Document:

Blueprint

 

 Exhibit
10.1

 

 

 

 

 

 

 

 

AMENDED AND RESTATED

 

ATRION CORPORATION 2006 EQUITY INCENTIVE PLAN

 

(As last amended on November 7, 2017)

 

 

 

 

 

 

 

 

 

 

 

Table of Contents

 

	

ARTICLE
1.

	

DEFINITIONS

	

1

	

ARTICLE
2.

	

COMMON
STOCK SUBJECT TO PLAN

	

3

	

2.1

	

Common
Stock Subject to Plan

	

3

	

2.2

	

Add-back
of Grants

	

3

	

ARTICLE
3.

	

ELIGIBILITY;
GRANTS; AWARD AGREEMENTS

	

4

	

3.1

	

Eligibility

	

4

	

3.2

	

Awards

	

4

	

3.3

	

Provisions
Applicable to Section 162(m)

	

4

	

3.4

	

Award
Agreement

	

4

	

ARTICLE
4.

	

OPTIONS

	

5

	

4.1

	

Award
Agreement for Option Grant

	

5

	

4.2

	

Option
Price

	

5

	

4.3

	

Qualification
for Incentive Stock Options

	

5

	

4.4

	

Change
in Incentive Stock Option Grant

	

5

	

4.5

	

Option
Term

	

5

	

4.6

	

Option
Exercisability and Vesting

	

6

	

ARTICLE
5.

	

EXERCISE
OF OPTIONS

	

6

	

5.1

	

Exercise

	

6

	

5.2

	

Manner
of Exercise

	

6

	

5.3

	

Conditions
to Issuance of Common Stock

	

7

	

5.4

	

Rights
as Stockholders

	

7

	

5.5

	

Ownership
and Transfer Restrictions

	

7

	

5.6

	

Limitations
on Exercise of Options

	

7

	

ARTICLE
6.

	

STOCK
AWARDS

	

8

	

6.1

	

Award
Agreement

	

8

	

6.2

	

Awards
of Restricted Common Stock, Restricted Stock Units and Deferred
Stock Units

	

8

	

6.3

	

Rights
as Stockholders

	

8

	

6.4

	

Restriction

	

9

	

6.5

	

Lapse
of Restrictions

	

9

	

6.6

	

Repurchase
of Restricted Common Stock

	

9

	

6.7

	

Escrow

	

9

	

6.8

	

Legend

	

9

	

6.9

	

Conversion

	

9

	

ARTICLE
7.

	

STOCK
APPRECIATION RIGHTS

	

9

	

7.1

	

Award
Agreement for SARs

	

9

	

7.2

	

General
Requirements

	

10

	

7.3

	

Base
Amount

	

10

	

7.4

	

Tandem
SARs

	

10

	

7.5

	

SAR
Exercisability

	

10

	

7.6

	

Value
of SARs

	

10

	

7.7

	

Form
of Payment

	

10

	

ARTICLE
8.

	

PERFORMANCE
UNITS

	

10

	

8.1

	

Award
Agreement for Performance Units

	

10

	

8.2

	

General
Requirements

	

10

	

8.3

	

Performance
Period and Performance Goals

	

11

	

8.4

	

Payment
With Respect to Performance Units

	

11

	

ARTICLE
9.

	

DIVIDEND
EQUIVALENTS

	

11

	

9.1

	

Grant
of Dividend Equivalents

	

11

	

ARTICLE
10.

	

OTHER
STOCK-BASED AWARDS

	

11

	

10.1

	

Grant
of Other Stock-Based Awards

	

11

	

ARTICLE
11.

	

ADMINISTRATION

	

11

	

11.1

	

Committee

	

11

	

11.2

	

Duties
and Powers of Committee

	

12

	

11.3

	

Compensation;
Professional Assistance; Good Faith Actions

	

12

	

11.4

	

Delegation
by the Committee.

	

12

 

 

i

 

 

	

ARTICLE
12.

	

AMISCELLANEOUS
PROVISIONS

	

12

	

12.1

	

Transferability

	

12

	

12.2

	

Amendment,
Suspension or Termination of this Plan

	

13

	

12.3

	

Changes
in Common Stock or Assets of the Company, Acquisition
or

	
 

	
 

	

Liquidation
of the Company and Other Corporate Events

	

13

	

12.4

	

Continued
Employment

	

14

	

12.5

	

Tax
Withholding

	

15

	

12.6

	

Forfeiture
Provisions

	

15

	

12.7

	

Limitations
Applicable to Section 16 Persons and Performance-Based
Compensation

	

15

	

12.8

	

Effect
of Plan Upon Option and Compensation Plans

	

15

	

12.9

	

Restrictions

	

15

	

12.1

	

Compliance
with Laws

	

15

	

12.11

	

Titles

	

16

	

12.12

	

Governing
Law

	

16

	

12.13

	

Effective
Date

	

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ii

 

 

AMENDED AND RESTATED

 

ATRION CORPORATION 2006 EQUITY INCENTIVE PLAN

 

 

Atrion
Corporation, a Delaware corporation (the "Company"), has
established the Amended and Restated Atrion Corporation 2006 Equity
Incentive Plan (the "Plan") for the benefit of Employees,
Non-Employee Directors and Consultants.

 

The
purposes of this Plan are (a) to recognize and compensate selected
Employees, Non-Employee Directors and Consultants who contribute to
the success of the Company and its Subsidiaries, (b) to attract and
retain Employees, Non-Employee Directors and Consultants, and (c)
to provide incentive compensation to Employees, Non-Employee
Directors and Consultants based upon the performance of the Company
and its Subsidiaries.

 

ARTICLE 1. DEFINITIONS

 

Whenever
the following initially capitalized terms are used in the Plan,
they shall have the meanings specified below, unless the context
clearly indicates otherwise.

 

"Award"
shall mean the grant or award of Options, Restricted Common Stock,
Restricted Stock Units, Deferred Stock Units, SARs, Dividend
Equivalents, Performance Units or Other Stock-Based Awards under
this Plan.

 

"Award
Agreement" shall mean an agreement between the Company and a
Participant setting forth the terms and conditions of an Award
granted to a Participant.

 

"Board"
shall mean the Board of Directors of the Company, as comprised from
time to time.

 

"Change
in Control" shall mean the occurrence of any of the following
events: (a) any person, entity or affiliated group, excluding the
Company or any employee benefit plan of the Company, acquiring more
than twenty-five percent (25%) of the then outstanding shares of
voting stock of the Company, (b) the consummation of any merger or
consolidation of the Company into another company, such that the
holders of the shares of the voting stock of the Company
immediately before such merger or consolidation own less than fifty
percent (50%) of the voting power of the securities of the
surviving company or the parent of the surviving company, (c) the
adoption of a plan for complete liquidation of the Company or the
sale or disposition of all or substantially all of the Company's
assets of the Company, such that after the transaction, the holders
of the shares of the voting stock of the Company immediately prior
to the transaction own less than fifty percent (50%) of the voting
securities of the acquiror or the parent of the acquiror, or (d)
during any period of two (2) consecutive years, individuals who at
the beginning of such period constituted the Board (including for
this purpose any new director whose election or nomination for
election by the Company's stockholders was approved by a vote of at
least a majority of the directors then still in office who were
directors at the beginning of such period) cease for any reason to
constitute at least a majority of the Board.

 

"Code"
shall mean the Internal Revenue Code of 1986, as
amended.

 

"Committee"
shall mean the Compensation Committee of the Board.

 

"Common
Stock " shall mean the common stock, par value ten cents ($0.10)
per share, of the Company.

 

"Company"
shall mean Atrion Corporation, a Delaware corporation, or any
business organization which succeeds to all or substantially all of
its business, whether by virtue of a purchase, merger,
consolidation, or otherwise. For purposes of this Plan, the term
Company shall include, where applicable, a Subsidiary that employs
an Employee or engages a Consultant.

 

"Consultant"
shall mean a professional or technical expert, consultant, advisor
or independent contractor who provides services to the Company or a
Subsidiary, and who may be selected to participate in the
Plan.

 

 

1

 

 

"Deferred
Stock Unit" shall mean a right to receive Common Stock awarded
under Article 6 of this Plan.

 

"Director"
shall mean a member of the Board.

 

"Dividend
Equivalent" shall mean a right granted to a Participant under
Article 9 of this Plan.

 

"Employee"
shall mean any employee (as defined in accordance with the
regulations and revenue rulings then applicable under Section
3401(c) of the Code) of the Company or a Subsidiary of the Company,
whether such employee was so employed at the time this Plan was
initially adopted or becomes so employed subsequent to the adoption
of this Plan, who may be selected to participate in the
Plan.

 

"Employment
Agreement" shall mean the employment, consulting or similar
contractual agreement entered into by an Employee or a Consultant,
as the case may be, and the Company governing the terms of the
Employee's or Consultant's employment or engagement with the
Company, if any.

 

"Exchange
Act" shall mean the Securities Exchange Act of 1934, as
amended.

 

"Fair
Market Value" of a share of Common Stock, as of a given date, means
(i) with respect to an Award of an Incentive Stock Option and an
Award which is intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code, the
average of the high and low sales price of shares of Common Stock
on such date as reported by any national securities exchange on
which the shares of Common Stock are traded or, if no shares of
Common Stock are traded on any such exchange on such date, then on
the next preceding date on which any shares of Common Stock were
traded on such exchange; and (ii) with respect to all other Awards,
the closing sales price of a share of Common Stock on such date as
reported by any national securities exchange on which the shares of
Common Stock are traded or, if no shares of Common Stock are traded
on any such exchange on such date, then on the next preceding date
on which any shares of Common Stock were traded on such exchange;
or (iii) if shares of Common Stock are not publicly traded on any
exchange, the fair market value of a share of Common Stock as
determined by the Committee acting in good faith and after
consultation with independent advisors.

 

"Incentive
Stock Option" shall mean an option which conforms to the applicable
provisions of Section 422 of the Code and which is designated as an
Incentive Stock Option by the Committee.

 

"Non-Employee
Director" shall mean a Director who is not an
Employee.

 

"Non-Qualified
Stock Option" shall mean an Option which the Committee does not
designate as an Incentive Stock Option.

 

"Option"
shall mean an option to purchase shares of Common Stock that is
granted under Article 4 of this Plan. An option granted under this
Plan shall, as determined by the Committee, be either a
Non-Qualified Stock Option or an Incentive Stock Option; provided,
however, that Options granted to consultants shall be Non-Qualified
Stock Options.

 

"Other
Stock-Based Awards" shall mean a right granted to a Participant
under Article 10 of this Plan.

 

"Participant"
shall mean an Employee, Non-Employee Director or Consultant who has
been granted an Award.

 

"Performance
Units" shall mean performance units granted under Article 8 of this
Plan.

 

"Permanent
Disability" or "Permanently Disabled" shall mean the inability of a
Participant, due to a physical or mental impairment, to perform the
material services of the Participant's position with the Company
for a period of six (6) months, whether or not consecutive, during
any 365-day period. A determination of Permanent Disability shall
be made by a physician satisfactory to both the Participant and the
Committee, provided that if the Participant and the Committee do
not agree on a physician, each of them shall select a physician and
those two physicians together shall select a third physician, whose
determination as to Permanent Disability shall be binding on all
parties.

 

 

2

 

 

"Plan"
shall mean the Amended and Restated Atrion Corporation 2006 Equity
Incentive Plan, as embodied herein and as amended from time to
time.

 

"Plan
Year" shall mean the fiscal year of the Company.

 

"Restricted
Common Stock" shall mean Common Stock awarded under Article 6 of
this Plan.

 

"Restricted
Stock Unit" shall mean a right to receive Common Stock awarded
under Article 6 of this Plan.

 

"Rule
16b-3" shall mean that certain Rule 16b-3 under the Exchange Act,
as such rule may be amended from time to time.

 

"SAR"
shall mean stock appreciation rights awarded under Article 7 of
this Plan.

 

"Stock
Award" shall mean an Award of Restricted Common Stock, Restricted
Stock Units or Deferred Stock Units under Article 6 of this
Plan.

 

"Stock
Award Account" shall mean the bookkeeping account reflecting Awards
of Restricted Stock Units and Deferred Stock Units under Article 6
of this Plan.

 

"Subsidiary"
shall mean an entity in an unbroken chain beginning with the
Company if each of the entities other than the last entity in the
unbroken chain owns fifty percent (50%) or more of the total
combined voting power of all classes of equity in one of the other
entities in such chain.

 

"Termination
of Employment" shall mean the date on which the employee-employer,
consulting, contractual, service or similar relationship between a
Participant and the Company is terminated for any reason, with or
without cause, including, but not by way of limitation, a
termination of employment by resignation, discharge, death,
Permanent Disability or Retirement, but excluding (i) termination
of employment where there is a simultaneous reemployment or
continuing employment of a Participant by the Company, and (ii) at
the discretion of the Committee, termination of employment which
results in a temporary severance of the employee-employer
relationship. The Committee, in its absolute discretion, shall
determine the effect of all matters and questions relating to a
Termination of Employment (subject to the provisions of any
Employment Agreement between a Participant and the Company),
including, but not limited to all questions of whether particular
leaves of absence constitute a Termination of Employment; provided,
however, that, unless otherwise determined by the Committee in its
discretion, a leave of absence, change in status from an employee
to an independent contractor or other change the employee-employer,
consulting, contractual, service or similar relationship shall
constitute a Termination of Employment if, and to the extent that,
such leave of absence, change in status or other change interrupts
employment for the purposes of Section 422(a)(2) of the Code and
the then applicable regulations and revenue rulings under said
Section.

 

ARTICLE 2. COMMON STOCK SUBJECT TO PLAN

 

Common Stock Subject to Plan.

 

The
Common Stock subject to an Award shall be shares of the Company's
authorized but unissued, reacquired, or treasury Common Stock.
Subject to adjustment as described in Section 12.3, the aggregate
number of shares of Common Stock that may be issued under the Plan
is two hundred thousand (200,000) shares. The Company, during the
term of the Plan, will at all times reserve and keep available such
number of shares of Common Stock as shall be sufficient to satisfy
the requirements of the Plan.

 

The
maximum number of shares of Common Stock with respect to which
Options may be granted or other Awards made to any individual in
any calendar year shall not exceed thirty-five thousand (35,000)
shares.

 

 

3

 

 

Add-back of Grants. If any Option or SAR expires or is
canceled without having been fully exercised, is exercised in whole
or in part for cash as permitted by this Plan, or is exercised
prior to becoming vested as permitted under Section 4.6.3 and is
forfeited prior to becoming vested, the number of shares of Common
Stock subject to such Option or SAR but as to which such Option,
SAR or other right was not exercised or vested prior to its
expiration, cancellation or exercise may again be optioned, granted
or awarded hereunder. Shares of Common Stock which are delivered by
the Participant or withheld by the Company upon the exercise of any
Option or other Award under this Plan, in payment of the exercise
price thereof, may again be optioned, granted or awarded hereunder.
If any shares of Common Stock awarded as Restricted Common Stock,
Restricted Stock Units, Dividend Equivalents, Other Stock-Based
Awards or other Award hereunder or as payment for Performance Units
are forfeited by the Participant, such shares may again be
optioned, granted or awarded hereunder. Notwithstanding the
provisions of this Section 2.2, no shares of Common Stock may again
be optioned, granted or awarded pursuant to an Incentive Stock
Option if such action would cause such Option to fail to qualify as
an Incentive Stock Option under Section 422 of the
Code.

 

ARTICLE 3. ELIGIBILITY; GRANTS; AWARD AGREEMENTS

 

Eligibility. Any Employee, Non-Employee Director or
Consultant selected to participate pursuant to Section 3.2 shall be
eligible to participate in the Plan.

 

Awards. The Committee shall determine which Employees,
Non-Employee Directors and Consultants shall receive Awards,
whether the Employee, Non-Employee Director or Consultant will
receive Options, Restricted Common Stock, Restricted Stock Units,
Deferred Stock Units, Dividend Equivalents, SARs, Performance Units
or Other Stock-Based Awards, whether an Option grant shall be of
Incentive Stock Options or Non-Qualified Stock Options, and the
number of shares of Common Stock subject to such Award.
Notwithstanding the foregoing, the terms and conditions of an Award
intended to qualify as performance-based compensation as described
in Section 162(m)(4)(C) of the Code shall include, but not be
limited to, such terms and conditions as may be necessary to meet
the applicable provisions of Section 162(m) of the
Code.

 

Provisions Applicable to Section 162(m).

 

Notwithstanding
anything in the Plan to the contrary, the Committee may grant
Options, Restricted Common Stock, Restricted Stock Units, SARs,
Dividend Equivalents, Performance Units or Other Stock Based Awards
to an Employee that vest upon the attainment of performance targets
for the Company which are related to one or more of the following
performance goals: (i) pre-tax income, (ii) operating income, (iii)
cash flow, (iv) earnings per share, (v) return on equity, (vi)
return on invested capital or assets, (vii) cost reductions or
savings, (viii) earnings from continuing operations, (ix) total
stockholder return, or (x) such other identifiable and measurable
performance objectives, as determined by the
Committee.

 

To the
extent necessary to comply with the performance-based compensation
requirements of Section 162(m)(4)(C) of the Code, no later than
ninety (90) days following the commencement of any fiscal year in
question or any other designated fiscal period (or such other time
as may be required or permitted by Section 162(m) of the Code), the
Committee shall, in writing, (i) select the performance goal or
goals applicable to the fiscal year or other designated fiscal
period, (ii) establish the various targets and bonus amounts which
may be earned for such fiscal year or other designated fiscal
period, (iii) specify the relationship between performance goals
and targets and the amounts to be earned by each Employee for such
fiscal year or other designated fiscal period and (iv) take such
other action as the Committee may deem appropriate to comply with
the performance-based compensation requirements of Section
162(m)(4)(C) of the Code. Following the completion of each fiscal
year or other designated fiscal period, the Committee shall certify
in writing whether the applicable performance targets have been
achieved for such fiscal year or other designated fiscal period. In
determining the amount earned by such Employee, the Committee shall
have the right to reduce (but not to increase) the amount payable
at a given level of performance to take into account additional
factors that the Committee may deem relevant to the assessment of
individual or corporate performance for the fiscal year or other
designated fiscal period.

 

 

4

 

 

Award Agreement. Upon the selection of an Employee,
Non-Employee Director or Consultant to receive an Award, the
Committee shall cause a written Award Agreement to be issued to
such individual encompassing the terms and conditions of such
Award, as determined by the Committee in its sole discretion;
provided, however, that, if applicable, the terms of such Award
Agreement shall comply with the terms of such Employee’s or
Consultant’s Employment Agreement, if any. Such Award
Agreement shall provide for the exercise price for Options and
SARs; the purchase price, if any, for Restricted Common Stock,
Restricted Stock Units, Deferred Stock Units and Other Stock-Based
Awards; the performance criteria for Performance Units; and the
exercisability and vesting schedule, payment terms and such other
terms and conditions of such Award that are consistent with the
Plan, as determined by the Committee in its sole discretion. Each
Award Agreement shall be executed by the Participant and an officer
of the Company authorized to sign such Award Agreement. All Awards
shall be made conditional upon the Participant's acknowledgment, in
writing in the Award Agreement or otherwise by acceptance of the
Award, that all decisions and determinations of the Committee shall
be final and binding on the Participant, his beneficiaries and any
other person having or claiming an interest under such
Award.

 

ARTICLE 4. OPTIONS

 

Award Agreement for Option Grant. Option grants shall be
evidenced by an Award Agreement, pursuant to Section 3.4. All Award
Agreements evidencing Options intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C)
of the Code shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m) of
the Code. All Award Agreements evidencing Incentive Stock Options
shall contain such terms and conditions as may be necessary to meet
the applicable provisions of Section 422 of the Code.

 

Option Price. The price per share of the Common Stock
subject to each Option shall be set by the Committee; provided,
however, that (i) such price shall not be less than the par value
of a share of Common Stock and shall not be less than one hundred
percent (100%) of the Fair Market Value of a share of Common Stock
on the date the Option is granted, (ii) in the case of Incentive
Stock Options granted to an individual then owning (within the
meaning of Section 424(d) of the Code) more than ten percent (10%)
of the total combined voting power of all classes of stock of the
Company or any Subsidiary or parent corporation thereof (within the
meaning of Section 422 of the Code), such price shall not be less
than one hundred and ten percent (110%) of the Fair Market Value of
a share of Common Stock on the date the Option is
granted.

 

Qualification for Incentive Stock Options. The Committee may
grant an Incentive Stock Option to an individual only if such
person is an employee of the Company or is an employee of a
Subsidiary as permitted under Section 422(a)(2) of the
Code.

 

Change in Incentive Stock Option Grant. Any Incentive Stock
Option granted under this Plan may be modified by the Committee to
disqualify such Option from treatment as an Incentive Stock Option
under Section 422 of the Code. To the extent that the aggregate
Fair Market Value of shares of Common Stock with respect to which
Incentive Stock Options (within the meaning of Section 422 of the
Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by a Participant during any calendar
year (under the Plan and all other Incentive Stock Option plans of
the Company) exceeds one hundred thousand dollars ($100,000), such
Options shall be treated as Non-Qualified Stock Options to the
extent required or permitted by Section 422 of the Code. The rule
set forth in the preceding sentence shall be applied by taking
Options into account in the order in which they were granted. For
purposes of this Section 4.4, the Fair Market Value of shares of
Common Stock shall be determined as of the time the Option with
respect to such shares of Common Stock is granted.

 

Option Term. The term of an Option shall be set by the
Committee in its discretion; provided, however, in the case of
Incentive Stock Options, the term shall not be more than ten (10)
years from the date the Incentive Stock Option is granted, or five
(5) years from such date if the Incentive Stock Option is granted
to an Employee then owning (within the meaning of Section 424(d) of
the Code) more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Subsidiary or
parent corporation thereof (within the meaning of Section 422 of
the Code). Such Incentive Stock Options shall be subject to Section
5.6, except as limited by the requirements of Section 422 of the
Code and regulations and rulings thereunder applicable to Incentive
Stock Options.

 

 

5

 

 

Option Exercisability and Vesting.

 

The
period during which Options in whole or in part become exercisable
and vest in the Participant shall be set by the Committee and shall
be as provided for in the Award Agreement. At any time after the
grant of an Option, the Committee may, in its sole and absolute
discretion and subject to whatever terms and conditions it selects,
accelerate the period during which an Option becomes exercisable
and vests.

 

Each
Award Agreement shall set forth the extent to which, if any, the
Participant shall have the right to exercise the Options after the
Participant's Termination of Employment. Such provisions shall be
determined in the sole discretion of the Committee, need not be
uniform among the Options granted and may differentiate between the
reasons for the Participants’ Termination of
Employment.

 

At any
time on or after the grant of an Option, the Committee may provide
in an Award Agreement that the Participant may elect to exercise
part or all of an Option before it otherwise has become
exercisable. Any shares of Common Stock so purchased shall be
restricted Common Stock and shall be subject to a repurchase right
in favor of the Company during a specified restriction period, with
the repurchase price equal to the lesser of (i) the price per share
paid by the Participant for the Common Stock, or (ii) the Fair
Market Value of such Common Stock at the time of repurchase, or
such other restrictions as the Committee deems appropriate. The
Participant shall have, unless otherwise provided by the Committee
in the Award Agreement, all the rights of an owner of Common Stock,
subject to the restrictions and provisions of his Award Agreement,
including the right to vote such Common Stock and to receive all
dividends and other distributions paid or made with respect to
Common Stock.

 

Any
Options which are not exercisable and vested immediately prior to a
Change in Control, including shares of restricted Common Stock
received upon the exercise of an Option as described in Section
4.6.3 above, shall, upon a Change in Control, become one hundred
percent (100%) exercisable, if not previously exercised, and one
hundred percent (100%) vested, unless the Award Agreement or the
Participant's Employment Agreement provides otherwise.

 

ARTICLE 5. EXERCISE OF OPTIONS

 

Exercise. At any time and from time to time prior to the
time when any exercisable Option or portion thereof becomes
unexercisable under the Plan or the Award Agreement, such Option or
portion thereof may be exercised in whole or in part; provided,
however, that the Company shall not be required to issue fractional
shares of Common Stock and the Committee may, by the terms of the
Option, require any partial exercise to be with respect to a
minimum number of shares of Common Stock.

 

Manner of Exercise. An exercisable Option, or any
exercisable portion thereof, may be exercised solely by delivery to
the Company of all of the following prior to the time when such
Option or such portion becomes unexercisable under the Plan or the
Award Agreement:

 

A
written notice signed by the Participant or other person then
entitled to exercise such Option or portion thereof, stating that
such Option or portion is being exercised, provided such notice
complies with all applicable rules established by the Committee
from time to time.

 

Such
representations and documents as the Committee, in its absolute
discretion, deems necessary or advisable to effect compliance with
all applicable provisions of the Securities Act of 1933, as
amended, and any other federal or state securities laws or
regulations. The Committee may, in its absolute discretion, also
take whatever additional actions it deems appropriate to effect
such compliance including, without limitation, causing legends to
be placed on certificates for shares of Common Stock and issuing
stop-transfer notices to agents and registrars.

 

In the
event that the Option shall be exercised pursuant to Section 12.1
by any person or persons other than the Participant, appropriate
proof of the right of such person or persons to exercise the Option
or portion thereof.

 

Unless
otherwise determined by the Committee, the exercise price of an
Option or portion thereof, including the amount of any withholding
tax due, may be paid as follows:

 

 

6

 

 

In cash
or by check;

 

Through
the delivery of shares of Common Stock owned by the Participant,
duly endorsed for transfer to the Company with a Fair Market Value
on the date of delivery equal to the aggregate exercise price of
the Option or exercised portion thereof, provided, that shares of
Common Stock used to exercise the Option have been held by the
Participant for the requisite period of time to avoid adverse
accounting consequences to the Company with respect to the
Option;

 

Through
the surrender of shares of Common Stock then issuable upon exercise
of the Option having a Fair Market Value on the date of Option
exercise equal to the aggregate exercise price of the Option or
exercised portion thereof;

 

Through
an exercise complying with Regulation T as promulgated from time to
time by the Board of Governors of the Federal Reserve System;
or

 

Through
any combination of the consideration provided for in this Section
5.2.4 or such other method approved by the Committee consistent
with applicable law.

 

Conditions to Issuance of Common Stock. The Company shall
not be required to issue or deliver any certificate or other
indicia evidencing ownership of shares of Common Stock purchased
upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:

 

The
obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its sole
discretion, determine to be necessary or advisable.

 

The
lapse of such reasonable period of time following the exercise of
the Option as the Committee may establish from time to time for
reasons of administrative convenience.

 

The
receipt by the Company of full payment for such Common Stock,
including payment of any applicable withholding tax.

 

The
Participant agreeing to the terms and conditions of the Plan and
the Award Agreement.

 

Rights as Stockholders. The holders of Options shall not be,
nor have any of the rights or privileges of, stockholders of the
Company in respect of any shares of Common Stock purchasable upon
the exercise of any part of an Option unless and until certificates
or other indicia representing such shares of Common Stock have been
issued by the Company to such holders.

 

Ownership and Transfer Restrictions. The Committee, in its
absolute discretion, may impose at the time of grant such
restrictions on the ownership and transferability of the shares of
Common Stock purchasable upon the exercise of an Option as it deems
appropriate. Any such restriction shall be set forth in the Award
Agreement and may be referred to on the certificates or other
indicia evidencing such shares of Common Stock.

 

Limitations on Exercise of Options.

 

Vested
Incentive Stock Options may not be exercised after the earliest of
(i) their expiration date, (ii) twelve (12) months from the date of
the Participant's Termination of Employment by reason of his death,
(iii) twelve (12) months from the date of the Participant's
Termination of Employment by reason of his Permanent Disability, or
(iv) the expiration of three (3) months from the date of the
Participant's Termination of Employment for any reason other than
such Participant's death or Permanent Disability, unless the
Participant dies within said three (3) month period and the Award
Agreement or the Committee permits later exercise. Leaves of
absence for less than ninety (90) days shall not cause a
Termination of Employment for purposes of Incentive Stock
Options.

 

Non-Qualified
Stock Options may be exercised up until their expiration date,
unless the Committee provides otherwise in the Award
Agreement.

 

 

7

 

 

ARTICLE 6. STOCK AWARDS

 

Award Agreement. Awards of Restricted Common Stock,
Restricted Stock Units and Deferred Stock Units shall be evidenced
by an Award Agreement, pursuant to Section 3.4. All Award
Agreements evidencing Restricted Common Stock, Restricted Stock
Units and Deferred Stock Units intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C)
of the Code shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m) of
the Code.

 

Awards of Restricted Common Stock, Restricted Stock Units and
Deferred Stock Units.

 

The
Committee may from time to time, in its absolute discretion,
consistent with this Plan:

 

determine
which Employees, Non-Employee Directors and Consultants shall
receive Stock Awards;

 

determine
the aggregate number of shares of Common Stock to be awarded as
Stock Awards to Employees, Non-Employee Directors and
Consultants;

 

determine
the terms and conditions applicable to such Stock Awards;
and

 

determine
when the restrictions, if any, lapse.

 

The
Committee may establish the purchase price, if any, and form of
payment for a Stock Award. If the Committee establishes a purchase
price, the purchase price shall be no less than the par value of
the Common Stock to be purchased, unless otherwise permitted by
applicable state law.

 

Upon
the selection of an Employee, Non-Employee Director or Consultant
to be awarded Restricted Common Stock, the Committee shall instruct
the Secretary of the Company to issue such Restricted Common Stock
and may impose such conditions on the issuance of such Restricted
Common Stock as it deems appropriate, subject to the provisions of
Article 11.

 

Upon
the selection of an Employee, Non-Employee Director or Consultant
to be awarded Restricted Stock Units or Deferred Stock Units, the
Committee shall instruct the Secretary of the Company to establish
a Stock Award Account on behalf of each such Participant. The
Committee may impose such conditions on the issuance of such
Restricted Stock Units or Deferred Stock Units as it deems
appropriate.

 

Awards
of Restricted Common Stock and Restricted Stock Units shall vest
pursuant to the Award Agreement.

 

Upon
the occurrence of a Change in Control, all Restricted Common Stock
and Restricted Stock Units shall become one hundred percent (100%)
vested, unless the Participant’s Award Agreement or the
Participant’s Employment Agreement provides
otherwise.

 

A
Participant shall be one hundred percent (100%) vested in the
number of Deferred Stock Units held in his or her Stock Award
Account at all times. The term for which the Deferred Stock Units
shall be deferred shall be provided for in the Award
Agreement.

 

Rights as Stockholders.

 

Upon
delivery of the shares of Restricted Common Stock to the
Participant or the escrow holder pursuant to Section 6.7, the
Participant shall have, unless otherwise provided by the Committee
in the Award Agreement, all the rights of an owner of Common Stock,
subject to the restrictions and provisions of his Award Agreement;
provided, however, that in the discretion of the Committee, any
extraordinary distributions with respect to the Common Stock shall
be subject to the restrictions set forth in Section
6.4.

 

 

8

 

 

Nothing
in this Plan shall be construed as giving a Participant who
receives an Award of Restricted Stock Units or Deferred Stock Units
any of the rights of an owner of Common Stock unless and until
shares of Common Stock are issued and transferred to the
Participant in accordance with the terms of the Plan and the Award
Agreement. Notwithstanding the foregoing, in the event that any
dividend is paid by the Company with respect to the Common Stock
(whether in the form of cash, Common Stock or other property), then
the Committee shall, in the manner it deems equitable or
appropriate, adjust the number of Restricted Stock Units or
Deferred Stock Units allocated to each Participant's Stock Award
Account to reflect such dividend.

 

Restriction. All shares of Restricted Common Stock issued
under this Plan (including any Common Stock received as a result of
stock dividends, stock splits or any other form of
recapitalization, if any) shall at the time of the Award, in the
terms of each individual Award Agreement, be subject to such
restrictions as the Committee shall, in its sole discretion,
determine, which restrictions may include, without limitation,
restrictions concerning voting rights, transferability, vesting,
Company performance and individual performance; provided, however,
that by action taken subsequent to the time shares of Restricted
Common Stock are issued, the Committee may, on such terms and
conditions as it may determine to be appropriate, remove any or all
of the restrictions imposed by the terms of the Award Agreement.
Restricted Common Stock may not be sold or encumbered until all
restrictions are terminated or expire.

 

Lapse of Restrictions. The restrictions on Awards of
Restricted Common Stock and Restricted Stock Units shall lapse in
accordance with the terms of the Award Agreement. Each Award
Agreement shall set forth whether shares of Restricted Common Stock
or Restricted Stock Units then subject to restrictions are
forfeited or if the restrictions shall lapse upon the Participant's
Termination of Employment. Such provisions shall be determined in
the sole discretion of the Committee, need not be uniform among the
Awards of Restricted Common Stock or Restricted Stock Units and may
differentiate between the reasons for the Participant's Termination
of Employment.

 

Repurchase of Restricted Common Stock. The Committee may
provide in the terms of the Award Agreement awarding Restricted
Common Stock that the Company shall have call rights, a right of
first offer or a right of refusal regarding shares of Restricted
Common Stock then subject to restrictions.

 

Escrow. The Company may appoint an escrow holder to retain
physical custody of each certificate or control of each other
indicia representing shares of Restricted Common Stock until all of
the restrictions imposed under the Award Agreement with respect to
the shares of Common Stock evidenced by such certificate expire or
shall have been removed.

 

Legend. In order to enforce the restrictions imposed upon
shares of Restricted Common Stock hereunder, the Committee shall
cause a legend or restrictions to be placed on certificates of
Restricted Common Stock that are still subject to restrictions
under Award Agreements, which legend or restrictions shall make
appropriate reference to the conditions imposed
thereby.

 

Conversion. Upon vesting in the case of Restricted Stock
Units, and upon the lapse of the deferral period in the case of
Deferred Stock Units, such Restricted Stock Units or Deferred Stock
Units shall be converted into an equivalent number of shares of
Common Stock that will be distributed to the Participant, or in the
case of the Participant's death, to the Participant's legal
representative. Such distribution shall be evidenced by a stock
certificate, appropriate entry on the books of the Company or of a
duly authorized transfer agent of the Company, or other appropriate
means as determined by the Company. All distributions shall be made
no later than March 15th of the calendar
year following the year, with respect to the Restricted Stock
Units, in which such Restricted Stock Units vest or, with respect
to Deferred Stock Units, in which the deferral period lapses. In
the event ownership or issuance of the Common Stock is not feasible
due to applicable exchange controls, securities regulations, tax
laws or other provisions of applicable law, as determined by the
Company in its sole discretion, the Participant, or, in the case of
the Participant's death, the Participant's legal representative,
shall receive cash proceeds in an amount equal to the value of the
shares of Common Stock otherwise distributable to the Participant,
net of tax withholding as provided in Section 12.5.

 

 

9

 

 

ARTICLE 7. STOCK APPRECIATION RIGHTS

 

Award Agreement for SARs. Awards of SARs shall be evidenced
by an Award Agreement, pursuant to Section 3.4. All Award
Agreements evidencing SARs intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall
contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 162(m) of the Code.

 

General Requirements. The Committee may grant SARs
separately or in tandem with any Option (for all or a portion of
the applicable Option). The Committee shall determine which
Employees, Non-Employee Directors and Consultants shall receive
Awards of SARs and the amount of such Awards.

 

Base Amount. The Committee shall establish the base amount
of the SAR at the time the SAR is granted. The base amount of each
SAR shall be equal to the price per share of the related Option or,
if there is no related Option, the Fair Market Value of a share of
Common Stock as of the date of grant of the SAR, unless the
Committee determines a higher base amount.

 

Tandem SARs. Tandem SARs may be granted either at the time
the Option is granted or at any time thereafter while the Option
remains outstanding; provided, however, that, in the case of an
Incentive Stock Option, SARs may be granted only at the time of
grant of the Incentive Stock Option. In the case of tandem SARs,
the number of SARs granted to an Employee or Consultant that shall
be exercisable during a specified period shall not exceed the
number of shares of Common Stock that the Employee, Non-Employee
Director or Consultant may purchase upon the exercise of the
related Option during such period. Upon the exercise of an Option,
the SARs relating to the Common Stock covered by such Option shall
terminate. Upon the exercise of the SARs, the related Option shall
terminate to the extent of an equal number of shares of Common
Stock.

 

SAR Exercisability.

 

The
period during which SARs in whole or in part become exercisable
shall be set by the Committee and shall be as provided for in the
Award Agreement. At any time after the grant of an SAR, the
Committee may, in its sole and absolute discretion and subject to
whatever terms and conditions its selects, accelerate the period
during which the SAR becomes exercisable.

 

In each
Award Agreement, the Committee shall indicate whether the portion
of the SAR, if any, that remains non-exercisable upon the
Participant’s Termination of Employment with the Company is
forfeited. In so specifying, the Committee may differentiate
between the reason for the Participant’s Termination of
Employment.

 

Value of SARs. When a Participant exercises an SAR, the
Participant shall receive in settlement of such SAR an amount equal
to the value of the stock appreciation for the number of SARs
exercised payable in cash, Common Stock or a combination thereof.
The stock appreciation for an SAR is the amount by which the Fair
Market Value of the underlying Common Stock on the date of exercise
of the SAR exceeds the base amount of the SAR.

 

Form of Payment. The Committee shall determine whether the
appreciation in an SAR shall be paid in the form of cash, Common
Stock or a combination of the two, in such proportion as the
Committee deems appropriate. For purposes of calculating the number
of shares of Common Stock to be received, shares of Common Stock
shall be valued at their Fair Market Value on the date of exercise
of the SAR. If shares of Common Stock are received upon exercise of
a SAR, cash shall be delivered in lieu of any fractional shares of
Common Stock.

 

ARTICLE 8. PERFORMANCE UNITS

 

Award Agreement for Performance Units. Awards of Performance
Units shall be evidenced by an Award Agreement, pursuant to Section
3.4. All Award Agreements evidencing Performance Units intended to
qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall contain such terms and conditions as
may be necessary to meet the applicable provisions of Section
162(m) of the Code.

 

 

10

 

 

General Requirements. Each Performance Unit shall represent
the right of the Participant to receive an amount based on the
value of the Performance Unit, if performance goals established by
the Committee are met. A Performance Unit shall be based on the
Fair Market Value of a share of Common Stock or such other
measurement base as the Committee deems appropriate. The Committee
shall determine and set forth in the Award Agreement the number of
Performance Units to be granted and the requirements applicable to
such Performance Units. The Committee shall determine which
Employees and Consultants shall receive Awards of a Performance
Unit and the amount of such Awards.

 

Performance Period and Performance Goals. When Performance
Units are granted, the Committee shall establish the performance
period during which performance shall be measured (the "Performance
Period"), performance goals applicable to the Performance Units
("Performance Goals") and such other conditions of the Award as the
Committee deems appropriate. Performance Goals may relate to the
financial performance of the Company or its Subsidiaries, the
performance of Common Stock, individual performance or such other
criteria as the Committee deems appropriate.

 

Payment With Respect to Performance Units. At the end of
each Performance Period, the Committee shall determine to what
extent the Performance Goals and other conditions of the
Performance Units are met, the value of the Performance Units (if
applicable), and the amount, if any, to be paid with respect to the
Performance Units. Payments with respect to Performance Units shall
be made in cash, in Common Stock or in a combination of the two, as
determined by the Committee. All payments shall be made no later
than March 15 of the calendar year following the year in which the
Performance Period ends.

 

 

ARTICLE 9. DIVIDEND EQUIVALENTS

 

 

Grant of Dividend Equivalents. The Committee is hereby
authorized, in its sole discretion, to grant Dividend Equivalents
to Employees, Non-Employee Directors and Consultants subject to
such terms and conditions as may be selected by the Committee.
Dividend Equivalents shall entitle the Participant to receive
payments (in cash, Common Stock, other Awards or other property as
determined in the discretion of the Committee) equivalent to the
amount of cash dividends paid by the Company to holders of Common
Stock. Dividend Equivalents may be granted on a free-standing basis
or in connection with another Award. Dividend Equivalents granted
in connection with another Award may be granted with respect to all
or a portion of the number of shares of Common Stock subject to
such Award. The Committee may provide that the Dividend Equivalents
be paid or distributed when accrued or be deemed to have been
reinvested in additional shares of Common Stock or otherwise
reinvested; provided, however, that the terms of any reinvestment
of Dividend Equivalents must comply with all applicable laws, rules
and regulations, including, without limitation, Section 409A of the
Code, and Dividend Equivalents (other than free-standing Dividend
Equivalents) shall be subject to all conditions and restrictions of
the underlying Awards to which they relate, unless otherwise
provided by the Committee. Notwithstanding the foregoing, the
Committee may not grant Dividend Equivalents to Participants in
connection with grants of Options or SARs to such
Participants.

 

 

ARTICLE 10. OTHER STOCK-BASED AWARDS

 

Grant of Other Stock-Based Awards. The Committee is
authorized, subject to limitations under applicable law, to grant
to Employees, Non-Employee Directors and Consultants such other
Awards that are payable in, valued in whole or in part by reference
to, or otherwise based on or related to, shares of Common Stock, as
deemed by the Committee to be consistent with the purposes of the
Plan, including, without limitation, shares of Common Stock awarded
purely as a "bonus" and not subject to any restrictions or
conditions, convertible or exchangeable debt securities, other
rights convertible or exchangeable into shares of Common Stock and
other Awards valued by reference to book value of shares of Common
Stock or the value of securities of or the performance of specified
Subsidiaries. The Committee shall determine the terms and
conditions of such Awards, which shall be evidenced an Award
Agreement, pursuant to Section 3.4.

 

 

11

 

 

ARTICLE 11. ADMINISTRATION

 

Committee. The Plan shall be administered by the
Compensation Committee of the Board. The Board may remove members,
add members, and fill vacancies on the Committee from time to time,
all in accordance with the Company's Certificate of Incorporation,
Bylaws, and with applicable law. The majority vote of the
Committee, or for acts taken in writing without a meeting by the
unanimous written consent of the members of the Committee, shall be
valid acts of the Committee. Committee members may resign at any
time by delivering written notice to the Board.

 

Duties and Powers of Committee. It shall be the duty of the
Committee to conduct the general administration of this Plan in
accordance with its provisions. The Committee shall have the power
to designate the Employees, Non-Employee Directors and Consultants
who shall participate in the Plan and to construe and interpret
this Plan and the agreements pursuant to which Options, Restricted
Common Stock, Restricted Stock Units, Deferred Stock Units, SARs,
Dividend Equivalents, Performance Units or Other Stock-Based Awards
are granted or awarded, and to adopt such rules for the
administration, interpretation, and application of this Plan as are
consistent therewith and to interpret, amend or revoke any such
rules. Any such Award under this Plan need not be the same with
respect to each Participant. Any such interpretations and rules
with respect to Incentive Stock Options shall be consistent with
the provisions of Section 422 of the Code. All determinations and
decisions made by the Committee pursuant to the provisions of the
Plan shall be final, conclusive and binding.

 

Compensation; Professional Assistance; Good Faith Actions.
Unless otherwise determined by the Board, members of the Committee
shall receive no compensation for their services pursuant to this
Plan. All expenses and liabilities which members of the Committee
incur in connection with the administration of this Plan shall be
borne by the Company. The Committee may, with the approval of the
Board, employ attorneys, consultants, accountants, appraisers,
brokers, or other persons. The Committee, the Company and the
Company's officers and directors shall be entitled to rely upon the
advice, opinions or valuations of any such persons. All actions
taken and all interpretations and determinations made by the
Committee or the Board in good faith shall be final and binding
upon all Participants, the Company and all other interested
persons. No members of the Committee or Board shall be personally
liable for any action, determination or interpretation made in good
faith with respect to this Plan or any Awards made hereunder, and
all members of the Committee and the Board shall be fully protected
by the Company in respect of any such action, determination or
interpretation.

 

Delegation by the Committee. The Committee may, from time to
time, delegate, to one (1) or more specified officers of the
Company, the power and authority to grant or document Awards under
the Plan to specified groups of eligible individuals, subject to
such restrictions and conditions as the Committee, in its sole
discretion, may impose. The delegation shall be as broad or as
narrow as the Committee shall determine, provided that the
delegation must specify any limitations on the authority required
by the Delaware General Corporation Law and The Nasdaq Stock Market
LLC listing rules. To the extent that the Committee has delegated
the authority to determine certain terms and conditions of an
Award, all references in the Plan to the Committee’s exercise
of authority in determining such terms and conditions shall be
construed to include the officer or officers to whom the Committee
has delegated the power and authority to make such determination.
However, there shall be no delegation of authority (a) to grant
awards to any Section 16 person, (b) that will cause Awards
intended to qualify as “performance-based” compensation
under Code Section 162(m) to fail to so qualify, (c) that will
result in a related-person transaction with an executive officer
required to be disclosed under Item 404(a) of Regulation S-K (in
accordance with Instruction 5.a.ii. thereunder) under the Exchange
Act, or (d) that is not permitted under Sections 152 and 157 and
other applicable provisions of the Delaware General Corporation
Law. Any such Awards shall be made on the form of Award Agreement
most recently approved for use by the Committee, unless the
resolutions delegating the authority permit the use of a different
form of Award Agreement approved by the Committee. Such delegation
may be revoked at any time by the Committee.

 

 

12

 

 

ARTICLE 12. MISCELLANEOUS PROVISIONS

 

Transferability.

 

No
Award or any right therein or part thereof, shall be liable for the
debts, contracts or engagements of the Participant or his
successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment
or any other means, whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including
bankruptcy), and any attempted disposition thereof shall be null
and void and of no effect; provided, however, that nothing in this
Section 12.1.1 shall prevent transfers by will or by the applicable
laws of descent and distribution or as permitted in Section 12.1.2
below. The Committee shall not be required to accelerate the
exercisability of an Award or otherwise take any action pursuant to
a divorce or similar proceeding in the event Participant's spouse
is determined to have acquired a community property interest in all
or any portion of an Award. Except as provided below, during the
lifetime of the Participant, only he may exercise an Award (or any
portion thereof) granted to him under the Plan. After the death of
the Participant, any exercisable portion of an Award, prior to the
time when such portion becomes unexercisable under the Plan or the
applicable Award Agreement or other agreement, may be exercised by
his personal representative or by any person empowered to do so
under the deceased Participant's will or under the then applicable
laws of descent and distribution.

 

Notwithstanding
the foregoing, the Committee may provide in an Award Agreement, or
amend an otherwise outstanding Award Agreement to provide, that a
Participant may transfer an Award that is not an Incentive Stock
Option or an SAR that is granted in relation to an Incentive Stock
Option to family members, or one or more trusts or other entities
for the benefit of or owned by family members, consistent with
applicable securities laws, according to such terms as the
Committee may determine; provided that the Participant receives no
consideration for the transfer of such an Award and the transferred
Award shall continue to be subject to the same terms and conditions
as were applicable to the Award immediately before the transfer and
shall be exercisable by the transferee according to the same terms
as applied to the Participant.

 

Amendment, Suspension or Termination of this Plan.

 

Except
as otherwise provided in this Section 12.2, this Plan may be wholly
or partially amended or otherwise modified, suspended or terminated
at any time or from time to time by the Board; provided, however,
no action of the Board may be taken that would otherwise require
stockholder approval as a matter of applicable law, regulation or
rule, without the consent of the stockholders. In no event may any
Option or SAR be amended, other than pursuant to Section 12.3, to
decrease the exercise or grant price thereof, be cancelled in
conjunction with the grant of any new Option or SAR with a lower
exercise or grant price, or otherwise be subject to any action that
would be treated, under generally accepted accounting principles,
as a "repricing" of such Option or SAR, unless the stockholders of
the Company provide prior approval. No amendment, suspension or
termination of this Plan shall impair any rights or obligations
under any Award theretofore made to a Participant, unless such
right has been reserved in the Plan or the Award Agreement, without
the consent of the Participant holding such Award. No Award may be
made during any period of suspension or after termination of this
Plan. In no event may any Award be made under this Plan after
December 31, 2019.

 

Notwithstanding
the foregoing, the Board or the Committee may take any action
necessary to comply with a change in applicable law, irrespective
of the status of any Award as vested or unvested, exercisable or
unexercisable, at the time of such change in applicable
law.

 

Changes in Common Stock or Assets of the Company, Acquisition or
Liquidation of the Company and Other Corporate Events.

 

In the
event that any dividend (other than an ordinary cash dividend) or
other distribution (whether in the form of cash, Common Stock,
other securities, or other property), recapitalization,
reclassification, stock split, reverse stock split, reorganization,
merger, consolidation, split up, spin-off, combination, repurchase
or other similar transaction or event affects the Common Stock such
that an adjustment is appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of the
following:

 

 

13

 

 

the
maximum number of shares of Common Stock available for
Awards;

 

the
maximum number of shares of Common Stock subject to the
Plan;

 

the
number and kind of Company stock with respect to which an Award may
be made under the Plan;

 

the
number and kind of Company stock subject to an outstanding Award;
and

 

the
exercise price or purchase price with respect to any
Award.

 

In
addition, in the event of any merger, consolidation, split-up,
spin-off, combination, repurchase, liquidation, dissolution, or
sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company or any unusual or
nonrecurring transactions or events affecting the Company or the
financial statements of the Company, or of changes in applicable
laws, regulations, or accounting principles, the Committee in its
discretion is hereby authorized to take any one or more of the
following actions whenever the Committee determines, in its sole
discretion, that such action is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or with respect to any
Award or right under this Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or
principles:

 

the
Committee may provide, by the terms of the Award Agreement or by
action taken prior to the occurrence of such transaction or event
and either automatically or upon the Participant's request, for (i)
the purchase of any such Award for the payment of an amount of cash
equal to the amount that could have been attained upon the exercise
of such Award or realization of the Participant's rights had such
Award been currently exercisable, payable, fully vested or the
restrictions lapsed, or (ii) the replacement of such Award with
other rights or property selected by the Committee;

 

the
Committee may provide, by the terms of such Award Agreement or by
action taken prior to the occurrence of such transaction or event,
that the Award cannot be exercised after such event;

 

the
Committee may provide, by the terms of such Award or by action
taken prior to the occurrence of such transaction or event, that
for a specified period of time prior to such transaction or event
such Award shall be exercisable, notwithstanding anything to the
contrary in Section 4.6 or the provisions of such
Award;

 

the
Committee may provide, by the terms of such Award or by action
taken prior to the occurrence of such transaction or event, that
upon such event, such Award be assumed by the successor or survivor
corporation, or a parent or subsidiary thereof, or shall be
substituted for by similar Awards covering the stock of the
successor or survivor corporation, or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kind of
shares and prices;

 

the
Committee may make adjustments in the number, type and kind of
shares of Common Stock subject to outstanding Options, Restricted
Common Stock, Restricted Stock Units, Deferred Stock Units, SARs
and Performance Units and in the terms and conditions of (including
the grant or exercise price), and the criteria included in,
outstanding Awards, and rights and awards which may be granted in
the future; and

 

the
Committee may provide, by the terms of an Award of Restricted
Common Stock or Restricted Stock Units or by action taken prior to
the occurrence of such event, that for a specified period of time
prior to such event, the restrictions imposed under an Award
Agreement upon some or all shares of the Restricted Common Stock or
the Restricted Stock Units may be terminated, and some or all
shares of such Restricted Common Stock or some or all of such
Restricted Stock Units may cease to be subject to forfeiture under
Section 6.5 or repurchase under Section 6.6 after such
event.

 

Subject
to Section 12.7, the Committee may, in its sole discretion, at the
time of grant, include such further provisions and limitations in
any Award Agreement or certificate, as it may deem appropriate and
in the best interests of the Company; provided, however, that no
such provisions or limitations shall be contrary to the terms of
the Participant's Employment Agreement or the terms of this
Plan.

 

 

14

 

 

Notwithstanding
the foregoing, no action pursuant to this Section 12.3 shall be
taken that is specifically prohibited under applicable law, the
rules and regulations of any governing governmental agency or
national securities exchange, or the terms of the Participant's
Employment Agreement, and no adjustment to an Option or SAR shall
be made to the extent the same constitutes a "modification" within
the meaning of Section 424(h)(3) of the Code, Regulation
§1.424-1(a) thereunder or Section 409(A) of the Code or the
regulations thereunder.

 

Continued Employment. Nothing in this Plan or in any Award
Agreement hereunder shall confer upon any Participant any right to
continue his employment, consulting or similar relationship with
the Company, whether as an employee or consultant or otherwise, or
shall interfere with or restrict in any way the rights of the
Company, which are hereby expressly reserved, to discharge or
terminate the relationship with any Participant at any time for any
reason whatsoever, subject to the terms of any Employment Agreement
entered into by the Participant and the Company.

 

Tax Withholding. The Company shall be entitled to require
payment in cash or deduction from other compensation payable to
each Participant of any sums required by federal, state or local
tax law to be withheld with respect to the issuance, vesting,
exercise or lapse of any restriction of any Option, Restricted
Common Stock, Restricted Stock Unit, Deferred Stock Unit, SAR or
Performance Unit. The Committee shall be authorized to establish
procedures for election by Participants to satisfy such obligation
for the payment of such taxes (i) by delivery of, or transfer of,
shares of Common Stock to the Company or (ii) by directing the
Company to retain shares of Common Stock otherwise deliverable
under an Award. Shares of Common Stock withheld or delivered in
accordance with this Section 12.5 shall be valued at Fair Market
Value as of such date as may be specified in procedures established
by the Committee.

 

Forfeiture Provisions. Pursuant to its general authority to
determine the terms and conditions applicable to Awards, the
Committee shall have the right to provide, in the terms of such
Award, or to require the Participant to agree by separate written
instrument, that the Award shall terminate and any unexercised
portion of such Award (whether or not vested) shall be forfeited if
(i) a Termination of Employment occurs prior to a specified date,
or within a specified time period following receipt or exercise of
the Award, (ii) the Participant at any time, or during a specified
time period, engages in any activity in competition with the
Company, or which is inimical, contrary or harmful to the interests
of the Company, as further defined by the Committee or as specified
in the Participant's Employment Agreement, or (iii) the Company
terminates the Participant with or without cause.

 

Limitations Applicable to Section 16 Persons and Performance-Based
Compensation. Notwithstanding any other provision of this
Plan, any Option, Restricted Common Stock, Restricted Stock Unit,
Deferred Stock Unit, SARs, Dividend Equivalents, Performance Units
or Other Stock-Based Awards granted or awarded to any individual
who is then subject to Section 16 of the Exchange Act shall be
subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any
amendment to Rule 16b-3 under the Exchange Act). To the extent
permitted by applicable law, Options granted or awarded hereunder
shall be deemed amended to the extent necessary to conform to such
applicable exemptive rule. Furthermore, notwithstanding any other
provision of this Plan to the contrary, any Award that is intended
to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code shall be subject to any additional
limitations set forth in Section 162(m) of the Code (including any
amendment to Section 162(m) of the Code) or any regulations or
rulings issued thereunder that are requirements for qualification
as performance-based compensation as described in Section
162(m)(4)(C) of the Code, and this Plan shall be deemed amended to
the extent necessary to conform to such requirements.

 

Effect of Plan Upon Option and Compensation Plans. The
adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Company. Nothing in this Plan
shall be construed to limit the right of the Company (i) to
establish any other forms of incentives or compensation for
Employees, Non-Employee Directors and Consultants, or (ii) to grant
or assume options or other rights otherwise than under this Plan in
connection with any proper corporate purpose including but not by
way of limitation, the grant or assumption of options in connection
with the acquisition by purchase, lease, merger, consolidation or
otherwise, of the business, stock or assets of any corporation,
partnership, limited liability company, firm or
association.

 

 

15

 

 

Restrictions. At the time of any Award, the Committee may
provide in connection with, and as condition of, any such Award, or
the exercise or vesting thereunder, that the shares of Common Stock
received as a result of such Award, exercise, or vesting shall be
subject to a right of first refusal, pursuant to which the
Participant shall be required to offer to the Company any shares
that the Participant wishes to sell, or a right of the Company to
repurchase such shares of Common Stock, with the price being the
then Fair Market Value of the Common Stock, subject to such other
terms and conditions as the Committee may specify at the time of
such Award.

 

Compliance with Laws. This Plan, the granting and vesting of
Awards under this Plan and the issuance and delivery of shares of
Common Stock and the payment of money under this Plan or under
Awards awarded hereunder are subject to compliance with all
applicable federal and state laws, rules and regulations (including
but not limited to state and federal securities law and federal
margin requirements) and to such approvals by any listing,
regulatory or governmental authority as may, in the opinion of
counsel for the Company, be necessary or advisable in connection
therewith. Any securities delivered under this Plan shall be
subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such
assurances and representations to the Company as the Company may
deem necessary or desirable to assure compliance with all
applicable legal requirements. To the extent permitted by
applicable law, the Plan shall be deemed amended to the extent
necessary to conform to such laws, rules and regulations. No Award
under this Plan (or modification thereof) shall provide for the
deferral of compensation that violates Section 409A of the Code. If
any provision of the Plan or an Award Agreement contravenes any
regulations or Treasury guidance promulgated under Section 409A of
the Code or could cause an Award to be subject to the interest and
penalties under Section 409A of the Code, such provision of the
Plan or any Award Agreement shall be modified to maintain, to the
maximum extent practicable, the original intent of the applicable
provision without violating the provisions of Section 409A of the
Code. Moreover, any discretionary authority that the Board or the
Committee may have pursuant to the Plan shall not be applicable to
an Award that is subject to Section 409A of the Code to the extent
such discretionary authority will contravene Section 409A of the
Code.

 

Titles. Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or construction of
this Plan.

 

Governing Law. This Plan and any agreements hereunder shall
be administered, interpreted and enforced under the laws of the
State of Texas, without regard to that state’s conflicts of
laws rules.

 

Effective Date. The Atrion Corporation 2006 Equity Incentive
Plan first became effective on May 22, 2006. This Amended and
Restated Atrion Corporation 2006 Equity Incentive Plan shall be
effective on the date it is approved by the stockholders of the
Company.

 

 

16Exhibit

Exhibit 10.1.1

EMC INSURANCE COMPANIES
AMENDED AND RESTATED 
REINSURANCE POOLING AGREEMENT 
BETWEEN
EMPLOYERS MUTUAL CASUALTY COMPANY
AND CERTAIN OF ITS AFFILIATED COMPANIES
EFFECTIVE JANUARY 1, 2017

This EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies (the "Agreement" or “Amended and Restated Pooling Agreement”)  is entered into as of January 1, 2017, by and between Employers Mutual Casualty Company and certain of its affiliated or subsidiary companies such as are signatory hereto by means of exhibits setting forth the interests and liabilities of the parties, attached hereto and made a part of this Agreement.  Employers Mutual Casualty Company is hereinafter referred to as “EMC”, and the other companies signatory hereto are hereinafter referred to as the “Affiliated Companies” or as the “Affiliated Company”, as the context requires.  Any addition or exclusion of an Affiliated Company shall be subject to the prior approval of the Iowa Insurance Division.     

BACKGROUND INFORMATION

1.    Employers Mutual Casualty Company and seven Affiliated Companies entered into a rewritten Reinsurance Pooling Agreement effective January 1, 1987 (the " Reinsurance Pooling Agreement").

2.    Effective January 1, 1993, Article XV was added to the Agreement (Addendum I).  The Article provided that certain voluntary reinsurance assumed business written by EMC would not be ceded by EMC to Affiliate Companies.  Addendum 1 also amended the Reinsurance Pooling Agreement by requiring that “EMC Insurance Companies” be substituted for “Employers Mutual Companies” wherever that term appeared in the Reinsurance Pooling Agreement.

3.    Effective July 24, 1998, Article XVI was added to the Agreement (Addendum II).  The Article provided that the Agreement, Addenda, Exhibits, Endorsements and Amendments constituted the entire agreement.

4.      Effective January 19, 1999, 'EMC Property & Casualty Company' was substituted for “American Liberty Insurance Company” and “Union Insurance Company of Providence” was substituted for “Union Mutual Insurance Company of Providence”  to correspond to the name changes of those respective companies (Addendum III).

5.    Effective retroactively to December 31, 2003, Article XVII was added to the Agreement (Addendum IV).  The Article provided that EMC was responsible for the accuracy of the computations related to the Agreement and that EMC would guarantee any shortfall or difference resulting from an error.

6.      Effective January 1, 2005, Article X was deleted and a new Article X was substituted (Addendum V).  Article X defined the term of the Agreement and required written notice if any party intends to terminate its participation.

7.    Effective January 1, 2005, Article XVIII was added to the Agreement (Addendum VI).  The Article provided for adjustment of obligations in the event EMC or an Affiliated Company becomes insolvent.

8.    Effective January 1, 2005, Article XIX was added to the Agreement (Addendum VII).  The Article provided that all development on prior years' outstanding losses and loss expenses shall be considered to be a component of losses and loss expenses and shall be pro-rated, and that all liabilities associated with policies incepted by a party prior to termination of such party's participation in the Agreement shall remain a part of and subject to the Agreement until such liabilities are resolved.

9.      Effective January 30, 2006, Addendum VIII substituted “Hamilton Mutual Insurance Company” for “The Hamilton Mutual Insurance Company of Cincinnati, Ohio” to correspond to the name change of that Company.

10.      Effective September 30, 2007, Article VIII was deleted and a new Article VIII was substituted (Addendum IX).  The Article provided that the settling of balances shall be made within 45 days after the end of each quarter.

11.       Effective July 1, 2010, Article XX was added to the Agreement (Addendum X).  The Article provided that the parties to the Agreement as an assuming insurer would submit to the jurisdiction of any court of competent jurisdiction and provided language required of authorized reinsurers in North Carolina.

12.    Exhibit I Interest and Liabilities was executed by EMC and Union Mutual Insurance Company of Providence (subsequently changed to Union Insurance Company of Providence) on November 25, 1986; effective January 1, 1987.  Exhibit I was amended by Amendment I effective January 1, 1992; Amendment II effective January 1, 1993; Amendment III effective January 1, 1997; Amendment IV effective January 1, 1998; Amendment V effective January 1, 2005; Amendment VI effective January 1, 2007; Amendment VII effective December 31, 2007 and Amendment VIII effective January 1, 2016.

13.    Exhibit II Interest and Liabilities was executed by EMC and Dakota Fire Insurance Company on November 25, 1986; effective January 1, 1987.  Exhibit II was amended by Amendment I effective January 1, 1992; Amendment II effective January 1, 1993; Amendment III effective January 1, 1997; Amendment IV effective January 1, 1998; Amendment V effective January 1, 2005; Amendment VI effective January 1, 2007; Amendment VII effective December 31, 2007 and Amendment VIII effective January 1, 2016.

14.    Exhibit III Interest and Liabilities was executed by EMC and Illinois EMCASCO Insurance Company on November 25, 1986; effective January 1, 1987.  Exhibit III was amended by Amendment I effective January 1, 1992; Amendment II effective January 1, 1993; Amendment III 

effective January 1, 1997; Amendment IV effective January 1, 1998; Amendment V effective January 1, 2005; Amendment VI effective January 1, 2007; Amendment VII effective December 31, 2007 and Amendment VIII effective January 1, 2016.

15.    Exhibit IV Interest and Liabilities was executed by EMC and EMCASCO Insurance Company on November 25, 1986; effective January 1, 1987.  Exhibit IV was amended by Amendment I effective January 1, 1992; Amendment II effective January 1, 1993; Amendment III effective January 1, 1997; Amendment IV effective January 1, 1998; Amendment V effective January 1, 2005; Amendment VI effective January 1, 2007; Amendment VII effective December 31, 2007 and Amendment VIII effective January 1, 2016.  

16.    Exhibit V Interest and Liabilities was executed by EMC and American Liberty Insurance Company (subsequently changed to EMC Property & Casualty Company) on November 25, 1986; effective January 1, 1987.  Exhibit V was amended by Amendment I effective January 1, 1992; Amendment II effective January 1, 1993; Amendment III effective January 1, 1997; Amendment IV effective January 1, 1998; Amendment V effective January 1, 2005; Amendment VI effective January 1, 2007; Amendment VII effective December 31, 2007 and Amendment VIII effective January 1, 2016.

17.    Exhibit VI Interest and Liabilities was executed by EMC and The Hamilton Mutual Insurance Company of Cincinnati, Ohio (subsequently changed to Hamilton Mutual Insurance Company) on March 26, 1997; effective January 1, 1997.  Exhibit VI was amended by Amendment I effective January 1, 1997; Amendment II effective January 1, 1998; Amendment III effective January 1, 2005; Amendment IV effective January 1, 2007; Amendment V effective December 31, 2007 and Amendment VI effective January 1, 2016.

Effective January 1, 1997, Hamilton Mutual and EMC also executed Endorsement No. I wherein it was agreed that notwithstanding language in Article II of the Agreement, Hamilton Mutual retains all of its obligations incurred under or in connection with any contracts or agreements to which Hamilton Mutual is a party as of the effective date of the endorsement and under which Hamilton Mutual has assumed or incurred any actual or potential reinsurance liabilities. 

18.    Exhibit VII Interest and Liabilities was executed by EMC and Farm and City Insurance Company January 15, 1998; effective January 1, 1998.  Exhibit VII was amended by Amendment I effective January 1, 1998; Amendment II effective January 1, 2005; and Amendment III effective January 1, 2007.  On December 31, 2007, Farm and City Insurance Company merged into EMCASCO Insurance Company and Farm and City Insurance Company's pool participation terminated.  As part of that merger, EMCASCO Insurance Company’s pool participation percentage increased by the amount previously allocated to Farm and City Insurance Company.

STATEMENT OF AGREEMENT

The Companies acknowledge the accuracy of the Background Information and hereby agree that effective on January 1, 2017, the Reinsurance Pooling Agreement is replaced in its entirety by this Amended and Restated Pooling Agreement.  

EMC and each Affiliated Company signatory to the Amended and Restated Pooling Agreement agree to honor the terms set forth herein as if this Agreement were solely between EMC and each such Affiliated Company.  Balances payable to or recoverable from EMC and any such Affiliated Company shall not serve to offset any balances payable to or recoverable from any other Affiliated Company signatory to this Agreement.  Reports and remittances between EMC and each Affiliated Company shall be in sufficient detail to identify the individual premium and loss obligation of each party to the other.

ARTICLE I

The companies are engaged in the insurance business and maintain a mutual business relationship having certain incidents of common management, and desire to bring about for each other added economies of operation, uniform underwriting results, diversification as respects the classes of insurance business written, and maximization of capacity.  To accomplish the aforesaid, the companies do by means of this Agreement, pool all of their insurance business then in force as of 12:01 A.M. of the date signatory hereto, and thereafter to share in the fortunes of their pooled insurance business.  The participation of each Affiliated Company in the pool established pursuant to this Agreement is set out in Exhibits I-VI, attached hereto and made a part of this Agreement by reference.

ARTICLE II

EMC hereby reinsures and the Affiliated Company hereby cedes and transfers to EMC all liabilities incurred under or in connections with all contracts and policies of insurance issued by the Affiliated Company outstanding and in force as of 12:01 A.M. of the date signatory hereto, or thereafter issued by it.  Such liabilities shall include the Affiliated Company’s reserves for unearned premiums, outstanding losses and loss expenses (including unreported losses) and all other underwriting and administrative expenses as evidenced by the Affiliated Company’s books and records, but shall not include inter-company balances, liabilities for Corporate Taxes including Federal or State Income Taxes, or liabilities incurred in connection with their respective investment transactions.

ARTICLE III

The Affiliated Company hereby assigns and transfers to EMC all right, title and interest in and to reinsurance outstanding and in force with respect to the liabilities reinsured by EMC under Article II hereof.

ARTICLE IV

The Affiliated Company assigns and transfers to EMC amounts equal to the aggregate of all of its liabilities reinsured by EMC under Article II hereof, less a commission allowance equal to the prepaid expenses of the Affiliated Company but not in excess of forty percent (40%) of the Affiliated Company’s combined ratio on a trade basis.  Prepaid expenses is defined as those expenses records in column 2, part 4, of the Underwriting and Expense Exhibit of the Affiliated Company’s 

convention statement.  The trade combined ratio is the ratio of loss and loss adjustment expense to earned premium, plus the ratio of underwriting expenses to premiums written.

ARTICLE V

The Affiliated Company hereby reinsures, and EMC hereby cedes and transfers to the Affiliated Company a portion of its net liabilities under all contracts and policies of insurance (including those reinsured by EMC under Article II hereof) on which EMC is subject to liability and which are outstanding and in force as of 12:01 A.M. of the date signatory hereto, or are issued thereafter, in accordance with the exhibit attached hereto and made a part hereof, to which the Affiliated Company is a signatory party.  Such liabilities shall include reserves for unearned premiums, outstanding losses and loss expenses (including unreported losses) and all other underwriting and administrative expenses, but shall not include inter-company balances, liabilities for Corporate Taxes including Federal or State Income Taxes, or liabilities in connection with investment transactions.

ARTICLE VI

EMC hereby assigns and transfers to the Affiliated Company amounts equal to the aggregate of all liabilities of EMC reinsured by the Affiliated Company under contracts and policies of insurance which are outstanding and in force as of 12:01 A.M. of the date signatory hereto under Article V hereof, less a commission allowance equal to the prepaid expenses of EMC but not in excess of forty percent (40%) of EMC’s combined ratio on a trade basis.  Prepaid expenses is defined as those expenses recorded in column 2, part 4, of the Underwriting and Expense Exhibit of EMC’s convention statement.  The trade combined ratio is the ratio of loss and loss adjustment expense to earned premium, plus the ratio of underwriting expenses to premiums written.

ARTICLE VII

EMC agrees to pay to the Affiliated Company its respective participation of all premiums written by the companies after first deducting premiums on all reinsurance ceded to reinsurers (other than the parties hereto).  Similarly, it is further agreed that all losses, loss expense and other underwriting and administrative expenses (with the exceptions noted in Articles II and V hereof) of the companies, less all losses and expense recovered and recoverable under reinsurance ceded to reinsurers (other than the parties hereto), shall be prorated between the parties on the basis of their respective participations as reflected in the aforesaid exhibit.

ARTICLE VIII

The obligations of the companies under this Agreement to exchange between themselves may be offset so that the net amount only shall be required to be transferred.  An accounting of all transactions shall be rendered quarterly, and the settling of balances shall be made within 45 days after the end of each quarter.  Except as otherwise required by the context of this Agreement, the amount of all payments between the companies under this Agreement shall be determined on the 

basis of the quarterly statements of the companies.  Notwithstanding anything herein contained, this Agreement shall not apply to the investment and income tax activities of the companies.

ARTICLE IX

The conditions of reinsurance hereunder shall in all cases be identical with the conditions of the original insurance or as changed during the term of insurance.

ARTICLE X

This Agreement shall be for a fixed term of three (3) years, and it shall not be terminated prior to December 31, 2007 (the “Initial Term”), nor shall EMC’s net retained portion of its net liabilities or the Affiliated Companies’ assumed portions of EMC’s net liabilities be further amended after January 1, 2005 during the Initial Term, absent the occurrence of a material event not in the ordinary course of business that could reasonably be expected to impact the appropriateness of the percentage allocations of EMC’s net liabilities pursuant to Article V of this Agreement, such as the sale, dissolution or suspension of business of an Affiliated Company (in which case not less than twelve (12) months advance written notice must be given to each participating company of any company’s intent to terminate its participation in the Agreement), or the acquisition by (or affiliation with) EMC of a subsidiary or affiliated company which desires to become a signatory to the Agreement; provided, however, that this Agreement shall be deemed to automatically renew at the end of the Initial Term for an additional term of three (3) years, and every three (3) years thereafter indefinitely (each such terms being a “Renewal Term”), without action by EMC or any Affiliated Company; provided further, however, that during a Renewal Term EMC or any Affiliated Company may terminate its participation in the Agreement effective January 1st of any year by providing at least twelve (12) months written notice to EMC and to each Affiliated Company of such company’s intent to terminate its participation in the Agreement.  The Iowa Insurance Division will be notified promptly of any termination of this Agreement.

ARTICLE XI

Each of the companies hereto, as the assuming insurer, hereby agrees that all reinsurance made, ceded, renewed or otherwise becoming effective under this Agreement shall be payable by the assuming insurer on the basis of the liability of the ceding insurer under the policy or contract reinsured without diminution because of insolvency of the ceding insurer; provided that such reinsurance shall be payable directly to the ceding insurer or to its liquidator, receiver or other statutory successor, except as provided by Section 4118 of New York Insurance Law or except where the assuming insurer, with consent of the direct insured or insureds, has assumed such policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payee; and further provided that the liquidator, receiver or statutory successor of the ceding insurer shall give written notice of the pendency of any claim against the insolvent ceding insurer on the policy or contract reinsured within a reasonable time after such claim; and the assuming insurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses which it may deem available to the ceding insurer or it liquidator, receiver 

or statutory successor, the expense thus incurred by the assuming insurer to be chargeable, subject to court approval against the insolvent ceding insurer as part of the expense of liquidation to the extent of proportionate share of the benefit which may accrue to the ceding insurer solely as a result of the defense undertaken by the assuming insurer.

ARTICLE XII

Each party shall allow the other party to inspect, at reasonable times, the records of the company relevant to the business reinsured under this Agreement, including files concerning claims, losses, or legal proceedings which involve or are likely to involve the other party.

ARTICLE XIII

A.As a condition precedent to any right of action hereunder any dispute arising out of this Agreement shall be submitted to the decision of a board of arbitration composed of two arbitrators and an umpire, meeting in Des Moines, Iowa, unless otherwise agreed.

B.The members of the board of arbitration shall be active or retired disinterested officials of insurance or reinsurance companies.  Each party shall appoint its arbitrator and the two arbitrators shall choose an umpire before instituting the hearing.  If the respondent fails to appoint its arbitrator within four weeks after being requested to do so by the claimant, the latter shall also appoint the second arbitrator.  If the two arbitrators fail to agree upon the appointment of an umpire within four weeks after their nominations, each of them shall name three, of whom the other shall decline two and the decision shall be made by drawing lots.

C.The claimant shall submit its initial brief within 20 days from appointment of the umpire.  The respondent shall submit its brief within 20 days after receipt of the claimant’s brief and the claimant may submit a reply brief within 10 days after receipt of the respondent’s brief.

D.The board shall make its decision with regard to the custom and usage of the insurance and reinsurance business.  The board shall issue its decision in writing based upon a hearing in which evidence may be introduced without following strict rules of evidence but in which cross examination and rebuttal shall be allowed.  The board shall make its decision within 60 days following the termination of the hearings unless the parties consent to an extension.  The majority decision of the board shall be final and binding upon all parties to the proceeding.  Judgment may be entered upon the award of the board in any court having jurisdiction thereof.

E.Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the expense of the umpire.  The remaining costs of the arbitration proceedings shall be allocated by the board.

ARTICLE XIV

By execution of this Agreement, the parties hereto simultaneously terminate any and all reinsurance agreements by and between them heretofore existing, upon the understanding that this Agreement shall supersede and exist in substitution for any such prior agreements.

ARTICLE XV

Notwithstanding the wording of this Agreement as contained in Articles II through VIII, it is agreed and understood that the voluntary reinsurance assumed business written by EMC and heretofore ceded to the Affiliated Companies under this Pooling Agreement, is hereafter not “contracts and policies of insurance” as used in this agreement, and is not business subject to cession and transfer by EMC to the Affiliated Companies.

ARTICLE XVI

This Agreement, including its attached Addenda, Exhibits, Endorsements and the Amendments thereto, constitutes the entire agreement between the parties hereto, and there are no other oral or written agreements, understandings or undertakings with respect to the subject matter hereof not expressed in this Agreement and its Addenda, Exhibits, Endorsements and the Amendments thereto.  Any amendment to this Agreement is subject to prior approval of the Iowa Insurance Division and the insurance department of any state of domicile of any Affiliated Company. 

ARTICLE XVII

Notwithstanding the wording of this Agreement as contained in Article II through VIII, it is agreed and understood that EMC is responsible for the accuracy of the amounts produced by its various systems and computational processes and utilized in the preparation of the financial statements of the Affiliated Companies.  In the event the amount produced by EMC’s systems and/or computational processes, and relied upon by both EMC and the Affiliated Companies in implementing this Agreement, subsequently prove to be inaccurate or overstated to the extent that a restatement of the financial statements of one or more of the Affiliated Companies would otherwise be required, EMC hereby guarantees to make up the shortfall or difference resulting from such error(s) in its systems and/or computational processes so that no such restatement of the financial statements of any Affiliated Company is required.

ARTICLE XVIII

In the event that one of the Affiliated Companies becomes insolvent or is otherwise subject to liquidation or receivership proceedings, EMC shall adjust the net retained portion of its net liabilities and the other Affiliated Companies shall adjust their assumed portions of the net liabilities of EMC, each on a pro rata basis, so as to collectively absorb or assume in full the assumed portion of the net liabilities of EMC which would otherwise be the responsibility of such impaired Affiliate Company, but for the impairment.  In the event that EMC becomes insolvent or is otherwise subject to liquidation or receivership proceedings, the Affiliated Companies shall, on a pro rata basis, assume 

the remaining net liabilities of EMC which they had not previously assumed so that, collectively, they are assuming one hundred percent (100%) of the net liabilities of EMC.  Notwithstanding the foregoing, however, no change in either EMC’s net retained portion of the net liabilities of EMC shall occur until EMC and the Affiliated Companies shall have complied with all regulatory requirements applicable to such change(s) under the laws of the states in which EMC and the Affiliated Companies are domiciled.

ARTICLE XIX

Notwithstanding the wording of this Agreement as contained in Article VII, it is agreed and understood that all development on prior years’ outstanding losses and loss expenses, whether favorable or adverse, shall be considered to be a component of losses and loss expenses and shall be pro-rated between the parties on the basis of their respective participation.  In addition, it is agreed and understood that all liabilities associated with insurance policies incepted by a party to this Agreement prior to the termination of such party’s participation in the Agreement shall remain a part of and subject to this Agreement until such liabilities are legally and conclusively resolved.

ARTICLE XX

Each party hereto agrees that if, as an assuming insurer, it fails to perform its obligations under the terms of this Agreement, then it, at the request of EMC or any Affiliated Company, will (a) submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, (b) comply with all requirements necessary to give the court jurisdiction, and (c) abide by the final decision of the court or any appellate court if there is an appeal.  For the purpose of achieving authorized reinsurer status in North Carolina pursuant to North Carolina General Statute 58-7-21(b)(3), or any successor provision, each party hereto which is not licensed to transact the business of insurance in the State of North Carolina further designates the Insurance Commissioner (or equivalent elected or appointed official) of the State of North Carolina, or his or her designated attorney, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding begun by or on behalf of a company which is signatory to this Agreement.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties.

Executed this 3rd day of January, 2017 and effective January 1, 2017.

EMPLOYERS MUTUAL CASUALTY COMPANY

BY:  /s/ Bruce G. Kelley                                              
Bruce G. Kelley
President, Treasurer and CEO

EMCASCO INSURANCE COMPANY

BY:  /s/ Scott R. Jean                                                    
Scott R. Jean
Executive Vice President – Finance & Analytics

ILLINOIS EMCASCO INSURANCE COMPANY

BY:  /s/ Scott R. Jean                                                    
Scott R. Jean
Executive Vice President – Finance & Analytics

DAKOTA FIRE INSURANCE COMPANY

BY:  /s/ Scott R. Jean                                                    
Scott R. Jean
Executive Vice President – Finance & Analytics

EMC PROPERTY & CASUALTY COMPANY

BY:  /s/ Scott R. Jean                                                    
Scott R. Jean
Executive Vice President – Finance & Analytics

UNION INSURANCE COMPANY OF PROVIDENCE

BY:  /s/ Scott R. Jean                                                    
Scott R. Jean
Executive Vice President – Finance & Analytics

HAMILTON MUTUAL INSURANCE COMPANY

BY:  /s/ Scott R. Jean                                                   
Scott R. Jean
Executive Vice President – Finance & Analytics

INTEREST AND LIABILITIES EXHIBIT #I
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 13.5% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2017.

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Hamilton Mutual Insurance Company     2.0%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
32.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  68.0%
100.0%

Executed this 3rd day of January, 2017 but effective January 1, 2017.

EMPLOYERS MUTUAL CASUALTY COMPANY    EMCASCO INSURANCE COMPANY

By:    /s/ Bruce G. Kelley                                 By:    /s/ Scott R. Jean                                  

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:     EVP – Finance & Analytics        

AMENDMENT #1 TO
INTEREST AND LIABILITIES EXHIBIT #I
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 13.5% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2017.

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Hamilton Mutual Insurance Company     0.0%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
30.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  70.0%
100.0%

Executed this 9th day of March, 2017 but effective January 1, 2017.

EMPLOYERS MUTUAL CASUALTY COMPANY    EMCASCO INSURANCE COMPANY

By:    /s/ Bruce G. Kelley                                By:    /s/ Scott R. Jean                                 

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:     EVP – Finance & Analytics        

AMENDMENT #2 TO
INTEREST AND LIABILITIES EXHIBIT #I
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 13.5% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2018.  This Amendment #2 to Interest & Liabilities Exhibit #I replaces all prior versions of Interest & Liabilities Exhibit #1, as referenced in Article V of this Agreement.  

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
30.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  70.0%
100.0%

Executed this 4th day of June, 2018 but effective January 1, 2018.

EMPLOYERS MUTUAL CASUALTY COMPANY    EMCASCO INSURANCE COMPANY

By:    /s/ Bruce G. Kelley                                By:    /s/ Scott R. Jean                                 

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:     Executive Vice President        

INTEREST AND LIABILITIES EXHIBIT #II
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 10.0% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2017.

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Hamilton Mutual Insurance Company     2.0%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
32.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  68.0%
100.0%

Executed this 3rd day of January, 2017 but effective January 1, 2017.

EMPLOYERS MUTUAL CASUALTY COMPANY    ILLINOIS EMCASCO INSURANCE COMPANY

By:    /s/ Bruce G. Kelley                                 By:    /s/ Scott R. Jean                                 

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:    EVP – Finance & Analytics        

AMENDMENT #1 TO
INTEREST AND LIABILITIES EXHIBIT #II
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 10.0% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2017.

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Hamilton Mutual Insurance Company     0.0%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
30.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  70.0%
100.0%

Executed this 9th day of March, 2017 but effective January 1, 2017.

EMPLOYERS MUTUAL CASUALTY COMPANY    ILLINOIS EMCASCO INSURANCE COMPANY

By:    /s/ Bruce G. Kelley                                By:    /s/ Scott R. Jean                                 

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:    EVP – Finance & Analytics        

AMENDMENT #2 TO
INTEREST AND LIABILITIES EXHIBIT #II
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 10.0% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2018.  This Amendment #2 to Interest & Liabilities Exhibit #II replaces all prior versions of Interest & Liabilities Exhibit #II, as referenced in Article V of this Agreement.  

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
30.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  70.0%
100.0%

Executed this 4th day of June, 2018 but effective January 1, 2018.

EMPLOYERS MUTUAL CASUALTY COMPANY    ILLINOIS EMCASCO INSURANCE COMPANY

By:    /s/ Bruce G. Kelley                                By:    /s/ Scott R. Jean                                 

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:    Executive Vice President        

INTEREST AND LIABILITIES EXHIBIT #III
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 6.5% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2017.

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Hamilton Mutual Insurance Company     2.0%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
32.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  68.0%
100.0%

Executed this 3rd day of January, 2017 but effective January 1, 2017.

EMPLOYERS MUTUAL CASUALTY COMPANY    DAKOTA FIRE INSURANCE COMPANY

By:    /s/ Bruce G. Kelley                                 By:    /s/ Scott R. Jean                                  

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:     EVP – Finance & Analytics        

AMENDMENT #1 TO
INTEREST AND LIABILITIES EXHIBIT #III
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 6.5% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2017.

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Hamilton Mutual Insurance Company     0.0%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
30.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  70.0%
100.0%

Executed this 9th day of March, 2017 but effective January 1, 2017.

EMPLOYERS MUTUAL CASUALTY COMPANY    DAKOTA FIRE INSURANCE COMPANY

By:    /s/ Bruce G. Kelley                                 By:    /s/ Scott R. Jean                                 

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:     EVP – Finance & Analytics        

AMENDMENT #2 TO
INTEREST AND LIABILITIES EXHIBIT #III
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 6.5% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2018.  This Amendment #2 to Interest & Liabilities Exhibit #III replaces all prior versions of Interest & Liabilities Exhibit #III, as referenced in Article V of this Agreement.    

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
30.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  70.0%
100.0%

Executed this 4th day of June, 2018 but effective January 1, 2018.

EMPLOYERS MUTUAL CASUALTY COMPANY    DAKOTA FIRE INSURANCE COMPANY

By:    /s/ Bruce G. Kelley                                 By:    /s/ Scott R. Jean                                 

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:     Executive Vice President        

INTEREST AND LIABILITIES EXHIBIT #IV
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 0.0% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2017.

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Hamilton Mutual Insurance Company     2.0%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
32.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  68.0%
100.0%

Executed this 3rd day of January, 2017 but effective January 1, 2017.

EMPLOYERS MUTUAL CASUALTY COMPANY    EMC PROPERTY & CASUALTY COMPANY

By:    /s/ Bruce G. Kelley                                 By:    /s/ Scott R. Jean                                  

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:     EVP – Finance & Analytics        

AMENDMENT #1 TO
INTEREST AND LIABILITIES EXHIBIT #IV
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 0.0% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2017.

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Hamilton Mutual Insurance Company     0.0%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
30.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  70.0%
100.0%

Executed this 9th day of March, 2017 but effective January 1, 2017.

EMPLOYERS MUTUAL CASUALTY COMPANY    EMC PROPERTY & CASUALTY COMPANY

By:    /s/ Bruce G. Kelley                                 By:    /s/ Scott R. Jean                                  

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:     EVP – Finance & Analytics        

AMENDMENT #2 TO
INTEREST AND LIABILITIES EXHIBIT #IV
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 0.0% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2018.  This Amendment #2 to Interest & Liabilities Exhibit #IV replaces all prior versions of Interest & Liabilities Exhibit #IV, as referenced in Article V of this Agreement.  

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
30.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  70.0%
100.0%

Executed this 4th day of June, 2018 but effective January 1, 2018.

EMPLOYERS MUTUAL CASUALTY COMPANY    EMC PROPERTY & CASUALTY COMPANY

By:    /s/ Bruce G. Kelley                                 By:    /s/ Scott R. Jean                                  

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:     Executive Vice President        

INTEREST AND LIABILITIES EXHIBIT #V
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 0.0% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2017.

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Hamilton Mutual Insurance Company     2.0%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
32.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  68.0%
100.0%

Executed this 3rd day of January, 2017 but effective January 1, 2017.

		
	EMPLOYERS MUTUAL CASUALTY COMPANY
	UNION INSURANCE COMPANY OF

PROVIDENCE

By:    /s/ Bruce G. Kelley                                 By:    /s/ Scott R. Jean                                 

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:     EVP – Finance & Analytics        

AMENDMENT #1 TO
INTEREST AND LIABILITIES EXHIBIT #V
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 0.0% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2017.

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Hamilton Mutual Insurance Company     0.0%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
30.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  70.0%
100.0%

Executed this 9th day of March, 2017 but effective January 1, 2017.

		
	EMPLOYERS MUTUAL CASUALTY COMPANY
	UNION INSURANCE COMPANY OF

PROVIDENCE

By:    /s/ Bruce G. Kelley                                 By:    /s/ Scott R. Jean                                 

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:     EVP – Finance & Analytics        

AMENDMENT #2 TO
INTEREST AND LIABILITIES EXHIBIT #V
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 0.0% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2018.  This Amendment #2 to Interest & Liabilities Exhibit #V replaces all prior versions of Interest & Liabilities Exhibit #V, as referenced in Article V of this Agreement.  

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
30.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  70.0%
100.0%

Executed this 4th day of June, 2018 but effective January 1, 2018.

		
	EMPLOYERS MUTUAL CASUALTY COMPANY
	UNION INSURANCE COMPANY OF

PROVIDENCE

By:    /s/ Bruce G. Kelley                                 By:    /s/ Scott R. Jean                                 

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:     Executive Vice President        

INTEREST AND LIABILITIES EXHIBIT #VI
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 2.0% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2017.

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Hamilton Mutual Insurance Company     2.0%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
32.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  68.0%
100.0%

Executed this 3rd day of January, 2017 but effective January 1, 2017.

EMPLOYERS MUTUAL CASUALTY COMPANY    HAMILTON MUTUAL INSURANCE COMPANY

By:    /s/ Bruce G. Kelley                                 By:    /s/ Scott R. Jean                                      

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:    EVP – Finance & Analytics        

AMENDMENT #1 TO
INTEREST AND LIABILITIES EXHIBIT #VI
TO EMC INSURANCE COMPANIES
REINSURANCE POOLING AGREEMENT

In consideration of the covenants and agreements as reflected in the EMC Insurance Companies Amended and Restated Reinsurance Pooling Agreement Between Employers Mutual Casualty Company and Certain of its Affiliated Companies to which this exhibit is attached, by and between EMC and the Affiliated Company which is signatory to this exhibit, EMC hereby cedes and transfers to the Affiliated Company, and the Affiliated Company hereby accepts reinsurance thereon, 0.0% of EMC’s net liabilities, pursuant to Article V, effective January 1, 2017.

The Affiliated Companies signatory to this Agreement and their assumed portions of the net liabilities of EMC are, as of the date of this Exhibit, as follows:

Dakota Fire Insurance Company    6.5%
EMC Property & Casualty Company    0.0%
EMCASCO Insurance Company    13.5%
Hamilton Mutual Insurance Company     0.0%
Illinois EMCASCO Insurance Company     10.0%
Union Insurance Company of Providence                                                   0.0%
30.0%

EMC’s Net Retained Portions of its Net Liabilities is                                  70.0%
100.0%

Executed this 9th day of March, 2017 but effective January 1, 2017.

EMPLOYERS MUTUAL CASUALTY COMPANY    HAMILTON MUTUAL INSURANCE COMPANY

By:    /s/ Bruce G. Kelley                                By:    /s/ Scott R. Jean                                    

Name:     Bruce G. Kelley                                      Name:    Scott R. Jean                
Title:    President, CEO & Treasurer                   Title:   EVP – Finance & Analytics

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