Document:

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                                                                   Exhibit 10(c)

                          REINSURANCE POOLING AGREEMENT

This REINSURANCE POOLING AGREEMENT (the "Pooling Agreement" or "Agreement"),
effective as of 12:00 a.m. Eastern Time on January 1, 2003 (the "Effective
Date"), is by and between Merchants Insurance Company of New Hampshire, Inc.
("MNH"), a New Hampshire domiciled insurance company having its principal place
of business at 250 Main Street, Buffalo, New York 14202 and Merchants Mutual
Insurance Company ("MMIC"), a New York domiciled insurance company having its
principal place of business at 250 Main Street, Buffalo, New York 14202 (herein
collectively referred to as the "Pooled Companies" and individually as a "Pooled
Company").

                                    RECITALS

WHEREAS, the Pooled Companies have determined that their business operations as
respects the Traditional Insurance Business (as defined below) should be managed
and administered by MMIC on behalf of each of the Pooled Companies; and

WHEREAS, MMIC provides underwriting, claims, administrative and investment
services for MNH with respect to MNH's Traditional Insurance Business in
accordance with the Administrative, Underwriting, Claims and Investment and Cash
Management Services Annexes which are part of the Services Agreement between
MMIC, on the one hand, and MNH and its parent company, Merchants Group, Inc.
("MGI"), on the other hand, dated the date of this Pooling Agreement (the
various Annexes and the Services Agreement being collectively referred to herein
as the "Services Agreement") attached hereto as Exhibit A and incorporated
herein by reference; and

WHEREAS, the Pooled Companies have determined that the combined underwriting
results of the Traditional Insurance Business should be shared between them by
means of mutual reinsurance on percentage bases as herein provided (the "Pool"
or "Pooled Traditional Insurance Business") so that each Pooled Company will
have the same loss and allocated and unallocated loss adjustment expense ("LAE")
ratio on its share of the Pooled Traditional Insurance Business; for purposes of
this Agreement, LAE shall include allocated and unallocated loss adjustment
expense; and

WHEREAS, the Pooled Companies have agreed to various profit-sharing and
retrospective commission adjustment percentages based upon the loss and LAE
ratio that is achieved by MMIC's management and administration of the Pooled
Traditional Insurance Business; and

WHEREAS, the parties desire to enter into this Pooling Agreement to provide for
the mutual reinsurance of the Traditional Insurance Business and in order to
better align the economic interests of the Pooled Companies as to the
Traditional Insurance Business.

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NOW, THEREFORE, in consideration of the terms, conditions and other agreements
set forth herein, the parties hereto hereby agree as follows:

I.       Definitions:

         As used in this Agreement:

         A.   "Applicable Ceding Commission" shall mean the Ceding Commission,
              as defined below, determined based upon underwriting expenses for
              each year of this Pooling Agreement.

         B.   "Ceding Commission" shall mean the sum of the following amounts
              relating to Traditional Insurance Business expressed as a
              percentage of net written premiums:

                  i.    Actual commissions including commissions paid to agents
                        or brokers and commissions on third party reinsurance
                        assumed or ceded, plus

                  ii.   Actual premium taxes, plus

                  iii.  Actual fees and assessments for boards, bureaus,
                        associations and industry and residual market facilities
                        related to policy or accident years as applicable, after
                        the Effective Date of this Pooling Agreement, plus

                  iv.   Agreed underwriting expenses as set forth in Schedule 1
                        attached hereto and incorporated herein.

              Item iv. shall be agreed for the initial cessions at the Effective
              Date of this Pooling Agreement and for each year thereafter.

         C.   "Claims Related Extra Contractual Obligation" shall mean, except
              to the extent contrary to New York law, the amount for which a
              Pooled Company is liable as a result of a judgment or settlement
              or arbitration, or otherwise, to its insured or a third-party
              claimant, where such liability has arisen because of:

                  i.    the failure of the Pooled Company to agree to pay a
                        claim within the policy limits or to provide a defense
                        against such claims as required by law, or

                  ii.   bad faith or negligence in investigating or handling a
                        claim or in rejecting an offer of settlement, or

                  iii.  negligence or breach of duty in the preparation of the
                        defense or the conduct of a trial or the preparation or
                        prosecution of any appeal and/or subrogation and/or any
                        subsequent action resulting therefrom.

               Any loss arising under this Pooling Agreement in respect of
               "Claims Related Extra Contractual Obligations" shall be deemed to
               have been incurred on the same date as the event giving rise to
               the claim to which the Claims Related Extra Contractual

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              Obligation is related, provided that the policy which gives rise
              to the Claims Related Extra Contractual Obligation falls within
              the scope of this Pooling Agreement.

         D.   "Initial Ceding Commission" shall mean the Ceding Commission
              determined based upon underwriting expenses incurred relative to
              the net unearned premiums as of the Effective Date.

         E.   "Maximum MNH annual written premium assumption" shall be that
              amount for each applicable year as set forth in Schedule 2
              attached hereto and incorporated herein.

         F.   "Net Retained Liability" shall mean that portion of the gross
              liability for losses and LAE, including losses in excess of policy
              limits and "Claims Related Extra Contractual Obligations" less
              salvage and subrogation, on the Traditional Insurance Business
              which shall remain after deducting the amount, if any, of
              liability ceded pursuant to third party reinsurance inuring to the
              benefit of the Pool.

         G.   "Net unearned premium reserves" shall mean as to either Pooled
              Company, a reserve equal to the direct unearned premiums on all
              Traditional Insurance Business in force as of the Effective Date
              or at any time during the term of this Pooling Agreement plus
              unearned premiums on related reinsurance assumed minus unearned
              premiums on related reinsurance ceded.

         H.   "Net written premiums" shall mean all direct written premiums plus
              reinsurance assumed minus reinsurance ceded.

         I.   "Pooling Percentage" shall be those percentages as set forth in
              Schedule 2 attached hereto and incorporated herein.

         J.   "Traditional Insurance Business" shall mean those commercial and
              personal lines of property, liability and workers' compensation
              insurance in any jurisdiction in which either of MNH or MMIC is or
              was licensed to do an insurance business, which insurance was
              produced through the Pooled Companies' independent insurance
              agents pursuant to the Management Agreement dated as of September
              29, 1986 among MMIC, MNH and MGI (the "Previous Management
              Agreement"), including residual market assumptions and
              assessments, industry underwriting facilities charges, and all
              similar assessments and charges attributable to such business, and
              such other business as the Pooled Companies may mutually agree.

II.      MNH Cessions:

         As of and from the Effective Date, MNH cedes and MMIC assumes a 100%
         quota share participation in the Net Retained Liability of MNH in
         respect of losses incurred and all other rights and obligations under
         MNH's Traditional Insurance Business:

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         A.   in force as of the Effective Date; and

         B.   issued or assumed after the Effective Date until the termination
              of this Agreement.

III.     Assets Transfer and Premiums Paid by MNH:

         In exchange for the assumption by MMIC of MNH's Net Retained Liability
         under Traditional Insurance Business issued by MNH, MNH hereby agrees
         to pay to MMIC:

         A.   as of the Effective Date, in premiums receivable, as agreed among
              the Pooled Companies, plus cash or other assets, an amount equal
              to the net unearned premium reserve of MNH as of the Effective
              Date assumed by MMIC under Section II hereof, less the Initial
              Ceding Commission associated with the net unearned premium
              reserves which are transferred as provided herein; and

         B.   for each year thereafter, in premiums receivable and cash or other
              assets, an amount equal to the MNH net written premiums on the
              Traditional Insurance Business, less the Applicable Ceding
              Commission for each such year.

IV.      MMIC Cessions:

         As of and from the Effective Date, MMIC cedes and MNH assumes the MNH
         Pooling Percentage of the Net Retained Liability of the Pooled
         Companies in respect of losses incurred and all other rights and
         obligations under Traditional Insurance Business issued by MMIC or
         assumed by MMIC from MNH as provided in Section II, as follows:

         A.   the initial Pooling Percentage for MNH as set forth in Schedule 2
              of the Traditional Insurance Business in force as of the Effective
              Date; and

         B.   the Pooling Percentage for MNH as set forth in Schedule 2 (but not
              more than the annual percentage that the Maximum MNH annual net
              written premium assumption as set forth in Schedule 2 bears to the
              total net written premiums of the Traditional Insurance Business
              of the Pooled Companies) of the Traditional Insurance Business
              issued or assumed after the Effective Date until the termination
              of this Agreement. However, the parties may mutually agree that
              MNH may assume a greater percentage or dollar amount of net
              premiums written.

V.       Assets Transfer and Premiums Paid by MMIC:

         In exchange for the assumption by MNH of MNH's Pooling Percentage of
         MMIC's obligations under Traditional Insurance Business issued or
         reinsured by MMIC, including the Traditional Insurance Business written
         by MNH and ceded to MMIC under Section II of this Pooling Agreement,
         MMIC hereby agrees to pay to MNH:

         A.   as of the Effective Date, in premiums receivable, as agreed among
              the Pooled Companies, plus cash or other assets, an amount equal
              to the Initial Pooling

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              Percentage for MNH of the net unearned premium reserve of MMIC
              including the net unearned premium reserve assumed by MMIC from
              MNH as provided in Section II hereof, less the Initial Ceding
              Commission associated with the net unearned premium reserves which
              are transferred as provided herein; and

         B.   for each year thereafter, in premiums receivable and cash or other
              assets, an amount equal to the Pooling Percentage for MNH of net
              written premiums of the Pooled Companies on the Traditional
              Insurance Business, less the Applicable Ceding Commission for each
              such year.

         C.   MMIC will reduce its payments to MNH under this section V. by an
              amount equal to the Pooling Percentage for MNH times any premiums
              on Traditional Insurance Business deemed uncollectible by MMIC.

VI.      Unallocated Loss Adjustment Expenses:

         In addition to its other obligations under this Agreement, MNH shall
         also be liable to pay its Pooling Percentage of the MMIC unallocated
         loss adjustment expenses, as defined in the Claims Services Annex of
         the Services Agreement, allocated to the Traditional Insurance Business
         subject to this Agreement.

VII.     Third Party Reinsurance:

         The Pooled Companies annually will agree on the structure of the third
         party reinsurance for the next year in accordance with the provisions
         of the Underwriting Services Annex to the Services Agreement. Each
         Pooled Company will pay reinsurance premiums based upon its direct
         premiums applied to the reinsurance rates in effect for the year. Each
         Pooled Company will make recoveries from such third party reinsurance
         for losses involving only its direct policies or its pro-rata share of
         recoveries from loss occurrences involving policies from more than one
         Pooled Company. Any of the Pooled Companies may, at its option and its
         expense, further reinsure any portion of its retention; provided that
         such reinsurance does not affect the cost, availability or security of
         the Pool's reinsurance with third parties.

VIII.    Adjustments to the Pooling Percentages:

         Adjustments to the Pooling Percentages shall occur at the times set
         forth in Schedule 2 or as may, from time to time, otherwise be agreed
         upon between the Pooled Companies. At the time adjustments are made,
         the Pooled Company whose Pooling Percentage is being decreased will
         transfer to the Pooled Company whose Pooling Percentage is being
         increased: (i) the appropriate proportionate amount of the adjustment
         in the net unearned premium reserve, less the Applicable Ceding
         Commission and (ii) the associated assets determined in accordance with
         Section V of this Agreement. The parties will thereafter adjust the
         allocation of net written premiums according to the new percentages as
         provided in Section IV and will adjust the asset transfers as provided
         in Section V.

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IX.      MMIC Administration, Premium Collections and Loss Payments of
         MNH Business:

         As of and from the Effective Date, MMIC shall administer MNH's
         Traditional Insurance Business reinsured under this Pooling Agreement
         in accordance with the terms of the Services Agreement as amended from
         time to time.

X.       Policy and Installment Fees:

         MMIC shall collect on behalf of the Pooled Companies all policy and
         installment fees related to the Traditional Insurance Business and
         shall pay to MNH its Pooling Percentage of the policy and installment
         fees processed and collected by the Pool after the Effective Date
         relating to policies in force as of, and/or to policy coverage provided
         prior to, the Effective Date, plus the MNH Pooling Percentage of the
         policy and installment fees for all policies becoming effective on and
         after the Effective Date of this Agreement.

XI.      Cash Settlements:

         Commencing with the Effective Date, and as relates to the Traditional
         Insurance Business subject to this Pooling Agreement:

         A.   MMIC hereby agrees to pay to MNH the MNH Pooling Percentage of the
              net written premiums collected by the parties hereto, less the
              Applicable Ceding Commission.

         B.   MNH hereby agrees to pay to MMIC the MNH Pooling Percentage of all
              net losses, after deducting salvage and subrogation, allocated
              LAE, unallocated LAE as set forth in Section VI, and policyholder
              dividends paid by the parties hereto.

         Accounts reflecting the net balance from A and B in this Section XI
         shall be rendered monthly and shall be settled within thirty (30) days
         after the end of the month.

XII.     Offset:

         It is understood and agreed that, insofar as is practicable and
         consistent with the purposes and intentions of this Pooling Agreement,
         the obligations of each of the Pooled Companies under this Agreement to
         transfer assets to the other Pooled Company may, in whole or in part,
         be offset against the obligations of each Pooled Company to the other
         Pooled Company under this Agreement so that each Pooled Company shall
         deliver hereunder only the net amount of assets required under such
         offset due under this Agreement.

XIII.    Accounting and Reporting:

         MMIC, as the Pool manager and pursuant to the terms of the Services
         Agreement, will maintain all of the accounting records and provide to
         the Pooled Companies monthly,

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         quarterly and annual accounting reports of each Pooled Company's
         respective share of the business transacted during the period and the
         balances of the related assets and liabilities as of each reporting
         date.

XIV.     Profit Sharing - Retrospective Commission Adjustment:

         A.   MNH shall pay profit sharing to MMIC equal to the amount that the
              actual cumulative net loss and LAE ratio on the Pooled Traditional
              Insurance Business from the Effective Date is less than 74.0%
              times MNH's cumulative earned premium assumed under this Pooling
              Agreement, multiplied by the Profit Sharing percentages in the
              table below. The profit sharing is based on the following
              percentages for the following bands:

<TABLE>
<CAPTION>
                                 Cumulative Net Loss          Profit Sharing
                                    and LAE Ratios             for L/R Band
                              -------------------------       ---------------
                               From                To
                              ------              -----
<S>                           <C>                 <C>              <C>
                 Band 1       >72.5%              74.0%            10%
                 Band 2       >70.5%              72.5%            25%
                 Band 3        68.5%              70.5%            33%
                              Less than           68.5%            50%
</TABLE>

         B.   MMIC will pay to, or return ceding commissions paid by, MNH equal
              to the amount that the actual cumulative net loss and LAE ratio on
              the Pooled Traditional Insurance Business from the Effective Date
              is greater than 74.0% times MNH's cumulative earned premium
              assumed under this Pooling Agreement, multiplied by the
              Retrospective Commission percentages in the table below. The
              retrospective amounts are based on the following percentages for
              the following bands:

<TABLE>
<CAPTION>
                                                                Retrospective
                                 Cumulative Net Loss              Commission
                                   and LAE Ratios                for L/R Band
                              -------------------------         ---------------
                               From                  To
                              ------                -----
<S>                           <C>                   <C>               <C>
                 Band 1       >74.0%                75.5%             10%
                 Band 2       >75.5%                77.5%             25%
                 Band 3       >77.5%                79.5%             33%
                              Greater than          79.5%             50%
</TABLE>

         C.   The calculations and payments shall be based on the following:

                  i.    The profit sharing or retrospective amount is the sum of
                        the amounts calculated for each band separately.

                  ii.   The profit sharing or retrospective amount is calculated
                        annually, 6 months after the end of each calendar year,
                        based upon the cumulative net earned premiums and
                        cumulative net incurred loss and LAE ratio, including
                        incurred but not reported (IBNR) losses and LAE, from
                        the Effective Date through the end of the calendar year
                        and adjusted to include experience through the date of
                        the calculation.

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                  iii.  The payment of profit sharing or retrospective
                        commission is settled annually as of the date of the
                        calculation. MNH shall pay the profit sharing or MMIC
                        shall pay the retrospective amount based upon the
                        cumulative amount of profit sharing or retrospective
                        amount as of each calculation date and the cumulative
                        amount of payments previously made.

                  iv.   Calculations and settlements of profit sharing or
                        retrospective amounts shall continue until all losses
                        are settled, or unless finally settled by mutual
                        agreement of the parties prior to that time.

                  v.    The development, implementation and operation of
                        Traditional Insurance Business without taking into
                        account the claims, losses and LAE that are the result
                        of any acts of terrorism similar to those acts of
                        September 11, 2001.

                  vi.   Claims Related Extra Contractual Obligations arising
                        from claims for which MNH has assumed direct
                        responsibility will be excluded from the calculation of
                        actual accumulated net losses.

XV.      Management Controls and Reports:

         A.   MMIC will develop an underwriting plan for the Traditional
              Insurance Business, and confer with the management of MNH in the
              course of developing or modifying that plan. MMIC will take any
              comments or suggestions of MNH under consideration in the
              development or modification of that plan; however, MMIC shall have
              ultimate authority and responsibility for the development and
              modification of that plan.

         B.   MMIC will present periodic reports, as more fully defined in the
              Services Agreement and as shall be agreed between MMIC and MNH, on
              the operating results of the Pool to MNH management including, but
              not limited to, the following:

                  i.    monthly Regional Management Reports which include
                        monthly and year-to-date premiums written and other
                        production data

                  ii.   periodic large loss reports

                  iii.  quarterly underwriting profit and loss statements by
                        line of business and management responsibility, e.g.
                        states or regional offices

                  iv.   all internal and home office underwriting and claim
                        audit reports

                  v.    other reports as are mutually agreed to by the parties.

XVI.     General Statement of Intent:

         It is the purpose and intent of this Pooling Agreement that:

         A.   The parties hereto intend to perpetuate a mutually beneficial
              relationship among the Pooled Companies following the termination
              of the Previous Management Agreement. In that regard, the parties
              hereto intend to align their interests by pooling risks and
              assuming common underwriting results on their Traditional
              Insurance Business, prior to any annual profit or loss sharing
              calculation pursuant to Section XIV.

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         B.   MMIC shall be liable as a reinsurer to MNH on the Traditional
              Insurance Business of MNH, issued and in force as of the Effective
              Date, and thereafter issued by MNH during the term of this
              Agreement.

         C.   MNH shall be liable as a reinsurer to MMIC on the Traditional
              Insurance Business of MMIC and MNH issued and in force as of the
              Effective Date, and thereafter issued by the Pooled Companies
              during the term of this Agreement to the extent of MNH's Pooling
              Percentage.

         D.   The parties hereto shall, on and after the Effective Date,
              participate in all of the underwriting operations related to the
              Traditional Insurance Business of each of the Pooled Companies
              hereto on the basis of their Pooling Percentages as set forth in
              Schedule 2 attached hereto.

         E.   The parties hereto reserve the right to mutually agree to modify
              any of the terms of this Pooling Agreement and any Schedule hereto
              in order to accommodate transition issues following the
              termination of the Previous Management Agreement and to handle
              immaterial adjustments resulting from or necessitated by timing or
              proration issues, or similar events.

         F.   The Pooled Companies acknowledge that MMIC intends to form a new,
              wholly owned subsidiary and to license that subsidiary to write
              property and casualty insurance. To the extent the new subsidiary
              writes Traditional Insurance Business, the Pooled Companies agree
              that the new subsidiary shall become a party to this Pooling
              Agreement and shall participate in MMIC's Pooling Percentage of
              the Traditional Insurance Business subject to this Pooling
              Agreement.

XVII.    "Follow the Fortunes":

         The reinsurance provided by the terms of this Pooling Agreement shall
         be subject to the same risks, terms and conditions under which the
         original policies and contracts for Traditional Insurance Business were
         written, or which may be or may have been agreed to during the term of
         the original insurance policy or contract, the intent of this Agreement
         being that the Pooled Companies shall, in every case to which this
         Agreement applies and in the proportions specified herein, follow the
         underwriting fortunes of one another in respect of the risk that has
         been written.

XVIII.    Methods and Procedures:

         The methods and procedures, including accounting transactions, by which
         the terms of this Pooling Agreement shall be performed by and on behalf
         of the parties hereto shall be determined in conjunction with the
         performance of the parties under the Services Agreement.

XIX.     Amendments:

         This Agreement may be modified from time to time, so as to adapt its
         provisions to the varying conditions of the business of the Pooled
         Companies, by a mutual agreement in writing of the parties hereto,
         subject to ratification by the Board of Directors of each party and, if
         required, with the approval of the insurance regulatory officials from
         the

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         State of New York and/or the State of New Hampshire.

XX.      Term and Termination:

         A.   This Pooling Agreement shall become effective on the Effective
              Date and shall continue in effect thereafter unless terminated on
              written notice as follows:

                  i.    MNH may tender notice to terminate this Agreement prior
                        to July 1, 2005 or July 1, 2006 for termination of this
                        Agreement effective for the calendar year commencing six
                        (6) months after such date, but only if the cumulative
                        loss and LAE ratio for the business pooled hereunder is
                        greater than 76%;

                  ii.   Either MMIC or MNH may tender notice to terminate this
                        Agreement for any reason on July 1, 2007 or any July 1
                        thereafter for termination of this Agreement effective
                        for the calendar year commencing six (6) months after
                        such date;

                  iii.  Either party may, at any time, terminate this Agreement
                        for "cause" by written notice specifying (i) the
                        effective date of termination, which date shall be not
                        less than sixty (60) days after the date of such notice,
                        and (ii) the reasons for termination. "Cause", for
                        purposes of terminating this Agreement, shall mean
                        either (i) any material breach of this Agreement or (ii)
                        continuous or repeated failure of a party to comply with
                        a material term of this Agreement. Any termination for
                        cause shall not affect the rights and obligations of the
                        parties as to transactions or acts by either party prior
                        to the effective date of termination or relieve either
                        party's obligation during the pendency of any dispute
                        over the cause of termination. Before a party may
                        terminate this Agreement for cause, the terminating
                        party must permit the other to rectify such breach,
                        non-performance, or violation within thirty (30)
                        business days after receipt of written notice of
                        termination. If the party in breach of this Agreement
                        fails to cure within thirty (30) days of receiving
                        notice of termination of this Agreement for cause, this
                        Agreement shall terminate on the effective day of the
                        termination as provided in the notice, unless agreed
                        otherwise by the terminating party;

                  iv.   Either party may terminate this Agreement immediately by
                        giving written notice of termination to the other party
                        if:

                        a.    the other party is placed under supervision or in
                              rehabilitation or liquidation by a state
                              authority;

                        b.    the other party is adjudged bankrupt;

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<PAGE>

                        c.    the other party has a receiver of its assets or
                              property appointed by a court of competent
                              jurisdiction;

                        d.    the other party makes a general assignment for the
                              benefit of creditors;

                        e.    the other party institutes (or suffers to be
                              instituted and not dismissed within sixty (60)
                              days) any proceeding for the reorganization or
                              arrangement of its affairs;

                        f.    this Agreement fails to qualify for credit as
                              authorized reinsurance, or any party fails to
                              qualify as an authorized reinsurer under either
                              the New York Insurance Laws or regulations or the
                              New Hampshire Insurance Laws or regulations;
                              provided however, if either party elects to engage
                              in an insurance business that would not qualify
                              either that business or that party as authorized
                              reinsurance or authorized reinsurer, respectively,
                              but the parties have mutually agreed to include
                              that business as Traditional Insurance Business,
                              then neither party may use that failure to qualify
                              as a basis to terminate this Agreement; or

                        g.    the Services Agreement or the Underwriting or
                              Claims Services Annexes thereto are terminated for
                              any reason including a "change in control" as that
                              term is defined in the Services Agreement.

        B.     Upon termination of this Agreement for any reason, the pooling
               will cease on a cutoff basis and MNH and MMIC will, respectively,
               return the net unearned premiums to the other, less the
               Applicable Ceding Commissions. The returned net unearned premiums
               shall be settled in premiums receivable, cash and other assets as
               agreed among the parties. Each of the Pooled Companies will
               remain obligated for their Pooling Percentages of all losses and
               LAE and other obligations incurred prior to the date of
               termination, whether or not such losses or associated LAE have
               been reported.

XXI.     Interpretation; Governing Law:

         A.   Wherever required to give the correct meaning throughout this
              Agreement, the singular shall be interpreted in the plural.
              Clerical errors or errors of involuntary or inadvertent omission
              or commission shall not be interpreted as a discharge of liability
              on behalf of any of the parties to this Agreement. Such errors
              shall be rectified at the time of discovery or as soon as
              practicable thereafter. Caption headings are for convenience only
              and are not intended to affect the construction of

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<PAGE>

              the terms hereof.

         B.   This Agreement shall be interpreted and construed in accordance
              with the internal laws of the State of New York without regard to
              conflicts of law.

         C.   The Pooled Companies will use their good faith efforts to
              interpret and apply the terms of this Pooling Agreement in a
              manner that is consistent with the Services Agreement and each
              Annex thereto if they are in effect at that time.

XXII.    Insolvency:

         The reinsurance made under this Agreement shall be payable by the
         assuming reinsurer on the basis of the liability of the ceding insurer
         under the contract or contracts reinsured without diminution because of
         the insolvency of the ceding insurer. The reinsurance made effective
         under this Agreement shall be payable by the assuming reinsurer to the
         ceding insurer or to the liquidator, receiver or statutory successor of
         the ceding insurer.

         In the event of insolvency of the ceding insurer, the liquidator or
         receiver or statutory successor of such insurer shall give written
         notice to the assuming reinsurer: (a) of the pendency of a claim
         against the insolvent ceding insurer on the policy or bond reinsured
         within a reasonable time after such claim is filed in the insolvency
         proceeding; (b) that during the pendency of such claim the assuming
         reinsurer 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 its
         liquidator or receiver or statutory successors; and (c) that the
         expense thus incurred by the assuming reinsurer shall be chargeable,
         subject to court approval, against the insolvent ceding insurer as part
         of the expense of liquidation to the extent of a proportionate share of
         the benefit which may accrue to the ceding insurer solely as a result
         of the defense undertaken by the assuming reinsurer.

XXIII.    Arbitration:

         The Pooled Companies shall use their best efforts to resolve any
         dispute under or arising out of this Agreement, the interpretation of
         this Agreement or any party's performance, nonperformance, rights or
         obligations under this Agreement. In the event any dispute cannot be
         mutually resolved between the parties, MMIC and MNH hereby agree that
         such dispute shall, upon the request of the one of the parties, be
         submitted to arbitration in the following manner: The dispute shall be
         submitted for determination to a panel of three (3) arbitrators, not
         related to or affiliated with any of the parties to this Agreement,
         with experience in the property and casualty insurance or reinsurance
         industry, one to be chosen by MMIC, one to be chosen by MNH and the
         third to be selected by the mutual agreement of the other two (2)
         arbitrators. The arbitration shall take place in Buffalo, New York, and
         shall be conducted in accordance with the then current Commercial
         Arbitration Rules of the American Arbitration Association. The
         arbitrators are not empowered to award punitive damages.

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<PAGE>

XXIV.    Records and Accounts; Reviews:

         MMIC shall keep accurate records and accounts of all transactions
         undertaken under this Pooling Agreement. Those records and accounts
         shall be maintained in accordance with the same prudent standards of
         record keeping as MMIC follows with respect to its own business and in
         accordance with all applicable state laws and regulations concerning
         records retention. All files shall be open and available for on-site
         review and/or inspection and reproduction, at MNH's expense, by duly
         authorized representatives of MNH. MNH may conduct such reviews during
         normal business hours upon reasonable prior written notice to MMIC.
         MMIC shall cooperate fully with MNH, its representatives, and designees
         in such reviews. MNH shall prepare written findings in connection with
         any review and shall provide MMIC with a copy of such findings within
         thirty (30) days after completion of the review.

XXV.     Entire Agreement:

         This Pooling Agreement, including the Schedules and the Exhibit
         attached hereto, constitutes the entire agreement of the parties hereto
         with respect to the subject matter hereof, and supersedes all previous
         agreements whether written or oral between them with respect to the
         subject matter hereof.

XXVI.    Counterparts:

         This Pooling Agreement may be executed in two or more counterparts,
         each of which shall be deemed an original and all of which shall
         constitute one and the same instrument.

                                       13
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date and the year first above written.

Attest                                        Merchants Mutual Insurance Company

/s/                                           By /s/
--------------------------------                    ----------------------------
Secretary                                           Robert M. Zak, President

Attest                                        Merchants Insurance Company of
                                              New Hampshire, Inc.

/s/                                           By /s/
--------------------------------                    ----------------------------
Secretary                                            Stephen C. June,
                                                     Executive Vice President

                                       14
<PAGE>

                                  "Schedule 1"

                              Underwriting Expenses
                 As Included in Calculation of Ceding Commission

INITIAL MNH TRANSFER TO MMIC

The underwriting expense component in the "Initial Ceding Commission"
calculation with respect to MNH's initial asset transfer to MMIC under Section
III of the Pooling Agreement the underwriting expenses as reported in the 2002
Underwriting and Investment Exhibit, Part 4 - Expenses of the MNH Annual
Statement included in Column 2 on lines 3 through 18 plus line 24, excluding the
following specific items:

     1.   Expenses unrelated to the Traditional Insurance Business;
     2.   Expenses deemed to be direct expenses of either MNH or MMIC;
     3.   Administrative expenses of MMIC that will be included in the
          determination of the fees payable under the Administrative Services
          Annex of the Services Agreement;
     4.   Provisions for payment of Senior Management bonuses by MMIC; and
     5.   Other expenses as may, from time to time, be agreed by the parties.

INITIAL MMIC TRANSFER TO MNH OF MNH POOLING PERCENTAGE

The underwriting expense component included in the "Initial Ceding Commission"
calculation with respect to MMIC's initial asset transfer to MNH under Section V
of the Pooling Agreement is the combined amount of underwriting expenses of MMIC
and MNH as reported in the 2002 Underwriting and Investment Exhibit, Part 4 -
Expenses of the MMIC and MNH Annual Statements included in Column 2 on lines 3
through 18 plus line 24, excluding the following specific items:

     1.   Expenses unrelated to the Traditional Insurance Business;
     2.   Expenses deemed to be direct expenses of either MNH or MMIC;
     3.   Administrative expenses of MMIC that will be included in the
          determination of the fees payable under the Administrative Services
          Annex of the Services Agreement;
     4.   Provisions for payment of Senior Management bonuses by MMIC; and
     5.   Other expenses as may, from time to time, be agreed by the parties.

SUBSEQUENT ASSET TRANSFERS BETWEEN THE PARTIES

The underwriting expense component included in the "Applicable Ceding
Commission" calculation with respect to each party's asset transfer to the other
party for each year after the initial asset transfer will be determined as
provided above, except that the expenses will be as reported in the most recent
Underwriting and Investment Exhibit, Part 4 - Expenses of Annual Statements
included in Column 2 on lines 3 through 18 plus line 24, but excluding the same
items excluded from the initial asset transfers. The parties agree that if the
applicable Exhibit changes over time, they will derive the underwriting expenses
by using comparable figures from the revised statutory reporting form.

                                       15
<PAGE>

                                  "Schedule 2"

The Pooling Percentages are as follows:

<TABLE>
<CAPTION>
                                                         MMIC            MNH
                                                         ----            ---
<S>                                                      <C>            <C>
Initial Percentage of policies in force as of
inception of the Agreement                                60%            40%

Accident Year 2003                                        60%            40%

Accident Year 2004                                        65%            35%

Accident Year 2005                                        70%            30%

Accident Year 2006                                        75%            25%

Accident Year 2007                                        75%            25%

</TABLE>

The maximum MNH annual written premium assumption shall be:

<TABLE>
<CAPTION>
                         Maximum Written
                             Premium
              Year       In $ millions
              ----       ---------------

<S>                      <C>
              2003           $68.0

              2004           $59.5

              2005           $50.0

              2006           $42.5

              2007           $37.5
</TABLE>

                                       16<PAGE>

                                                                    EXHIBIT 10.1

                                     KEYCORP

                            AWARD OF RESTRICTED STOCK

<<First>> <<Middle>> <<Last>>

         By action of the Compensation Committee ("Committee") of the Board of
Directors of KeyCorp, taken pursuant to the KeyCorp Amended and Restated 1991
Equity Compensation Plan ("Plan") on January 16, 2003, you have been awarded
<<Restricted_Shares>> shares of Restricted Stock. (Unless otherwise indicated,
the capitalized terms used herein shall have the same meaning as set forth in
the Plan.)

                  1. One-half of the Restricted Stock ("the Time Lapse
         Restricted Shares") may not be sold, transferred, otherwise disposed
         of, pledged or otherwise hypothecated until the earlier of the
         following:

                  a)  December 31, 2005; or

                  b) the date not more than two years on or after a Change of
                  Control upon which your employment terminates under
                  circumstances entitling you to receive severance benefits or
                  salary continuation benefits under KeyCorp Separation Pay Plan
                  or under any employment or change of control or similar
                  arrangement or agreement.

                  2. The remaining one-half of the Restricted Stock ("the
         Performance Accelerated Restricted Shares") may not be sold,
         transferred, otherwise disposed of, pledged, or otherwise hypothecated
         until the earliest of the following shall occur:

                  a)  December 31, 2009;

                  b) the percentage increase in KeyCorp's average daily stock
                  price plus dividends for the years 2003 through 2005 exceeds
                  the percentage increase in the average daily stock price plus
                  dividends of the median of the banks which comprise the
                  Standard & Poor's Regional Bank Index (If at any time the
                  Standard & Poor's Regional Bank Index ceases to be published
                  or is altered in such manner as to make its use as a
                  comparative reference inappropriate, as determined by the
                  Committee in its sole discretion, then the Committee shall (i)
                  select such other index as is then available that the
                  Committee deems most appropriate to use as a substitute for
                  the Standard & Poor's Regional Bank Index and (ii) decide
                  whether to use that other index

                                       1

<PAGE>

                  to determine whether the condition of this paragraph has been
                  met); or

                  c) the first day on which a Change of Control occurs on or
                  before December 31, 2005.

                  3. If you shall die or become Disabled prior to the lapse of
         the restrictions on the Time Lapse Restricted Shares, then a pro rata
         number of the Time Lapse Restricted Shares shall be retained by you or
         your estate and become freely transferable upon death or Disability but
         the remainder shall immediately be forfeited upon your death or
         Disability, as the case may be.

                  4. The restrictions shall lapse upon a pro rata number of the
         Time Lapse Restricted Shares when you have been continuously employed
         by KeyCorp and reach age 65 and each year thereafter that you remain
         employed by KeyCorp on your birthday the restrictions shall lapse on
         the lesser of an additional one-third of the Time Lapse Restricted
         Shares or the number of Time Lapse Restricted Shares remaining in your
         award.

                  5. The Time Lapse Restricted Shares shall immediately be
         forfeited if you retire between the ages of 55 and 65 prior to the
         lapse of the restrictions; provided, however, that the Committee may in
         its sole discretion determine that a pro rata number of the Time Lapse
         Restricted Shares shall be retained by you and become freely
         transferable upon retirement but that the remainder shall immediately
         be forfeited upon your retirement.

                  6. If you retire at age 65 or older, die or become Disabled
         prior to the lapse of the restrictions on the Performance Accelerated
         Restricted Shares and such shares thereafter cease to be restricted
         because of the performance of KeyCorp's average daily stock price plus
         dividends, then a pro rata number of the Performance Accelerated
         Restricted Shares shall be retained by you or your estate and become
         freely transferable if and when the restrictions lapse because of the
         performance of KeyCorp's average daily stock price plus dividends but
         the remainder shall immediately be forfeited upon your retirement,
         death, or Disability, as the case may be, and if the restrictions do
         not lapse as a result of performance of KeyCorp's average daily stock
         price plus dividends, the pro rata number of Performance Accelerated
         Restricted Shares retained by you or your estate shall be forfeited on
         December 31, 2005.

                  7. The Performance Accelerated Restricted Shares shall be
         forfeited if you retire between the ages of 55 and 65 prior to the
         lapse of the restrictions; provided, however, that the Committee may in
         its sole discretion determine that a pro rata number of shares shall be
         retained by you and become freely transferable if and when the
         performance of KeyCorp's average daily stock price plus dividends meets
         the requirements of this Agreement but that the remainder of the shares
         shall immediately be forfeited upon your retirement, and if the
         restrictions do not lapse as

                                       2

<PAGE>

         a result of performance of KeyCorp's average daily stock price plus
         dividends, the pro rata number of Performance Accelerated Restricted
         Shares retained by you shall be forfeited on December 31, 2005.

                  8. For purposes of this Agreement, the pro rata number of
         shares of Restricted Stock granted to you shall be based on a fraction
         the numerator of which is the number of months beginning in January
         2003 that are completed prior to your change of status and the
         denominator of which is 36.

                  9. The Restricted Stock shall be immediately forfeited if your
         employment with KeyCorp terminates prior to the date of the lapse of
         the restrictions as set forth earlier in this Agreement unless your
         employment terminates because of death, Disability, or retirement (in
         which case the specific provisions set forth earlier in this Agreement
         shall apply).

                  10. The Restricted Stock upon which the restrictions have
         lapsed nevertheless may not be sold or otherwise transferred until and
         unless you meet KeyCorp's Stock Ownership Guidelines or terminate your
         employment with KeyCorp; provided, however, that notwithstanding the
         foregoing you shall be permitted to sell the number of shares necessary
         to satisfy any withholding tax obligation that may arise in connection
         with the lapse of any restriction on the Restricted Stock.

                  11. If the lapse of the restrictions on the Restricted Stock
         would result in compensation to you that if earned would not be
         deductible by KeyCorp by reason of the disallowance rules of Section
         162(m) of the Internal Revenue Code but would be deductible if deferred
         until a later year, then the Committee in its sole discretion may
         require that all or a portion of the Restricted Stock shall be
         exchanged for an award of equal value which shall be deferred into and
         remain in the KeyCorp Deferred Compensation Plan ("Deferred Plan")
         Common Stock Account pursuant to the provisions of the Deferred Plan;
         provided that if the Committee shall not require a deferral pursuant to
         this paragraph, then any provision in any KeyCorp Plan, Employment
         Agreement, or similar agreement or arrangement requiring a deferral by
         you because of Section 162(m) shall be deemed waived by KeyCorp with
         respect to the Restricted Stock.

                  12. You may elect to exchange Restricted Stock for an award of
         equal value which shall be deferred into the Deferred Plan Common Stock
         Account; provided, however, that such election shall be made at least
         one year prior to the lapse of the restrictions upon the Restricted
         Stock and provided further that the deferred award may not be
         transferred to another account in the Deferred Plan.

                  13. The Committee reserves the right to (at any time and from
         time to time) make adjustments in or alter the performance criteria
         (i.e., daily average stock price performance) set forth in this
         Agreement, in the Committee's sole discretion, to take into account
         changed circumstances which, in the Committee's judgment, make the

                                        3

<PAGE>

         performance criteria inapplicable, inappropriate, or otherwise
         undesirable. Consistent with the provisions of the Plan, the
         determination by the Committee as to whether the performance criteria
         have been satisfied or should be adjusted or altered shall be final and
         conclusive.

                  14. If you are an officer for purposes of Section 16 of the
         Securities Exchange Act of 1934, you shall be permitted to satisfy, in
         whole or in part, any withholding tax obligation that may arise in
         connection with the lapse of any restriction on the Restricted Stock by
         delivering to KeyCorp in Common Shares an amount equal to the
         withholding tax obligation arising with respect to such lapse.

                  15. Notwithstanding any other provisions of this Agreement, if
         you engage in any "harmful activity" (as defined in Section 16 of the
         Plan) prior to or within six months after the termination of your
         employment with KeyCorp, then any and all shares of Restricted Stock
         which have vested on or after one year prior to termination of
         employment shall be immediately forfeited to KeyCorp and the sales
         price realized upon the sale of any such shares of Restricted Stock by
         you shall inure to and be payable to KeyCorp upon demand.

                  16. The provisions of Section 11 of the Plan entitled
         "Acceleration upon Change of Control" shall not apply to the Time Lapse
         Restricted Shares at any time and shall not apply to the Performance
         Accelerated Restricted Shares after December 31, 2005.

         January 16, 2003                              /s/ Thomas E. Helfrich
                                                       -------------------------
                                                       Thomas E. Helfrich
                                                       Executive Vice President

                                       4

<PAGE>

                      ACCEPTANCE OF RESTRICTED STOCK AWARD

         I acknowledge receipt of the above award and in consideration thereof I
accept such award subject to the terms and conditions of the Plan (including,
without limitation, the Harmful Activity provisions thereof) and the
restrictions upon me as set forth hereinafter.

         My agreement to the following restrictions is (i) in addition to (and
not in limitation of) any other agreements, plans, policies, or practices that
are applicable to me as a KeyCorp or Subsidiary (collectively "Key") employee,
and (ii) independent of any Plan provisions.

         1.       I recognize the importance of preserving the confidentiality
                  of Non-Public Information of Key. Therefore, I acknowledge and
                  agree that: (a) during my employment with Key, I will acquire,
                  reproduce, and use such Non-Public Information only to the
                  extent reasonably necessary for the proper performance of my
                  duties; (b) during and after my employment with Key, I will
                  not use, publish, sell, trade or otherwise disclose such
                  Non-Public Information; and (c) upon termination of my
                  employment with Key, I will immediately return to Key all
                  documents, data, and things in my possession or to which I
                  have access that involve such Non-Public Information. I agree
                  to sign nondisclosure agreements in favor of Key and others
                  doing business with Key with whom Key has a confidential
                  relationship.

         2.       I acknowledge and agree that the duties of my position at Key
                  may include the development of Intellectual Property.
                  Accordingly, any Intellectual Property which I create with any
                  of Key's resources or assistance, in whole or in part, during
                  my employment with Key, and which pertains to the business of
                  Key, is the property of Key; and I hereby agree to and do
                  assign to Key all right, title, and interest in and to such
                  Intellectual Property, including, without limitation,
                  copyrights, trademarks, service marks, and patents in or to
                  (or associated with) such Intellectual Property and agree to
                  sign patent applications and assignments thereof, without
                  additional compensation.

         3.       Except in the proper performance of my duties for Key, I
                  acknowledge and agree that from the date hereof through a
                  period of one (1) year after the termination of my employment
                  with Key for any reason, I will not, directly or indirectly,
                  for myself or on behalf of any other person or entity, hire or
                  solicit or entice for employment any Key employee without the
                  written consent of Key, which consent it may grant or withhold
                  in its discretion.

         4.       Except in the proper performance of my duties for Key, I
                  acknowledge and agree that from the date hereof through a
                  period of one (1) year after the termination of my employment
                  with Key for any reason, I will not, directly or indirectly,
                  for myself or on behalf of any other person or entity, call
                  upon, solicit, or do business with (other than for a business
                  which does not

                                       5

<PAGE>

                  compete with any business or business activity conducted by
                  Key) any Key customer or potential customer I interacted with,
                  became acquainted with, or learned of through access to
                  information while I performed services for Key during my
                  employment with Key, without the written consent of Key, which
                  consent it may grant or withhold in its discretion.

         5.       In the event a court of competent jurisdiction determines that
                  any of the restrictions contained in the above numbered
                  paragraphs are excessive because of duration or scope or are
                  otherwise unenforceable, the provisions hereof shall not be
                  void but, with respect to such limitations held to be
                  excessive, they shall be modified to incorporate the maximum
                  limitations such court will permit, not exceeding the
                  limitations contained herein. In the event I engage in any
                  activity in violation hereof, I acknowledge that such activity
                  may cause serious damage and irreparable injury to Key, which
                  will permit Key to terminate my employment (if applicable) and
                  seek monetary damages, and Key shall also be entitled to
                  injunctive, equitable, and other relief. I acknowledge and
                  agree that the validity, interpretation, and performance of
                  this Agreement shall be construed under the laws of Ohio.

BY SIGNING THIS ACCEPTANCE OF RESTRICTED STOCK AWARD, YOU ACKNOWLEDGE THAT YOU
HAVE HAD AMPLE OPPORTUNITY TO READ THIS AGREEMENT AND THE PLAN, MAKE A DILIGENT
INQUIRY, ASK QUESTIONS, AND CONSULT WITH YOUR ATTORNEY IF YOU CHOSE TO DO SO.

______________________________________
Sign Your Name

______________________________________
Date

                                       6

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