Document:

<PAGE>

                                                                    EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

      AGREEMENT dated the 24th day of March, 1998 between LAWRENCE H. POMEROY
("Employee") and AMERICA SERVICE GROUP INC., a Delaware corporation (the
"Company").

      WHEREAS, the Company seeks to employ the Employee in various executive
capacities at the Company;

      WHEREAS, the Employee accepts the positions contemplated herein;

      NOW, THEREFORE, the parties hereby agree as follows:

      1.    Employment and Duties. The Company hereby employs the Employee as
senior vice president responsible for sales and marketing of Prison Health
Services, Inc. ("PHS"), a wholly-owned subsidiary of the Company, and/or such
other offices and duties as the chief executive officer of the Company or PHS
shall reasonably determine from time to time, consistent with Employee's
responsibilities. Employee shall perform the duties and services of the offices
and titles for which he is employed from time to time hereunder.

      2.    Performance. Employee agrees to actively devote all of his time and
effort during normal business hours to the performance of his duties hereunder
and to use his reasonable best efforts and endeavors to promote the interests
and welfare of the Company.

      3.    Term. The term of Employee's employment hereunder shall commence on
or about April 15, 1998 and shall continue as an employment-at-will unless
terminated by written notice from either party to the other at least thirty (30)
days prior to termination.

      4.    Compensation. For all services rendered by Employee, the Company
agrees to pay Employee from and after the date hereof: (i) a salary (the "Base
Salary") at an annual rate of not less than $160,000.00, payable in such
installments as the parties shall mutually agree; plus (ii) such additional
compensation as the Compensation Committee of the Board (the "Committee") shall
from time to time determine.

      5.    Employee Benefits. During the period of his employment under this
Agreement, Employee shall be entitled to vacation, insurance, and other
employment benefits customarily provided by the Company to its executives,
including increased or changed benefits as are from time to time provided to the
Company's executives generally.

      6.    Expenses. The Company shall promptly pay or reimburse Employee for
all reasonable expenses incurred by him in connection with the performance of
his duties and responsibilities hereunder, including, but not limited to,
payment or reimbursement of reasonable expenses paid or incurred for travel and
entertainment relating to the business of the Company.

<PAGE>

      7.    Termination.

            (a)   Termination for Cause. Employee may be terminated from his
employment hereunder, either before Term End or thereafter, and without advance
notice, by the Company for "cause." For purposes hereof, "cause" shall mean: (i)
violation of the material terms of this Agreement, (ii) intentional commission
of an act, or failure to act, in a manner which constitutes dishonesty or fraud
or which has a direct material adverse effect on the Company or its business;
(iii) Employee's conviction of or a plea of guilty to any felony or crime
involving moral turpitude; (iv) continued incompetence, as determined by the
chief executive officer of the Company, using reasonable standards; (v) drug
and/or alcohol abuse which impairs Employee's performance of his duties or
employment; (vi) breach of loyalty to the Company, whether or not involving
personal profit, as determined by the chief executive officer of the Company
using reasonable standards; or (vii) failure to follow the directions of the
chief executive officer of the Company within 20 days after notice to Employee
of such failure, provided that the directions are not inconsistent with
Employee's duties and further provided that Employee is not directed to violate
any law or take any action that he reasonably deems to be immoral or unethical.

            (b)   Disability, Death. If Employee shall fail to or be unable to
perform the duties required hereunder because of any physical or mental
infirmity, and such failure or inability shall continue for any six (6)
consecutive months while Employee is employed hereunder, the Company shall have
the right to terminate this Agreement. Except as otherwise provided herein, this
Agreement shall terminate upon the death of Employee, and the estate of Employee
shall be entitled to receive all unpaid amounts due Employee hereunder to such
date of death.

            (c)   Termination Without Cause. The Company shall have the right to
terminate the employment of Employee at any time, without cause, cause being
determined under Section 7(a), upon thirty (30) days' advance written notice.

            (d)   Change in Control. Employee may terminate his employment
hereunder in the event of a change in control of the Company within ninety (90)
days after such change in control. For purposes of this Agreement, a "change in
control of the Company" shall mean a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934 ("Exchange Act");
provided however, that without limitation, such a change in control shall be
deemed to have occurred if: (i) any "person" (as such term is used in Sections
13(d) and 14(d) (2) of the Exchange Act) other than Employee or any other person
currently the beneficial owner of 10% or more of the outstanding common stock of
the Company, becomes the beneficial owner, directly or indirectly, of securities
of the Company representing 30% or more of the combined voting power of the
Company's then outstanding securities; (ii) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors of the Company cease for any reason to constitute at least a majority
thereof (unless the election of each director, who was not a director at the
beginning of the period, was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of the
period); or (iii) approval by the stockholders of the Company of (A) a complete
liquidation of the Company; (B) an agreement for the sale or other disposition
of all or substantially all of the

                                        2
<PAGE>

assets of the Company to any "person"; or (C) a merger, consolidation or
reorganization involving the Company, unless (1) the stockholders of the Company
immediately before such merger, consolidation or reorganization own, directly or
indirectly immediately following such merger, consolidation or reorganization,
at least two-thirds of the combined voting power of the outstanding voting
securities of the corporation resulting from such merger or consolidation or
reorganization or its parent company (the "Surviving Corporation") in
substantially the same proportion as their ownership of the voting shares
immediately before such merger, consolidation or reorganization; or (2) the
individuals who were members of the Board immediately prior to the execution of
the agreement for such merger, consolidation or reorganization constitute at
least two-thirds of the members of the board of directors of the Surviving
Corporation.

            (e)   Voluntary Termination. Employee may voluntarily terminate his
employment hereunder at any time, for any reason or for no reason.

            (f)   Termination Compensation. If Employee's employment hereunder
is terminated pursuant to Sections 7(a) or 7(e) of this Agreement, the Company
shall pay the Employee his full base salary through the termination date, plus,
within five (5) business days of the termination date, any bonuses, incentive
compensation, or other payments due which pursuant to the terms of any
compensation or benefit plan have been earned or vested as of the termination
date. If Employee's employment is terminated by the Company under Section 7(c)
without cause, or if there is a change in control of the Company as defined in
Section 7(d), all unexercised options granted to Employee under the Company's
Incentive Stock Plan or Amended Incentive Stock Plan shall accelerate and shall
immediately vest. If Employee's employment is terminated pursuant to Sections
7(b), 7(c) or 7(d) of this Agreement, the Company shall pay the Employee the
following:

                  (i)   within five (5) business days of the termination, his
full base salary through the termination date, plus any bonuses, incentive
compensation, or other payments due which pursuant to the terms of any
compensation or benefit plan have been earned or vested as of the termination
date;

                  (ii)  within five (5) business days of the termination, to
compensate for all accrued but unpaid leave such as holidays, vacation and sick
pay under the Company's paid leave plan, an amount equal to the Employee's then
current base salary multiplied by the product of (A) the total number of leave
days accrued, divided by (B) the total number of work days in the fiscal year in
which the termination date occurs;

                  (iii) within five (5) business days of a termination pursuant
to Section 7(b) or 7(d), a lump sum severance payment equal to the Employee's
annual base salary as of the termination date, less, in the case of a
termination for disability under Section 7(b), any payments to be received by
the Employee under any disability plan or policy maintained by the Company;

                                        3
<PAGE>

                  (iv)  in the event of a termination pursuant to Section 7(c),
Employee's annual base salary as of the termination date shall be continued for
one (1) year following the termination date.

            If Employee's employment is terminated pursuant to Sections 7(b),
7(c) or 7(d) of this Agreement, the Company shall maintain, for eighteen (18)
months following the termination date, in full force and effect for the benefit
of the Employee and Employee's dependents and beneficiaries, at the Company's
expense, all medical insurance under plans and programs in which the Employee
and/or the Employee's dependents and beneficiaries participated immediately
prior to the termination date, provided that continued participation is possible
under the general terms and provisions of such plans and programs. If continued
participation in any such plan or program is barred, the Company shall arrange
at its own expense to provide the Employee with benefits substantially similar
to those which he was entitled to receive under such plans and programs.

      8.    Covenant Not to Compete, Nonemployment, Noninducement.

            (a)   Employee acknowledges that in the course of his employment he
will become familiar with the Company and its affiliates' confidential
information concerning the Company and its affiliates and that his services are
of special, unique and extraordinary value to the Company and its affiliates.
Therefore, Employee agrees that, during his employment with the Company, and for
one year after Employee ceases to perform duties hereunder, neither Employee nor
any company with which Employee is affiliated as an employee, consultant or
independent contractor, will directly or indirectly (i) engage in any business
similar to the Business of the Company, as described below, anywhere in the
United States of America, or have interest directly or indirectly in any
Business; provided, however, that nothing herein shall prohibit Employee from
(A) owning in the aggregate not more than 5% of the outstanding stock of any
class of stock of a corporation so long as Employee has no active participation
in the business of such corporation; (B) affiliating with any company which may
participate in the Business, so long as that participation at the time of
affiliation aggregates less than 10% of such company's revenue; or (C) directly
or through an affiliate, acquiring, merging or otherwise gaining control, or
purchasing an interest in an organization as long as the Business represents
less than 10% of the acquiree's revenue at the time of the transaction; (ii)
employ or retain as an independent contractor any employee of the Company; or
(iii) recruit, solicit or otherwise induce any employee of the Company to
discontinue such employment relationship. For purposes hereof, the "Business"
shall consist of (i) delivery of contract health care to correctional
facilities, and (ii) any other business in which the Company is significantly
engaged as of the date that Employee ceases to perform duties hereunder.

            (b)   If, at the time of enforcement of this Section 8 a court shall
hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area.

                                        4
<PAGE>

            (c)   In the event of the breach by Employee of any of the
provisions of this Section 8, the Company, in addition and supplementary to
other rights and remedies existing in its favor, may apply to any court of law
or equity of competent jurisdiction for specific performance and/or injunctive
or other relief in order to enforce or prevent any violations of the provisions
hereof.

      9.    Notices. All notices hereunder, to be effective, shall be in writing
and shall be deemed delivered when delivered by and or when sent by first-class,
certified mail, postage and fees prepaid, to the following addresses or as
otherwise indicated in writing by the parties:

            (a)      If to the Company:

                     America Service Group Inc.
                     105 Westpark Drive, Suite 300
                     Brentwood, TN 37027
                     Attn: Chief Executive Officer

            (b)      If to Employee:

                     Lawrence H. Pomeroy
                     9152 Saddlebow Drive
                     Brentwood, TN 37027

      10.   Assignment. This Agreement is based upon the personal services of
Employee and the rights and obligations of Employee hereunder shall not be
assignable except as herein expressly provided. This Agreement shall inure to
the benefit of and be enforceable by the Employee's personal and legal
representatives, executors, administrators, successors, heirs, and distributees,
devisees and legatees. If the Employee should die while any amounts would still
be payable to him hereunder if he would have continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the Employee's devisee, legatee or other designee and
if there is no such devisee, legatee or designee, to the Employee's estate.

      11.   Entire Agreement. This Agreement supersedes all prior understandings
and agreements with respect to the provisions hereof and contains the entire
agreement of the parties and may be amended only in writing, signed by the
parties hereto.

      12.   Severability. The provisions of this Agreement are severable, and
the invalidity of any provision shall not affect the validity of any other
provision. In the event that any arbitrator or court of competent jurisdiction
shall determine that any provision of this Agreement or the application thereof
is unenforceable because of the duration or scope thereof, the parties hereto
agree that said arbitrator or court in making such determination shall have the
power to reduce the duration and scope of each provision to the extent necessary
to make it enforceable, and that

                                        5
<PAGE>

the Agreement in its reduced from shall be valid and enforceable to the full
extent permitted by law.

      13.   Non-Exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Employee's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company (except for
any severance or termination policies, plans, programs or practices) and for
which the Employee may qualify, nor shall anything herein limit or reduce such
rights as the Employee may have under any other Agreement with the Company.
Amounts which are vested benefits or which the Employee is otherwise entitled to
receive under any plan or program of the Company shall be payable in accordance
with such plan or program, except as explicitly modified by this Agreement.

      14.   Governing Law. This Agreement shall be construed under and governed
by the internal laws of the State of Tennessee.

      IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as a binding contract as of the day and year first above written.

EMPLOYEE                                       AMERICA SERVICE GROUP INC.

By: /s/ Lawrence H. Pomeroy                    By: /s/ Scott L. Mercy
    ---------------------------------              ---------------------------
         Lawrence H. Pomeroy                       Scott L. Mercy
                                                   Chief Executive Officer

                                       6<PAGE>

                                                                     EXHIBIT 4.1

         THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO YEARS (OR
SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES
ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE
LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER
THE SECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH
INTEREST OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (II) SUCH LATER DATE,
IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A)
TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER", AS DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7) OR (8) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR SUCH
INTEREST OR PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT OR
(E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) ABOVE TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT
IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE
COMPANY. THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY
ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.

<PAGE>

         THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY
ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS
AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN, INDIVIDUAL RETIREMENT
ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR
AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY
ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS
SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER
U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60,
91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING
OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

         IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL
DELIVER TO THE TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE
REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.

         THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY
ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS THAN $100,000 SHALL
BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND
SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.

<PAGE>

No. D-1

                            PROASSURANCE CORPORATION
              FLOATING RATE JUNIOR SUBORDINATED DEBENTURE DUE 2034

$13,403,000

         ProAssurance Corporation, a Delaware corporation (the "Company", which
term includes any successor entity under the Indenture hereinafter referred to),
for value received, hereby promises to pay to Wilmington Trust Company, as
Institutional Trustee for ProAssurance Capital Trust I or registered assigns,
the principal sum of thirteen million four hundred three thousand dollars
($13,403,000) on April 29, 2034, unless redeemed by the Company prior to the
Stated Maturity in accordance with the terms specified herein and in the
Indenture. Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the Indenture. The Company further
promises to pay interest on said principal sum from April 29, 2004, or from the
most recent Interest Payment Date (as defined below) to which interest has been
paid or duly provided for, quarterly (subject to deferral as set forth herein)
in arrears on February 15, May 15, August 15 and November 15 of each year
commencing August 15, 2004 (each, an "Interest Payment Date"), at a rate per
annum with respect to such Interest Payment Period (the "Interest Rate") equal
to LIBOR as determined on the Determination Date with respect to such Interest
Payment Period, plus 3.85% (provided, that the Interest Rate for any Interest
Payment Period prior to the Interest Payment Period commencing on the Interest
Payment Date on May 15, 2009 may not exceed 12.5% per annum and, provided
further, that the Interest Rate for any Interest Payment Period shall not exceed
the highest rate permitted by New York law, as the same may be modified by
United States law of general applicability) until the principal hereof shall
have become due and payable, and on any overdue principal and (to the extent
enforceable under applicable law) on any overdue interest at the then applicable
Interest Rate, compounded quarterly.

         The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year and the actual number of days elapsed in
such Interest Payment Period.

         In the event that any Interest Payment Date is not a Business Day, then
any interest payable on such date will be paid on, and such Interest Payment
Date will be moved to, the next succeeding Business Day, and additional interest
will accrue for each day that such payment is delayed as a result thereof,
except that, if such next Business Day is in the next succeeding calendar month,
such payment shall be made on the preceding Business Day, in each case with the
same force and effect as if made on the date such payment otherwise would have
been payable; provided, however, that in the event that the Stated Maturity date
or earlier redemption date is not a Business Day, then payment of principal,
interest and premium (if any) payable on such date will be made on the next
Business Day (and without any additional accrual of interest or other payment in
respect of any such delay).

         The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the

<PAGE>

relevant record dates, which will be the fifteenth calendar day preceding the
relevant Interest Payment Date. Payments of interest may be deferred by the
Company pursuant to the provisions of the Indenture. Any such interest
installment not punctually paid or duly provided for shall forthwith cease to be
payable to the Holders on such regular record date and may be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof shall be
given to the Holders of Debentures not less than 10 days prior to such special
record date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Debentures may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.

         The principal of and the interest on this Security shall be payable at
the office or agency of the Trustee maintained for that purpose in Wilmington,
Delaware in any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest on an Interest Payment Date may be
made at the option of the Company by check mailed to the Holder at such address
as shall appear in the Security Register or by wire transfer to an account
appropriately designated by the Holder entitled thereto, while payments due at
Stated Maturity or earlier redemption will be made by the Company in same-day
funds against presentation and surrender of this Security. Notwithstanding the
foregoing, so long as the Holder of this Security is the Institutional Trustee,
the payment of the principal of, premium, if any, and interest on this Security
will be made by the Company in same-day funds at such place and to such account
as may be designated by the Institutional Trustee.

         The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions. Each Holder hereof, by his or
her acceptance hereof, hereby agrees to treat this Security as indebtedness for
all United States federal income tax purposes.

         This Security shall not be entitled to any benefit under the Indenture
or be valid or become obligatory for any purpose until the Certificate of
Authentication hereon shall have been signed by or on behalf of the Trustee.

         The provisions of this Security are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.

                                             PROASSURANCE CORPORATION

                                             By: _______________________________
                                                   Name:
                                                   Title:

Attest:
________________________________
Name:
Title:

<PAGE>

                          CERTIFICATE OF AUTHENTICATION

Dated:  April 29, 2004

         This is one of the Securities referred to in the within-mentioned
Indenture.

WILMINGTON TRUST COMPANY,
as Trustee

By:
   ______________________________________
         Authorized Signatory

<PAGE>

         This Security is issued under and pursuant to an indenture, dated as of
April 29, 2004, duly executed and delivered between the Company and Wilmington
Trust Company, as trustee (the "Trustee") (such indenture as amended or
supplemented from time to time, the "Indenture"). The Securities of which this
Security is a part is entitled the "Floating Rate Junior Subordinated Debentures
due 2034". These Securities are limited in aggregate principal amount to
$13,403,000, as specified in said Indenture. Reference is hereby made to the
Indenture and all indentures supplemental thereto for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder of
the Trustee, the Company and the Holders of the Debentures.

         This Security is redeemable prior to its Stated Maturity by the Company
(i) in whole or in part on any Interest Payment Date after April 29, 2009 or
(ii) in whole but not in part at any time prior to April 29, 2009 upon the
occurrence and continuation of a Special Event. Any redemption pursuant to this
paragraph will be made, upon not less than 30 days nor more than 60 days' prior
written notice, at a redemption price (the "Redemption Price") equal to 100% of
the principal amount to be redeemed plus any unpaid interest (including
Additional Tax Sums and Compound Interest, if any) accrued thereon to the date
of such redemption (the "Redemption Price") provided, (i) that the Company may
not exercise its option to redeem with respect to a Special Event unless it
fixes, not later than 90 days after the occurrence of such Special Event, a date
for redemption and mails a notice thereof to Holders and (ii) that the Company
may not exercise its option to redeem with respect to a Special Event unless it
pays a premium, in addition to the Redemption Price, in cash equal to the
product of (y) 100% of the outstanding principal amount of such Security, and
(z) the percentage specified below for the applicable date of redemption
provided that the Company shall have received the prior approval of any
applicable insurance regulatory authority therefor, if necessary:

<TABLE>
<CAPTION>
Redemption During the 12-Month Period
      Beginning April 29, 2004               Percentage of Principal Amount
-------------------------------------        ------------------------------
<S>                                          <C>
            2004                                         5%
            2005                                         4%
            2006                                         3%
            2007                                         2%
            2008                                         1%
     2009 and thereafter                                 0%
</TABLE>

         The Redemption Price and premium, if any, shall be paid prior to 10:00
a.m., New York City time, on the date of such redemption or at such earlier time
as the Company determines. If the Securities are only partially redeemed by the
Company, the Securities will be redeemed pro rata or by lot or by any other
method utilized by the Trustee (in integral multiples of $1,000).

<PAGE>

         In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.

         In case an Event of Default shall have occurred and be continuing, the
principal of all of the Securities may be declared, and upon such declaration
shall become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.

         The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of a majority in aggregate principal
amount of the Securities at the time outstanding, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders; provided,
however, that no such supplemental indenture shall without the consent of the
Holders of each Security, (i) change the Stated Maturity of any such Security,
or reduce the Interest Rate (or change the manner of calculation of the Interest
Rate) or change any date on which interest thereon is payable, or reduce the
principal amount thereof or any premium thereon, or change any redemption or
repayment date or period or price, or make the principal thereof or any interest
or premium thereon payable in any coin or currency other than that provided in
the Securities, or impair or affect the right of any Securityholder to institute
suit for payment thereof, (ii) reduce the aforesaid percentage of Securities the
Holders of which are required to consent to any such supplemental indenture or
(iii) otherwise materially and adversely affect the interests of the Holders of
any such Security; provided, further, that if the Securities are held by the
Trust or a trustee of the Trust, such supplemental indenture shall not be
effective until the registered holders of a majority in aggregate liquidation
amount of Trust Securities shall have consented to such supplemental indenture;
provided further, that if the consent of the Holder of each outstanding Security
is required, such supplemental indenture shall not be effective until each
registered holder of the Trust Securities shall have consented to such
supplemental indenture. The Indenture also contains provisions permitting the
Holders of a majority in aggregate principal amount of the Securities at the
time outstanding affected thereby, on behalf of all of the Holders of the
Securities, to waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture, and its
consequences, except a default in the payment of the principal of or premium, if
any, or interest on any of the Securities. Any such consent or waiver by the
Holder of this Security (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this Security and of any Security issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this
Security.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Security at the time and place and at the rate and in the money
herein prescribed.

         The Company shall have the right, on one or more occasions during the
term of the Securities, to time to defer the payments of interest of such
Securities for up to 20 consecutive quarterly periods (each, a "Deferral
Period"); provided, that (i) no Deferral Period may exceed

<PAGE>

20 consecutive quarterly periods and (ii) no Deferral Period may extend beyond
the Stated Maturity or the earlier redemption of the Securities. No interest
shall be due and payable during a Deferral Period. At the end of each Deferral
Period, the Company shall pay all interest then accrued and unpaid (together
with interest thereon, including any Compound Interest and Additional Tax Sums
at the Interest Rate to the extent that payment of such interest is enforceable
under applicable law). Before the termination of any such Deferral Period, the
Company may further extend such Deferral Period, provided that such Deferral
Period together with all such previous and further extensions within such
Deferral Period shall not exceed 20 consecutive quarterly periods or extend
beyond the Stated Maturity or earlier redemption of the Securities. At the
termination of any Deferral Period and upon the payment of all accrued and
unpaid interest, including any Additional Tax Sums and Compound Interest, the
Company may commence a new Deferral Period, subject to the foregoing
requirements.

         As provided in the Indenture and subject to certain limitations therein
set forth, this Security is transferable by the Holder hereof on the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Trustee, accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or the Trustee duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Securities of authorized denominations
and for the same aggregate principal amount will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.

         The Securities are issuable only in fully registered form without
interest coupons in denominations of $100,000 and any integral multiple of
$1,000 in excess thereof. As provided in the Indenture and subject to certain
limitations herein and therein set forth, Securities so issued are exchangeable
for a like aggregate principal amount of Securities of a different authorized
denomination, as requested by the Holder surrendering the same.

         Prior to due presentment for registration of transfer of this Security,
the Company, the Trustee, any Paying Agent, any transfer agent and any Security
registrar may deem and treat the Holder hereof as the absolute owner hereof
(whether or not this Security shall be overdue and notwithstanding any notice of
ownership or writing hereon made by anyone other than a security registrar) for
the purpose of receiving payment of or on account of the principal hereof and
interest hereon and for all other purposes, and none of the Company, the
Trustee, any paying agent, any transfer agent or any security registrar shall be
affected by any notice to the contrary.

         THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}]]