Document:

Exhibit 10.3

 Exhibit 10.3 
  
 EASTERN INSURANCE HOLDINGS, INC. 
 2005 STOCK INCENTIVE PLAN 
 Effective
                             , 2006 
 (As Approved by Shareholders on                     
        , 2006) 

 EASTERN INSURANCE HOLDINGS, INC. 
 2005 STOCK INCENTIVE PLAN 
  
 TABLE OF CONTENTS 
  

			
	 ARTICLE

	  	PAGE

	 ARTICLE 1. PURPOSE OF THE PLAN; TYPES OF AWARDS
	  	1
		
	 ARTICLE 2. DEFINITIONS
	  	1
		
	 ARTICLE 3. ADMINISTRATION
	  	5
		
	 ARTICLE 4. COMMON STOCK SUBJECT TO THE PLAN
	  	6
		
	 ARTICLE 5. ELIGIBILITY
	  	7
		
	 ARTICLE 6. STOCK OPTIONS IN GENERAL
	  	7
		
	 ARTICLE 7. TERM, VESTING AND EXERCISE OF OPTIONS
	  	9
		
	 ARTICLE 8. EXERCISE OF OPTIONS FOLLOWING TERMINATION OF EMPLOYMENT OR SERVICE
	  	10
		
	 ARTICLE 9. RESTRICTED STOCK
	  	11
		
	 ARTICLE 10. ADJUSTMENT PROVISIONS
	  	13
		
	 ARTICLE 11. GENERAL PROVISIONS
	  	14

 ARTICLE 1. PURPOSE OF THE PLAN; TYPES OF AWARDS 
  
 1.1 Purpose. The Eastern Insurance Holdings, Inc. 2005 Stock
Incentive Plan is intended to provide selected employees and non-employee directors of Eastern Insurance Holdings and its Subsidiaries with an opportunity to acquire Common Stock of the Corporation. The Plan is designed to help the Corporation
attract, retain, and motivate employees and non-employee directors to make substantial contributions to the success of the Corporation’s business and the businesses of its Subsidiaries. Awards will be granted under the Plan based, among other
things, on a participant’s level of responsibility and performance. 
  
 1.2 Authorized Plan Awards. Incentive Stock Options, Nonqualified Stock Options, and Restricted Stock may be awarded within the limitations of the Plan herein described. 
  
 ARTICLE 2. DEFINITIONS 
  
 2.1 “Agreement.” A written or electronic agreement between the
Corporation and a Participant evidencing the grant of an Award. A Participant may be issued one or more Agreements from time to time, reflecting one or more Awards. 
  
 2.2 “Award.” The grant of a Stock Option or Restricted Stock. 
  
 2.3 “Board.” The Board of Directors of the Corporation. 

 
 2.4 “Change in Control.” Except as otherwise provided in an
Agreement, the first to occur of any of the following events: 
  
 (a) any “Person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), except for any of the Corporation’s employee benefit plans, or any entity holding the Corporation’s
voting securities for, or pursuant to, the terms of any such plan (or any trust forming a part thereof) (the “Benefit Plan(s)”), is or becomes the beneficial owner, directly or indirectly, of the Corporation’s securities representing
19.9% or more of the combined voting power of the Corporation’s then outstanding securities other than pursuant to a transaction excepted in Clause (d); 
  
 (b) there occurs a contested proxy solicitation of the Corporation’s shareholders that results in the
contesting party obtaining the ability to vote securities representing 19.9% or more of the combined voting power of the Corporation’s then outstanding securities; 
  
 (c) a binding written agreement is executed providing for a sale, exchange, transfer or other disposition of
all or substantially all of the assets of the Corporation to another entity, except to an entity controlled directly or indirectly by the Corporation; 
  
 (d) the shareholders of the Corporation approve a merger, consolidation, or other reorganization of the Corporation, unless: 

 
 (i) under the terms of the agreement providing for such
merger, consolidation or reorganization, the shareholders of the Corporation immediately before such merger, consolidation or reorganization, will own, directly or indirectly immediately following 

  

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such merger, consolidation or reorganization, at least 51% of the combined voting power of the outstanding voting securities of the Corporation resulting
from such merger, consolidation or reorganization (the “Surviving Corporation”) in substantially the same proportion as their ownership of the voting securities immediately before such merger, consolidation or reorganization; 

 
 (ii) under the terms of the agreement providing for such
merger, consolidation or reorganization, the individuals who were members of the Board immediately prior to the execution of such agreement will constitute at least 51% of the members of the board of directors of the Surviving Corporation after such
merger, consolidation or reorganization; and 
  
 (iii) based on the terms of the agreement providing for such merger, consolidation or reorganization, no Person (other than (A) the Corporation or any Subsidiary of the Corporation, (B) any Benefit Plan, (C) the Surviving
Corporation or any Subsidiary of the Surviving Corporation, or (D) any Person who, immediately prior to such merger, consolidation or reorganization had beneficial ownership of 19.9% or more of the then outstanding voting securities) will have
beneficial ownership of 19.9% or more of the combined voting power of the Surviving Corporation’s then outstanding voting securities; 
  
 (e) a plan of liquidation or dissolution of the Corporation, other than pursuant to bankruptcy or insolvency laws, is adopted; or

  
 (f) during any period of two consecutive
years, individuals, who at the beginning of such period, constituted the Board cease for any reason to constitute at least a majority of the Board unless the election, or the nomination for election by the Corporation’s shareholders, of each
new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. 
  
 Notwithstanding Clause (a), a Change in Control shall not be deemed to have occurred if a Person becomes the beneficial owner, directly or
indirectly, of the Corporation’s securities representing 19.9% or more of the combined voting power of the Corporation’s then outstanding securities solely as a result of an acquisition by the Corporation of its voting securities which, by
reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to 19.9% or more of the combined voting power of the Corporation’s then outstanding securities; provided, however, that if
a Person becomes a beneficial owner of 19.9% or more of the combined voting power of the Corporation’s then outstanding securities by reason of share purchases by the Corporation and shall, after such share purchases by the Corporation, become
the beneficial owner, directly or indirectly, of any additional voting securities of the Corporation (other than as a result of a stock split, stock dividend or similar transaction), then a Change in Control of the Corporation shall be deemed to
have occurred with respect to such Person under Clause (a). In no event shall a Change in Control of the Corporation be deemed to occur under Clause (a) with respect to Benefit Plans. 
  
 2.5 “Code.” The Internal Revenue Code of 1986, as amended.

  

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 2.6 “Code of Conduct.” The policies and procedures related to employment of employees by the
Corporation or a Subsidiary set forth in [the Corporation’s employee handbook]. The Code of Conduct may be amended and updated at any time. The term “Code of Conduct” shall also include any other policy or procedure that may be
adopted by the Corporation or a Subsidiary and communicated to Employees and Non-Employee Directors of the Corporation or a Subsidiary. 
  
 2.7 “Committee.” The Compensation/Human Resources Committee of the Board. 
  
 2.8 “Common Stock.” The common stock of the Corporation (no par value) as described in the Corporation’s
Articles of Incorporation, or such other stock as shall be substituted therefor. 
  
 2.9 “Corporation.” Eastern Insurance Holdings, Inc., a Pennsylvania corporation. 
  
 2.10 “Employee.” Any common law employee of the Corporation or a Subsidiary. An Employee does not include any individual who: (i) does not
receive payment for services directly from the Corporation’s or a Subsidiary’s payroll; (ii) is employed by an employment agency that is not a Subsidiary; or (iii) who renders services pursuant to a written arrangement that
expressly provides that the service provider is not eligible for participation in the Plan, regardless if such person is later determined by the Internal Revenue Service or a court of law to be a common law employee. 
  
 2.11 “Exchange Act.” The Securities Exchange Act of 1934, as
amended. 
  
 2.12 “Incentive Stock Option.” A Stock
Option intended to satisfy the requirements of Code Section 422(b). 
  
 2.13 “Non-Employee Director.” A member of the Board who is not an Employee. 
  
 2.14 “Nonqualified Stock Option.” A Stock Option which does not satisfy the requirements of Code Section 422(b). 
  
 2.15 “Optionee.” A Participant who is awarded a Stock Option
pursuant to the provisions of the Plan. 
  
 2.16
“Participant.” An Employee or Non-Employee Director to whom an Award has been granted and remains outstanding. 
  
 2.17 “Performance Criteria.” Any objective determination based on one or more of the following areas of performance of the Corporation, a
Subsidiary, or any division, department or group of either which includes, but is not limited to: (a) earnings, (b) cash flow, (c) revenue, (d) financial ratios, (e) market performance, (f) shareholder return,
(g) operating profits (including earnings before interest, taxes, depreciation and amortization), (h) earnings per share, (i) return on assets, (j) return on equity, (k) return on investment, (l) stock price,
(m) asset quality, (n) expense reduction, (o) systems conversion, (p) special projects as determined by the Committee, and (q) acquisition integration initiatives. Performance Criteria shall be established by the Committee
prior to the issuance of a Performance Grant. 
  

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 2.18 “Performance Goal.” One or more goals established by the Committee, with respect to an
Award intended to constitute a Performance Grant, that relate to one or more Performance Criteria. A Performance Goal shall relate to such period of time, not less than one year (unless coupled with a vesting schedule of at least one year) or more
than five years, as may be specified by the Committee at the time of the awarding of a Performance Grant. 
  
 2.19 “Performance Grant.” An Award, the vesting or receipt without restriction of which, is conditioned on the satisfaction of one or more
Performance Goals. 
  
 2.20 “Plan.” The Eastern
Insurance Holdings, Inc. 2005 Stock Incentive Plan. 
  
 2.21
“Restricted Stock.” An award of Common Stock pursuant to the provisions of the Plan, which award is subject to such restrictions and other conditions, including achievement of one or more performance goals, as may be specified by the
Committee at the time of such award. 
  
 2.22
“Retirement.” The termination of a Participant’s employment following the first day of the month coincident with or next following attainment of age 65, [as the term “Normal Retirement Date” is defined in the Eastern
Insurance Holdings, Inc. Employee Stock Ownership Plan], or attainment of age 55 and the completion of five (5) years service [as described in the Eastern Insurance Holdings, Inc. Employee Stock Ownership Plan.] 
  
 2.23 “Securities Act.” The Securities Act of 1933, as amended.

  
 2.24 “Stock Option” or “Option.” A grant
of a right to purchase Common Stock pursuant to the provisions of the Plan. 
  
 2.25 “Subsidiary.” A subsidiary corporation, as defined in Code Section 424(f), that is a subsidiary of a relevant corporation. 
  
 2.26 “Termination or Dismissal For Cause.” Termination of an Employee by the Corporation or a Subsidiary or
dismissal of a Non-Employee Director from the Board after: 
  
 (a) any government regulatory agency recommends or orders in writing that the Corporation or a Subsidiary terminate the employment of such Employee or relieve him or her of his or her duties; 
  
 (b) such Employee or Non-Employee Director is convicted of
or enters a plea of guilty or nolo contendere to a felony, a crime of falsehood, or a crime involving fraud or moral turpitude, or the actual incarceration of the Employee or Non-Employee Director for a period of 45 consecutive
days; 
  
 (c) a determination by the Committee
that such Employee willfully failed to follow the lawful instructions of the Board or any officer of the Corporation or a Subsidiary after such Employee’s receipt of written notice of such instructions, other than a failure resulting from the
Employee’s incapacity because of physical or mental illness; 
  
 (d) a determination by the Committee that the willful or continued failure by such Employee or Non-Employee Director to substantially and satisfactorily perform his duties with 

  

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the Corporation or a Subsidiary (other than any such failure resulting from the Employee’s or Non-Employee Director’s “permanent and total
disability” (as defined in Code Section 22(e)(3)) or as a result of physical or mental illness), within a reasonable period of time after a demand for substantial performance or notice of lack of substantial or satisfactory performance is
delivered to the Employee or Non-Employee Director, which demand identifies the manner in which the Employee or Non-Employee Director has not substantially or satisfactorily performed his or her duties; or 
  
 (e) a determination by the Committee that such Employee or
Non-Employee Director has failed to conform to the Corporation’s Code of Conduct. 
  
 For purposes of the Plan, no act, or failure to act, on a Employee’s or Non-Employee Director’s part shall be deemed “willful” unless done, or omitted to be done, by such Employee or Non-Employee
Director not in good faith and without reasonable belief that such Employee’s or Non-Employee Director’s action or omission was in the best interest of the Corporation or a Subsidiary. 
  
 ARTICLE 3. ADMINISTRATION 
  
 3.1 The Committee. The Plan shall be administered by the
Compensation/Human Resources Committee of the Board composed of two or more members of the Board, all of whom are (a) ”non-employee directors” as such term is defined under the rules and regulations adopted from time to time by the
Securities and Exchange Commission pursuant to Section 16(b) of the Exchange Act, and (b) ”outside directors” within the meaning of Code Section 162(m). The Board may from time to time remove members from, or add members to,
the Committee. Vacancies on the Committee, however caused, shall be filled by the Board. 
  
 3.2 Powers of the Committee. 
  
 (a) The Committee shall be vested with full authority to make such rules and regulations as it deems necessary or desirable to administer the Plan and to interpret the provisions of the Plan, unless otherwise
determined by a majority of the disinterested members of the Board. Any determination, decision, or action of the Committee in connection with the construction, interpretation, administration or application of the Plan shall be final, conclusive,
and binding upon all Participants and any person claiming under or through a Participant, unless otherwise determined by a majority of the disinterested members of the Board. 
  
 (b) Subject to the terms, provisions and conditions of the Plan and subject to review and approval by a
majority of the disinterested members of the Board, the Committee shall have exclusive jurisdiction to: 
  
 (i) determine and select the Employees and Non-Employee Directors to be granted Awards (it being understood that more than one Award may
be granted to the same person); 
  
 (ii)
determine the number of shares subject to each Award; 
  
 (iii) determine the date or dates when the Awards will be granted; 
  

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 (iv) determine the exercise price of shares subject to an Option in accordance with
Article 6; 
  
 (v) determine the date or
dates when an Option may be exercised within the term of the Option specified pursuant to Article 7; 
  
 (vi) determine whether an Option constitutes an Incentive Stock Option or a Nonqualified Stock Option; 
  
 (vii) determine the Performance Criteria and establish
Performance Goals with respect thereto, to be applied to an Award; and 
  
 (viii) prescribe the form, which shall be consistent with the Plan document, of the Agreement evidencing any Awards granted under the Plan. 
  
 3.3 Liability. No member of the Board or the Committee shall be liable for any action or determination made in good
faith by the Board or the Committee with respect to this Plan or any Awards granted under this Plan. 
  
 3.4 Establishment and Certification of Performance Goals. The Committee shall establish, prior to grant, Performance Goals with respect to each
Award intended to constitute a Performance Grant. Except as may otherwise be provided in Article 8 hereof, no Option that is intended to constitute a Performance Grant may be exercised until the Performance Goal or Goals applicable thereto is
or are satisfied, nor shall any share of Restricted Stock that is intended to constitute a Performance Grant be released to a Participant until the Performance Goal or Goals applicable thereto is or are satisfied. 
  
 3.5 No Waiver of Performance Goals. Except as may otherwise be
provided in Article 8 hereof, the Committee or the Board shall not waive any Performance Goals with respect to the grant of any Award hereunder. 
  
 3.6 Performance Grants Not Mandatory. Nothing herein shall be construed as requiring that any Award be made a Performance Grant. 
  
 ARTICLE 4. COMMON STOCK SUBJECT TO THE PLAN 
  
 4.1 Common Stock Authorized. 
  
 (a) The initial total aggregate number of shares of Common
Stock for which Options may be granted under the Plan or which may be awarded as Restricted Stock under the Plan shall not exceed              shares [10% OF ALL SHARES SOLD IN THE
CONVERSION] The limitation established by the preceding sentence shall be subject to adjustment as provided in Article 10. 
  
 (b) The maximum aggregate number of shares of Common Stock for which Restricted Stock may be awarded under the Plan shall not exceed
             shares [4% OF ALL SHARES SOLD IN THE CONVERSION]. The limitation established by the preceding sentence shall be subject to adjustment as provided in Article 10.

  

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 (c) The maximum aggregate number of shares of Common Stock for which Incentive Stock
Options may be granted under the Plan shall not exceed                     . The limitation established by the preceding sentence shall be
subject to adjustment as provided in Article 10. 
  
 (d) The maximum aggregate number of shares of Common Stock for which Awards may be granted under the Plan to non-employee directors shall not exceed
                    . The limitation established by the preceding sentence shall be subject to adjustment as provided in Article 10.

  
 (e) If any Option is exercised by tendering
Common Stock, either actually or by attestation, to the Corporation as full or partial payment in connection with the exercise of such Option under the Plan, or if the tax withholding requirements are satisfied through such tender, only the number
of shares of Common Stock issued net of the Common Stock tendered shall be deemed delivered for purposes of determining the maximum number of shares available for Awards under the Plan. 
  
 4.2 Shares Available. The Common Stock to be issued under the Plan shall be the Corporation’s Common Stock,
which shall be made available at the discretion of the Board, either from authorized but unissued Common Stock, treasury shares, or shares acquired by the Corporation, including shares purchased on the open market. In the event that any outstanding
Award under the Plan for any reason expires, terminates, or is forfeited, the shares of Common Stock allocable to such expiration, termination, or forfeiture may thereafter again be made subject to an Award under the Plan. 
  
 ARTICLE 5. ELIGIBILITY 
  
 5.1 Participation. Awards shall be granted by the Committee only to
persons who are Employees and Non-Employee Directors. 
  
 5.2
Incentive Stock Option Eligibility. Incentive Stock Option Awards may only be granted to Employees of the Corporation. Notwithstanding any other provision of the Plan to the contrary, an individual who owns more than ten percent of the total
combined voting power of all classes of outstanding stock of the Corporation shall not be eligible for the grant of an Incentive Stock Option, unless the special requirements set forth in Sections 6.1 and 7.1 are satisfied. For purposes of this
section, in determining stock ownership, an individual shall be considered as owning the stock owned, directly or indirectly, by or for his brothers and sisters (whether by the whole or half blood), spouse, ancestors and lineal descendants. Stock
owned, directly or indirectly, by or for a corporation, partnership, estate or trust shall be considered as being owned proportionately by or for its shareholders, partners or beneficiaries. “Outstanding stock” shall include all stock
actually issued and outstanding immediately before the grant of the Option. “Outstanding stock” shall not include shares authorized for issue under outstanding Options held by the Optionee or by any other person. 
  
 ARTICLE 6. STOCK OPTIONS IN GENERAL 
  
 6.1 Exercise Price. The exercise price of an Option to purchase a
share of Common Stock shall be, in the case of an Incentive Stock Option, not less than 100% of the fair market value of 

  

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a share of Common Stock on the date the Option is granted, except that the exercise price shall be not less than 110% of such fair market value in the case
of an Incentive Stock Option granted to any individual described in the second sentence of Section 5.2. The exercise price of an Option to purchase a share of Common Stock shall be, in the case of a Nonqualified Stock Option, not less than 100%
of the fair market value of a share of Common Stock on the date the Option is granted. The exercise price shall be subject to adjustment pursuant to the limited circumstances set forth in Article 10. 
  
 6.2 Limitation on Incentive Stock Options. The aggregate fair market
value (determined as of the date an Option is granted) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any individual in any calendar year (under the Plan and all other plans maintained by the
Corporation and Subsidiaries) shall not exceed $100,000. 
  
 6.3
Determination of Fair Market Value. 
  
 (a) If the Common Stock is not listed on an established stock exchange or exchanges but is listed on NASDAQ, the fair market value per share shall be the closing sale price for the Common Stock on the day an Option is granted. If no sale of
Common Stock has occurred on that day, the fair market value shall be determined by reference to such price for the next preceding day on which a sale occurred. 
  
 (b) If the Common Stock is not listed on an established stock exchange or on NASDAQ, fair market value per
share shall be the mean between the closing dealer “bid” and “asked” prices for the Common Stock for the day an Option is granted, and if no “bid” and “asked” prices are quoted for the day an Option is
granted, the fair market value shall be determined by reference to such prices on the next preceding day on which such prices were quoted. 
  
 (c) If the Common Stock is listed on an established stock exchange or exchanges, the fair market value shall be deemed to be the closing
price of Common Stock on such stock exchange or exchanges on the day an Option is granted. If no sale of Common Stock has been made on any stock exchange on that day, the fair market value shall be determined by reference to such price for the next
preceding day on which a sale occurred. 
  
 (d)
In the event that the Common Stock is not traded on an established stock exchange or on NASDAQ, and no closing dealer “bid” and “asked” prices are available on the day an Option is granted, then fair market value will be the
price established by the Committee in good faith. 
  
 In
connection with determining the fair market value of a share of Common Stock on any relevant day, the Committee may use any source deemed reliable; and its determination shall be final and binding on all affected persons, absent clear error.

  
 6.4 Limitation on Option Awards. Awards under this Plan
(and any other plan of the Corporation or a Subsidiary providing for stock option awards) to an Employee described in Code Section 162(m)(3) shall not exceed, in the aggregate, Options to acquire 50,000 shares of 

  

 8 

 
Common Stock during any period of 12 consecutive months. Such limitation shall be subject to adjustment in the manner described in Article 10.

  
 6.5 Transferability of Options. 
  
 (a) Except as provided in Subsection (b), an Option
granted hereunder shall not be transferable other than by will or the laws of descent and distribution, and such Option shall be exercisable, during the Optionee’s lifetime, only by him or her. 
  
 (b) An Optionee may, with the prior approval of the
Committee, transfer a Nonqualified Stock Option for no consideration to or for the benefit of one or more members of the Optionee’s “immediate family” (including a trust, partnership or limited liability company for the benefit of one
or more of such members), subject to such limits as the Committee may impose, and the transferee shall remain subject to all terms and conditions applicable to the Option prior to its transfer. The term “immediate family” shall mean an
Optionee’s spouse, parents, children, stepchildren, adoptive relationships, sisters, brothers and grandchildren (and, for this purpose, shall also include the Optionee). 
  
 ARTICLE 7. TERM, VESTING AND EXERCISE OF OPTIONS 
  
 7.1 Term and Vesting. Each Option granted under the Plan shall terminate on the date determined by the Committee, and
specified in the Agreement; provided, however, that (i) each intended Incentive Stock Option granted to an individual described in the second sentence of Section 5.2 shall terminate not later than five years after the date of the grant,
(ii) each other intended Incentive Stock Option shall terminate not later than ten years after the date of grant, and (iii) each Option granted under the Plan which is intended to be a Nonqualified Stock Option shall terminate not later
than ten years and one month after the date of grant. Each Option granted under the Plan shall be fully exercisable (i.e., become 100% vested) only after the earlier of the date on which [(i) the Optionee completes three years of continuous
employment with, or service as a Non-Employee Director with the Corporation or a Subsidiary immediately following the date of the grant of the Option (or such later date as may be specified in an Agreement, including a date that may be tied to the
satisfaction of one or more Performance Goals)]; (ii) unless otherwise provided in an Agreement, a Change in Control occurs; and (iii) unless otherwise provided in an Agreement, the Optionee terminates employment or service as a
Non-Employee Director by reason of death, “permanent and total disability” (as defined in Code Section 22(e)(3)), or Retirement. Except as provided in Article 8, an Option may be exercised only during the continuance of the
Optionee’s employment with, or service as a Non-Employee Director with respect to, the Corporation. 
  
 7.2 Exercise. 
  
 (a) A person electing to exercise an Option shall give notice to the Corporation of such election and of the number of shares he or she
has elected to purchase and shall at the time of exercise tender the full exercise price of the shares he or she has elected to purchase. The exercise notice shall be delivered to the Corporation in person, by certified mail, or by such other method
(including electronic transmission) and in such form as determined by the Committee. The exercise price shall be paid in full, in cash, upon the exercise of the Option; provided, 

  

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however, that in lieu of cash, with the approval of the Committee at or prior to exercise, an Optionee may exercise an Option by tendering to the Corporation
shares of Common Stock owned by him or her and having a fair market value equal to the cash exercise price applicable to the Option (with the fair market value of such stock to be determined in the manner provided in Section 6.3) or by
delivering such combination of cash and such shares as the Committee in its sole discretion may approve; further provided, however, that no such manner of exercise shall be permitted if such exercise would violate Section 402 of the
Sarbanes-Oxley Act of 2002. Notwithstanding the foregoing, Common Stock acquired pursuant to the exercise of an Incentive Stock Option may not be tendered as payment unless the holding period requirements of Code Section 422(a)(1) have
been satisfied, and Common Stock not acquired pursuant to the exercise of an Incentive Stock Option may not be tendered as payment unless it has been held, beneficially and of record, for at least six months (or such longer time as may be required
by applicable securities law or accounting principles to avoid adverse consequences to the Corporation or a Participant). 
  
 (b) A person holding more than one Option at any relevant time may, in accordance with the provisions of the Plan, elect to exercise such
Options in any order. 
  
 (c) At the request of
the Participant and to the extent permitted by applicable law, the Committee may, in its sole discretion, selectively approve arrangements whereby the Participant irrevocably authorizes a third party to sell shares of Common Stock (or a sufficient
portion of the shares) acquired upon the exercise of an Option and to remit to the Corporation a sufficient portion of the sales proceeds to pay the entire exercise price and any tax withholding required as a result of such exercise. 
  
 7.3 Deferred Delivery of Nonqualified Stock Option Shares. The
Committee may approve an arrangement whereby an Optionee may elect to defer receipt of Common Stock otherwise issuable to him or her upon exercise of a Nonqualified Stock Option. Any such arrangement, if approved at all, shall be subject to such
terms and conditions as the Committee, in its sole discretion, may specify, which terms and conditions may (but need not) include provision for the award of additional shares to take into account dividends paid subsequent to exercise of the Option.
No exercise of discretion under this section with respect to an event or person shall create an obligation to exercise such discretion in any similar or same circumstance. 
  
 ARTICLE 8. EXERCISE OF OPTIONS FOLLOWING TERMINATION 
 OF EMPLOYMENT OR SERVICE 
  
 8.1 Retirement; Other Termination by Corporation or Subsidiary; Change in Control. In the event of an Optionee’s termination of employment or service as a Non-Employee Director (i) due to Retirement,
(ii) by the Corporation or a Subsidiary other than Termination for Cause, or (iii) due to a Change in Control, such Optionee’s Option shall lapse at the earlier of the expiration of the term of such Option or: 
  
 (a) in the case of an Incentive Stock Option, three months
from the date of such termination of employment; and 
  

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 (b) in the case of a Nonqualified Stock Option, [one year] from the date of such
termination of employment or service as a Non-Employee Director. 
  
 8.2 Death or Total Disability. In the event of an Optionee’s termination of employment or service as a Non-Employee Director by reason of death, “permanent and total disability” (as defined in Code
Section 22(e)(3)), such Optionee’s Option shall lapse at the earlier of the expiration of the term of such Option or: 
  
 (a) in the case of an Incentive Stock Option, one year from the date of such termination of employment; and 
  
 (b) in the case of a Nonqualified Stock Option, [one year]
from the date of such termination of employment or service as a Non-Employee Director. 
  
 8.3 Termination or Dismissal For Cause; Other Termination by Optionee. In the event of an Optionee’s Termination or Dismissal For Cause, or in the event of termination of employment at the election of an
Optionee, such Optionee’s Option shall lapse upon such termination. 
  
 8.4 Special Termination Provisions for Options. 
  
 (a) In the event that an Optionee’s employment or service as a Non-Employee Director is terminated and the Committee deems it
equitable to do so, the Committee may, in its discretion and subject to the approval of a majority of the disinterested members of the Board, waive any continuous service requirement for vesting (but not any Performance Goal or Goals) specified in
an Agreement pursuant to Section 7.1 and permit exercise of an Option held by such Optionee prior to the satisfaction of such continuous service requirement. Any such waiver may be made with retroactive effect, provided it is made within
60 days following the Optionee’s termination of employment or service as a Non-Employee Director. 
  
 (b) In the event the Committee waives the continuous service requirement with respect to an Option as set forth in Section 8.4(a)
above and the circumstance of an Optionee’s termination of employment or service as a Non-Employee Director is described in Section 8.1, the affected Option will lapse as otherwise provided in the relevant section. 
  
 (c) In the event the Committee waives the continuous service
requirement with respect to an Option as set forth in Section 8.4(a) above, such Option shall lapse at the earlier of the expiration of the term of such Option or: 
  
 (i) in the case of an Incentive Stock Option, three months from the date of termination of employment; and

  
 (ii) in the case of a Nonqualified Stock
Option, one year from the date of termination of employment or service as a Non-Employee Director. 
  
 ARTICLE 9. RESTRICTED STOCK 
  
 9.1 In General. Each Restricted Stock Award shall be subject to such terms and conditions as may be specified in the Agreement issued to a Participant to evidence the grant of 

  

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such Award. Subject to Section 3.6, a Restricted Stock Award shall be subject to a vesting schedule or Performance Goals, or both. 
  
 9.2 Minimum Vesting Period for Certain Restricted Stock Awards. Each
Restricted Stock Award granted to a Participant shall be fully exercisable (i.e., become 100% vested) only after the earlier of the date on which [(i) the Participant completes three years of continuous employment with, or service as a
Non-Employee Director with the Corporation or a Subsidiary immediately following the date that the Restricted Stock was awarded (or such later date as may be specified in an Agreement, including a date that may be tied to the satisfaction of one or
more Performance Goals)]; (ii) unless otherwise provided in an Agreement, a Change in Control occurs; or (iii) unless otherwise provided in an Agreement, the Participant terminates employment or service as a Non-Employee Director by reason
of death, “permanent and total disability” (as defined in Code Section 22(e)(3)), or Retirement. 
  
 9.3 Waiver of Vesting Period for Certain Restricted Stock Awards. In the event that a Participant’s employment or service as a Non-Employee
Director is terminated and the Committee deems it equitable to do so, the Committee may, in its discretion and subject to the approval of a majority of the disinterested members of the Board, waive any minimum vesting period (but not any Performance
Goal or Goals) with respect to a Restricted Stock Award held by such Participant. Any such waiver may be made with retroactive effect, provided it is made within 60 days following such Participant’s termination of employment or service as
a Non-Employee Director. 
  
 9.4 Limitation on Restricted Stock
Awards. Grants under this Plan (and any other plan of the Corporation or a Subsidiary providing for restricted stock awards) to any Employee described in Code Section 162(m)(3) shall not exceed, in the aggregate, Restricted Stock Awards for
             shares of Common Stock during any period of 12 consecutive months. Such limitation shall be subject to adjustment in the manner described in Article 10.

  
 9.5 Issuance and Retention of Share Certificates By
Corporation. One or more share certificates shall be issued upon the grant of a Restricted Stock Award; but until such time as the Restricted Stock shall vest or otherwise become distributable by reason of satisfaction of one or more Performance
Goals, the Corporation shall retain such share certificates. 
  
 9.6 Stock Powers. At the time of the grant of a Restricted Stock Award, the Participant to whom the grant is made shall deliver such stock powers, endorsed in blank, as may be requested by the Corporation. 
  
 9.7 Release of Shares. Within 30 days following the date on which
a Participant becomes entitled under an Agreement to receive shares of previously Restricted Stock, the Corporation shall deliver to him or her a certificate evidencing the ownership of such shares, together with an amount of cash (without interest)
equal to the dividends that have been paid on such shares with respect to record dates occurring on and after the date of the related Award. 
  
 9.8 Forfeiture of Restricted Stock Awards. In the event of the forfeiture of a Restricted Stock Award, by reason of a Participant’s
termination of employment or termination of service as a Non-Employee Director prior to vesting, the failure to achieve a Performance Goal or 

  

 12 

 
otherwise, the Corporation shall take such steps as may be necessary to cancel the affected shares and return the same to its treasury. 
  
 9.9 Assignment, Transfer, Etc. of Restricted Stock Rights. The
potential rights of a Participant to shares of Restricted Stock may not be assigned, transferred, sold, pledged, hypothecated, or otherwise encumbered or disposed of until such time as unrestricted certificates for such shares are received by him or
her. 
  
 9.10 Deferred Delivery of Formerly Restricted
Stock. The Committee may approve an arrangement whereby a Participant may elect to defer receipt of Restricted Stock beyond the date on which a restriction terminates or a Performance Goal is satisfied with respect thereto. Any such arrangement,
if approved at all, shall be subject to such terms and conditions as the Committee, in its sole discretion, may specify, including terms covering the accumulation or distribution of dividends previously paid with respect to the subject shares and
those that may thereafter be paid. 
  
 9.11 Shareholder
Rights. Participants who have been awarded shares of Restricted Stock shall be entitled to vote and to receive dividends with respect to such Restricted Stock during the periods of restriction to the same extent as such holders would have been
entitled if the Restricted Stock were unrestricted Common Stock. 
  
 ARTICLE 10. ADJUSTMENT PROVISIONS 
  
 10.1 Share
Adjustments. 
  
 (a) In the event that the
shares of Common Stock of the Corporation, as presently constituted, shall be changed into or exchanged for a different number or kind of shares of stock or other securities of the Corporation, or if the number of such shares of Common Stock shall
be changed through the payment of a stock dividend, stock split or reverse stock split, then (i) the shares of Common Stock authorized hereunder to be made the subject of Awards, (ii) the shares of Common Stock then subject to outstanding
Awards and the exercise price thereof (where relevant), (iii) the maximum number of Awards that may be granted within a 12-month period and (iv) the nature and terms of the shares of stock or securities subject to Awards hereunder shall be
increased, decreased or otherwise changed to such extent and in such manner as may be necessary or appropriate to reflect any of the foregoing events. 
  
 (b) If there shall be any other change in the number or kind of the outstanding shares of the Common Stock of the Corporation, or of any
stock or other securities into which such Common Stock shall have been changed, or for which it shall have been exchanged, and if a majority of the disinterested members of the Board shall, in its sole discretion, determine that such change
equitably requires an adjustment in any Award which was theretofore granted or which may thereafter be granted under the Plan, then such adjustment shall be made in accordance with such determination. 
  
 (c) In the event that the Corporation declares a special
cash dividend or return of capital after the effective date of this Plan in an amount per share which exceeds 10% of the fair 

  

 13 

 
market value of a share of Common Stock as of the date of declaration, the per share exercise price of all Options previously granted under the Plan that
remain unexercised as of the date of such declaration shall be proportionately adjusted to give effect to such special cash dividend or return of capital; provided, however, that if such treatment with respect to Incentive Stock Options would be
treated as a modification of outstanding incentive stock options with the effect that, for purposes of Code Sections 422 and 425(h), and the rules and regulations thereunder, new Incentive Stock Options would be deemed granted, then, in the sole
discretion of the Committee, no adjustment to the per share exercise price shall be made. In addition, no such adjustment of the per share exercise price shall be made with respect to any Option if applicable regulatory requirements prohibit such an
adjustment. 
  
 (d) The grant of an Award
pursuant to the Plan shall not affect in any way the right or power of the Corporation to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge, to consolidate, to dissolve, to liquidate or to
sell or transfer all or any part of its business or assets. 
  
 10.2 Corporate Changes. A liquidation or dissolution of the Corporation, a merger or consolidation in which the Corporation is not the surviving Corporation or a sale of all or substantially all of the Corporation’s assets,
shall cause each outstanding Award to terminate, except to the extent that another corporation may and does, in the transaction, assume and continue the Award or substitute its own awards. 
  
 10.3 Fractional Shares. Fractional shares resulting from any
adjustment in Awards pursuant to this article may be settled as the Committee shall determine. 
  
 10.4 Binding Determination. To the extent that the foregoing adjustments relate to stock or securities of the Corporation, such adjustments shall be made by a majority of the disinterested members of the Board,
whose determination in that respect shall be final, binding and conclusive. Notice of any adjustment shall be given by the Corporation to each holder of an Award which shall have been so adjusted. 
  
 ARTICLE 11. GENERAL PROVISIONS 
  
 11.1 Effective Date. The Plan shall become effective upon the approval
of the Plan by the shareholders of the Corporation within 12 months of adoption by the Board. 
  
 11.2 Termination of the Plan. Unless previously terminated by the Board, the Plan shall terminate on, and no Award shall be granted after, the day
immediately preceding the tenth anniversary of its adoption by the Board. 
  
 11.3 Limitation on Termination, Amendment or Modification. 
  
 (a) The Board may at any time terminate, amend, modify or suspend the Plan, provided that, without the approval of the shareholders of the
Corporation, no amendment or modification shall be made solely by the Board which: 
  
 (i) increases the maximum number of shares of Common Stock as to which Awards may be granted under the Plan (except as provided in
Section 10.1); 
  

 14 

 (ii) changes the class of eligible Participants; or 
  
 (iii) otherwise requires the approval of shareholders under
applicable state law or under applicable federal law to avoid potential liability or adverse consequences to the Corporation or a Participant. 
  
 (b) No amendment, modification, suspension or termination of the Plan shall in any manner affect any Award theretofore granted under the
Plan without the consent of the Participant or any person validly claiming under or through the Participant. 
  
 11.4 No Right to Grant of Award or Continued Employment or Service. Nothing contained in this Plan or otherwise shall be construed to
(a) require the grant of an Award to an individual who qualifies as an Employee or Non-Employee Director, or (b) confer upon a Participant any right to continue in the employ or service of the Corporation or any Subsidiary or limit in any
respect the right of the Corporation or of any Subsidiary to terminate the Participant’s employment or service at any time and for any reason. 
  
 11.5 No Obligation. No exercise of discretion under this Plan with respect to an event or person shall create an obligation to exercise such
discretion in any similar or same circumstance, except as otherwise provided or required by law. 
  
 11.6 Withholding Taxes. 
  
 (a) Subject to the provisions of Subsection (b), the Corporation will require, where sufficient funds are not otherwise available,
that a Participant who is an Employee pay or reimburse to it any withholding taxes at such time as withholding is required by law. 
  
 (b) With the permission of the Committee, a Participant who is an Employee may satisfy the withholding obligation described in
Subsection (a), in whole or in part, by electing to have the Corporation withhold shares of Common Stock (otherwise issuable to him or her) having a fair market value equal to the amount required to be withheld. An election by a Participant who
is an Employee to have shares withheld for this purpose shall be subject to such conditions as may then be imposed thereon by any applicable securities law. 
  
 11.7 Listing and Registration of Shares. 
  
 (a) No Option granted pursuant to the Plan shall be exercisable in whole or in part, and no share certificate shall be delivered, if at
any relevant time the Committee determines in its discretion that the listing, registration or qualification of the shares of Common Stock subject to an Award on any securities exchange or under any applicable law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in connection with, such Award, until such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not
acceptable to the Committee. 
  
 (b) If a
registration statement under the Securities Act with respect to the shares issuable under the Plan is not in effect at any relevant time, as a condition of the issuance of the shares, a Participant (or any person claiming through a Participant)
shall give the Committee a written or electronic statement, satisfactory in form and substance to the Committee, that he or 

  

 15 

 
she is acquiring the shares for his or her own account for investment and not with a view to their distribution. The Corporation may place upon any stock
certificate for shares issued under the Plan the following legend or such other legend as the Committee may prescribe to prevent disposition of the shares in violation of the Securities Act or other applicable law: 
  
 ‘THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (“ACT”) AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THEM UNDER THE ACT OR A WRITTEN
OPINION OF COUNSEL FOR THE CORPORATION THAT REGISTRATION IS NOT REQUIRED.’ 
  
 11.8 Disinterested Director. For purposes of this Plan, a director shall be deemed “disinterested” if such person could qualify as a member of the Committee under Section 3.1. 
  
 11.9 Gender; Number. Words of one gender, wherever used herein, shall
be construed to include each other gender, as the context requires. Words used herein in the singular form shall include the plural form, as the context requires, and vice versa. 
  
 11.10 Applicable Law. Except to the extent preempted by federal law,
this Plan document, and the Agreements issued pursuant hereto, shall be construed, administered, and enforced in accordance with the domestic internal law of the Commonwealth of Pennsylvania. 
  
 11.11 Headings. The headings of the several articles and sections of
this Plan document have been inserted for convenience of reference only and shall not be used in the construction of the same. 
  

 16 

 “WORD” 
  

			
	Long Document Name:	  	Eastern Insurance Holdings, Inc. 2005 Stock Incentive Plan
		
	System Database, Document Number, and Author’s Initials:	  	568081v2 (SL1) ECR
		
	From Where Did Document Originate:	  	duped 429930

  
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	 Origination Date:
	  	 August 29, 2005
	  	 	  	 
				
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	  	 ECR
	  	 	  	 
				
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	  	 ccs
	  	 	  	 
				
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	 	  	 	  	  ̈        I do not want this reviewed.

  

 17Exhibit 10.9

 Exhibit 10.9 
  
 REINSURANCE TRUST AGREEMENT 
  
 THIS REINSURANCE TRUST AGREEMENT made as of October 1, 2003 by and among EDUCATORS MUTUAL LIFE INSURANCE
COMPANY, a Pennsylvania mutual life insurance corporation (“Grantor”), LONDON LIFE REINSURANCE COMPANY, a Pennsylvania life insurance corporation (“Beneficiary”), and WACHOVIA BANK, N.A., a national banking
association (hereinafter referred to as the “Trustee”). 
  
 NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties agree as follows: 
  
 ARTICLE I: The Trust Account 
  
 1.1. Establishment of the Trust. Grantor hereby establishes a trust account (the “Trust Account”) with the Trustee for the sole
use and benefit of Beneficiary, upon the terms and conditions hereinafter set forth. Trustee will accept and credit to the Trust Account all assets which shall from time to time be delivered to it for the Trust Account by the Grantor’s order or
for the Grantor’s account and, as provided in this Agreement, will disburse the same in accordance with the parties’ instructions and the terms and conditions of this Trust Agreement. 
  
 1.1.1. The term, “Beneficiary” includes any
successor of the Beneficiary by operation of law, including, without limitation, any liquidator, rehabilitator, receiver or conservator named or appointed to act for the Beneficiary. 
  
 1.2. Receipt and Custody of Payments Into the Trust. The Trustee and its lawfully appointed successors is and
are authorized and shall have power to receive such securities and other property (“Assets”) as Grantor from time to time may transfer, remit or vest in the Trustee or place in the Trustee’s hands or under the Trustee’s control,
and to hold, invest, reinvest, and dispose of the same for the uses and purposes and in the manner and according to the provisions hereinafter set forth. All such Assets at all times shall be maintained in the Trust Account, separate and apart from
all other assets of the Trustee. 
  
 1.3. Location and
Control of the Assets. Trustee may hold the Assets in its vaults, or may hold on deposit, portions of the Assets with agents qualified to act as depositories or subcustodians under the Pennsylvania insurance laws and approved for such
purposes by the Pennsylvania Insurance Department; provided, however, that the Assets shall at all times be located in the United States. Trustee shall be responsible for the selection of such agents subject to the approval of the Beneficiary, but
shall remain liable to the Beneficiary for the agents’ acts or omissions to the same extent as if the Assets were held directly by it. Trustee also shall have the right to hold property on an uncertificated basis with the issuer, with the
Beneficiary’s prior approval. Trustee will use the same care with respect to the safekeeping of Assets held in the Trust Account as it uses in respect of its own similar property. 
  
 1.4. Permitted Investments. Assets deposited in the Trust Account by Grantor and investments and reinvestments
of the proceeds shall consist only of cash and those investments listed at Schedule 1 hereto (“Permitted Investments”). 

 1.5. Title and Transfer Documents. Upon execution of this Agreement, and from time to time
thereafter as required, Grantor shall execute assignments or endorsements in blank of all securities or other property standing in Grantor’s name which are delivered to the Trustee to form a part of the Trust Account so that, whenever
necessary, Trustee can renegotiate any such Asset without the consent or signature of Grantor or any person or entity. Any Assets delivered to the Trustee which are not in such negotiable form shall not be accepted by the Trustee and shall be
returned to Grantor as unacceptable. 
  
 1.6. Use of
Nominees. Trustee is directed to transfer into the name of nominees selected by it all registered securities from time to time held under this Agreement. Trustee shall be responsible for the acts of its nominees with respect to such
securities. Grantor authorizes the Trustee to execute in Grantor’s name, and to deliver, any instrument determined by Trustee to be appropriate in furtherance of the purposes hereof, including but not limited to, the transfer of registered
securities into the name of the nominee and the collection of any payment on such securities in the name of the nominee. 
  
 1.7. Advances and Credits. From time to time, Trustee may, but shall not be required, to credit the Trust Account with, interest, dividend
or principal payments on Assets in the Trust Account in anticipation of receiving same from a payor, central depository, broker or other agent employed by Grantor or Trustee. Any such crediting and posting shall be at the Grantor’s sole risk,
and Trustee shall be authorized to reverse any such advance posting in the event it does not receive good funds from any such payor, central depository, broker or agent of the Grantor. Trustee shall not be required to enforce the payment and
collection by legal process of any amount due in respect of the Assets, but shall use reasonable diligence to make all of such collections as may be effected in the ordinary course of business. 
  
 1.8. Sale and Exchange of Securities. Trustee is authorized,
without further instructions, to exchange securities in temporary form for securities in definitive form, to effect an exchange of the shares where the par value of stock is changed, and to surrender securities at maturity or when advised of earlier
call for redemption against payment therefor in accordance with accepted industry practice (with the proceeds of any such payment to be immediately deposited into the Trust Account). 
  
 1.8.1. The Grantor understands that Trustee subscribes and shall continue to subscribe to one or more
nationally recognized services that provide information with respect to calls for redemption of bonds and other corporate actions. Trustee shall not be liable for failure to redeem any called bond or take other action if notice of such call or
action was not provided by any service to which Trustee subscribes. 
  
 1.8.2. Trustee shall have no duty to notify the Grantor of any rights, duties, limitations, conditions or other information set forth in any security (including mandatory or optional put, call and similar provisions),
but Trustee shall forward to Grantor any notices or other documents received in regard to any such security. 
  

 2 

 1.8.3. Trustee shall maintain securities received in bearer form in such form unless
instructed by Grantor to exchange such securities for securities in registered form. 
  
 1.8.4. Where redemption options, tenders or other like securities have fixed expiration dates, the Grantor understands that in order for
Trustee to act, Trustee must receive Grantor’s instructions at its offices, addressed as Trustee may from time to time request, by no later than 9:00 a.m. (Trustee’s local time) at least one (1) business day prior to the last
scheduled date to act with respect thereto (or such earlier date or time as Trustee may notify the Grantor). Absent Trustee’s timely receipt of such instruction, such instruments will expire without liability to Trustee unless Trustee did not,
with due diligence, provide Grantor with timely and appropriate information. 
  
 1.9. Declarations and Affidavits. Trustee will execute as agent in the name of the Grantor all declarations, affidavits, and certificates of ownership now or hereafter required in respect of Assets held
in the Trust Account. Grantor hereby authorizes Trustee to disclose Grantor’s name, address and securities positions to issuers of securities held in the Trust Account if, as and to the extent that such disclosure may be required by law.

  
 1.10. Deposits, Withdrawals and Substitutions.

  
 1.10.1. Grantor may substitute Permitted
Investments for Assets forming a part of the Trust Account only if the current market value of the substitute Permitted Investments is no less than the then current market value of the Assets withdrawn. The Trustee shall be protected in relying upon
any statement of Grantor as to the market value of any Assets so withdrawn or substituted. 
  
 1.10.2. Upon call or maturity of an Asset, the Trustee may withdraw the Asset without the consent of Beneficiary if the Trustee provides
notice to Beneficiary, liquidates or redeems the Asset, and the proceeds are paid into the Trust Account no later than two (2) business days after the liquidation or redemption of the Asset. 
  
 1.10.3. The Trustee shall furnish to Grantor and Beneficiary
notice of any deposits to the Trust Account, and shall confirm to Grantor and Beneficiary all substitutions or withdrawals of Assets from the Trust Account, within ten (10) days of the deposit, withdrawal or substitution, as applicable.

  
 1.11. Investment and Reinvestment Decisions.
Grantor shall be responsible for directing the Trustee to invest and reinvest the Assets in the Trust Account. Unless and until directed in accordance with this Agreement by Grantor, the Trustee shall not be required to take any action with
respect to the investment or reinvestment of the Trust Account’s Assets. 
  
 1.11.1. Grantor shall direct the Trustee to invest and reinvest the proceeds of the Trust Account in Permitted Investments as provided in Section 1.4. 
  

 3 

 1.11.2. Trustee will provide Grantor and Beneficiary monthly with one or more schedules
listing the Assets (including the market value of the Assets) held in the Trust Account and transaction statements showing all transactions in the Trust Account for the period. The Grantor and Beneficiary agree to examine the schedules and
transaction statements promptly. Unless the Grantor or Beneficiary file with the Trustee a written exception, or claim of noncompliance with Grantor’s instructions within one year of the closing date of the period covered thereby, the Grantor
and Beneficiary will be deemed to have waived any such exception or claim against the Trustee with respect thereto. 
  
 1.12. Beneficiary Withdrawals. The Beneficiary shall have the right to withdraw Assets from the Trust Account at any time, subject only to
(i) not less than five (5) business days’ prior written notice to the Trustee and Grantor and (ii) a certification (included in the notice) that the withdrawal is being made for a permitted purpose under this Section 1.12.. No other statement
or document need be presented by Beneficiary in order to withdraw Assets except that Beneficiary shall be required by the Trustee to acknowledge receipt of withdrawn Assets. Withdrawals may be made by the Beneficiary only for the purposes permitted
in the Coinsurance Agreement between Grantor and Beneficiary dated October 1, 2003 (“Coinsurance Agreement”). 
  
 1.12.1. Upon receipt of Beneficiary’s instructions, the Trustee shall immediately take any and all necessary steps to transfer
absolutely and irrevocably to Beneficiary all right, title and interest in the Assets being withdrawn, and to deliver the physical custody thereof to Beneficiary. 
  
 1.12.2. The Trustee shall be protected in relying upon any written demand of Beneficiary for such withdrawal
and on any statement made therein. 
  
 1.13. Grantor
Withdrawals. Grantor shall have the right to withdraw Assets from the Trust Account at any time, subject only to (i) not less than five (5) business days’ prior written notice to the Trustee and Beneficiary and (ii) a certification
(included in the notice) that the withdrawal is being made for a permitted purpose under this Section 1.13. No other statement or document need be presented by Grantor in order to withdraw Assets except that Grantor shall be required by the Trustee
to acknowledge receipt of withdrawn Assets. Withdrawals may be made by Grantor only for the purposes permitted in the Coinsurance Agreement. 
  
 1.13.1. Upon receipt of Grantor’ s instructions, the Trustee shall immediately take any and all necessary steps to transfer
absolutely and irrevocably to Grantor all right, title and interest in the Assets being withdrawn, and to deliver the physical custody thereof to Grantor. 
  
 1.13.2. The Trustee shall be protected in relying upon any written demand of Grantor for such withdrawal and on any statement made
therein. 
  

 4 

 ARTICLE II: Provisions Relating to the Trustee 
  
 2.1. Trustee Status. The Trustee, and any successor trustee
duly appointed and acting hereunder, shall at all times comply with the following qualification criteria: 
  
 2.1.1. The Trustee shall be a bank or trust company in the United States and shall be a member in good standing of the Federal Reserve
System of the United States of America. 
  
 2.1.2. The Trustee shall not be the parent, subsidiary or affiliate of either Grantor or of Beneficiary. 
  
 2.2. Trustee Compensation. The Trustee shall be entitled to receive as compensation for its services hereunder, a fee, computed and payable
monthly, at such rate as may be agreed from time to time in writing between Grantor and the Trustee. Grantor shall be solely responsible for the payment of the fee of the Trustee and all reasonable expenses of the Trustee, including reasonable fees
of counsel. The Trust Account shall not be utilized for payment of fees and expenses. 
  
 2.3. Custody of Trust Assets. The Trustee shall be liable for the safekeeping and administration of the Trust Account Assets in accordance with provisions of this Section 2.3. 
  
 2.3.1. The Trustee shall exercise the standard of care with
respect to the Assets that a professional trustee, engaged in the banking or trust company business, having professional expertise in financial and securities processing transactions and custody, would observe in such affairs. 
  
 2.3.2. The Trustee shall be responsible for physical loss
of, or damage to, Assets under its care, custody, possession or control, or under the care, custody, possession or control of depositories, subcustodians, other agents or nominee(s), from all causes including, but not limited to, fire, burglary,
robbery, theft or mysterious disappearance. 
  
 2.3.3. In the event of loss or damage to the Assets under the care, custody or control of Trustee or its depositories, subcustodians, other agents or nominee(s), Trustee shall, upon demand of the Grantor or Beneficiary, promptly replace
such Assets with other assets of like kind and quality, together with all rights and privileges pertaining to the Assets (by, among other methods, posting appropriate security or bond with the issuer of the Assets to obtain reissue of such Assets
or, if acceptable to Grantor, delivery of cash equivalent to the fair market value of the Assets as of the date of the discovery of the loss or damage). 
  
 2.3.4. Nothing contained in any contract between Trustee and any entity authorized to hold Assets, as defined herein, shall diminish or
otherwise alter the liability of Trustee to the Grantor or Beneficiary hereunder. 
  
 2.3.5. The Trustee shall be liable for the Trustee’s negligence, willful misconduct, lack of good faith and/or breach of
Trustee’s obligations under this Agreement. 
  

 5 

 2.4. Indemnification of the Trustee. The Grantor will indemnify and hold the Trustee
harmless against any and all claims, losses, liabilities or damages, including reasonable attorneys’ fees and other expenses, arising from any action taken in accordance with the Grantor’s instructions (i) in connection with this Agreement
or (ii) the performance of its duties hereunder; provided that nothing contained herein shall require that Trustee be indemnified for its negligence, willful misconduct, lack of good faith or breach of its obligations under this Agreement.

  
 2.5. Reliance on Instructions. Trustee is
authorized to accept and rely upon all written instructions given by one or more officers, employees or agents of Grantor and Beneficiary authorized by or in accordance with the resolutions delivered to Trustee which authorized the opening of the
Trust Account (each such officer, employee or agent, or combination of officers, employees and agents, is hereinafter referred to as an “Authorized Officer”), including without limitation, instructions to sell, assign, transfer, deliver or
purchase Assets for the Trust Account in connection with a securities transaction. 
  
 2.5.1. The Trustee may rely on any instructions bearing or purporting to bear the facsimile signature of any of the individuals designated
as an Authorized Officer pursuant to the resolutions described above, regardless of or by whom or by what means the actual or purported facsimile signature or signatures thereon may have been affixed thereto if such facsimile signature or signatures
resemble the facsimile specimens from time to time furnished to Trustee by any of such Authorized Officers. 
  
 2.5.2. The Trustee may rely on instructions received by telephone, telex, TWX, facsimile transmission, bank wire or other teleprocess
acceptable to it which Trustee believes in good faith, absent its negligence or willful misconduct, to have been given by an Authorized Officer or which are transmitted with proper testing or authentication pursuant to terms and conditions which
Trustee may specify. 
  
 2.5.3. Trustee may also
rely on instructions transmitted electronically through any electronic instruction system acceptable to Trustee. 
  
 2.5.4. Trustee shall incur no liability to the Grantor or Beneficiary or otherwise as a result of any act or omission by Trustee in
accordance with the instructions on which Trustee is authorized to rely pursuant to the provisions of this section. 
  
 2.5.5. Any instructions delivered to Trustee by telephone shall promptly thereafter be confirmed in writing by an Authorized Officer, but
Trustee will incur no liability for the Grantor’s or Beneficiary’s failure to send such confirmation in writing, or the failure of any such written confirmation to conform to the telephone instructions which Trustee received, in the
absence of negligence on the part of Trustee. 
  
 2.5.6. Unless otherwise expressly provided, all authorizations and instructions shall continue in full force and effect until canceled or superseded by subsequent instructions received by Trustee. 
  

 6 

 2.5.7. The Grantor and Beneficiary agree that test arrangements, authentication methods
and/or other security devices to be used with respect to instructions which Grantor and Beneficiary may give by telephone, telex, TWX, facsimile transmission, bank wire or other teleprocess, or through an electronic instruction system, shall be
processed in accordance with terms and conditions for the use of such arrangements, methods or devices as Trustee may put into effect and modify from time to time. Grantor and Beneficiary shall safeguard any test keys, identification codes or other
security devices which Trustee makes available to Grantor and Beneficiary and agree that Grantor and Beneficiary shall be responsible for any losses, liability or damage incurred by Trustee as a result, of Trustee’s acting in accordance with
instructions from any unauthorized person using the proper security device, provided that such person did not obtain such security device solely as a result of Trustee’s negligence or willful misconduct. Trustee may electronically record, but
shall not be obligated to so record, any instructions given by telephone and any other telephone discussions with respect to the Trust Account. If Grantor and Beneficiary use any electronic communications or information system, Grantor and
Beneficiary agree that Trustee is not responsible for the consequences of the failure to perform, for any reason of any communications carrier, utility, communications network or the failure to perform for any reason of communications or computer
equipment. If such a system is inoperable, Grantor and Beneficiary agree to notify Trustee immediately, and Trustee agrees that it will accept the communication of transaction instructions by telephone, facsimile transmission or equipment compatible
to Trustee’s facsimile receiving equipment or by letter, at no additional charge to the Grantor. 
  
 2.6. Limitations on Trustee Duties. Trustee shall be under no obligation to determine whether or not any instructions given by Grantor and
Beneficiary are contrary to any provision of law. It is understood and agreed that Trustee’s duties are solely those set forth herein and that Trustee shall have no duty to take any other action unless specifically agreed to by Trustee in
writing. Without limiting the generality of the foregoing, Trustee shall have no duty to appear in or defend any suit with respect thereto unless requested by Grantor or Beneficiary in writing and indemnified to Trustee’s satisfaction; to
advise, manage, supervise or make recommendations with respect to the purchase, retention or sale of Assets; to give notice of default, make demand for payment, provide notification of the solvency or financial condition of issuers, or take any
other action with respect to any Assets in the Trust Account as to which a default in the payment of principal or interest has occurred, or to be responsible for the consequences of insolvency or the legal inability of any broker, dealer, bank or
other agent employed by the Grantor or Trustee with respect to the Trust Account Assets, except to the extent that Trustee was negligent in the selection of any such person or entity. 
  
 2.7. Trust Account Records. The Trustee shall keep full and complete records of the administration of the
Trust Account. Grantor, the Insurance Departments of the Commonwealth of Pennsylvania, and/or the Beneficiary may examine such records at any time during business hours, upon reasonable request. 
  

 7 

 2.8. Acceptance, Resignation and Removal. 
  
 2.8.1. The Trustee hereby accepts the trust herein created
and declared upon the terms herein expressed. 
  
 2.8.2. The Trustee may resign, by written notification, effective not earlier than ninety (90) days after delivery thereof to Grantor and Beneficiary. 
  
 2.8.3. The Trustee may be removed by Grantor by delivery to the Trustee and Beneficiary of a written notice
of removal, effective not earlier than ninety (90) days after notice to the Trustee and Beneficiary. 
  
 2.8.4. Upon resignation or removal of the Trustee, a successor trustee shall be appointed by Grantor and approved by Beneficiary. If the
Trustee resigns or is removed and a successor trustee has not been appointed by Grantor, approved by the Beneficiary and agreed to serve as trustee within the 90-day period contemplated by this Section 2.8, the Trustee shall deliver the cash
and securities to the Grantor at expiration of the 90-day period. For purposes of such delivery, legal ownership of the securities shall be conveyed to the Grantor. Written notice of the transfer shall be provided to the Beneficiary not less than
two (2) days before the transfer is made. 
  
 2.8.5. Upon appointment of a successor trustee in accordance with this Section 2.8, all of the powers, rights and duties of the Trustee named herein shall survive and continue in the successor trustee, and every successor trustee shall
succeed to take and have all the estate, powers, rights and duties of the Trustee named herein which shall survive and continue in the successor trustee, and every successor Trustee shall succeed to take and have all the estate, powers, rights and
duties which belonged to or were held by its predecessor. 
  
 2.8.6. Upon resignation or removal of a Trustee, the Trustee shall have the right to a final accounting with respect to the Trust Account. 
  
 ARTICLE III: Miscellaneous Provisions 
  
 3.1. Termination. This Agreement shall be effective until terminated by not less than sixty
(60) days’ advance written notice sent to Trustee by Grantor and the Beneficiary. 
  
 3.1.1. Upon the termination of this Trust Agreement, the Trustee shall, with Beneficiary and Grantor’s written consent, transfer, pay
over and deliver to Grantor all of the Assets of the Trust Account less all its proper fees and expenses then owing in exchange for a written receipt from Grantor. 
  
 3.2. Governing Law. The provisions, validity and construction of this Agreement and any amendments thereto
shall be governed by, and construed in accordance with the laws of the Commonwealth of Pennsylvania, and the Trust Account shall be administered in accordance with the laws of Pennsylvania. 
  

 8 

 3.3. Amendments. This Agreement may be amended at any time by written agreement signed by
Grantor and Beneficiary and delivered to the Trustee; provided, however, that no such amendment shall affect any provision of this Agreement which relates to the Trustee without the Trustee’s written consent. 
  
 3.4. Partial Unenforceability. In the event any provision of
this Agreement shall be held invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the remaining parts of this Trust Agreement. 
  
 3.5. Notices. All notices and other communications hereunder shall be in writing and shall be either
(i) deposited in first class United States mail, certified, with postage prepaid, (ii) delivered by messenger, (iii) sent by overnight courier, or (iv) sent by fully completed and confirmed facsimile transmission (with a written
confirmation simultaneously sent in first class United States mail), as follows: 
  
 If to the Trustee: 
  
 If to the Beneficiary: 
 Mr. Jeff Poulin 
 Senior Vice President Life and Annuity 
 London Life Reinsurance Company 
 1787 Sentry Parkway West, Suite 420 
 Blue
Bell, PA 19422 
  
 If to Grantor: 
 Mr. Alex T. Schneebacher 
 President & CEO

 Educators Mutual Life Insurance Company 
 202 North Prince Street 
 Lancaster, PA 17603 
  
 or such other address or fax number as any party may request by notice given under this section. Notices sent as provided herein shall be
deemed given on the date received by the recipient. If a recipient rejects or refuses to accept a notice given pursuant to this section, or if a notice is not deliverable because of a changed address or fax number of which no notice was given in
accordance with this section, such notice shall be deemed to be received two (2) days after such notice was mailed (whether as the actual notice or as the confirmation of a faxed notice) in accordance with the terms hereof. The foregoing shall
not preclude the effectiveness of actual written notice given to a party at any address or by any means. 
  
 3.6. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and the
counterparts shall constitute but one and the same instrument, which shall be sufficiently evidenced by any one counterpart. 
  

 9 

 3.7. Successors and Assigns. This Agreement shall be binding upon the successors and
permitted assigns of the parties. Except as otherwise expressly provided herein, none of the parties respective rights or obligations hereunder may be assigned with the prior written consent of the other parties. 
  

 10 

 SIGNATURE PAGE TO TRUST AGREEMENT 
  
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day it is effective. 
  

									
	WACHOVIA BANK, N.A.	 	 	 	EDUCATORS MUTUAL LIFE INSURANCE COMPANY
					
	By:	 	 	 	 	 	By:	 	

	Title:	 	 	 	 	 	Title:	 	President & CEO
			
	LONDON LIFE REINSURANCE COMPANY	 	 	 	 
					
	By:	 	

	 	 	 	 	 	 
	Title:	 	President & CEO	 	 	 	 	 	 

  

 11 

 Schedule 1 
  
 “Permitted Investments” means any combination of: 
  

	 	(a)	cash; 

  

	 	(b)	federally insured negotiable certificates of deposit issued by any national or state chartered bank or savings and loan association, no more than $100,000 principal per bank;

  

	 	(c)	United States Government issued or guaranteed bonds, bills or notes; 

  

	 	(d)	Publicly issued bonds issued by U.S. corporations with a Moody’s and Standard & Poor’s quality rating of “A” or better (if the rating falls below
“A” the bonds cease to be eligible assets and must be replaced); 

  

	 	(e)	No more than $500,000 may be invested in publicly issued bonds from the same issuer. 

  

	 	(f)	money market funds consisting exclusively of United States Government issued securities; 

  

	 	(g)	money market funds rated “AAA” by Moody’s or Standard & Poor’s; or 

  

	 	(h)	any other financial asset (as defined in section 408.102(1)(i) of the UCC) agreed to in writing from, time to time by REINSURERS and the COMPANY by means of an amendment to this
Agreement, but only upon presentment of such amendment to AGENT. 

  

	 	(i)	The average duration of the assets in the trust may not exceed the greater of 5 years or the duration of the reinsured liabilities + 1 year. The duration of the liabilities is to be
determined according to sound actuarial practice. 

  
 “Assets” shall not include any private placements or investments in corporations or persons which are affiliated with, controlled by, or which control the COMPANY.

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