Document:

Exhibit

Exhibit 10.1.1

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

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

BACKGROUND INFORMATION

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

STATEMENT OF AGREEMENT

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

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

ARTICLE I

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

ARTICLE II

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

ARTICLE III

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

ARTICLE IV

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

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

ARTICLE V

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

ARTICLE VI

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

ARTICLE VII

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

ARTICLE VIII

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

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

ARTICLE IX

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

ARTICLE X

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

ARTICLE XI

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

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

ARTICLE XII

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

ARTICLE XIII

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

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

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

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

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

ARTICLE XIV

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

ARTICLE XV

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

ARTICLE XVI

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

ARTICLE XVII

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

ARTICLE XVIII

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

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

ARTICLE XIX

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

ARTICLE XX

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

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

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

EMPLOYERS MUTUAL CASUALTY COMPANY

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

EMCASCO INSURANCE COMPANY

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

ILLINOIS EMCASCO INSURANCE COMPANY

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

DAKOTA FIRE INSURANCE COMPANY

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

EMC PROPERTY & CASUALTY COMPANY

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

UNION INSURANCE COMPANY OF PROVIDENCE

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

HAMILTON MUTUAL INSURANCE COMPANY

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

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

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

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

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

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

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

EMPLOYERS MUTUAL CASUALTY COMPANY    EMCASCO INSURANCE COMPANY

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

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

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

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

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

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

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

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

EMPLOYERS MUTUAL CASUALTY COMPANY    EMCASCO INSURANCE COMPANY

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

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

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

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

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

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

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

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

EMPLOYERS MUTUAL CASUALTY COMPANY    ILLINOIS EMCASCO INSURANCE COMPANY

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

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

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

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

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

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

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

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

EMPLOYERS MUTUAL CASUALTY COMPANY    ILLINOIS EMCASCO INSURANCE COMPANY

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

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

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

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

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

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

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

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

EMPLOYERS MUTUAL CASUALTY COMPANY    DAKOTA FIRE INSURANCE COMPANY

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

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

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

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

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

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

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

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

EMPLOYERS MUTUAL CASUALTY COMPANY    DAKOTA FIRE INSURANCE COMPANY

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

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

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

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

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

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

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

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

EMPLOYERS MUTUAL CASUALTY COMPANY    EMC PROPERTY & CASUALTY COMPANY

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

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

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

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

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

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

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

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

EMPLOYERS MUTUAL CASUALTY COMPANY    EMC PROPERTY & CASUALTY COMPANY

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

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

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

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

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

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

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

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

		
	EMPLOYERS MUTUAL CASUALTY COMPANY
	UNION INSURANCE COMPANY OF

PROVIDENCE

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

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

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

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

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

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

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

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

		
	EMPLOYERS MUTUAL CASUALTY COMPANY
	UNION INSURANCE COMPANY OF

PROVIDENCE

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

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

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

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

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

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

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

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

EMPLOYERS MUTUAL CASUALTY COMPANY    HAMILTON MUTUAL INSURANCE COMPANY

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

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

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

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

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

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

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

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

EMPLOYERS MUTUAL CASUALTY COMPANY    HAMILTON MUTUAL INSURANCE COMPANY

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

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

March 21, 2017

 
Dale T. Cochran II
120 Warbler Way
Shavano Park, TX 78231

Dear Dale,
 
We are happy to offer you the position of Chief Risk Officer with a date of hire of May 1, 2017 (“Date of Hire”). You will be reporting hierarchically to the Santander Consumer (SC) Chief Executive Officer and functionally to the SHUSA Chief Risk Officer and the SC Risk Committee. The compensation and benefit details for your position are as follows:

Base Salary:

Your base salary will be $685,000.00 gross per year, and it will be paid over 26 equal bi-weekly pay periods per year.

Annual Incentive Compensation:

You will be eligible to participate in our annual incentive bonus program, with the first bonus to be awarded for the 2017 performance year. The target amount for your annual incentive bonus potential is $485,000.00.  SC will pay any annual incentive bonus in accordance with the Performance Management & Compensation Policy, and the annual amount will be determined by SC based on your achievement of individual objectives and on the performance of SC and its Affiliates.  Any future company provided annual deferral or long-term incentive program participation will be carved out of your annual bonus target.  Your position is currently deemed “Identified Staff”, requiring your annual incentive bonus to be paid out in the manner prescribed by applicable regulations and company policy.  Currently, the annual incentive bonus will be paid as follows:

		
	•
	30% in cash paid immediately;

		
	•
	30% in immediately-vested Restricted Stock Units (RSUs);

		
	•
	20% in cash to be paid in equal payments on the first, second, and third anniversary of the original bonus payment; and

		
	•
	20% in RSUs that vest ratably on the first, second and third anniversaries of the initial bonus.

This bonus is contingent on the approval of the Santander Consumer USA Holdings, Inc.’s Risk Committee and Compensation Committee. The award will also be contingent on your executing applicable award agreements, and such awards will be subject to the terms of those agreements, including, without limitation, the restriction against selling or transferring shares of common stock settled upon the vesting of the RSUs until the one year anniversary of the vesting date.

Sign on Bonus / Buyout:

Page 1

You will be eligible to receive $970,000.00 (the “Sign-On Bonus”) as compensation to replace the value of any deferred or other compensation you forfeit as a result your employment with SC. The Sign-On Bonus has been approved by the Santander Consumer USA Holdings, Inc.’s Risk Committee and Compensation Committee.

The Sign-On Bonus will be structured as follows:

		
	•
	$485,000 payable in cash on the first regularly scheduled payroll date 90 days after your Date of Hire.

		
	o
	The cash portion of the Sign-On Bonus will also be subject to the “Additional Signing-On Bonus Conditions” attached hereto.

		
	•
	$485,000 in RSUs that vest ratably on the first, second and third anniversaries of the grant date of the RSUs.

		
	o
	The RSU portion of the Sign-On Bonus will also be contingent on your executing applicable award agreements, and such awards will be subject to the terms of those agreements, including, without limitation, the restriction against selling or transferring shares of common stock settled upon the vesting of the RSUs until the one year anniversary of the vesting date.

		
	o
	The grant of RSUs is subject to the approval of the Santander Consumer USA Holdings Inc.’s Compensation Committee.

Benefits:

On your first day you will be eligible to participate in the benefit plan offered to full-time employees which includes but not limited to medical, dental, and vision insurance options, life insurance, short and long-term disability, white-glove service, employee discounts and pre-tax monthly transportation reimbursement.  

401K:

You are eligible to enroll in our 401K the 1st of the month following six (6) months of employment; SC matches 100% up to 6% contributions. 

Relocation:

Your relocation benefits will consist of the following:

		
	1.
	Home Sale Assistance:  Upon sale of your primary residence in San Antonio, TX will reimburse you the cost of the realtor commission for the sale of your home, not to exceed six percent of the sale price.

		
	2.
	Household Goods Move:  Through our third party vendor, SC will coordinate the packing, shipment and delivery of your household goods from San Antonio to Dallas.  You will also be eligible to receive sixty days of temporary storage.  

		
	3.
	Home Finding Trip:  SC will reimburse one trip for you and your spouse for up to three nights.  Reimbursement includes hotel, airfare (coach), car rental and meals.

		
	4.
	Area Touring:  Through our third party vendor, SC will coordinate two full days of destination services.

		
	5.
	Temporary Housing:  Through our third party vendor, SC will provide sixty days of temporary housing.

		
	6.
	Home Purchase Assistance:  Upon closing on the purchase of your home in the Dallas area, SC will reimburse actual, reasonable, and customary buyer’s closing costs including typical inspections (general home inspection, termite, and/or radon).  

Page 2

		
	7.
	Miscellaneous Allowance:  Lump sum payment equal to one month’s new annual base salary, capped at $7,500 net payable in the first regular pay cycle after you begin employment with SC.

		
	8.
	Return Trips home:  While in temporary housing you will be eligible for up to four return trips home to San Antonio.  These trips will be booked through our third party vendor and will follow the guidelines of our Travel and Expense Policy.

		
	9.
	Final Move:  SC will reimburse you the cost of the final trip for you and your spouse to relocate to Dallas.  This can be mileage reimbursement (.23 cents per mile or coach airfare).

		
	10.
	Tax Assistance:  SC will provide tax assistance for all the benefits listed at a rate of 39 percent.

Once we receive the signed offer letter you will be contacted by our Global Mobility Manager who will be your primary contact for your relocation to Dallas.

Page 3

Notice Provision and Garden Leave: 
Given the strategic importance of the position you are being offered, you hereby acknowledge and agree that SC, its client relationships and/or its business opportunities would likely suffer irreparable harm were you to resign or otherwise end your employment without providing sufficient notice to SC. To avoid such harm, and in exchange for the pay and benefits SC extends to you pursuant to this offer of employment, you agree to provide SC with ninety (90) days prior written notice of your intent to end your employment with SC (the “Notice Period”). During the Notice Period you will be paid your base salary pursuant to SC’s regular payroll practices and will be eligible to continue to participate in the employee benefit plans in which you were enrolled prior to submitting your resignation, with the exception that (i) you will not continue to accrue paid time off during the notice period and (ii) you will not continue to accrue any time or other interest under any bonus plans. You will be expected to perform all duties and tasks assigned to you during the Notice Period, including all assignments related to the transition of your duties and responsibilities, and you will devote all of your working time, labor, skill and energies to the business and affairs of SC. 
You agree that during the Notice Period you will continue to owe SC a duty of loyalty and you will remain bound by all fiduciary duties and obligations owed to SC as an employee and executive, as well as abide by all prior non-competition, non-disclosure and non-solicitation agreements you have entered into with SC. As a condition of being hired, you agree by signing below not to compete with SC, or to start employment with or an engagement with a competitor, during the period of time you are employed by SC, including during the Notice Period. You agree that during your employment, including the Notice Period, and regardless of whether your title, position or responsibilities change at any point, you will not directly or indirectly become employed or engaged by (whether as an employee, consultant, proprietor, partner, director or otherwise) another bank, financial institution, or any other competitor of SC. 
Upon receipt of your resignation, SC may, in its sole discretion, waive the Notice Period, in which case your employment will be terminated upon receipt of written notice from SC, which SC can invoke at any time during the Notice Period. Under such circumstances, SC will not be obliged to provide you with pay in lieu of notice and, in turn, you will no longer be bound by the specific non-competition restriction outlined in the prior paragraph. Alternatively, the Company may, in its sole discretion, retain you as an employee during the Notice Period and direct you not to report to work; in which case you will be placed on “Garden Leave.” 
While on Garden Leave, you will remain bound by all fiduciary obligations owed as an employee and executive, the non-competition restrictions set out in the prior paragraphs, as well as any non-disclosure agreements and non-solicitation agreements between you and SC. For purposes of clarity, while on Garden Leave you will (1) remain an employee of SC; (2) continue to be paid your base salary; and (3) continue to be eligible to participate in the same benefit plans in which you were enrolled prior to submitting your resignation, with the exception that (i) you will not continue to accrue paid time off during the Garden Leave and (ii) you will not continue to accrue any time or other interest under any bonus plans. During the Garden Leave, you must be reasonably available during normal business hours to answer questions and provide advice to the Company. 
You agree that because your services are personal and unique and because you will have access to and will be acquainted with SC’s confidential information and/or its customer relationships, to the fullest extent permitted by law, this Notice Provision will be enforceable by injunction, specific performance or other equitable relief, without bond and without prejudice to any other rights or remedies that SC may have for breach of this Notice Provision. If you violate the non-competition restrictions contained in this offer, you 

Page 4

shall continue to be bound by those restrictions until a period of ninety (90) consecutive days has expired without any violation of such provisions. 

Your employment is subject to the covenants and agreements of Exhibit A, which are hereby incorporated by reference as if fully set forth herein. In return for your employment, the compensation described in this letter agreement, SC ’s providing you access to its Confidential Information (as defined in Exhibit A), and other consideration, you agree to be bound by the terms, conditions, and covenants of Exhibit A. 

This offer is contingent upon successful completion of pre-employment screening, and is valid for a period of five (5) business days. SCUSA considers all information related to associate compensation to be private and confidential. SCUSA is an at-will employer, meaning that either the employee or the Company may terminate the employment relationship at any time at their sole discretion and without cause. Neither this letter nor any other communication by a representative of the management of the Company other than in writing and signed by the CEO can vary this policy or create a contract of permanent employee or employment for a specified period of time. 

Upon acceptance of this offer, you will receive a link to login and begin your onboarding experience with SCUSA. 

SC considers all information related to associate compensation to be private and confidential.

You will be required to provide the Company with sixty (60) days’ advance written notice of Termination of Service, provided that the Company shall have the right, but not the obligation, to terminate your service immediately without further consideration, or to require you to continue in service in a reduced role as determined by the Company, upon receiving such advance written notice.  

Your employment is subject to the covenants and agreements of Exhibit A, which are hereby incorporated by reference as if fully set forth herein.  In return for your employment, the compensation described in this letter agreement, SC’s providing you access to its Confidential Information (as defined in Exhibit A), and other consideration, you agree to be bound by the terms, conditions, and covenants of Exhibit A.
SC is an at-will employer, meaning that either the employee or SC may terminate the employment relationship at any time at his or its sole discretion and without cause.  Neither this offer letter nor any other communication by a representative of the management of SC other than in writing and signed by the CEO can vary this policy or create a contract of permanent employee or employment for a specified period of time.

Sincerely,

/s/ Lisa VanRoekel

Lisa VanRoekel
Chief Human Resource Officer
Santander Consumer USA

Your signature below represents your acceptance of this offer and that you understand and agree to the above conditions.
 
 
/s/ Dale T. Cochran II___________________
Dale T. Cochran II

Page 5

March 26, 2017________________________ 
Date

Page 6

EXHIBIT A
CONFIDENTIALITY AND RESTRICTIVE COVENANT AGREEMENT
This Confidentiality and Restrictive Covenant Agreement (“Agreement”) is entered into between Santander Consumer USA Inc., Santander Consumer USA Holdings, Inc. (collectively “Santander” or the “Company”), and Dale T. Cochran II (“Employee”). In exchange for the mutual promises and obligations in this Agreement, Santander and Employee agree as follows:
1.    NO ALTERATION OF EMPLOYMENT RELATIONSHIP. Nothing in this Agreement is intended to alter the nature of the relationship between Employee and the Company. The terms and conditions of employment for employees that have executed separate, specific employment agreements will continue to be governed by such agreements except to the extent altered herein. Employment for employees that have not signed separate, specific employment agreements remains “at will,” and either the employee or the Company may terminate the employee’s employment at any time, with or without notice, for any or no reason and with or without cause. Nothing in this Agreement shall constitute a promise or contract of employment for any particular duration, for any specified rate of pay, under any specified terms and conditions, or for any specific job function.

2.    AGREEMENT TO PROVIDE CONFIDENTIAL INFORMATION. Santander agrees to furnish Employee with Confidential Information related to Santander during Employee’s employment. Employee acknowledges that this Confidential Information is furnished for the purpose of enabling Employee to access and provide service to the Company and its customers. Employee acknowledges and agrees that the Company’s business is to a large extent based upon Confidential Information, and that the Company’s provision of this Confidential Information justifies the restrictions provided for in this Agreement.

For purposes of this Agreement, the term “Confidential Information” shall mean information that Santander owns or possesses, that Santander has developed, that it uses or that is potentially useful in the business of the Company, and/or that the Company treats as proprietary, private, or confidential. Confidential Information includes, but is not limited to, (a) inventions, ideas, processes, formulas, data, lists, programs, internal memos, other works of authorship, know-how, improvements, discoveries, trade secrets, developments, designs, and techniques relating to the business or proposed business of Santander; (b) information regarding plans for research, development, new products and services, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers, customer lists, cost structures, customer needs/preferences, the identity of Santander’s automotive dealer partners, and the terms of the relationship between Santander and the automotive dealerships; and (c) information regarding the skills and capabilities of other employees, consultants, vendors, and contractors for Santander that the Company desires to protect against disclosure or competitive use.
3.    NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Employee agrees not to, either during or after Employee’s employment, use or disclose such Confidential Information for any reason other than in the performance of Employee’s duties.

Employee’s obligation not to disclose Confidential Information does not apply to information that: (a) is or becomes generally available to the public other than as a result of disclosure by Employee; or (b) Employee is legally required by law, subpoena, or judicial/regulatory process, provided, however, that in the event Employee is legally required to disclose such information, Employee agrees to provide the Company with prompt notice thereof so that the Company may, in the Company’s sole discretion, seek an appropriate protective order. 

Page 7

4.    RESTRICTIVE COVENANTS. Employee acknowledges that: (a) during Employee’s employment with Santander, Employee will obtain Confidential Information; (b) the Confidential Information has been developed and created by Santander at substantial expense and the Confidential Information constitutes valuable proprietary assets of the Company; (c) Santander will suffer substantial damage which will be difficult to compute if Employee should solicit or interfere with the Company’s employees, clients, customers, vendors, or suppliers or should divulge Confidential Information relating to the business of the Company; (d) the provisions of this Agreement are reasonable and necessary for the protection of Santander’s business and the Confidential Information; (e) Santander would not have provided Employee with Confidential Information unless Employee agreed to be bound by the terms hereof; and (f) the provisions of this Agreement will not preclude Employee from other gainful employment.

For these reasons, Employee agrees to the following restrictive covenants designed to protect the Confidential Information:

		
	(i)
	Non-Competition: Employee shall not, during the Restricted Period, without the prior written consent of Santander, directly or indirectly, on Employee’s behalf or on behalf of or in conjunction with others, as a contractor, agent, shareholder, owner, partner, director, officer, principal, member, employee, or in any other capacity or manner whatsoever, for Employee’s own benefit or for the benefit of any other person or entity, render services or advice to, accept employment with, lend Employee’s name or credit to, work for, participate in the ownership, management, operation, financing, or control of, an entity currently engaged in, or desiring to become engaged in, Competing Activities in the Restricted Area. Notwithstanding the foregoing, nothing in this Agreement restricts Employee from owning less than 1% of any class of securities of such entity as a passive investor, if such securities are listed on a national securities exchange. Employee understands that this provision does not restrict Employee from accepting any employment with any entity that does not engage in Competing Activities.

		
	(ii)
	Non-Solicitation: Employee shall not, during the Restricted Period, without the prior written consent of Santander, directly or indirectly, on Employee’s behalf or on behalf of or in conjunction with others, as a contractor, agent, shareholder, owner, partner, director, officer, principal, member, employee, or in any other capacity or manner whatsoever, solicit business from, attempt to transact business with, transact business with, or interfere with the Company’s relationship with any Customer or Prospective Customer, vendor, supplier, or contractor of the Company. This restriction applies only to business that is a Competitive Activity.

		
	(iii)
	Anti-Raiding: Employee shall not, during the Restricted Period, without the prior written consent of the Company, directly or indirectly, on Employee’s behalf or on behalf of or in conjunction with others, as a contractor, agent, shareholder, owner, partner, director, officer, principal, member, employee, or in any other capacity or manner whatsoever, directly or indirectly solicit for employment, employ, or otherwise engage as an employee, independent contractor, or otherwise, any person who is, or within the 12-month period immediately preceding the date of any such activity was, an employee or contractor engaged by the Company.

The term “Restricted Period” means during Employee’s employment with the Company and for a period of twelve (12) months thereafter.
The term “Restricted Area” means the United States.

Page 8

The term “Competing Activity” means any business activity that involves or is related to providing vehicle finance and/or unsecured consumer lending products. 
The term “Customer or Prospective Customer” means any client or customer of the Company, or any person or entity with whom the Company has attempted to do business, within the 24-month period prior to the end of Employee’s employment. This term is limited to those clients, customers, persons, or entities: (1) with whom Employee had contact; or (2) about whom Employee received Confidential Information.
5.    REMEDIES. Employee acknowledges and agrees that if Employee breaches any of the provisions of this Agreement, the Company will suffer immediate and irreparable harm for which monetary damages alone will not be a sufficient remedy, and that, in addition to all other remedies that the Company may have, the Company shall be entitled to seek injunctive relief, specific performance, and any other form of equitable relief to remedy a breach or threatened breach of this Agreement and to enforce the provisions of this Agreement. The existence of this right shall not preclude or otherwise limit the applicability or exercise of any other rights and remedies that the Company may have at law or in equity. Santander shall further be entitled to attorneys’ fees and costs associated with obtaining any legal or equitable remedies.

If Employee violates the restrictive covenants of this Agreement and the Company brings legal action for injunctive or other relief, then the Company will not be deprived of the benefit of the full Restricted Period as a result of the time involved in obtaining the relief. Accordingly, Employee agrees that the Restricted Period will have duration of the Restricted Period, and the regularly scheduled expiration date of such Restricted Period will be extended by the same amount of time that Employee is determined to have violated such covenant.
It is further agreed that such covenant will be regarded as divisible, and if any part of such covenant is declared invalid, unenforceable, or void as to time, area, or scope of activities, a court with appropriate jurisdiction shall be authorized to rewrite, substitute, and enforce provisions which are valid; and the validity and enforceability of this Agreement as modified will not be affected.

6.    EXCLUSIVITY AND DUTY OF LOYALTY TO THE COMPANY’S INTEREST. Employee agrees that, during Employee’s employment with the Company, Employee shall:

		
	(a)
	Work for the best interest of the Company and make Employee’s services available only to the Company and not to Employee’s own account or for any other person or entity without the prior written consent of the Company;

		
	(b)
	Not engage in any activity which conflicts or interferes with the performance of any of the duties and/or responsibilities assigned to Employee by the Company;

		
	(c)
	Promptly disclose to the Company, and not divert, any business opportunities or prospective customers of which Employee becomes aware;

		
	(d)
	Promptly disclose any solicitation of any of the Company’s current, former, or prospective customers or employees by any competitor of the Company of which Employee becomes aware;

		
	(e)
	Not act to antagonize or oppose the interests of the Company; and

		
	(f)
	Not take advantage of any opportunity that Employee’s position may provide to profit beyond the agreed compensation and benefits.

7.    OWNERSHIP OF WORK PRODUCT. Employee acknowledges that all discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, processes, programs, designs, analyses, drawings, reports, patent applications, copyrightable work and mask work (whether or not including 

Page 9

any confidential information) and all registrations or applications related thereto, all other proprietary information, and all similar or related information (whether or not patentable) that relate to Santander’s actual or anticipated business, research and development, or existing or future products or services and that are conceived, developed, contributed to, made, or reduced to practice by Employee (either solely or jointly with others) while engaged or employed by the Company (including any of the foregoing that constitutes any proprietary information or records) (“Work Product”) belong to the Company, and Employee hereby assigns, and agrees to assign, all of the above Work Product to the Company. Any copyrightable work prepared in whole or in part by Employee in the course of Employee’s work for any of the foregoing entities shall be deemed a “work made for hire” under the copyright laws, and Santander shall own all rights therein. To the extent that any such copyrightable work is not a “work made for hire,” Employee hereby assigns and agrees to assign to Santander all right, title, and interest, including without limitation, copyright in and to such copyrightable work. Employee shall promptly disclose such Work Product and copyrightable work to the Company and perform all actions reasonably requested by the Company (whether during or after the term of Employee’s employment with the Company) to establish and confirm the Company’s ownership (including, without limitation, assignments, consents, powers of attorney, and other instruments).

8.    RETURN OF MATERIALS. Upon the termination of Employee’s employment for any reason or upon the Company’s request at any time, Employee shall immediately return to Santander all of the Company’s property, including, but not limited to, mobile phone, personal digital assistant (PDA), keys, pass cards, credit cards, confidential or proprietary lists (including, but not limited to, customer, supplier, licensor, and client lists), rolodexes, tapes, laptop computer, software, computer files, marketing and sales materials, and any other property, record, document, or piece of equipment belonging to the Company. Employee will not (a) retain any copies of the Company’s property, including any copies existing in electronic form, which are in Employee’s possession, custody, or control or (b) destroy, delete, or alter any property of the Company, including, but not limited to, any files stored electronically, without the Company’s prior written consent. The obligations contained in this paragraph shall also apply to any property which belongs to a third party, including, but not limited to, the Company’s customers, licensors, or suppliers.

9.    EMPLOYEE REPRESENTATIONS. Employee represents and warrants that: (a) Employee has full right, power, legal capacity and authority to enter into this Agreement; (b) neither the execution and delivery of this Agreement nor the performance of Employee’s duties as an employee of the Company, will breach, violate or (whether immediately or with the lapse of time or the giving of notice or both) constitute an event of default under, or require any consent or the giving of any notice under, any contract or instrument to which Employee is a party or by which Employee may be bound; and (c) Employee has disclosed to the Company all legal obligations, if any, owed to previous employers, and agrees not to improperly use or disclose any confidential information or trade secrets of any previous employers.

10.    MISCELLANEOUS.

		
	(a)
	Governing Law. This Agreement is made under and shall be construed according to the laws of the State of Texas.

		
	(b)
	Construction. The parties understand and agree that, should any portion of any clause or paragraph of this Agreement be deemed too broad to permit enforcement to its fullest extent, or should any portion of any clause or paragraph of this Agreement be deemed unreasonable, then said clause or paragraph shall be reformed and enforced to the maximum extent permitted by law. In the event that such portion of any clause or paragraph is deemed incapable of reform, the offending language shall be severed, and the remaining terms and provisions of this Agreement shall remain unaffected, valid, and enforceable for all purposes.

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	(c)
	Waiver. The waiver by either party of the breach of any of the terms and conditions of, or any right under this Agreement, shall not be deemed to constitute the waiver of any similar right. No such waiver shall be binding or effective unless expressed in writing and signed by the party giving such waiver. 

		
	(d)
	Entire Agreement. This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof. No oral statements or prior written material not specifically incorporated herein shall be of any force and effect, and no changes in or additions to this Agreement shall be recognized unless incorporated herein by written amendment, such amendment to become effective on the date stipulated therein. Employee acknowledges and represents that in executing this Agreement, Employee did not rely, and has not relied, on any communications, promises, statements, inducements, or representation(s), oral or written, by the Company, except as expressly contained in this Agreement. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs, legal representatives and permitted assigns (if any).

I, Dale T. Cochran II, acknowledge that I have carefully read this entire Agreement and understand the nature and extent of the obligations I am assuming hereunder.

	
				
	/s/ Dale T. Cochran II
	 
	March 26, 2017

	 
	EMPLOYEE SIGNATURE
	 
	DATE

	
				
	FOR SANTANDER
	 
	 

	 
	 
	 
	 

	/s/ Lisa VanRoekel
	 
	March 26, 2017

	 
	 
	 
	DATE

	Name:
	Lisa VanRoekel
	 
	 

	Title:
	Chief Human Resources Officer
	 
	 

Page 11

Additional Sign-On Bonus Conditions
I, Dale T. Cochran II (“I,” “Me,” “My”, or “Myself”), hereby acknowledge that, Santander Consumer USA Inc. (“SC”), in connection with my employment offer, will provide to me with a sign-on bonus net of taxes or other withholdings, to be paid as indicated in my offer letter. 

I understand that if I voluntarily terminate my employment for any reason or if SC terminates my employment within one year of my effective Date of Hire, I will be responsible for reimbursing SC the full amount that was paid to me. 
To the extent permitted by applicable state law, I authorize SC to retain from any and all compensation otherwise payable to Me at the time of termination including, but not limited to, unpaid wages, bonuses, commissions, accrued and unused PTO or other leave to which I am entitled, the amount to which I owe SC. To the extent that the amount owed is greater than this amount, or if no such earnings are owed, I understand that I must remit this amount directly to SC within thirty (30) days. 
I understand that if I fail to remit payment in full within the thirty (30) day period, SC has the right to charge interest on the amount owed at the maximum rate allowed by law. I also understand that I will be responsible for any cost, fees or expenses (including attorney fees) incurred by SC related to any and all collection efforts. 

Your signature below represents your acceptance of our Sign-On Agreement. 

/s/ Dale T. Cochran II___________________ 
Signature 

March 26, 2017________________________ 
Date

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