Document:

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                                                                    Exhibit 10.1

                                   HORACE MANN

                              SUPPLEMENTAL EMPLOYEE

                                 RETIREMENT PLAN

                                     (SERP)

                                2002 RESTATEMENT

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                                TABLE OF CONTENTS

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                                                                           Page
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<S>                                                                        <C>
ARTICLE I. - GENERAL ....................................................   1
   1.1    Establishment .................................................   1
   1.2    Purpose .......................................................   1
   1.3    Application of Plan ...........................................   1
   1.4    Sponsorship ...................................................   1

ARTICLE II. - DEFINITIONS ...............................................   1
   2.1    "Committee" ...................................................   1
   2.2    "Company" .....................................................   2
   2.3    "Compensation" ................................................   2
   2.4    "Eligible Employee" ...........................................   2
   2.5    "Employer" or "HMSC " .........................................   2
   2.6    "ERISA" .......................................................   2
   2.7    "Final Average Earnings" ......................................   2
   2.8    "HMPP" ........................................................   2
   2.9    "Hour of Service" .............................................   2
   2.10   "Internal Revenue Code" or "Code" .............................   2
   2.11   "Joint and 50% Survivor Annuity" ..............................   2
   2.12   "Joint and Survivor Annuity" ..................................   2
   2.13   "MPPP" ........................................................   2
   2.14   "Normal Form of Payment" ......................................   2
   2.15   "Participant" .................................................   2
   2.16   "Payment Date" ................................................   3
   2.17   "Plan" ........................................................   3
   2.18   "Plan Year" ...................................................   3
   2.19   "Predecessor Employer" ........................................   3
   2.20   "Primary Social Security Benefit" .............................   3
   2.21   "QDRO" ........................................................   3
   2.22   "Spouse" ......................................................   3
   2.23   "Termination of Employment" ...................................   3
   2.24   "Years of Credited Service " or "Credited Service " ...........   3
   2.25   "Years of Eligible Service " or "Eligible Service " ...........   3

ARTICLE III. - PARTICIPATION ............................................   3
   3.1    Becoming a Participant ........................................   3
   3.2    Reemployment ..................................................   3
   3.3    Ceasing to be a Participant ...................................   4

ARTICLE IV. - ELIGIBILITY FOR AND AMOUNT OF RETIREMENT BENEFITS .........   4
   4.1    Eligibility ...................................................   4
   4.2    Vesting .......................................................   5
   4.3    Retirement Benefit Calculation ................................   5
   4.4    Commencement of Retirement Benefits ...........................   6
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<TABLE>
<S>                                                                          <C>
ARTICLE V. - DEATH BENEFITS ..............................................    6
   5.1    Entitlement to Death Benefits. .................................    6
   5.2    Claiming Death Benefits ........................................    6

ARTICLE VI. - FORM AND COMMENCEMENT OF RETIREMENT BENEFITS ...............    7
   6.1    Form and Commencement ..........................................    7
   6.2    Participant Elections ..........................................    7
   6.3    Hardship .......................................................    7
   6.4    Facility of Payment ............................................    8
   6.5    Effect of Return of Benefit Checks .............................    8
   6.6    Small Pensions .................................................    8

ARTICLE VII. - PLAN FINANCING ............................................    8
   7.1    Funding ........................................................    8
   7.2    Employer Contributions .........................................    9
   7.3    Benefits Payable Only From Corporate Assets ....................    9

ARTICLE VIII. - ADMINISTRATION ...........................................    9
   8.1    Pension Committee ..............................................    9
   8.2    Plan Administrator .............................................    9
   8.3    Liability ......................................................    9
   8.4    Claims Procedure ...............................................    9

ARTICLE IX. - AMENDMENT AND TERMINATION ..................................   10
   9.1    Amendment or Termination .......................................   10
   9.2    Change of Control ..............................................   10
   9.3    Corporate Successors ...........................................   11

ARTICLE X. - MISCELLANEOUS PROVISIONS ....................................   11
   10.1   Maximum Pensions ...............................................   11
   10.2   Nonalienation of Benefits ......................................   11
   10.3   No Contract of Employment ......................................   12
   10.4   Termination of Employment ......................................   12
   10.5   No Duplication of Benefits .....................................   12
   10.6   Limitations on Liability and Indemnification ...................   12
   10.7   Tax Implications ...............................................   12
   10.8   Reduction for Overpayment ......................................   12
   10.9   No Trust Relationship ..........................................   12
   10.10  Gender and Number ..............................................   13
   10.11  Invalidity of Certain Provisions ...............................   13
   10.12  Headings .......................................................   13
   10.13  Law Governing ..................................................   13
</TABLE>

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                              ARTICLE I. - GENERAL

1.1  Establishment. Effective January 1, 1992, Horace Mann Educators Corporation
     and Horace Mann Service Corporation (collectively referred to as the
     "Company") established an unfunded, deferred compensation plan on behalf of
     certain designated management or highly compensated employees of the
     Company or any subsidiary of the Company which has adopted the Horace Mann
     Pension Plan ("HMPP"). This document defines the provisions of such plan
     and shall be known as the "Horace Mann Supplemental Employee Retirement
     Plan" (the "Plan" or "SERP").

     Effective February 12, 1997, the Plan was amended and restated to include
     the same vesting provisions as contained in the HMPP.

     The Plan was amended effective March 31, 2002, to provide that no
     Participant will earn or accrue benefits under the Plan after March 31,
     2002.

     This amendment and restatement of the Plan is effective March 31, 2002.

1.2  Purpose. The Company maintains the HMPP which is intended to meet the
     requirements of a "qualified" retirement plan under Section 401(a) of the
     Internal Revenue Code of 1986, as amended ("Code"). The HMPP was amended
     effective January 1, 1992, to contain a new benefit formula designed to
     comply with the requirements for a qualified retirement plan as a result of
     the Tax Reform Act of 1986 and other legislative and regulatory
     developments. As of December 31, 1991, the HMPP's original primary offset
     formula was frozen. This Plan was established to replace benefits lost
     under the HMPP due to diminution of benefit accruals for the Eligible
     Employees. This Plan is intended to be an unfunded, deferred compensation
     plan for this select group of management or highly compensated employees,
     as described in Sections 201(2), 301(a)(3), and 401(a)(1) of the Employee
     Retirement Income Security Act of 1974 ("ERISA"). The purpose of the 2002
     amendment and restatement is to effect the amendment to the Plan freezing
     benefit accruals effective as of March 31, 2002.

1.3  Application of Plan. The terms of this Plan are applicable only to the
     Eligible Employees who were in the active employ of the Company before
     August 29, 1989 and after January 1, 1992.

1.4  Sponsorship. Horace Mann Service Corporation maintains and sponsors the
     Plan.

                           ARTICLE II. - DEFINITIONS

     The following terms, whenever used in the following capitalized form, shall
have the meaning set forth below unless the context clearly indicates otherwise:

2.1  "Committee" means the Committee appointed pursuant to the terms of the
     HMPP, with the responsibility and authority described therein.

                                      -1-

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2.2   "Company" means Horace Mann Educators Corporation and Horace Mann Service
      Corporation and any successors thereto.

2.3   "Compensation" means the Compensation recognized for a Participant under
      the HMPP at the same point in time. The Compensation of a Participant
      earned after March 31, 2002, shall not be taken into account for any
      purpose under the Plan.

2.4   "Eligible Employee" means those designated management or highly
      compensated Employees in the Appendix, but only for the period prior to
      their Termination of Employment.

2.5   "Employer" or "HMSC" means Horace Mann Service Corporation.

2.6   "ERISA" means the Employee Retirement Income Security Act of 1974, as from
      time to time amended.

2.7   "Final Average Earnings" means the Final Average Earnings recognized for a
      Participant under the HMPP at the same point in time. In determining a
      Participant's Final Average Earnings, the Compensation and service of a
      Participant after March 31, 2002 shall not be taken into account.

2.8   "HMPP" means the Horace Mann Pension Plan, as amended by the 2002
      restatement thereof and as further amended from time to time.

2.9   "Hour of Service" means each hour which an Eligible Employee is directly
      or indirectly paid or entitled to payment by the Employer for the
      performance of duties. Hour of Service shall not include any hour after
      March 31, 2002.

2.10  "Internal Revenue Code" or "Code" means the Internal Revenue Code of 1986,
      as amended, and any subsequent Internal Revenue Code. If there is a
      subsequent Internal Revenue Code, any references herein to Internal
      Revenue Code sections shall be deemed to refer to comparable sections of
      any subsequent Internal Revenue Code.

2.11  "Joint and 50% Survivor Annuity" means a reduced monthly benefit payable
      as defined in the HMPP.

2.12  "Joint and Survivor Annuity" means a reduced Retirement Benefit payable as
      defined in the HMPP.

2.13  "MPPP" means the Horace Mann Money Purchase Pension Plan, as amended by
      the 2002 restatement thereof and as further amended from time to time.

2.14  "Normal Form of Payment" has the same meaning as defined in the HMPP.

2.15  "Participant" means an Eligible Employee or former Eligible Employee who
      has an Accrued Benefit under the Plan.

                                      -2-

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2.16  "Payment Date" means the relevant date for determining when the retirement
      benefits or death benefits shall be paid and the form of payment and shall
      be the first day of the month next following a Participant's Termination
      of Employment.

2.17  "Plan" means the Plan as herein set forth, or as may be amended hereafter
      from time to time.

2.18  "Plan Year" means each twelve-consecutive month period beginning January
      1, 1992.

2.19  "Predecessor Employer" means CIGNA Corporation and each other company for
      whom employment would earn "eligible service" under the Prior Plan as
      defined in the HMPP.

2.20  "Primary Social Security Benefit" means the estimated monthly primary
      insurance amount as defined in Appendix I to the HMPP.

2.21  "QDRO" means a domestic  relations order which the Committee has
      determined to be a qualified domestic relations order within the meaning
      of Section 414(p) of the Code.

2.22  "Spouse" means a person who is the Participant's Spouse under the HMPP.

2.23  "Termination of Employment" occurs when a person ceases to be employed by
      HMSC.

2.24  "Years of Credited Service" or "Credited Service" means only those periods
      of service as defined in the HMPP for purposes of benefit calculation. Any
      service beyond 30 years will not be included in the benefit calculation. A
      Participant will earn no Credited Service under this Plan after March 31,
      2002.

2.25  "Years of Eligible Service" or "Eligible Service" means the number of full
      and fractional Years of Eligible Service recognized for a Participant as
      defined under the HMPP.

                          ARTICLE III. - PARTICIPATION

3.1   Becoming a Participant. Each Eligible Employee shall initially become a
      Participant on January 1, 1992.

3.2   Reemployment.

      (a)  Following Retirement. If a Participant retires from the Company, and
           subsequently is re-employed as a full time, part time or temporary
           employee who works more than 10 days per month, the Participant's
           periodic SERP benefit will cease until he re-retires. Upon his
           subsequent retirement, his prior and additional service and earnings,
           plus any additional credit earned under the qualified plan(s), but
           not any additional service and earnings or any additional credit
           earned with respect to periods after March 31, 2002, will be included
           in the recalculation of the Participant's SERP benefit.

                                      -3-

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          In the event the Participant retires and is re-employed and works less
          than 10 days a month, the Participant's periodic SERP payment will
          continue.

     (b)  Following Termination of Employment for reason(s) other than
          Retirement. If an Eligible Employee's Termination of Employment is for
          reason(s) other than Early or Normal Retirement, then upon
          re-employment on or prior to March 31, 2002, any prior service will be
          credited as it is credited under the HMPP. However, to the extent that
          the Participant received a Lump Sum distribution under the SERP, as
          defined in the HMPP, the Participant will not receive credit under
          this Plan for that prior service.

3.3  Ceasing to be a Participant. A person will cease to be a Participant with
     respect to his Accrued Benefit earned prior to his Termination of
     Employment:

     (a)  if he becomes a Participant in the Executive Supplemental Employee
          Retirement Plan (ESERP) then all benefits under this Plan will be
          forfeited;

     (b)  if he loses all of his Years of Credited Service under the HMPP; or

     (c)  if he dies.

        ARTICLE IV. - ELIGIBILITY FOR AND AMOUNT OF RETIREMENT BENEFITS

4.1  Eligibility. Benefits are payable under the SERP only if the Participant
     separates from service from the Company and would be considered to be
     vested under the HMPP. That eligibility would include early, normal, and
     postponed retirement. As defined in the HMPP:

     (a)  For employees who separate from service and are immediately eligible
          for retirement benefits:

          (i)   Normal Retirement Date is the first day of the month coincident
                with or next following the month in which the Participant is at
                least 65 years and has at least 5 years of service;

          (ii)  Early Retirement Date is the first day of the month coincident
                with or following the month in which the Participant is at least
                55 years and has at least 10 years of service. Benefits will be
                reduced according to the Early Retirement Adjustment Factor
                Table as contained in the HMPP; or

          (iii) Postponed Retirement Date is the first day of the month
                coincident with or next following the Participant's termination
                of employment with the Company after his Normal Retirement Date,
                and until March 31, 2002, the Participant will continue to
                accrue service under this Plan (up to 30 years) and eligible
                compensation.

                                      -4-

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     (b)  For employees who separate from service, who are vested but not yet
          eligible for retirement benefits:

          (i)   Normal vested benefits are payable as of the first day of the
                month coincident with or next following the Participant's 65th
                birthday and the Participant has at least 5 years of service and
                are calculated in the same manner as provided in the HMPP at the
                time of the Participant's separation from service; or

          (ii)  Early vested benefits are payable as of the first day of the
                month coincident with or following the month in which the
                Participant is at least 55 years and has at least 10 years of
                service. Benefits are calculated in the same manner as provided
                in the HMPP at the time of the Participant's separation from
                service and will be reduced according to the Deferred Vested
                Retirement Adjustment Factor Table as contained in the HMPP.

4.2  Vesting. The SERP benefits are subject to the same vesting provisions as
     described in the HMPP.

4.3  Retirement Benefit Calculation. The purpose of the SERP is to provide in
     conjunction with benefits payable from the HMPP and the MPPP, a retirement
     income equal to the benefit provided under the pre-January 1, 1992 HMPP as
     stated in the "guaranteed benefit" at age 65 years subject to the ceasing
     of benefit accruals hereunder on March 31, 2002.

     (a)  A Participant who attains his Normal Retirement Date as an Eligible
          Employee shall have a retirement benefit equal to his Accrued Benefit,
          defined in the same manner as the Accrued Benefit in the HMPP. The
          SERP base benefit formula is:

          *an average of the Participant's highest 36 consecutive months of
           Compensation;
          *times 2%;
          *times Years of Credited Service under the HMPP (up to 30 years);
          *minus 50% of the Primary Social Security Benefit;
          *equals the Participant's lifetime only benefit at age 65 years.

     (b)  To determine what benefit, if any, is due under the SERP, the
          following calculation would be performed.

          *SERP lifetime only base benefit;
          *minus the lifetime only benefit payable from the HMPP;
          *minus the lifetime only benefit payable from the MPPP, as defined in
           the HMPP and as determined as of the Valuation Date specified in the
           HMPP which shall be no later than March 31, 2002;
          *equals the lifetime only benefit payable from the SERP.

          If the combined payable benefits from the HMPP and the MPPP are
          greater than the SERP, then no benefits are payable from the SERP.
          This would apply to any other forms of benefits payable (such as,
          early retirement or surviving spouse

                                      -5-

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          options). In addition, the SERP will not pay supplemental benefits due
          to IRC statutory limitations.

4.4  Commencement of Retirement Benefits. All Retirement Benefits will be paid
     as of the appropriate Payment Date. In the event payment of a Retirement
     Benefit does not commence or is not made until after a Participant's
     Payment Date, the Plan will pay to such Participant all amounts due and
     unpaid since the Payment Date in accordance with the form of payment in
     effect on the Payment Date.

                          ARTICLE V. - DEATH BENEFITS

5.1  Entitlement to Death Benefits.

     (a)  Amount and Conditions of Spouse's Death Benefit. Upon the death on or
          after January 1, 1992 and prior to the Payment Date of any Retirement
          Benefit, of a Participant who has satisfied the conditions hereinafter
          described, the Spouse of such Participant shall be entitled to a Death
          Benefit commencing on the Spouse's Payment Date and in the amount
          described hereinafter:

          (i)   With respect to a Participant who is not an Eligible Employee on
                his date of death, and whose death occurs after he has attained
                his Normal Retirement Date or Early Retirement Date, the Death
                Benefit shall be an amount that the Participant would have been
                paid had the Participant commenced to receive Retirement
                Benefits on what would have been the Participant's Payment Date
                and had he died the next day.

          (ii)  In the case of a Participant who is an Eligible Employee on the
                date of his death and who has accrued not less than five (5)
                Years of Eligible Service, the Death Benefit shall be an amount
                equal to fifty percent (50%) of the Participant's Accrued
                Benefit payable in a Single Life Annuity.

     (b)  No Death Benefit. If a Death Benefit is not applicable in accordance
          with Section 5.1(a), or the Spouse dies before the Payment Date of
          such Death Benefit, no Death Benefit shall be paid from the Plan.

5.2  Claiming Death Benefits. All Death Benefits will be paid commencing as of
     the appropriate Payment Date. In the event payment of a Death Benefit does
     not commence or is not made until after the Payment Date, the Plan will pay
     to such Spouse all amounts due and unpaid since the Payment Date in
     accordance with the form of payment automatically in effect on the Payment
     Date. Notwithstanding the request or election to the contrary, the Plan
     Administrator shall direct an immediate distribution of a Lump Sum payment
     (determined pursuant to the appropriate table as defined in the HMPP) if
     the value of the Death Benefit payable as of the Payment Date does not
     exceed the applicable limit as defined in the HMPP.

                                      -6-

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           ARTICLE VI. - FORM AND COMMENCEMENT OF RETIREMENT BENEFITS

6.1  Form and Commencement. As defined in the HMPP, benefits payable under this
     Plan shall be paid in the Normal Form of Payment beginning on the
     Participant's Payment Date. However, in the manner described in Section
     6.2, any benefit due to a Participant under this Plan may be paid in the
     form of a Joint and Survivor Annuity or a Lump Sum payment. Each alternate
     form of payment shall be in the Actuarial Equivalent as defined in the HMPP
     of a Single Life Annuity.

6.2  Participant Elections. A Participant (or a Participant's spouse should the
     Participant pre decease the Participant) shall have the right to elect, by
     delivery of written notice to the Plan Administrator at any time prior to
     his Payment Date, not to have the Retirement Benefit paid in the Normal
     Form of Payment. Any election made by a person pursuant to this Section may
     be revoked by such person by delivering written notice to the Plan
     Administrator at any time prior to his Payment Date and, once revoked, may
     be made again at any time by delivering written notice to the Plan
     Administrator prior to his Payment Date. An election to receive payment of
     his Retirement Benefit in the form of a Lump Sum shall be subject to the
     approval of the Plan Administrator in his or her absolute discretion. The
     Plan Administrator shall only approve a Lump Sum form of payment when the
     Participant has demonstrated to the Plan Administrator's satisfaction that
     he is suffering or will soon be suffering a severe economic hardship due to
     severe and unexpected financial emergencies, as described in Section 6.3,
     and he has no readily available resources to meet the hardship.

6.3  Hardship. A severe economic hardship shall include:

     (a)  unreimbursed medical expenses for the Participant, the Participant's
          Spouse, or the Participant's dependents;

     (b)  unreimbursed expense for the Participant, Participant's Spouse or the
          Participant's dependents for long-term care, custodial care, or elder
          care;

     (c)  purchase of a Participant's primary residence;

     (d)  mortgage or rent payments to prevent the Participant's eviction from,
          or foreclosure on, his principal residence;

     (e)  unreimbursed educational expense for the Participant or the
          Participant's dependents;

     (f)  payment of expenses in order to prevent the Participant's bankruptcy;

     (g)  in the cases of terminal illness of the Participant, the Spouse or the
          Participant's Dependents;

     (h)  other financial emergencies of an unforeseen nature, that would impose
          severe hardship on the Participant as determined in a
          nondiscriminatory manner.

                                      -7-

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     Hardships for purposes of the Plan would not include purchase of a
     secondary residence or similar types of real estate, meeting outstanding
     credit indebtedness, mortgage balloon payments, refinancing, and other
     similar types of events.

     In order to qualify for a Lump Sum distribution for the above hardships,
     the Participant must not have any other readily available resources that
     would meet the Participant's unforeseen, immediate financial need. This
     would not include the forced selling of property significantly below its
     true value or incurring a substantial penalty because of an early surrender
     of a certificate of deposit. If the Participant requests a "hardship" Lump
     Sum distribution, he will be required to make the request in writing and to
     submit documentation of the financial need and certification of the
     unavailability of other resources to meet the need.

     The review and approval of the hardship Lump Sum distribution is made by
     the Plan Administrator. Should the Participant's request be denied, and he
     feels that denial is in error, he should appeal his request within sixty
     (60) days of the denial to the Plan Administrator and the Chairperson of
     the Pension Committee. Any decision made subsequent to the appeal review
     process will be considered final.

     Subsequent to review and approval, benefits will be paid approximately
     thirty (30) days later by draft without interest from the Payment Date.

6.4  Facility of Payment. All benefits under the Plan shall be paid to the
     Participant or Spouse entitled thereto ("Payee") by a check which shall be
     endorsed personally by the Payee.

6.5  Effect of Return of Benefit Checks. Each person entitled to benefits under
     this Plan shall furnish the Plan Administrator with the address to which
     his benefit checks shall be mailed. If any benefit check is mailed by
     regular United States Mail to the last address appearing on the Plan
     Administrator's record is returned because the addressee is not found at
     that address, the mailing of benefit checks shall stop. Thereafter, if the
     Plan Administrator receives written notice of the proper address of the
     person entitled to receive such benefit checks and is furnished with
     evidence satisfactory to the Plan Administrator that such person is living,
     all amounts then due shall be forwarded to such person.

6.6  Small Pensions. Notwithstanding a Participant's election otherwise or any
     other provision of this Plan, if the Lump Sum value (determined pursuant to
     the appropriate Table contained in the HMPP) of a Participant's Retirement
     Benefit does not exceed the applicable limit prescribed by the HMPP, the
     Plan Administrator shall make full payment of such Retirement Benefit in a
     Lump Sum.

                         ARTICLE VII. - PLAN FINANCING

7.1  Funding. All benefits payable under the Plan constitute general corporate
     obligations of the Employer. The amounts payable under the Plan shall be
     reflected on the accounting records of the Employer but shall not be
     construed to create or require the creation of a trust, custodial, or
     escrow account. No Participant (or Spouse of a Participant) shall have

                                       -8-

<PAGE>

     any right, title, or interest whatever in or to any investment reserves,
     accounts, or funds that an Employer may purchase, establish, or accumulate
     to aid in providing benefits under this Plan. Nothing contained in this
     Plan, and no action taken pursuant to its provisions, shall create a trust
     or fiduciary relationship of any kind between an Employer and a Participant
     or any other person. Neither a Participant or Spouse of a Participant shall
     acquire any interest greater than that of an unsecured creditor.

7.2  Employer Contributions. The Employer shall make payments from its general
     assets to pay benefits under this Plan in such amounts and at such times as
     the Committee, in accordance with the Plan, shall from time to time direct.

7.3  Benefits Payable Only From Corporate Assets. All benefits provided by this
     Plan shall be paid solely out of the corporate assets of the Employer.

                         ARTICLE VIII. - ADMINISTRATION

8.1  Pension Committee. The same membership structure, actions, responsibility
     and authority shall apply to this Plan as described in the HMPP and the
     MPPP. The decision of the Pension Committee in matters within its
     jurisdiction shall be final, binding, and conclusive upon the Company and
     upon each Eligible Employee, Participant, spouse, and every other person or
     party interested or concerned.

8.2  Plan Administrator. The Plan Administrator shall have the same duties and
     authority pursuant to this Plan as are described in the HMPP and the MPPP.
     All affairs of calculation, payment and administration of the SERP are
     conducted by the Plan Administrator. No benefits will be paid under the
     terms of this Plan without the authorization of the Plan Administrator. The
     Plan Administrator shall be entitled to rely conclusively upon all tables,
     valuations, certificates, opinions and reports furnished by any actuary,
     accountant, controller, counsel or other person employed or engaged by the
     Company with respect to the Plan.

8.3  Liability. The Committee and Plan Administrator shall be free from all
     liability, joint and several, for their acts as members of such Committee,
     except to the extent that they may have committed willful misconduct or
     otherwise required by federal law.

8.4  Claims Procedure. If a Participant believes he is being denied a benefit to
     which he is entitled under the Plan, the Participant may file a written
     request for such benefit with the Committee setting forth his claim. Upon
     receipt of the claim, the Committee shall advise the Participant that a
     reply will be forthcoming within ninety (90) days and shall deliver such
     reply within such period, unless Committee extends the reply period for an
     additional ninety (90) days for reasonable cause. If the claim is denied in
     whole or in part, the Committee shall so advise the Participant in writing
     setting forth: (a) the specific reason or reasons for such denial; (b) the
     specific reference to pertinent provisions of the Plan on which such denial
     is based; (c) a description of any additional material or information
     necessary for the Participant to perfect his claim and an explanation why
     such material or such information is necessary; and (d) appropriate
     information as to the steps to be taken if the Participant wishes to submit
     the claim for review. Any request for review must be submitted in writing
     by the Participant

                                      -9-

<PAGE>

         to the Committee in care of the Committee at its principal place of
         business within sixty (60) days after the receipt by the Participant of
         the denial of the Participant's claim. The Participant or his duly
         authorized representative may, but need not, review the pertinent
         documents and submit issues and comments in writing for consideration
         by the Committee. If the Participant does not request a review of the
         Committee's determination within such sixty (60) day period, the
         Participant shall be barred and estopped from challenging the
         Committee's determination. Within sixty (60) days after the Committee's
         receipt of a request for review, it will review its determination.
         After considering all materials presented by the Participant, the
         Committee will render a written opinion, written in a manner calculated
         to be understood by the Participant, setting forth the specific reasons
         for the decision and containing specific references to the pertinent
         provisions of the Plan on which the decision is based. If special
         circumstances require that the sixty (60) day time period be extended,
         the Committee will so notify the Participant and will render the
         decision as soon as possible, but no later than one hundred twenty
         (120) days after receipt of the request for review.

                    ARTICLE IX. - AMENDMENT AND TERMINATION

9.1      Amendment or Termination. The Company and Pension Committee intend the
         Plan to be permanent but reserve the right to amend or terminate the
         Plan when, in the sole opinion of the Pension Committee, such amendment
         or termination is advisable. Any such amendment or termination shall be
         made pursuant to a resolution of the Board of Directors of the Company
         and shall be effective as of the date of such resolution. No amendment
         or termination of the Plan shall directly or indirectly deprive any
         Participant or surviving spouse of all or any portion of any SERP
         Benefit payment which has commenced prior to the effective date of the
         resolution amending or terminating the Plan.

         Unless expressly provided for in this Plan, the Pension Committee may
         only amend, modify, change or revise the Plan by amendment if such
         amendment could have been adopted under the first paragraph of this
         Section and it does not cause a change in the level or type of expenses
         to be made to the Plan or otherwise materially increase the duties and
         obligation of the Employer with respect to the Plan.

9.2      Change of Control. In the event of a Change of Control of HMEC (the
         parent company of HMSC), certain protection will apply. Any Participant
         who is employed by HMSC when a Change of Control occurs, who has signed
         a severance agreement and who is discharged for reasons other than
         cause, during a three year period subsequent to the Change of Control,
         will receive their benefit from the SERP in a lump sum payment equal to
         their accrued benefit under the SERP, as defined in Article 4, at the
         time of severance. Should this Plan be terminated and not replaced due
         to a Change of Control of HMEC, all SERP Participants will receive a
         lump sum payment as defined in the HMPP of their accrued benefit as of
         the date of termination of the SERP. All payments will be made in a
         reasonable period after the triggering event has occurred.

         A Change of Control shall be deemed to have occurred if (i) there shall
         be consummated (1) any consolidation or merger of HMEC in which HMEC is
         not the continuing or surviving corporation, or pursuant to which
         shares of HMEC's common stock would be converted into cash, securities
         or other property, other than a merger of HMEC in which

                                      -10-

<PAGE>

         no Company shareholder's ownership percentage in the surviving
         corporation immediately after the merger is less than such
         shareholder's ownership percentage in HMEC immediately prior to such
         merger by ten percent (10%) or more, or (2) any sale, lease exchange or
         other transfer (in one transaction or a series of related transactions)
         of all, or substantially all of the assets of HMEC; (ii) the
         shareholders of HMEC approve any plan or proposal for the liquidation
         or dissolution of HMEC which is a part of a sale of assets, merger, or
         reorganization of HMEC or other similar transaction; (iii) any "person"
         as such term is used in Sections 13(d) and 14(d) of the Securities
         Exchange Act of 1934, as amended (the "Exchange Act"), is or becomes,
         directly or indirectly, the "beneficial owner," as defined in Rule
         l3d-3 under the Exchange Act, of securities of HMEC that represent 51%
         or more of the combined voting power of HMEC's then outstanding
         securities; or (iv) a majority of the members of HMEC's Board of
         Directors are persons who are then serving on the Board of Directors
         without having been elected by the Board of Directors or having been
         nominated by HMEC for election by its shareholders.

9.3      Corporate Successors. The Plan shall not be automatically terminated by
         a transfer or sale of assets of the Company or by the merger or
         consolidation of the Company into or with any other corporation or
         other entity, but the Plan shall be continued after such sale, merger
         or consolidation only if and to the extent that the transferee,
         purchaser or successor entity agrees to continue the Plan. In the event
         the Plan is not continued by the transferee, purchaser or successor
         entity, then the Plan shall terminate subject to the provisions of
         paragraphs 9.1 and 9.2.

                     ARTICLE X. - MISCELLANEOUS PROVISIONS

10.1     Maximum Pensions. The provisions of Section 14.11 of the HMPP (or
         successor provisions thereof) which impose the Code Section 415 limits
         on benefit accruals and all related definitions in the HMPP are
         incorporated herein by reference, made a part hereof, and made
         applicable to limit a Participant's Retirement Benefit or his Spouse's
         Death Benefit hereunder.

10.2     Nonalienation of Benefits. No benefit payable at any time under this
         Plan shall be subject to any manner to alienation, sale, transfer,
         assignment, pledge, attachment, or other legal processes, or
         encumbrance of any kind. Any attempt to alienate, sell, transfer,
         assign, pledge or otherwise encumber any such benefits, whether
         currently or thereafter payable, shall be void. No benefit, nor any
         fund which may be established for the payment of such benefits, shall,
         in any manner, be liable for or subject to the debts or liabilities of
         any person entitled to such benefits. If any person shall attempt to,
         or shall, alienate, sell, transfer, assign, pledge or otherwise
         encumber his benefits under this Plan, or if by reason of his
         bankruptcy or other event happening at any time, such benefits would
         devolve upon any other person or would not be enjoyed by the person
         entitled thereto under the Plan, then the Committee, in its discretion,
         may terminate the interest in any such benefits of the person entitled
         thereto under the Plan and hold or apply them to or for the benefit of
         such person entitled thereto under the Plan in such manner as the
         Committee may deem proper.

                                      -11-

<PAGE>

10.3  No Contract of Employment. Nothing contained in this Plan shall be
      construed as a contract of employment between any Employer and any person
      or as creating a right of any person to be continued in the employment of
      any Employer.

10.4  Termination of Employment. When a person incurs a Termination of
      Employment his right to benefits from this Plan shall be determined only
      by the terms of this Plan.

10.5  No Duplication of Benefits. No benefits shall be paid to any person under
      more than one provision of this Plan for the same period of time.

10.6  Limitations on Liability and Indemnification. Notwithstanding any of the
      preceding provisions of the Plan, neither the Company, Plan Administrator,
      nor any individual acting as an employee or agent of the Company or as a
      member of the Pension Committee shall be liable to any Participant, former
      Participant, surviving spouse or any other person for any claim, loss,
      liability or expense incurred in connection with the Plan.

      Further, the Company shall indemnify and hold harmless each member of the
      Board of Directors, each member of the Pension Committee, the Plan
      Administrator, and each officer and employee of the Company to whom are
      delegated duties, responsibilities and authority with respect to the Plan
      against all claims, liabilities, fines and penalties, and all expenses
      reasonably incurred by or imposed upon him (including but not limited to
      reasonable attorney fees) which are not the result of intentional acts
      knowingly in violation of the Plan or the law.

10.7  Tax Implications. The SERP is not a qualified pension plan, but a deferred
      compensation plan. It is not eligible for a tax free rollover at the time
      of distribution and may also be subject to taxation on benefit accruals
      during a Participant's employment. The Company will cause taxes
      (including, but not limited to, employment taxes or federal or state
      income taxes) to be withheld from amounts paid hereunder as required by
      law. A Participant should seek the advice of a tax consultant or financial
      advisor regarding his personal tax situation.

10.8  Reduction for Overpayment. The Committee shall, whenever it determines
      that a person has received benefit payments under this Plan in excess of
      the amount to which the person is entitled under the terms of the Plan,
      make two reasonable attempts to collect such overpayment from the person.
      If the person to whom such overpayments were made does not, within a
      reasonable time, make the requested repayment to the Plan Administrator,
      the overpayment shall be considered as an advance payment of benefits and
      the Committee shall direct the Plan Administrator to reduce all future
      benefits payable to that person by the actuarial equivalent value of the
      overpayment. The Actuarial Equivalency is defined in the same manner as
      the HMPP.

10.9  No Trust Relationship. Nothing contained herein and no actions taken
      pursuant to the Plan shall create or be construed to create a trust of any
      kind or a fiduciary relationship between the Company and any Participant.
      The Company shall not be considered a trustee by reason of any provision
      of this Plan.

10.10 Gender and Number. Except when the context indicates to the contrary when
      used herein, masculine terms shall be deemed to include the feminine, and
      singular the plural.

                                      -12-

<PAGE>

10.11 Invalidity of Certain Provisions. If any provision of this Plan shall be
      held invalid or unenforceable, such invalidity or unenforceability shall
      not affect any other provisions hereof and the Plan shall be construed and
      enforced as if such provisions, to the extent invalid or unenforceable,
      had not been included.

10.12 Headings. The headings of articles are included solely for convenience of
      reference, and if there is any conflict between such headings and the text
      of this Plan, the text shall control.

10.13 Law Governing. The Plan shall be construed and enforced according to the
      laws of the State of Illinois (other than its laws respecting choice of
      law).

      Executed effective as of March 31, 2002.

                                          HORACE MANN SERVICE CORPORATION

                                          By:        /s/ Kathryn E. Karr
                                             -----------------------------------
                                                     Plan Administrator

                                      -13-<PAGE>

                                                                    Exhibit 10.2

                                   HORACE MANN
                         EXECUTIVE SUPPLEMENTAL EMPLOYEE
                                 RETIREMENT PLAN
                                     (ESERP)

                                2002 RESTATEMENT

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                           Page
                                                                                           ----
<S>                                                                                        <C>
ARTICLE I. - GENERAL .....................................................................    1
   1.1    Background and Establishment ...................................................    1

ARTICLE II. - DEFINITIONS ................................................................    1
   2.1    "Actuarial Equivalent" or "Equivalent" .........................................    1
   2.2    "Company" or "HMSC" ............................................................    1
   2.3    "Eligible Earnings" ............................................................    1
   2.4    "Eligible Employee" ............................................................    2
   2.5    "ESERP Benefit" ................................................................    2
   2.6    "Final Average Earnings" .......................................................    2
   2.7    "Internal Revenue Code" or "Code" ..............................................    2
   2.8    "NQMPPP" .......................................................................    2
   2.9    "NQMPPP Eligible Earnings" .....................................................    2
   2.10   "Participant" ..................................................................    2
   2.11   "Plan" .........................................................................    2
   2.12   "Plan Year" ....................................................................    2
   2.13   "Spouse" .......................................................................    2
   2.14   "Vesting Service" ..............................................................    2
   2.15   "Years of Service" or "Years of Credited Service" ..............................    2

ARTICLE III. - ELIGIBILITY TO PARTICIPATE ................................................    3
   3.1    Becoming a Participant .........................................................    3
   3.2    Reemployment ...................................................................    3
   3.3    Ceasing to be a Participant ....................................................    3

ARTICLE IV. - ELIGIBILITY FOR AND AMOUNT OF BENEFITS .....................................    3
   4.1    Eligibility ....................................................................    3
   4.2    Retirement Benefit Calculation .................................................    4
   4.3    Accrual of Benefits ............................................................    6
   4.4    Disability Retirement ..........................................................    6
   4.5    Vesting ........................................................................    6

ARTICLE V. - FORM AND COMMENCEMENT OF BENEFITS ...........................................    6
   5.1    Forms of Benefits Payable ......................................................    6
   5.2    Survivor Benefits ..............................................................    7
   5.3    Commencement of Payment of SERP Benefits .......................................    7

ARTICLE VI. - ADMINISTRATION .............................................................    8
   6.1    Pension Committee ..............................................................    8
   6.2    Plan Administrator .............................................................    8
   6.3    Liability ......................................................................    8
   6.4    Claims Procedure ...............................................................    8
</TABLE>

                                      -i-

<PAGE>

<TABLE>
<S>                                                                                            <C>
ARTICLE VII. - AMENDMENT AND TERMINATION ....................................................   9
   7.1    Amendment or Termination ..........................................................   9
   7.2    Change of Control .................................................................   9
   7.3    Corporate Successors ..............................................................   9

   ARTICLE VIII. - MISCELLANEOUS ............................................................  10
   8.1    No Contract of Employment .........................................................  10
   8.2    Funding ...........................................................................  10
   8.3    Nonalienation of Benefits .........................................................  10
   8.4    Tax Implications ..................................................................  10
   8.5    Reduction for Overpayment .........................................................  10
   8.6    State Law .........................................................................  11
   8.7    Incapacity of Recipient ...........................................................  11
   8.8    Unclaimed Benefit .................................................................  11
   8.9    Invalidity of Certain Provisions ..................................................  11
   8.10   Limitations on Liability and Indemnification ......................................  11
   8.11   No Trust Relationship .............................................................  11
   8.12   Gender and Number .................................................................  12
   8.13   Headings ..........................................................................  12

APPENDIX A ..................................................................................  13
</TABLE>

<PAGE>

                              ARTICLE I. - GENERAL

1.1  Background and Establishment. The Horace Mann Executive Supplemental
     Employee Retirement Plan (ESERP) was effective as of January 1, 1992. The
     function of the ESERP is to provide supplemental retirement income benefits
     to a finite group of employees. This finite group was identified by their
     estimated projected loss of benefits due to limitations on compensation as
     defined under Section 401(a)(17) of the Internal Revenue Code and benefit
     limitations as defined under Section 415 of the Internal Revenue Code from
     the qualified Money Purchase Pension Plan ("MPPP"), qualified Horace Mann
     Pension Plan ("HMPP") and non-qualified Supplemental Employee Retirement
     Plan ("SERP"). (All references are to the HMPP and MPPP as the "Floor
     Offset" arrangement under their 2002 Restatement, as amended, unless
     specified otherwise.) The Floor Offset arrangement is described in its
     Summary Plan Description (SPD) as contained in the Employee Benefits
     Binder. The ESERP plan only covers named employees.

     In 1994, the Plan was expanded to include certain key employees, who may
     not be executives of the Company, but whose employment and performance are
     considered to be important to meeting the goals and objectives of Horace
     Mann Educators Corporation ("HMEC"), the parent company of HMSC.
     Additionally, the structure of the Plan was changed to replicate features
     of the qualified Floor Offset arrangement that exists with the HMPP and the
     MPPP.

     Effective February 12, 1997, the Plan was amended and restated to include
     the same vesting provisions as the HMPP and MPPP.

     The Plan was amended effective March 31, 2002, to provide that no
     Participant will earn or accrue benefits under the Plan after March 31,
     2002.

     The Plan is hereby amended and restated effective March 31, 2002, to effect
     the amendment to the Plan freezing benefit accruals effective as of March
     31, 2002, and to spin off the portion of each Participant's benefit
     hereunder represented by the NQMPPP Feature account to the Horace Mann
     Nonqualified Supplemental Money Purchase Pension Plan effective as of April
     1, 2002.

                           ARTICLE II. - DEFINITIONS

The following words shall have the meanings below unless the context clearly
indicates otherwise:

2.1  "Actuarial Equivalent" or "Equivalent" means the actuarial equivalent as
     defined in the HMPP.

2.2  "Company" or "HMSC" means Horace Mann Service Corporation and any successor
     thereto.

2.3  "Eligible Earnings" means the same earnings (compensation) as those which
     are eligible under the SERP, MPPP and HMPP and as described in their SPD's
     unless otherwise specified in the Appendix; provided, however, earnings
     which exceed the statutory limits

                                      -1-

<PAGE>

      as defined and controlled by the Internal Revenue Code in Section
      401(a)(17), as amended, will be included as eligible earnings for purposes
      of the ESERP. No earnings of a Participant earned after March 31, 2002,
      shall be taken into account for any purpose under the Plan.

2.4   "Eligible Employee" means those employees who are identified by their
      estimated projected loss of benefits due to limitations on compensation as
      defined under Section 401(a)(17) of the Internal Revenue Code and benefit
      limitations as defined under Section 415 of the Internal Revenue Code from
      the MPPP, HMPP and SERP, who are highly compensated key employees and who
      are designated in the Appendix as recorded by the Plan Administrator.

2.5   "ESERP Benefit" means the benefit payable in accordance with the Plan.

2.6   "Final Average Earnings" means the Participant's Final Average Earnings as
      defined in the HMPP, which Final Average Earnings is to be determined
      without taking into account any earnings or service of the Participant
      earned or credited after March 31, 2002.

2.7   "Internal Revenue Code" or "Code" means the Internal Revenue Code of
      1986, as amended, and any subsequent Internal Revenue Code. If there is a
      subsequent Internal Revenue Code, any references herein to Internal
      Revenue Code sections shall be deemed to refer to comparable sections of
      any subsequent Internal Revenue Code.

2.8   "NQMPPP" means the defined contribution feature of the Plan as described
      in Article 4.2.

2.9   "NQMPPP Eligible Earnings" means only those Eligible Earnings in excess of
      the limits imposed by Section 401(a)(17) of the Internal Revenue Code,
      which Eligible Earnings are to be determined without taking into account
      any earnings of the Participant earned after March 31, 2002.

2.10  "Participant" means those highly compensated key employees listed in the
      Appendix.

2.11  "Plan" means the Executive Supplemental Employee Retirement Plan as herein
      set forth and as amended from time to time.

2.12  "Plan Year" means each twelve-consecutive month period beginning January
      1, 1992.

2.13  "Spouse" means a person who is the Participant's Spouse as defined in the
      HMPP.

2.14  "Vesting Service" means the sum of an Eligible Employee's periods of
      continuous service as defined in the MPPP.

2.15  "Years of Service" or "Years of Credited Service" means only those periods
      of service as defined in the HMPP for purposes of benefit calculation. Any
      service beyond 30 years will not be included in the benefit calculation. A
      Participant will earn no years of service or years of credited service
      under this Plan after March 31, 2002.

                                      -2-

<PAGE>

                   ARTICLE III. - ELIGIBILITY TO PARTICIPATE

3.1   Becoming a Participant. Each Eligible Employee shall initially become a
      Participant as indicated in Appendix A, as amended from time to time.

3.2   Reemployment.

      (a) Following Retirement. If a Participant retires from the Company, and
          subsequently is re-employed as a full time, part time or temporary
          employee who works more than 10 days per month, the Participant's
          periodic ESERP benefit will cease until he re-retires. Upon his
          subsequent retirement, his prior and additional service and earnings,
          plus any additional credit earned under the qualified plan(s), but not
          any additional service and earnings or any additional credit earned
          with respect to periods after March 31, 2002, will be included in the
          recalculation of the Participant's ESERP benefit. In the event the
          Participant retires and is re-employed and works less than 10 days a
          month, the Participant's periodic ESERP payment will continue.

3.3   Ceasing to be a Participant A person will cease to be a Participant:

      (a) if he loses all of his Years of Credited Service under the HMPP or
          MPPP, or

      (b) if he dies.

              ARTICLE IV. - ELIGIBILITY FOR AND AMOUNT OF BENEFITS

4.1   Eligibility. Benefits are payable under the ESERP only if the Participant
      separates from service from the Company and would be considered to be
      vested under the HMPP or MPPP. That eligibility would include early,
      normal, and postponed retirement. As defined in the HMPP:

      (a) For employees who separate from service and are immediately eligible
          for retirement benefits:

          (i)   Normal Retirement Date is the first day of the month coincident
                with or next following the Participant's 65th birthday and the
                Participant has at least 5 years of service;

          (ii)  Early Retirement Date is the first day of the month coincident
                with or following the month in which the Participant is at least
                55 years and has at least 10 years of service. Benefits will be
                reduced according to the Early Retirement Adjustment Factor
                Table as contained in the HMPP; or

          (iii) Postponed Retirement Date is the first day of the month
                coincident with or next following the Participant's termination
                of employment with the Company after his Normal Retirement Date
                and until March 31, 2002 the

                                      -3-

<PAGE>

                Participant will continue to accrue service under this Plan (up
                to 30 years) and eligible compensation.

     (b)  For employees who separate from service, who are vested but not yet
          eligible for  retirement benefits:

          (i)   Normal vested benefits are payable as of the first day of the
                month coincident with or next following the Participant's 65th
                birthday and the Participant has at least 5 years of service and
                are calculated in the same manner as provided in the HMPP at the
                time of the Participant's separation from service; or

          (ii)  Early vested benefits are payable as of the first day of the
                month coincident with or following the month in which the
                Participant is at least 55 years and has at least 10 years of
                service. Benefits are calculated in the same manner as provided
                in the HMPP at the time of the Participant's separation from
                service and will be reduced according to the Deferred Vested
                Retirement Adjustment Factor Table as contained in the HMPP.

4.2  Retirement Benefit Calculation. The purpose of the ESERP is to provide
     minimum "floor" post retirement income benefits that are not available to
     the Participant under the HMPP, MPPP and SERP due to limits pertaining to
     IRC Sections 401(a)(17) and 415, as amended. Any benefits under the HMPP
     and MPPP offset the benefits available under the ESERP.

     If a Participant under the SERP becomes a Participant under the ESERP, then
     all accrued and future accrual of SERP benefits are transferred to the
     ESERP.

     Prior to the 2002 restatement the ESERP provided for benefit accruals under
     two plan features.

     (a)  The first plan feature is a defined benefit calculation which is the
          "floor" benefit of the Plan ("Floor Benefit Feature"). If the
          retirement is prior to age 65 years, then the Early Retirement
          Reduction Factors as stated in the HMPP apply. To calculate the Floor
          Benefit Feature:

          (i)   For Participants with an adjusted service date of 8/29/89 or
                prior and who were Participants in the HMPP or its predecessor
                plans:

          *the average of the highest 36 consecutive months of Eligible Earnings
           under the ESERP;
          *times 2%;
          *times years of credited service under the HMPP (up to 30 years);
          *minus 50% of the Primary Social Security Benefit as defined in
           Appendix I to the HMPP;
          *equals the Participant's monthly age 65 "floor" benefit.

          (ii)  For Participants with an adjusted service date subsequent to
                8/29/89 and who were or became Participants in the HMPP:

                                      -4-

<PAGE>

          *the average of the highest 36 consecutive months of Eligible Earnings
           under the ESERP;
          *times 1.6%;
          *times years of credited service under the HMPP (up to 30 years);
          *equals the Participant's monthly age 65 "floor" benefit.

     (b)  The second plan feature was a defined contribution benefit, referred
          to as the "Non-Qualified MPPP" or "NQMPPP Feature". This benefit was
          determined by the Participant's Years of Service and NQMPPP Eligible
          Earnings.

          (i)   As defined in the MPPP, Employer contributions were based on a
                percentage of the Participant's NQMPPP Eligible Earnings
                determined by the Participant's Vesting Service:

                Vesting Service Completed by                Amount of Employer's
                Participant                                 Contribution

                Less than 5 years                           5%
                5 years but less than 15 years              6%
                15 years or more                            7%

          (ii)  For record keeping purposes, for each Participant, a notional or
                bookkeeping account was established. Phantom contributions to
                the NQMPPP Feature account were not made prior to a Participant
                becoming an Eligible Employee in the ESERP. In addition,
                contributions to the NQMPPP Feature account were not made on a
                retroactive basis.

          (iii) The NQMPPP Feature account was valued as accumulated
                contributions, plus any gains or losses that would have been
                credited to those contributions based on the rate of return
                credited to the qualified MPPP. Effective March 31, 2002, and
                solely for the purpose of Article 4.2(c) below, the NQMPPP
                Feature account will always equal the value of the frozen value
                of the account as of March 31, 2002.

          (iv)  The NQMPPP Feature account benefit of any Participant who has a
                positive account value under this plan, shall be transferred to
                the Horace Mann Nonqualified Supplemental Money Purchase Pension
                Plan (the "HMNSMPPP") effective as of April 1, 2002 (after all
                adjustments thereto have been made as provided in Article
                4.2(b)(iii)), and effective as of April 1, 2002, no such
                Participant (nor the survivor of any such Participant who is
                deceased) shall be entitled to any payment under this Plan of an
                amount representing the NQMPPP Feature (even though the
                Participant's NQMPPP Feature Monthly Equivalent will continue to
                apply hereunder for purposes of determining the Participant's
                ESERP Monthly Benefit hereunder as provided in Article 4.2(c)
                below.)

                                       -5-

<PAGE>

     (c)  To determine what benefit is due under the ESERP (if any) the
          following calculation would be performed. The NQMPPP Feature Monthly
          Equivalent is calculated in the same form and manner as the Monthly
          Equivalent in the MPPP.

          *ESERP monthly Floor Benefit Feature;
          *minus the NQMPPP Feature Monthly Equivalent determined using a
           valuation date of March 31, 2002;
          *minus the HMPP Monthly Benefit;
          *minus the MPPP Monthly Equivalent determined using a valuation date
           of March 31, 2002;
          *equals the ESERP Monthly Benefit Due.

     If the combined payable benefit from the HMPP and the MPPP are greater than
     the ESERP, then no benefit is payable from the ESERP. This also applies to
     any other forms of benefits payable (such as, early retirement or surviving
     spouse options).

4.3  Accrual of Benefits. If a Participant ceases to meet the definition of an
     Eligible Employee, ESERP benefit accruals will cease as of that time. No
     further accruals will occur unless and until the Participant once again
     meets the definition an Eligible Employee but in no event will accruals
     occur after March 31, 2002. Notwithstanding the foregoing, if a Participant
     ceases to meet the definition of an Eligible Employee while remaining an
     employee who accrues benefits or earnings under the NQMPPP, HMPP and/or the
     MPPP, then the offsets for the NQMPPP Monthly Equivalent, HMPP Monthly
     Benefit and MPPP Monthly Equivalent as so increased shall continue to be
     used to decrease the ESERP monthly Floor Benefit Feature; provided,
     however, no such offsets shall increase or decrease after March 31, 2002.

4.4  Disability Retirement. Should the Participant be placed on a long term
     disability leave of absence, he will continue to accrue service (but not
     after March 31, 2002) with regards to the Floor Benefit Feature of this
     Plan (up to a maximum of 30 years). However, Eligible Earnings will be
     considered those which were earned as an active employee. If at the time
     the disability ceases, the Participant is eligible to receive a qualified
     retirement benefit from the HMPP, he will also be eligible to receive an
     ESERP benefit.

4.5  Vesting. The ESERP benefits are subject to the same vesting provisions as
     described in the HMPP and the MPPP.

                 ARTICLE V. - FORM AND COMMENCEMENT OF BENEFITS

5.1  Forms of Benefits Payable. As of the 2002 restatement, effective as of
     April 1, 2002, the ESERP benefit is comprised solely of the defined benefit
     form of payment described in Article 5.1(a) below. Accordingly, Article
     5.1(b) which provided for the NQMPP distribution in a defined contribution
     form is reserved effective April 1, 2002 with the transfer of the liability
     for those benefits to the HMNSMPPP. For the same reason, Article 5.2(a)(ii)
     below is reserved.

                                      -6-

<PAGE>

     (a)  The form is a defined benefit payment, payable, provided the
          Participant is eligible for retirement benefits under the HMPP, as a
          periodic payment in the same form as is provided by the HMPP including
          any applicable reduction factors. The same calculation methodology and
          order of calculation used in the HMPP is used in the calculation of
          benefits in the ESERP.

          (i)    Forms of monthly payments could reflect survivor benefits and
                 would be based on annuity payment factors as expressed in the
                 HMPP.

          (ii)   An automatic lump sum distribution of the ESERP benefit will
                 occur at retirement if the lump sum benefit equivalent is less
                 than $5,000. The $5,000 limit may be changed in accordance with
                 the limits established by the Service for qualified pension
                 plans.

     (b)  [RESERVED.]

5.2  Survivor Benefits.

     (a)  With regards to the Floor Benefit Feature, if a Participant elects to
          receive a periodic payment from the qualified pension plans, the same
          election will apply to the ESERP in the equivalent forms of annuity
          options available under the HMPP. Currently, those forms include a
          50%, 66 2/3%, 75% and 100% survivor option. The monthly benefit will
          be actuarially reduced if a Participant elects one of the survivor
          options.

          (i)    If a Participant dies after having a vested termination in
                 employment but prior to commencing benefits, the surviving
                 spouse would receive a benefit of 50% based on the
                 Participant's lifetime ESERP benefit as calculated in Article
                 4.2 based on the Participant's age at the time of death. All
                 other factors would be based on those at the time of the
                 Participant's Normal Retirement Date from the Company. If the
                 Participant does not have a spouse, as defined in the HMPP,
                 upon the death of a Participant, no benefit will be due or
                 payable.

          (ii)   [RESERVED.]

     (b)  If a Participant dies while actively employed with the Company, the
          Participant's spouse, as defined in the HMPP, would receive a benefit
          from the ESERP. The benefit would be calculated as provided in Article
          4.2 and will be reduced in the same form and manner as the HMPP.

5.3  Commencement of payment of SERP Benefits. Payment of any ESERP benefit due
     will begin on commencement of payment of benefits from the qualified
     pension plans, except as provided in Article 5.1(b). Notification of
     retirement to the Employee Benefits Unit for the qualified pension plans
     will also initiate the process of calculation and payment of the ESERP
     benefit. A Participant cannot defer the ESERP benefit if he has commenced
     receiving benefits from the qualified plans. Conversely, if the Participant
     defers receiving benefits from the qualified plans, he must defer receiving
     the ESERP benefit except as provided in Article 5.1(b).

                                      -7-

<PAGE>

                          ARTICLE VI. - ADMINISTRATION

6.1  Pension Committee. The same membership structure, actions, responsibility
     and authority shall apply to this Plan as described in the HMPP and the
     MPPP. The decision of the Pension Committee in matters within its
     jurisdiction shall be final, binding, and conclusive upon the Company and
     upon each Eligible Employee, Participant, spouse, and every other person or
     party interested or concerned.

6.2  Plan Administrator. The Plan Administrator shall have the same duties and
     authority pursuant to this Plan as are described in the HMPP and the MPPP.
     All affairs of calculation, payment and administration of the ESERP are
     conducted by the Plan Administrator. No benefits will be paid under the
     terms of this Plan without the authorization of the Plan Administrator. The
     Plan Administrator shall be entitled to rely conclusively upon all tables,
     valuations, certificates, opinions and reports furnished by any actuary,
     accountant, controller, counsel or other person employed or engaged by the
     Company with respect to the Plan.

6.3  Liability. The Committee and Plan Administrator shall be free from all
     liability, joint and several, for their acts as members of such Committee
     except to the extent that they may have committed willful misconduct or
     otherwise required by federal law.

6.4  Claims Procedure. If a Participant believes he is being denied a benefit to
     which he is entitled under the Plan, the Participant may file a written
     request for such benefit with the Committee setting forth his claim. Upon
     receipt of the claim, the Committee shall advise the Participant that a
     reply will be forthcoming within ninety (90) days and shall deliver such
     reply within such period, unless Committee extends the reply period for an
     additional ninety (90) days for reasonable cause. If the claim is denied in
     whole or in part, the Committee shall so advise the Participant in writing
     setting forth: (a) the specific reason or reasons for such denial; (b) the
     specific reference to pertinent provisions of the Plan on which such denial
     is based; (c) a description of any additional material or information
     necessary for the Participant to perfect his claim and an explanation why
     such material or such information is necessary; and (d) appropriate
     information as to the steps to be taken if the Participant wishes to submit
     the claim for review. Any request for review must be submitted in writing
     by the Participant to the Committee in care of the Committee at its
     principal place of business within sixty (60) days after the receipt by the
     Participant of the denial of the Participant's claim. The Participant or
     his duly authorized representative may, but need not, review the pertinent
     documents and submit issues and comments in writing for consideration by
     the Committee. If the Participant does not request a review of the
     Committee's determination within such sixty (60) day period, the
     Participant shall be barred and estopped from challenging the Committee's
     determination. Within sixty (60) days after the Committee's receipt of a
     request for review, it will review its determination. After considering all
     materials presented by the Participant, the Committee will render a written
     opinion, written in a manner calculated to be understood by the
     Participant, setting forth the specific reasons for the decision and
     containing specific references to the pertinent provisions of the Plan on
     which the decision is based. If special circumstances require that the
     sixty (60) day time period be extended, the Committee will so notify the
     Participant and will render the decision as soon as possible, but no later
     than one hundred twenty (120) days after receipt of the request for review.

                                      -8-

<PAGE>

                    ARTICLE VII. - AMENDMENT AND TERMINATION

7.1  Amendment or Termination. The Company and Pension Committee intend the Plan
     to be permanent but reserve the right to amend or terminate the Plan when,
     in the sole opinion of the Pension Committee, such amendment or termination
     is advisable. Any such amendment or termination shall be made pursuant to a
     resolution of the Board of Directors of the Company and shall be effective
     as of the date of such resolution. No amendment or termination of the Plan
     shall directly or indirectly deprive any Participant or surviving spouse of
     all or any portion of any ESERP Benefit payment which has commenced prior
     to the effective date of the resolution amending or terminating the Plan.

7.2  Change of Control. In the event of a Change of Control of HMEC (the parent
     company of HMSC), certain protection will apply. Any Participant who is
     employed by HMSC when a Change of Control occurs, who has signed a
     Severance Agreement and who is discharged for reasons other than cause,
     during a three year period subsequent to the Change of Control, will
     receive their benefit from the ESERP in a lump sum payment equal to their
     accrued benefit under the ESERP, as defined in Article 4.2, at the time of
     severance. Should this Plan be terminated and not replaced due to a Change
     of Control of HMEC, all ESERP Participants will receive a lump sum payment
     of their accrued benefit as of the date of termination of the ESERP. All
     payments will be made in a reasonable period after the triggering event has
     occurred.

     A Change of Control shall be deemed to have occurred if (i) there shall be
     consummated (1) any consolidation or merger of HMEC in which HMEC is not
     the continuing or surviving corporation, or pursuant to which shares of
     HMEC's common stock would be converted into cash, securities or other
     property, other than a merger of HMEC in which no Company shareholder's
     ownership percentage in the surviving corporation immediately after the
     merger is less than such shareholder's ownership percentage in HMEC
     immediately prior to such merger by ten percent (10%) or more, or (2) any
     sale, lease exchange or other transfer (in one transaction or a series of
     related transactions) of all, or substantially all of the assets of HMEC;
     (ii) the shareholders of HMEC approve any plan or proposal for the
     liquidation or dissolution of HMEC which is a part of a sale of assets,
     merger, or reorganization of HMEC or other similar transaction; (iii) any
     "person" as such term is used in Sections 13(d) and 14(d) of the Securities
     Exchange Act of 1934, as amended (the "Exchange Act"), is or becomes,
     directly or indirectly, the "beneficial owner," as defined in Rule 13d-3
     under the Exchange Act, of securities of HMEC that represent 51% or more of
     the combined voting power of HMEC's then outstanding securities; or (iv) a
     majority of the members of HMEC's Board of Directors are persons who are
     then serving on the Board of Directors without having been elected by the
     Board of Directors or having been nominated by HMEC for election by its
     shareholders.

7.3  Corporate Successors. The Plan shall not be automatically terminated by a
     transfer or sale of assets of the Company or by the merger or consolidation
     of the Company into or with any other corporation or other entity, but the
     Plan shall be continued after such sale, merger or consolidation only if
     and to the extent that the transferee, purchaser or

                                      -9-

<PAGE>

     successor entity agrees to continue the Plan. In the event the Plan is not
     continued by the transferee, purchaser or successor entity, then the Plan
     shall terminate subject to the provisions of paragraphs 7.1 and 7.2.

                         ARTICLE VIII. - MISCELLANEOUS

8.1  No Contract of Employment. Nothing contained in this Plan will confer upon
     any Participant the right to be retained in the service of the Company nor
     limit the right of the Company to discharge or otherwise deal with
     Participants without regard to the existence of the Plan.

8.2  Funding. The Plan at all times shall be entirely unfunded and no provision
     shall at any time be made with respect to segregating any assets of the
     Company for payment of any benefits hereunder. The ESERP does not have a
     trust or trust fund arrangement. No Participant, surviving spouse or any
     other person shall have any interest in any particular assets of the
     Company by reason of the right to receive a benefit under the Plan and any
     such Participant, surviving spouse or other person shall have only the
     rights of a general unsecured creditor of the Company with respect to any
     rights under the Plan. Nothing contained in the Plan shall constitute a
     guaranty by the Company or any other entity or person that the assets of
     the Company will be sufficient to pay any benefit hereunder.

8.3  Nonalienation of Benefits. No benefit payable under the Plan shall be
     subject in any manner to anticipation, alienation, sale, transfer,
     assignment, pledge, encumbrance, or charge prior to actual receipt thereof
     by the payee; and any attempt so to anticipate, alienate, sell, transfer,
     assign, pledge, encumber or charge prior to such receipt shall be void; and
     the Company shall not be liable in any manner for or subject to the debts,
     contracts, liabilities, engagements or torts of any person entitled to any
     benefit under the Plan.

8.4  Tax Implications. The ESERP is not a qualified pension plan, but a deferred
     compensation plan. It is not eligible for a tax free rollover at the time
     of distribution and may also be subject to taxation on benefit accruals
     during a Participant's employment. The Company will cause taxes (including,
     but not limited to, employment taxes or federal or state income taxes) to
     be withheld from amounts paid hereunder as required by law. A Participant
     should seek the advice of a tax consultant or financial advisor regarding
     his personal tax situation.

8.5  Reduction for Overpayment. The Plan Administrator shall, whenever it
     determines that a person has received benefit payments under this Plan in
     excess of the amount to which the person is entitled under the terms of the
     Plan, make two reasonable attempts to collect such overpayment from the
     person. If the person to whom such overpayment was made does not, within a
     reasonable time, make the requested repayment to the Plan Administrator,
     the overpayment shall be considered as an advance payment of benefits and
     the Plan Administrator will reduce all future benefits payable to that
     person by the actuarial equivalent value of the overpayment.

                                      -10-

<PAGE>

8.6   State Law. The Plan is established under and will be construed according
      to the laws of the State of Illinois, to the extent that such laws are not
      preempted by the Employee Retirement Income Security Act and valid
      regulations published thereunder.

8.7   Incapacity of Recipient. In the event a Participant or surviving spouse is
      declared incompetent and a conservator or other person legally charged
      with the care of his person or of his estate is appointed, any benefits
      under the Plan to which such Participant or surviving spouse is entitled
      shall be paid to such conservator or other person legally charged with the
      care of his person or his estate. Except as provided above in this
      paragraph, when the Plan Administrator in its sole discretion, determines
      that a Participant or surviving spouse is unable to manage his financial
      affairs, the Plan Administrator will make distributions to any person for
      the benefit of such Participant or surviving spouse.

8.8   Unclaimed Benefit. Each Participant shall keep the Plan Administrator
      informed of his current address and the current address of his spouse. The
      Plan Administrator shall not be obligated to search for the whereabouts of
      any person. If the location of a Participant is not made known to the Plan
      Administrator within three (3) years after the date on which any payment
      of the Participant's ESERP benefit may be made, payment may be made as
      though the Participant had died at the end of the three-year period. If,
      within one additional year after such three-year period has elapsed, or,
      within three years after the actual death of a Participant, the Plan
      Administrator is unable to locate any surviving spouse of the Participant,
      then the Company shall have no further obligation to pay any benefit
      hereunder to such Participant or surviving spouse or any other person and
      such benefit shall be irrevocably forfeited.

8.9   Invalidity of Certain Provisions. If any provision of this Plan shall be
      held invalid or unenforceable, such invalidity or unenforceability shall
      not affect any other provisions hereof and the Plan shall be construed and
      enforced as if such provisions, to the extent invalid or unenforceable,
      had not been included.

8.10  Limitations on Liability and Indemnification. Notwithstanding any of the
      preceding provisions of the Plan, neither the Company, Plan Administrator,
      nor any individual acting as an employee or agent of the Company or as a
      member of the Pension Committee shall be liable to any Participant, former
      Participant, surviving spouse or any other person for any claim, loss,
      liability or expense incurred in connection with the Plan.

      Further, the Company shall indemnify and hold harmless each member of the
      Board of Directors, each member of the Pension Committee, the Plan
      Administrator, and each officer and employee of the Company to whom are
      delegated duties, responsibilities and authority with respect to the Plan
      against all claims, liabilities, fines and penalties, and all expenses
      reasonably incurred by or imposed upon him (including but not limited to
      reasonable attorney fees) which are not the result of intentional acts
      knowingly in violations of the Plan or the law.

8.11  No Trust Relationship. Nothing contained herein and no actions taken
      pursuant to the Plan shall create or be construed to create a trust of any
      kind or a fiduciary relationship between the

                                      -11-

<PAGE>

      Company and any Participant. The Company shall not be considered a trustee
      by reason of any provision of this Plan.

8.12  Gender and Number. Except when the context indicates to the contrary when
      used herein, masculine terms shall be deemed to include the feminine, and
      singular the plural.

8.13  Headings. The headings of articles are included solely for convenience of
      reference, and if there is any conflict between such headings and the text
      of this Plan, the text shall control.

Executed effective as of March 31, 2002.

                                        HORACE MANN SERVICE CORPORATION

                                        By:     /s/ Kathryn E. Karr
                                           -------------------------------------
                                                Plan Administrator

                                      -12-

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