 6(f) is amended to add the words, "bonus or other amounts referred
      to in the Agreement" after the words "payment of base salary" in the
      second line thereof.

8.    In all other respects, the parties hereto confirm the terms and conditions
      of the Agreement.

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9.    This Agreement shall be governed and construed in accordance with the laws
      of the State of Michigan.

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of
June 25, 1998.

                                       NORTH POINTE FINANCIAL SERVICES, INC.

                                       By:_________________________________

                                       By:_________________________________

__________________________             ____________________________________
         Witness                       JAMES G. PETCOFF

                                       QUEENSWAY FINANCIAL HOLDINGS LIMITED

                                       By: /s/ Lisa Enright
                                           --------------------------------
                                           Its Director of Finance

                                       By:_________________________________

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