Document:

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                                                                   EXHIBIT 10.20

October 14, 2004

Joseph F. Morris
420 S. York Road
Hatboro, PA 19040

Dear Joe:

Reference is made to Executive Employment Agreement dated as of October 14, 2004
(the "Agreement") between you and Penn-America Group, Inc. and its insurance
subsidiaries (the "Company"). Capitalized terms not otherwise defined herein
shall have the same meaning as their counterparts in the Agreement.

If the Company terminates Executive's employment on or before the first
anniversary date of the Closing, and if it shall be determined that as a result
of such termination that any amount or benefit paid or distributed to the
Executive pursuant to the Agreement, taken together with any amounts or benefits
otherwise paid or distributed to the Executive in connection with the merger
contemplated by the Agreement and Plan of Merger ("Merger Agreement"), dated as
of the date hereof, by and among United National Group, Ltd., Cheltenham
Acquisition Corp., U.N. Holdings II, Inc. (collectively, "UNGL") and the Company
(collectively, the "Covered Payments"), would be an "excess parachute payment"
as defined in Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code") and would thereby subject the Executive to the tax (the "Excise Tax")
imposed under Section 4999 of the Code (or any similar tax that may hereafter be
imposed), then the Company will reimburse the Executive in an amount equal to
the "Tax Gross-Up Amount" (as defined in the next sentence). The Tax Gross-Up
Amount means an amount equal to the sum of the Excise Tax, any other similar
federal tax and the amount of any other additional federal, state and/or local
tax, including but not limited to any additional income tax, arising as a result
of any payment pursuant to this letter, which sum may be due and payable by the
Executive or withheld by the Company (collectively, the "Total Taxes") so that
the Executive receives actual payments or benefits, after payment or
withholding, in an amount no less than that which would have been received by
him if no obligation for Total Taxes had arisen.

In addition to the foregoing, all of the reasonable fees and expenses of any
accounting firm or other firm selected by the Company in performing the
determinations and valuations referred to in the preceding paragraph shall be
borne solely by the Company. The Company shall control all proceedings relating
to any contest of any alleged Excise Tax. Executive shall promptly return to the
Company a refund of any amount previously advanced by the Company as part of the
Tax Gross-up Amount.

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Joseph F. Morris
October 14, 2004
Page 2

You agree at all times, both during and after your employment, to cooperate
fully with the Company in connection with any inquiries or proceedings regarding
matters relating to the obligations described in this letter, including any
payments or benefits provided to you under the Agreement, and you agree further
to coordinate your positions and responses in advance with the Company so as to
eliminate or minimize to the maximum degree possible any basis for the Covered
Payments.

Please indicate your acceptance to the terms above by signing below.

Sincerely,

PENN-AMERICA GROUP, INC.

/s/ Garland P. Pezzuolo
---------------------------
Garland P. Pezzuolo
Vice President, Secretary & General Counsel

AGREED AND ACCEPTED:

/s/ Joseph F. Morris                                 10/14/2004
------------------------------------                 ----------------------
Joseph F. Morris                                           Date<PAGE>

                                                                   EXHIBIT 10.21

                         EXECUTIVE EMPLOYMENT AGREEMENT

      Intended to be legally bound hereby, this AGREEMENT made as of this 18th
day of October, 2004, is entered into for good and valuable consideration
between Penn Independent Corporation, a corporation, (hereinafter referred to as
"Company") and Robert A. Lear, the executive employee (hereinafter referred to
as "Executive").

                                    RECITAL:

      Executive has given many years of valuable service to the Company and
possesses valuable knowledge and skills that have contributed to the successful
operation of the Company's business;

      The Company desires that Executive remain in employment following the
consummation of the transactions under consideration with United National Group,
Ltd. ("UNGL"), so as to assist in the integration and post-closing operations of
the Company;

      In furtherance of the foregoing, the Company and Executive have agreed to
execute and deliver this Agreement in consideration, among other things, of (i)
Executive's past valuable services; (ii) Executive's future valuable services;
(iii) the access Executive will have to confidential or proprietary information
of the Company; (iv) the willingness of the Company to make valuable benefits
available hereafter to Executive, including the Company's willingness to enter
into this employment contract with Executive; (v) Executive's receipt of
compensation from time to time by the Company.

1.    EMPLOYMENT AND TERM

      The word "Company" as used in this Agreement shall refer to and include
Penn Independent Corporation and its subsidiaries, affiliates, successors and
all related companies. The Company shall employ Executive and Executive shall be
employed by the Company for a term beginning on the Effective Date and
continuing until the third anniversary of the Effective Date (the "Term"). For
purposes of this Agreement, "Effective Date" shall mean the date on which occurs
(x) the closing of the anticipated business transaction between the Company and
UNGL (the "Transaction") and (y) the payment to Executive of the "Section 17
Payment" (as defined below, and which will be approximately $2.9 million). At
least sixty (60) days prior to the expiration of the Term, the parties shall
endeavor to explore alternative arrangements following the expiration of the
Term pursuant to which Executive could provide consulting and advisory services
to the Company and its affiliates.

2.    SALARY, BONUS, EXECUTIVE EMPLOYEE BENEFITS, equity grants

      A)    Executive shall receive a base salary at the annual rate of
            $420,000, effective the date hereof, for the term of this Agreement.
            Effective as of each January 1, Executive shall also receive an
            annual increase of not less than the percentage

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            increase of the Consumer Price Index Philadelphia, PA area for the
            calendar year just ended.

      B)    Executive shall be eligible to receive a target bonus opportunity
            that will provide for an annual incentive opportunity of 30% of his
            base salary if plan targets are satisfied, with the terms of such
            bonus opportunity similar to the terms of the 2004 KEIC Bonus Plan
            in effect for senior executives of Penn-America Group, Inc., and
            modified accordingly for the business and operations of the Company.

      C)    Executive shall remain eligible for all executive insurance and
            benefit policies maintained by Company for its senior executive
            team. During each full calendar year comprising the Term, Executive
            shall be entitled to receive five (5) weeks of vacation (which shall
            be pro-rated for those portions of a calendar year falling within
            the Term).

      D)    Executive shall be eligible to receive a grant of options to
            purchase Class A common shares of UNGL in accordance with and
            subject to the execution of the form of time vesting and performance
            vesting option agreements used by UNGL for its senior executive
            option grantees. The foregoing option grants may be made, at the
            election of the Board of Directors of the Company (the "Board"),
            under either the UNGL Share Incentive Plan or any share incentive
            plan maintained by any affiliate of the Company. Executive may elect
            not to accept such an option grant, in his discretion.

      E)    No later than the first regular payroll date after the Effective
            Date in 2005, Executive shall receive the payment of his $100,000
            bonus attributable to services rendered in 2004 (the "2004 Bonus")
            (regardless of whether he remains employed as of such date), unless
            such payment has already been made in 2005.

      F)    The Company shall provide Executive with 40 hours of paid leave in
            any calendar year so he can continue to satisfy his CPE requirements
            and cover the reasonable costs of attending CPE seminars and related
            events. The Company shall also pay for Executive's CPA license fees
            and related dues and subscriptions (such as, but not limited to,
            membership in the AICPA).

      G)    Upon the Effective Date, and the consummation of the Transaction,
            Executive shall receive all amounts otherwise due him under Section
            17 of the "Prior Agreement" (as defined below) (the "Section 17
            Payment") as a result of the Transaction and as if he had resigned
            from employment with the Company upon the consummation of the
            Transaction, and his receipt of the Section 17 Payment shall be an
            express condition to the effectiveness of this Agreement.

      H)    Executive is eligible to participate in an integration bonus plan,
            with the terms and conditions to be supplied by the Company at a
            later date. Executive may elect not to participate in such plan, in
            his discretion.

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3.    POSITION AND DUTIES

      Executive shall serve as President and Chief Executive Officer of the
Company pursuant to the power of the Board to install and remove officers.
Executive shall devote his best efforts and his business time, attention and
energies to all executive duties assigned to him by the Board on behalf of the
Company and/or all subsidiaries and interests of the Company. Executive shall
devote his best efforts and his business time, attention and energies to the
performance of all assignments with the exception of vacation, illness or
disability time. Executive shall always conduct himself in a manner that
maintains the good reputation of the Company, its shareholders, subsidiaries and
related interests. Executive shall not directly or indirectly undertake or
accept other employment or compensation for services rendered during the term of
this Agreement without having obtained the prior approval of the Board. This
shall not prevent Executive from investing his assets in a business whose
operation or affairs will not require significant service from Executive. In
addition this shall not require Executive to divest himself of ownership in or
management of any investments or business he currently may have.

4.    TERMINATION BY EXECUTIVE

      Executive agrees to give the Company one hundred twenty (120) days prior
written notice of the termination of his employment with the Company, effective
upon the close of business on such 120th day (the "Resignation Date"). Upon
receipt of such notice, the Company shall reserve its rights to terminate
Executive's employment at its election prior to the proposed Resignation Date,
provided that in the event of termination hereunder, Executive shall be entitled
to the following:

      A) Salary to the Resignation Date.

      B) Any declared bonus unpaid by the Company and the 2004 Bonus.

      C) All benefits that may be due him at that time under the Company's
         profit sharing, pension, stock option or other plans.

5.    DISABILITY

      Executive shall be eligible to participate in Company's disability
benefits program in accordance with the terms and conditions thereof.

6.    DEATH

      For as long as Executive remains employed, the Company shall annually
provide Executive, during the time of the Agreement, an amount equal to 175% of
the annual premium of a $500,000 term life insurance policy on the life of
Executive. The beneficiary of such policy shall be as designated by Executive.

7.    CONFIDENTIAL INFORMATION

      Executive recognizes and acknowledges that in the course of Executive's
employment by the Company it will be necessary for Executive to acquire or

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develop or continue to acquire or develop information which could include, in
whole or in part, information concerning the Company's business plans, methods
of doing business, financial affairs, financial and other record systems,
computers, computer programs, system documentation, hardware, software
development, as well as information concerning the business and affairs of the
Company's affiliates. Executive agrees to treat any such information as
confidential and agrees not to disclose any such information to any third party
or use any such information for any other purpose (except as Executive's duties
as an officer of the Company may require) without the prior express written
authorization of the Board.

8.    RESTRICTIONS ON COMPETITION/SOLICITATION

      A)    Executive agrees that during his employment with the Company and for
            twelve (12) months thereafter, he shall not, directly or indirectly,
            solicit the trade of, trade with, or in any way do business with,
            any brokers or agents for the purposes of competing with the
            Delaware Valley Underwriting Agency, Inc., Apex Insurance Agency,
            Inc. and Stratus Insurance Services, Inc. (collectively, the
            "Subsidiaries"), nor shall he engage in wholesale brokerage business
            in competition with the Subsidiaries and their respective
            subsidiaries.

      B)    Executive agrees that, during his employment with the Company and
            for twelve (12) months following termination of Executive's
            employment with the Company, Executive shall not, directly or
            indirectly solicit or induce, attempt to solicit or induce, or hire
            any employee of the Company to leave the employ of the Company.

      C)    In the event that this Section 8 is determined by any court of
            competent jurisdiction to be unenforceable in part by reason of its
            being too great a period of time or covering too great a
            geographical area, it shall be in full force and in effect as to
            that period of time or geographical area determined to be reasonable
            by the court.

9.    AUTOMOBILE

      The Company shall pay to Executive a $1120 per month automobile allowance
which will be subject to an annual increase of not less than the Consumer Price
Index for the Philadelphia, Pennsylvania area for the calendar year just ended.

10.   ASSIGNMENT, SUCCESSORS, ETC.

      The rights and obligations hereunder shall be binding upon and take effect
for the benefit of any successor in interest of the Company created by merger,
reorganization, sale of assets, assignment or otherwise.

11.   NOTICES

      Under this Agreement, any notice shall be sufficient if in writing and
sent by registered mail addressed as follows:

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                                                                  EXECUTION COPY

      A) If to the Company, addressed to:

                      Board of Directors
                      Penn Independent Corporation
                      420 South York Road
                      Hatboro, PA 19040

      B) If to Executive, addressed to

                      Robert A. Lear
                      3689 Markham Drive
                      Bensalem, PA 19020

      Either party may change the address specified herein by giving written
notice of the change to the other party as herein provided.

12.   YEAR TO YEAR EXTENSION

      This Agreement shall continue in effect during its initial term. It shall
be extended on a year to year basis, for an additional year, unless either party
to the Agreement notifies the other, in writing, one hundred and twenty days
(120) days prior to the then effective expiration date, that the Agreement shall
not be so extended.

13.   MEDIATION

      The parties first shall endeavor to resolve any controversy or claim
resulting from or relating to this Agreement or breach thereof by mediation.
Unless the parties agree otherwise, the mediator shall be selected from the CPR
Institute for Dispute Resolution ("CPR"), Panels of Neutrals with notification
to CPR. Each party shall split the cost of the mediator.

      Any controversy or claim resulting from or relating to this Agreement or
breach thereof which remains unresolved 45 days after appointment of a mediator,
shall be settled by arbitration as set forth in the next paragraph.

14.   ARBITRATION

      In the event that any disagreement or dispute whatsoever shall arise
between the parties concerning this Agreement, such disagreement or dispute
shall be submitted to the Judicial Arbitration and Mediation Services, Inc
("JAMS") for resolution in a confidential private arbitration in accordance with
the comprehensive rules and procedures of JAMS, including the internal appeal
process provided for in Rule 34 of the JAMS rules with respect to any initial
judgment rendered in an arbitration. Any such arbitration proceeding shall take
place in Philadelphia, Pennsylvania, New York, New York or Washington, D.C. (as
selected by Executive) before a single arbitrator (rather than a panel of
arbitrators). The parties agree that the arbitrator shall have no authority to
award any punitive or exemplary damages and waive, to the full extent permitted
by law, any right to recover such damages in such arbitration. Each party shall
each bear their respective costs (including attorney's fees, and there shall be
no award of attorney's fees); provided that the Company shall bear the cost of
any arbitrator selected by

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the parties (unless such arbitrator shall determine that Executive has commenced
a frivolous action, in which case arbitrator fees shall be split between the
parties); except in the case of an appeal, in which case the appealing party
shall bear the costs of the appeal. Judgment upon the final award rendered by
such arbitrator, after giving effect to the JAMS internal appeal process, may be
entered in any court having jurisdiction thereof. If JAMS is not in business or
is no longer providing arbitration services, then the American Arbitration
Association shall be substituted for JAMS for the purposes of the foregoing
provisions. Each party agrees that it shall maintain absolute confidentiality in
respect to any dispute between them.

      Notwithstanding anything in this Section 14 to the contrary, Executive and
the Company agree that in the event that Executive engages in activities or
breaches of this Agreement that the Company believes are causing or will cause
the Company or the Company's affiliates immediate and irreparable injury,
including but not limited to any breaches of paragraphs 7 or 8 of this
Agreement, the Company shall be entitled to bring an action in court to have an
injunction issued or for any other relief, without first going to mediation and
in addition to any other rights and remedies it may have. Further, the existence
of any claim or cause of action which Executive may have against the Company or
any of their affiliates shall not constitute a defense or bar to the enforcement
of paragraphs 7 or 8 of the Agreement.

15.   OTHER AGREEMENTS

      Effective upon the consummation of the Transaction and receipt by
Executive of the Section 17 Payment, which shall be approximately $2.9 million,
the Executive Employment Agreement between Executive and Company, dated November
11, 1997, as amended (the "Prior Agreement"), shall be terminated and without
further force and effect, and shall be superseded in its entirety by this
Agreement. Effective upon his receipt of the Section 17 Payment, Executive
hereby irrevocably waives and releases all claims and rights under any change of
control provision of the Prior Agreement.

16.   GOVERNING LAW

      This Agreement is made and shall be interpreted and carried out under the
laws of Pennsylvania (applicable to contracts to be performed wholly within such
state).

17.   SEVERANCE COMPENSATION

            a.    If, during the term or any renewal or extended term of this
Executive Employment Agreement, any one of the following events should occur,
the Company will pay Executive severance compensation as described in this
Section 17:

                  (i)   Retirement by Executive from full time employment with
                        the Company with the prior agreement and approval of
                        Company.

                  (ii)  Executive's mental or physical disability which
                        continues for more than six (6) months.

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                  (iii) Termination of Executive's employment by the Company for
                        any reason other than "Cause." For purposes of this
                        Agreement, "Cause" shall mean:

                        1.    Executive's willful misconduct or gross negligence
                              or any intentional or reckless material
                              misrepresentation to the directors or officers of
                              the Company (including any intentional or reckless
                              material misrepresentation made in this Agreement
                              or any document related to the proposed
                              transaction with UNGL), or

                        2.    Executive's engagement in fraud or embezzlement,
                              or a good faith determination by the Board that
                              Executive's arraignment for a felony charge or
                              other serious crime involving moral turpitude is
                              based on facts and actions of Executive that are
                              likely to result in the successful criminal
                              prosecution of Executive and that such arraignment
                              and prosecution would be likely to adversely
                              affect the business, operations or prospects of
                              the Company or its affiliates, or Executive's plea
                              of nolo contendre to a felony. This provision
                              shall not apply to any arraignment, conviction or
                              plea of nolo contendre to any traffic (driving)
                              offenses.

                  (iv)  Termination by Executive for "Good Reason." For purposes
                        of this Agreement, "Good Reason" shall mean:

                        1.    a transfer or relocation of the site of employment
                              of Executive, without his express consent, to a
                              location more than 25 miles from the location of
                              his principal place of business immediately
                              preceding the Effective Date;

                        2.    an assignment to Executive of any duties or
                              responsibilities that comprise a significant
                              reduction or change by the Company (or its
                              successor) in the nature or scope of the authority
                              of, such duties or responsibilities assigned to or
                              held by Executive as of the Effective Date;
                              provided that a good faith assignment by the Board
                              to a position within the Company or one of its
                              affiliates with similar responsibility, title and
                              compensation is not considered to be Good Reason;

                        3.    any removal of Executive from the officer
                              positions with the Company (or its successor) and
                              its affiliates held by him as of the Effective
                              Date; provided that a good faith assignment by the
                              Board to a position within the Company

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                              or one of its affiliates with similar
                              responsibility, and compensation is not considered
                              to be Good Reason;

                        4.    a reduction by the Company (or its successor) and
                              its subsidiaries in Executive's base salary as of
                              the Effective Date or, if greater, at any time
                              thereafter; or

                        5.    any failure of the Company to comply with and
                              satisfy its material obligations under this
                              Agreement (other than those specified in clauses
                              (1) through (4) above, as to which no notice and
                              opportunity to cure shall be provided) that
                              remains uncured for 30 days after written notice
                              thereof is given to the Company; provided that
                              Executive's decision not to accept -------- ----
                              benefits or payments arising under Sections 2.D
                              and 2.H shall not give rise to "Good Reason"
                              hereunder.

            b.    Upon a termination by the Company as described in Section
17.a., Executive shall be paid an amount equal to (x) if such termination occurs
prior to the first anniversary of the Effective Date, two times his then base
salary payable in equal monthly installments over a twelve-month period
beginning on the last day of the month following such termination, (y) if such
termination occurs on or after the first anniversary of the Effective Date but
prior to the second anniversary of the Effective Date, one times his then base
salary payable in equal monthly installments over a twelve month period
beginning on the last day of the month following such termination, and (z) if
such termination occurs on or after the second anniversary of the Effective
Date, the amount of base salary due for the remainder of the Term, but in such
case, no less than one-half of his base salary (each such payment, the
"Severance Compensation Payment").

            c.    In addition, upon the occurrence of the events described in
Section 17.a, the Company shall perform each of the following:

                  (i)   For a total of six months, the Company shall continue to
pay Executive a cash amount equal to 175% of the annual premium of a $500,000
term life insurance policy on the life of Executive in accordance with the
provisions of Section 6 hereof. Such amount shall be paid to Executive on
written demand by Executive.

                  (ii)  Notwithstanding the provisions of Section 18 hereof, the
Company shall be required to provide the health, dental and prescription
medication coverage (or reimbursement thereof) as described in Section 18 to
Executive and his spouse.

            d.    The provisions of this Section 17 shall survive any
termination or expiration of this Agreement. Notwithstanding any other provision
of this Agreement, no payments shall be made to Executive unless he delivers to
the Company an executed general release (the form of which is attached hereto as
Exhibit A and remains in compliance with his post-termination obligations
hereunder.

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18.   HEALTH, DENTAL and prescription medication BENEFITS

      In addition to all health, dental and prescription medication benefits
provided for as a part of Section 2c. of this Agreement, the Company shall
provide and pay for Executive and his spouse's Company group health, dental and
prescription medication benefits for five and one-half years from the later of
(i) the consummation of the Transaction, or (ii) Executive's termination from
employment for any reason (the "Benefit Period"). If group health, dental and
prescription medication coverage is not available to Executive and his spouse,
then the Company will provide equivalent health, dental and prescription
medication coverage or the reimbursement thereof for the remaining portion of
the Benefit Period. The benefits described above will be similar or equivalent
to Executive and his spouse's coverage elected during the time of this
Agreement.

19.   INDEMNIFICATION

      The Company shall indemnify Executive to the maximum extent provided for
under its charter and by-laws and applicable law, with respect to any action
suit or proceeding to which Executive is made, or threatened to be made, a party
by reason of the fact that he is an officer, member, employee, consultant or
agent of the Company. During the Term, and for so long as Executive remains
employed, the Company shall continue in place its D&O insurance coverage,
subject to such across-the-board modifications for senior executives as the
Board may determine.

20.   ENTIRE AGREEMENT

Upon the Effective Date, the entire Agreement of and between the parties is
contained within this Agreement and supercedes all prior conversations,
discussions and arrangements between the parties. It may not be changed or
modified orally, but only by written Agreement enforcing the change, waiver,
modification, extension or termination and signed by the party against whom
enforcement is sought.

21.   COUNTERPARTS

This Agreement may be executed by one or more of the parties hereto on any
number of separate counterparts and all such counterparts shall be deemed to be
one and the same instrument. Each party hereto confirms that any facsimile copy
of such party's executed counterpart of the Agreement (or its signature page
thereof) shall be deemed to be an executed original thereof.

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INTENDING TO BE LEGALLY BOUND

                                            Penn Independent Corporation

                                            By: /s/ Irvin Saltzman
                                                -------------------------------
                                                Irvin Saltzman, Chairman

                                            By: /s/ Jason M. Waksman
                                                -------------------------------
                                                Jason M. Waksman, VP

                                            Attest: /s/ James E. Heerin
                                                    ---------------------------
                                                    James E. Heerin
                                            Secretary

Witness: /s/  Edward Levy                        /s/ Robert A. Lear
         ---------------------                   ------------------------------
                                                 Robert A. Lear

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