Document:

STOCK OPTION CERTIFICATE

                                                               For ______ Shares

                             Issued Pursuant to the
                             2003 Incentive Plan of

                             JAMES RIVER GROUP, INC.

         THIS CERTIFIES that on _____________ (the "Issuance Date"),
______________ (the "Holder") was granted an option (the "Option") to purchase,
at the option price of $______ per share (the "Exercise Price"), up to
___________ fully paid and non-assessable shares of the Common Stock, $.01 par
value per share (the "Shares"), of James River Group, Inc., a Delaware
corporation (the "Company"), upon and subject to the following terms and
conditions:

         (a)    Terms of the Plan. The Option is granted pursuant to, and is
subject to the terms and conditions of, the 2003 Incentive Plan of the Company
(as amended from time to time, the "Plan"), the terms, conditions and
definitions of which are hereby incorporated herein as though set forth at
length, and the receipt of a copy of which the Holder hereby acknowledges by his
signature below. Capitalized terms used herein shall have the meanings set forth
in the Plan, unless otherwise defined herein.

         (b)    Expiration. This Option shall expire at 11:59 p.m.,
_______________, unless earlier terminated in accordance with this Option
Certificate or the Plan.

         (c)    Exercise. This Option may be exercised or surrendered during the
lifetime of the Representative (as defined below) only by the Holder. THIS
OPTION SHALL NOT BE TRANSFERABLE BY THE HOLDER. As used in this Option
Certificate, "Representative" means _________________.

         This Option shall vest and be exercisable as set forth below:

                (i)     If the Representative has continuously served the
Company or any of its subsidiaries or affiliates on ____________, this Option
shall vest and be exercisable in accordance with its terms with respect to
______ Shares.

                (ii)    If the Representative has continuously served the
Company or any of its subsidiaries or affiliates on ____________, this Option
shall vest and be exercisable in accordance with its terms with respect to an
additional ______ Shares.

                (iii)   If the Representative has continuously served the
Company or any of its subsidiaries or affiliates on ____________, this Option
shall vest and be exercisable in accordance with its terms with respect to an
additional ______ Shares.

                (iv)    If the Representative has continuously served the
Company or any of its subsidiaries or affiliates on ____________, this Option
shall vest and be exercisable in accordance with its terms with respect to an
additional ______ Shares.

         This Option shall be exercised by the Holder as to all or part of the
Shares, by the giving of written notice of exercise to the Company, specifying
the number of Shares to be purchased, accompanied by payment of the full
Exercise Price for the Shares being purchased. Full payment of such purchase
price shall be made at the time of exercise and shall be made (i) in cash or by
certified check or bank check or wire transfer of immediately available funds,
(ii) with the consent of the Committee, by delivery of a promissory note in
favor of the Company upon such terms and conditions as determined by the
Committee, (iii) with the consent of the Committee, by tendering previously
acquired Shares (valued at its Fair Market Value, as determined by the Committee
as of the date of tender) that have been owned for a period of at least six
months (or such other period to avoid accounting charges against the Company's
earnings), (iv) if Shares are traded on a national securities exchange, the
Nasdaq Stock Market, Inc. or quoted on a national quotation system sponsored by
the National Association of Securities Dealers, Inc. and the Committee
authorizes this method of exercise, through the delivery of irrevocable
instructions to a broker approved by the Committee to deliver promptly to the
Company an amount equal to the purchase price, or (v) with the consent of the
Committee, any combination of (i), (ii), (iii) and (iv). In connection with a
tender of previously acquired Shares pursuant to clause (iii) above, the
Committee, in its sole discretion, may permit the Holder to constructively
exchange Shares already owned by the Holder in lieu of actually tendering such
Shares to the Company, provided that adequate documentation concerning the
ownership of the Shares to be constructively tendered is furnished in form
satisfactory to the Committee. The notice of exercise, accompanied by such
payment, shall be delivered to the Company at its principal business office or
such other office as the Committee may from time to time direct, and shall be in
such form, containing such further provisions consistent with the provisions of
the Plan, as the Committee may from time to time prescribe. In no event may any
Option granted hereunder be exercised for a fraction of a Share. The Company
shall effect the transfer of Shares purchased pursuant to an Option as soon as
practicable, and, within a reasonable time thereafter, such transfer shall be
evidenced on the books of the Company. No person exercising an Option shall have
any of the rights of a holder of Shares subject to an Option until certificates
for such Shares shall have been issued following the exercise of such Option. No
adjustment shall be made for cash dividends or other rights for which the record
date is prior to the date of such issuance.

         (d)    Termination of Service. In the event of the termination or
separation of the Representative's service from the Company for any reason, this
Option, to the extent not previously exercised or expired, to the extent vested
on the date of such termination or separation shall be exercisable as of such
termination for a period not to exceed three months after the date of such
termination or separation, provided, however, that the Committee shall have the
absolute discretion to increase such period or to decrease such period to a
period of not less than two weeks.

         (e)    Adjustments. The number of Shares subject to this Option, and
the exercise price, shall be subject to adjustment in accordance with Section
9.9 of the Plan.

         (f)    Delivery of Share Certificates. Within a reasonable time after
the exercise of this Option, the Company shall cause to be delivered to the
person entitled thereto a certificate for the

                                       2

Shares purchased pursuant to the exercise of this Option. If this Option shall
have been exercised with respect to less than all of the Shares subject to this
Option, the Company shall also cause to be delivered to the person entitled
thereto a new Option Certificate in replacement of this Option Certificate if
surrendered at the time of the exercise of this Option, indicating the number of
Shares with respect to which this Option remains available for exercise, or this
Option Certificate shall be endorsed to give effect to the partial exercise of
this Option.

         (g)    Withholding. In the event that the Holder elects to exercise
this Option or any part thereof, and if the Company or any subsidiary or
affiliate of the Company shall be required to withhold any amounts (the
"Withholding Taxes") by reason of any federal, state or local tax laws, rules or
regulations in respect of the issuance of Shares to the Holder pursuant to the
Option or the exercise or disposition (in whole or in part) of the Option, the
Company or such subsidiary or affiliate shall be entitled to deduct and withhold
such amounts from any payments to be made to the Holder. In any event, the
Holder shall make available to the Company or such subsidiary or affiliate,
promptly when requested by the Company or such subsidiary or affiliate,
sufficient funds to meet the requirements of such withholding; and the Company
or such subsidiary or affiliate shall be entitled to take and authorize such
steps as it may deem advisable in order to have such funds available to the
Company or such subsidiary or affiliate out of any funds or property due or to
become due to the Holder.

         (h) Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance and/or delivery upon exercise of this
Option such number of Shares as shall be required for issuance or delivery upon
exercise hereof.

         (i)    Rights of Representative and Holder. Nothing contained herein
shall be construed to confer upon the Holder or the Representative any right to
be in the employ or service, or to be continued in the employ or service, as the
case may be, of the Company and/or any subsidiary or affiliate of the Company or
derogate from any right of the Company and/or any subsidiary or affiliate of the
Company to retire, request the resignation of, or discharge the Representative
or the Holder from service for the Company at any time, with or without cause.
The Holder shall not, by virtue hereof, be entitled to any rights of a
shareholder in the Company, either at law or in equity, and the rights of the
Holder are limited to those expressed herein and are not enforceable against the
Company except to the extent set forth herein.

         (j)    Registration; Legend. The Company may postpone the issuance and
delivery of Shares upon any exercise of this Option until (i) the admission of
such Shares to listing on any stock exchange or exchanges on which Shares of the
Company of the same class are then listed and (ii) the completion of such
registration or other qualification of such Shares under any state or federal
law, rule or regulation as the Company shall determine to be necessary or
advisable. The Holder shall make such representations and furnish such
information as may, in the opinion of counsel for the Company, be appropriate to
permit the Company, in light of the then existence or non-existence with respect
to such Shares of an effective Registration Statement under the Securities Act
of 1933, as amended, to issue the Shares in compliance with the provisions of
that or any comparable act.

         The Company may cause the following or a similar legend to be set forth
on each certificate representing Shares or any other security issued or issuable
upon exercise of this

                                       3

Option unless counsel for the Company is of the opinion as to any such
certificate that such legend is unnecessary:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR
         SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
         REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED
         (THE "ACT"), OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
         ACT, THE AVAILABILITY OF WHICH IS ESTABLISHED BY AN OPINION FROM
         COUNSEL TO THE COMPANY.

         (k)    Amendment. The Company may at any time or from time to time
amend the terms and conditions of this Option in accordance with the Plan.

         (l)    Notices. Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, or overnight courier, addressed as
follows: if to the Company, at the office of James River Group, Inc., 1414
Raleigh Road, Suite 415, Chapel Hill, North Carolina 27517 or at such other
address as the Company by notice to the Holder may designate in writing from
time to time; and if to the Holder, at the address shown below his/her signature
on this Option Certificate, or at such other address as the Holder by notice to
the Company may designate in writing from time to time. Notices shall be
effective upon receipt.

         (m)    Interpretation. A determination of the Committee, in its sole
discretion, as to any questions which may arise with respect to the
interpretation of the provisions of this Option and of the Plan shall be final
and binding. The Committee, in its sole discretion, may authorize and establish
such rules, regulations and revisions thereof as it may deem advisable.

                                       4

         IN WITNESS WHEREOF, the parties have executed this Option Certificate
as of the date set forth above.

                                             JAMES RIVER GROUP, INC.

                                             By:________________________
                                                Name:
                                                Title:

ACCEPTED:

_______________________________________________
Name of Holder (limited liability company,
trust, corporation, limited partnership or
other entity) (Please Print)

By:____________________________________________
    Signature of Authorized Person

_______________________________________________
Name of above Signatory
(Please Print)

_______________________________________________
Title of Signatory

Address of Holder:

_______________________________________________

_______________________________________________

_______________________________________________

Employer Identification Number of Holder:

_______________________________________________

                                       5[FORM OF ISO GRANT CERTIFICATE FOR EMPLOYEE]

                            STOCK OPTION CERTIFICATE
                               (Non-Transferable)

                                                               For ______ Shares

                             Issued Pursuant to the
                             2003 Incentive Plan of

                             JAMES RIVER GROUP, INC.

         THIS CERTIFIES that on _______________ (the "Issuance Date"),
[Holders's name] (the "Holder") was granted an option (the "Option") to
purchase, at the option price of $_____ per share (the "Exercise Price"), up to
_______________ fully paid and non-assessable shares of the Common Stock, $.01
par value per share (the "Shares"), of James River Group, Inc., a Delaware
corporation (the "Company"), upon and subject to the following terms and
conditions:

         (a)    Terms of the Plan. The Option is granted pursuant to, and is
subject to the terms and conditions of, the 2003 Incentive Plan of the Company
(as amended from time to time, the "Plan"), the terms, conditions and
definitions of which are hereby incorporated herein as though set forth at
length, and the receipt of a copy of which the Holder hereby acknowledges by his
signature below. Capitalized terms used herein shall have the meanings set forth
in the Plan, unless otherwise defined herein.

         The Company intends that this Option qualify as an "incentive" share
option within the meaning of Section 422 of the Internal Revenue Code to the
maximum extent permissible under the Internal Revenue Code. To the extent that
the Option does not qualify as an incentive share option, the Option or the
portion thereof which does not so qualify shall constitute a separate
"nonqualified" share option.

         (b)    Expiration. This Option shall expire at 11:59 p.m., ____________
[date that is within 10 years less one day after grant date], unless earlier
terminated in accordance with this Option Certificate or the Plan.

         (c)    Exercise. This Option may be exercised or surrendered during the
Holder's lifetime only by the Holder or his/her guardian or legal
representative. THIS OPTION SHALL NOT BE TRANSFERABLE BY THE HOLDER OTHERWISE
THAN BY WILL OR BY THE LAWS OF DESCENT AND DISTRIBUTION.

         This Option shall vest and be exercisable as set forth below:

                (i)    If the Holder has been continuously employed by the
Company or any of its subsidiaries or affiliates on ____________ [one year],
this Option shall vest and be exercisable in accordance with its terms with
respect to ______ Shares [25% of total].

                (ii)   If the Holder has been continuously employed by the
Company or any of its subsidiaries or affiliates on ____________ [two years],
this Option shall vest and be

exercisable in accordance with its terms with respect to an additional ______
Shares [25% of total].

                (iii)  If the Holder has been continuously employed by the
Company or any of its subsidiaries or affiliates on ____________ [three years],
this Option shall vest and be exercisable in accordance with its terms with
respect to an additional ______ Shares [25% of total].

                (iv)   If the Holder has been continuously employed by the
Company or any of its subsidiaries or affiliates on ____________ [four years],
this Option shall vest and be exercisable in accordance with its terms with
respect to an additional ______ Shares [25% of total].

              [Insert alternative vesting schedule, if applicable.]

         This Option shall be exercised by the Holder (or by his/her executors,
administrators, guardian or legal representative) as to all or part of the
Shares, by the giving of written notice of exercise to the Company, specifying
the number of Shares to be purchased, accompanied by payment of the full
Exercise Price for the Shares being purchased. Full payment of such purchase
price shall be made at the time of exercise and shall be made (i) in cash or by
certified check or bank check or wire transfer of immediately available funds,
(ii) with the consent of the Committee, by delivery of a promissory note in
favor of the Company upon such terms and conditions as determined by the
Committee, (iii) with the consent of the Committee, by tendering previously
acquired Shares (valued at its Fair Market Value, as determined by the Committee
as of the date of tender) that have been owned for a period of at least six
months (or such other period to avoid accounting charges against the Company's
earnings), (iv) if Shares are traded on a national securities exchange, the
Nasdaq Stock Market, Inc. or quoted on a national quotation system sponsored by
the National Association of Securities Dealers, Inc. and the Committee
authorizes this method of exercise, through the delivery of irrevocable
instructions to a broker approved by the Committee to deliver promptly to the
Company an amount equal to the purchase price, or (v) with the consent of the
Committee, any combination of (i), (ii), (iii) and (iv). In connection with a
tender of previously acquired Shares pursuant to clause (iii) above, the
Committee, in its sole discretion, may permit the Holder to constructively
exchange Shares already owned by the Holder in lieu of actually tendering such
Shares to the Company, provided that adequate documentation concerning the
ownership of the Shares to be constructively tendered is furnished in form
satisfactory to the Committee. The notice of exercise, accompanied by such
payment, shall be delivered to the Company at its principal business office or
such other office as the Committee may from time to time direct, and shall be in
such form, containing such further provisions consistent with the provisions of
the Plan, as the Committee may from time to time prescribe. In no event may any
Option granted hereunder be exercised for a fraction of a Share. The Company
shall effect the transfer of Shares purchased pursuant to an Option as soon as
practicable, and, within a reasonable time thereafter, such transfer shall be
evidenced on the books of the Company. No person exercising an Option shall have
any of the rights of a holder of Shares subject to an Option until certificates
for such Shares shall have been issued following the exercise of such Option. No
adjustment shall be made for cash dividends or other rights for which the record
date is prior to the date of such issuance.

                                       2

         (d)    Termination of Employment. In the event of the termination of
the Holder's employment or separation from service for any reason (other than
death, disability or termination for cause as provided below), this Option, to
the extent not previously exercised or expired, to the extent vested on the date
of such termination shall be exercisable as of such termination for a period not
to exceed three months after the date of such termination, provided, however,
that the Committee shall have the absolute discretion to increase such period
(in which event this Option shall no longer qualify as an "incentive" share
option) or to decrease such period to a period of not less than two weeks.

         In the event of the termination of the Holder's employment for cause,
the Option and all rights granted hereunder shall be forfeited and deemed
canceled and no longer exercisable on the day of such termination of employment.
For the purposes of this Stock Option Certificate, the term "cause" shall be
defined as: (i) any act of fraud or embezzlement in respect of the Company or
any of their respective funds, properties or assets; (ii) conviction of the
Holder of a felony under the laws of the United States or any state thereof;
(iii) willful misconduct or gross negligence by the Holder in connection with
the performance of his or her duties to the Company; (iv) intentional dishonesty
by the Holder in the performance of his or her duties to the Company; (v)
engagement by the Holder in the use of illegal substances or alcohol, which use
has impaired the Holder's ability, as determined by the Board of Directors of
the Company, on an ongoing basis, to perform his or her duties to the Company;
or (vi) breach by the Holder of any terms and conditions set forth in any
non-competition, non-solicitation and/or non-disclosure agreement executed by
the Holder. A determination of cause shall be made by the Board of Directors of
the Company.

         (e)    In the event (i) the Holder dies while in the service of the
Company or any of its subsidiaries or affiliates or (ii) the Holder's service
with the Company or any of its subsidiaries or affiliates is terminated due to
his total disability, the terms and conditions of Sections 9.6 and 9.7 of the
Plan shall apply.

         (f)    Adjustments. The number of Shares subject to this Option, and
the exercise price, shall be subject to adjustment in accordance with Section
9.9 of the Plan.

         (g)    Delivery of Share Certificates. Within a reasonable time after
the exercise of this Option, the Company shall cause to be delivered to the
person entitled thereto a certificate for the Shares purchased pursuant to the
exercise of this Option. If this Option shall have been exercised with respect
to less than all of the Shares subject to this Option, the Company shall also
cause to be delivered to the person entitled thereto a new Option Certificate in
replacement of this Option Certificate if surrendered at the time of the
exercise of this Option, indicating the number of Shares with respect to which
this Option remains available for exercise, or this Option Certificate shall be
endorsed to give effect to the partial exercise of this Option.

         (h)    Withholding. In the event that the Holder elects to exercise
this Option or any part thereof, and if the Company or any subsidiary or
affiliate of the Company shall be required to withhold any amounts (the
"Withholding Taxes") by reason of any federal, state or local tax laws, rules or
regulations in respect of the issuance of Shares to the Holder pursuant to the
Option or the exercise or disposition (in whole or in part) of the Option, or a
Disqualifying Disposition (defined below) of Shares, the Company or such
subsidiary or affiliate shall be

                                       3

entitled to deduct and withhold such amounts from any payments to be made to the
Holder. In any event, the Holder shall make available to the Company or such
subsidiary or affiliate, promptly when requested by the Company or such
subsidiary or affiliate, sufficient funds to meet the requirements of such
withholding; and the Company or such subsidiary or affiliate shall be entitled
to take and authorize such steps as it may deem advisable in order to have such
funds available to the Company or such subsidiary or affiliate out of any funds
or property due or to become due to the Holder.

         (i)    Notice to Company of Disqualifying Disposition. Each Holder
agrees to notify the Company in writing immediately after such Holder makes a
"Disqualifying Disposition" of any Shares acquired pursuant to the exercise of
the Option. A "Disqualifying Disposition" is any disposition (including any
sale) of such Shares before the later of (a) two years after the date the Holder
was granted the Option, or (b) one year after the date the Holder acquired
Shares by exercising the Option. If the Holder has died before such Shares are
sold, these holding period requirements do not apply.

         (j)    Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and/or delivery upon exercise of this
Option such number of Shares as shall be required for issuance or delivery upon
exercise hereof.

         (k)    Rights of Holder. Nothing contained herein shall be construed to
confer upon the Holder any right to be continued in the employ of the Company
and/or any subsidiary or affiliate of the Company or derogate from any right of
the Company and/or any subsidiary or affiliate of the Company to retire, request
the resignation of, or discharge the Holder at any time, with or without cause.
The Holder shall not, by virtue hereof, be entitled to any rights of a
shareholder in the Company, either at law or in equity, and the rights of the
Holder are limited to those expressed herein and are not enforceable against the
Company except to the extent set forth herein.

         (l)    Registration; Legend. The Company may postpone the issuance and
delivery of Shares upon any exercise of this Option until (a) the admission of
such Shares to listing on any stock exchange or exchanges on which Shares of the
Company of the same class are then listed and (b) the completion of such
registration or other qualification of such Shares under any state or federal
law, rule or regulation as the Company shall determine to be necessary or
advisable. The Holder shall make such representations and furnish such
information as may, in the opinion of counsel for the Company, be appropriate to
permit the Company, in light of the then existence or non-existence with respect
to such Shares of an effective Registration Statement under the Securities Act
of 1933, as amended, to issue the Shares in compliance with the provisions of
that or any comparable act.

         The Company may cause the following or a similar legend to be set forth
on each certificate representing Shares or any other security issued or issuable
upon exercise of this Option unless counsel for the Company is of the opinion as
to any such certificate that such legend is unnecessary:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR
         SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT

                                       4

         PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
         ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO AN EXEMPTION FROM
         REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS ESTABLISHED
         BY AN OPINION FROM COUNSEL TO THE COMPANY.

         (m)    Amendment. The Company may at any time or from time to time
amend the terms and conditions of this Option in accordance with the Plan.

         (n)    Notices. Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, or overnight courier, addressed as
follows: if to the Company, at the office of James River Group, Inc., Inc., 1414
Raleigh Road, Suite 415, Chapel Hill, North Carolina 27517 or at such other
address as the Company by notice to the Holder may designate in writing from
time to time; and if to the Holder, at the address shown below his/her signature
on this Option Certificate, or at such other address as the Holder by notice to
the Company may designate in writing from time to time. Notices shall be
effective upon receipt.

         (o)    Interpretation. A determination of the Committee, in its sole
discretion, as to any questions which may arise with respect to the
interpretation of the provisions of this Option and of the Plan shall be final
and binding. The Committee, in its sole discretion, may authorize and establish
such rules, regulations and revisions thereof as it may deem advisable.

                                       5

         IN WITNESS WHEREOF, the parties have executed this Option Certificate
as of the date set forth above.

                                           JAMES RIVER GROUP, INC.

                                           By:________________________
                                              Name:
                                              Title:

ACCEPTED:

______________________________________
Holder

Print Name:  _________________________

Address:  ____________________________

______________________________________

Social Security Number:  _____________

                                       6

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