Document:

First Amendment to Employment and Non-Competition Agreement--David W. Michelson

 Exhibit 10.3 
 FIRST AMENDMENT TO EMPLOYMENT AND NON-COMPETITION AGREEMENT 
 This First Amendment to Employment and Non-Competition
Agreement (this “Amendment”) is made this 28th day of December, 2007 by and between National Interstate Corporation (“NIC”) and David W. Michelson (“Michelson”). NIC and Michelson are parties to an Employment and
Non-Competition Agreement executed on March 12, 2007 and effective as of January 1, 2007 (the “Agreement”). This Amendment amends the Agreement, effective as of January 1, 2008. 
 In connection with the promotion of Michelson to the post of Chief Executive Officer of NIC, effective as of January 1, 2008, NIC and Michelson agree as follows:

 1. Compensation. Sections 3(a) and 3(b) of the Agreement are hereby amended to read in their entirety as follows: 
 “(a) Base Salary. NIC will pay base salary to Michelson during the Term, in accordance with NIC’s normal payroll practices at the rate of
$350,000 per year. The rate of Michelson’s base salary will be subject to review and potential increase, but not decrease, (i) in connection with annual salary reviews to be conducted in accordance with NIC’s customary practice or
(ii) at such other time or times as the Board of Directors of NIC may deem it appropriate to increase Michelson’s base salary. 
 “(b) Annual Bonus. Michelson will be eligible for a bonus each year, subject to and in accordance with the rules of NIC’s Management Bonus Plan, with a target bonus for each year equal to 100% of his base salary for the
year. Assuming Michelson remains in the employ of NIC through the end of 2008, the gross amount of his bonus for 2008, to be paid in accordance with and subject to the rules of NIC’s Management Bonus Plan, will be not less than $350,000.”

 2. Compliance with Section 409A of the Code. A new Section 22, reading in its entirety as follows, is hereby inserted as the last
numbered section in the Agreement: 
 “22. Compliance with Section 409A of the Code. 
 “(a) It is intended that the payments and benefits provided under this Agreement shall either be exempt from the application of, or comply with, the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). This Agreement shall be construed, administered, and governed in a manner that effects such intent, and NIC shall not take any action that
would be inconsistent with such intent. Without limiting the foregoing, the payments and benefits provided under this Agreement may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an
additional tax under Section 409A of the Code upon Michelson. Notwithstanding anything contained in this Agreement to the contrary, and except as provided in Section 22(b): 
 “(i) The severance benefits described under paragraphs (a)(i) and (a)(iv) of Section 16 shall be payable only upon a “separation from
service” within the meaning of Section 409A of the Code. 
 “(ii) The continued base salary described in Section 16(a)(i)
shall be paid in accordance with NIC’s normal payroll practices in effect on January 1, 2008. The additional profit sharing contributions required under Section 16(a)(iv) shall be paid in a single lump sum within 30 days following
separation from service. 

 “(iii) The continued benefits described in Section 16(a)(iv) (other than the profit sharing
contributions) that are taxable benefits (and that are not disability pay or death benefit plans within the meaning of Section 409A of the Code) are intended to comply, to the maximum extent possible, with the exception to Section 409A of
the Code set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations. To the extent that any of those benefits either do not qualify for that exception, or are provided beyond the applicable time periods set forth in
Section 1.409A-1(b)(9)(v) of the Treasury Regulations, then they shall be subject to the following additional rules: (x) any reimbursement of eligible expenses shall be paid within 30 days following Michelson’s written request for
reimbursement; provided that Michelson provides written notice no later than 60 days prior to the last day of the calendar year following the calendar year in which the expense was incurred; (y) the amount of expenses eligible for
reimbursement, or in-kind benefits provided, during any calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (z) the right to reimbursement or
in-kind benefits shall not be subject to liquidation or exchange for another benefit. The reimbursement of legal fees and expenses described in Section 17(b) are subject to the rules of the immediately preceding sentence, provided that the
legal fees and expenses must be incurred during the period commencing on the Effective Date and ending on the tenth anniversary of the end of the Term. Any interest described in Section 17(c) shall be paid at the same time as the payment or
benefit is made or provided. 
 “(iv) In no event shall the exercise period of any stock option described in Section 16(a)(v) extend
beyond its original term. 
 “(v) The severance benefits described in Section 16(b) of this Agreement shall be paid at the same time
and in the same form as the benefits described in Section 16(a). 
 “(b) Notwithstanding anything contained in this Agreement to the
contrary, if Michelson is a “specified employee,” as determined under NIC’s policy for determining specified employees on his termination date, all payments, benefits, or reimbursements provided under this Agreement that constitute a
“deferral of compensation” within the meaning of Section 409A of the Code, that are provided upon a “separation from service” within the meaning of Section 409A of the Code (other than as a result of his death) and that
would otherwise be paid or provided during the first six months following separation from service, shall instead be accumulated through and paid or provided, together with interest at the applicable federal rate under Section 7872(f)(2)(A) of
the Code in effect on his separation from service, within 30 days after the first business day that is more than six months after the date of his separation from service (or, if Michelson dies during such six-month period, within 30 days after
Michelson’s death).” 
 3. Confirmation of Agreement. Except as specifically provided in Sections 1 and 2 above, NIC and Michelson confirm
that the Agreement is in effect on the date hereof and will remain in effect until terminated according to its terms, whether before or after January 1, 2008, and that all of the general provisions of the Agreement, including, without
limitation, those relating to choice of law and notices, apply with equal force to this Amendment. 

 In witness whereof, the parties have executed this Amendment as of the date first written above. 
  

			
	NATIONAL INTERSTATE CORPORATION
		
	By:	 	 /s/ Julie A. McGraw

		 	 Julie A. McGraw
 Vice President and Chief Financial
Officer

	
	 /s/ David W. Michelson

	DAVID W. MICHELSONPromissory Note and Pledge Security Agreement

 Exhibit 10.1 
 PROMISSORY NOTE AND PLEDGE SECURITY AGREEMENT 
  

			
	$13,500,000	 	December 29, 2007

 FOR VALUE RECEIVED, the undersigned, TACTICAL HOLDINGS, INC., a Delaware corporation (the
“Maker”), hereby promises to pay to the order of PHOENIX FOOTWEAR GROUP, INC., a Delaware corporation (the “Payee”), the principal sum of THIRTEEN MILLION FIVE HUNDRED THOUSAND DOLLARS and NO CENTS ($13,500,000),
together with interest on the outstanding principal balance hereunder accrued from the date hereof until this Note is fully and finally paid in full at the rate of four percent (4%) percent per annum; provided, that after any Event of Default
(as defined below) interest shall accrue at the rate of ten percent (10%) percent per annum. All payments of principal and/or interest shall be paid as set forth below, and each such payment shall be made in lawful money of the United States of
America by wire transfer to Payee’s account held at Manufacturers and Traders Trust Company (the “Bank”) pursuant to wire transfer instructions provided by the Bank and/or Payee. 
 This Note is executed and delivered in payment of the Estimated Purchase Price pursuant to a Stock Purchase Agreement (the “Stock Purchase
Agreement”) dated December 29, 2007 between Maker and Payee related to the purchase and sale of the capital stock of Altama Delta Corporation, a Georgia corporation (“Altama”). Concurrently with the delivery of this
Note, Maker is delivering or causing to be delivered to Payee: (a) a guaranty of Maker’s obligations hereunder from Altama pursuant to a continuing Guaranty of even date herewith (the “Altama Guaranty”); (b) first
priority security interest in Altama’s assets pursuant to a Security Agreement of even date herewith between Altama, Altama (Puerto Rico) Corporation, a Delaware corporation and Maker (the “Security Agreement”); and (c) a
guaranty of Maker’s obligations hereunder (the “Golden Gate Guaranty”) from Golden Gate Private Equity, Inc. and GGC Administration, LLC (collectively with Altama, the “Guarantors”). 
 1. Payments of Principal and Interest. Unless sooner due as provided below, the entire principal balance of this Note, and all unpaid
accrued interest thereon, shall be due and payable, without necessity of demand, on February 29, 2008 (the “Maturity Date”). The Maker expressly acknowledges and agrees that payment of this Note is not subject to any right of
offset, counterclaim or deduction of any kind and shall be irrevocably and unconditionally due and payable on the Maturity Date under all circumstances. 
 2. Prepayment. The Maker shall have the right to prepay, without penalty, at any time or times after the date hereof, all or any portion of the outstanding principal balance of this Note, together with
interest on the principal amount prepaid accrued to the date of prepayment. 

 3. Events of Default. The following are Events of Default hereunder: 
 (a) any failure by the Maker to pay when due all or any principal or interest hereunder or failure to perform or observe any obligation hereunder; or

 (b) the occurrence of an Event of Default or any failure by Altama to perform or observe any obligation under the Security Agreement or
the Altama Guaranty or any other material breach thereof (including any misrepresentation or breached warranty) (and such Event of Default, failure or breach remains uncured for 10 days after Maker receives notice thereof) or challenge to the
enforceability thereof; 
 (c) the occurrence of an Event of Default or any failure by the Golden Gate Entities to perform or observe any
obligation under the Golden Gate Guaranty or any other material breach thereof (including any misrepresentation or breached warranty) (and such Event of Default, failure or breach remains uncured for 10 days after Maker receives notice thereof) or
challenge to the enforceability thereof; 
 (e) the failure of Maker and Altama to make the initial payment of $750,000 required under the
Transition Services Agreement among such parties and Maker; 
 (f) if the Maker or any Guarantor (i) admits in writing its inability to
pay generally its debts as they mature, or (ii) makes a general assignment for the benefit of creditors, or (iii) is adjudicated a bankrupt or insolvent, or (iv) files a voluntary petition in bankruptcy, or (v) takes advantage,
as against its creditors, of any bankruptcy law or statute of the United States of America or any state or subdivision thereof now or hereafter in effect, or (vi) has a petition or proceeding filed against it under any provision of any
bankruptcy or insolvency law or statute of the United States of America or any state or subdivision thereof, (vii) has a receiver, liquidator, trustee, custodian, conservator, sequestrator or other such person appointed by any court to take
charge of its affairs or assets or business, or (viii) takes any action in furtherance of any of the foregoing; 
 (f) any liquidation,
dissolution or winding up of the Maker or any Guarantor; 
 (g) the sale or other transfer of substantially all of the business or assets of
Altama, or the sale or other transfer of a material portion (10% or more) of such business or assets if such a sale is outside the ordinary course of business of Altama, or sale or other transfer of more than 10% of the outstanding stock or voting
power of or in Altama in a single transaction or a series of transactions; or 
 (h) if Altama enters into any merger or consolidation.

 4. Remedies on Default. If any Event of Default shall occur, the holder hereof shall, in addition to any and all other
available rights and remedies, have the right, at its option (except for an Event of Default under paragraph 4(e) above, the occurrence of which shall automatically effect acceleration hereunder), (a) to declare the entire unpaid principal
balance of this Note, together with all accrued interest hereunder, to be immediately due and payable, and (b) to pursue any and all available remedies for the collection of such principal and interest. 

 5. Share Pledge. 
 (a) Pledge. Maker hereby pledges to the Payee, and grants to the Payee a security interest in, the shares acquired by Maker pursuant to the Stock
Purchase Agreement (the “Shares”), as security for the prompt and complete payment of the unpaid principal of and interest on this Note when such amounts become due and payable from time to time in accordance with the terms and
provisions hereof. 
 (b) Delivery of Pledged Shares. Upon the execution of this Note, Maker shall deliver to the Payee the
certificate(s) representing the Shares (to the extent such Shares are certificated), together with duly executed forms of assignment sufficient to transfer title thereto to the Payee. 
 (c) Voting Rights; Cash Dividends. Notwithstanding anything to the contrary contained herein, until such time as there exists an Event of Default,
Maker shall be entitled to all voting rights with respect to the Shares. Under no circumstances other than as contemplated by Paragraph 5(d) below, shall Payee permit Altama issue any capital stock or other voting securities of any kind. The amount
of any cash dividends payable on the Shares shall be deposited with the Payee as additional security hereunder. 
 (d) Stock Dividends;
Distributions, etc. If, prior to the Maturity Date, Maker becomes entitled to receive or receives any securities or other non-cash property in addition to, in substitution of, or in exchange for any of the Shares (whether as a distribution in
connection with any recapitalization, reorganization or reclassification, a stock dividend or otherwise), Maker shall accept such securities or other property on behalf of and for the benefit of the Payee as additional security for Maker’s
obligations hereunder and shall promptly deliver such additional security to the Payee, together with duly executed forms of assignment, and such additional security shall be deemed to be part of the pledged Shares hereunder. 
 (e) Default. This Note constitutes a security agreement for purposes of the Uniform Commercial Code in all relevant jurisdictions. If Maker
defaults in the payment of the principal or interest under this Note as they become due (whether upon demand, maturity, acceleration or otherwise), the Payee may exercise any and all rights, powers and remedies of any owner of the Shares (including
the right to vote the shares and receive dividends and distributions with respect to such shares) and shall have and may exercise without demand any and all of the rights and remedies granted to a secured party upon default under the Uniform
Commercial Code or otherwise available to the Payee under applicable law. 
 6. Certain Waivers. Except as otherwise expressly
provided in this Note, the Maker hereby waives diligence, demand, presentment for payment, protest, dishonor, nonpayment, default, and notice of any and all of the foregoing. All amounts payable under this Note shall be payable without relief under
any applicable valuation and appraisement laws. 

 7. Amendments. This Note may not be changed orally, but only by an agreement in writing and
signed by the party against whom enforcement of any waiver, change, modification or discharge is sought. 
 8. Cumulative
Remedies. No right or remedy conferred upon the Payee under this Note is intended to be exclusive of any other right or remedy contained herein or in the Stock Purchase Agreement, or in any instrument or document delivered in connection
herewith or therewith, including those described in paragraph 6 above, and every such right or remedy shall be cumulative and shall be in addition to every other such right or remedy contained herein and therein and/or now or hereafter existing at
law or in equity or otherwise. 
 9. Waivers; Course of Dealing. No course of dealing between the Maker and the Payee, or any
failure or delay on the part of the Payee in exercising any rights or remedies, or any single or partial exercise of any rights or remedies, shall operate as a waiver or preclude the exercise of any other rights or remedies available to the Payee.

 10. Governing Law. This Note shall be governed by and construed in accordance with the domestic laws of the State of
Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

 11. Jurisdiction; Venue; Waiver of Service of Process. 
 (a) Jurisdiction. Maker (i) hereby irrevocably submits to the exclusive jurisdiction of the state courts of the State of Delaware or the
United States District Court located in the District of Delaware for the purpose of any action between it and Payee or any holder hereof; (ii) hereby waives to the extent not prohibited by applicable law, and agrees not to assert, by way of
motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such action brought in one
of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred or removed to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any
other court other than one of the above-named courts, or that this Note or the subject matter hereof may not be enforced in or by such court and (iii) hereby agrees not to commence any such action other than before one of the above-named
courts. 
 (b) Venue. Maker waives any claim and will not assert that venue should properly lie in any other location within the
jurisdiction selected by Payee or the holder of this Note. 

 12. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE
WAIVED, MAKER HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. MAKER AGREES THAT PAYEE MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND
BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN IT AND MAKER RELATING TO THIS NOTE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. 
 13. Assignment. The Payee may assign its rights and interest under this Note, including without limitation its rights related to the pledge
contained in Section 5 hereof, to a lender as collateral security without the prior consent of Maker. Any other assignment without the prior written consent of Maker shall be void. 
 14. Collection Costs. In the event that the Payee shall, after the occurrence of an Event of Default, turn this Note over to an attorney
for collection, the Maker shall further be obligated to the Payee for the Payee’s reasonable attorneys’ fees and expenses incurred in connection with such collection. 
 [SIGNATURE PAGE FOLLOWS] 

 IN WITNESS WHEREOF, the undersigned has executed and unconditionally delivered this Note as of this 29th
day of December 2007. 
  

			
	TACTICAL HOLDINGS, INC.
		
	By:	 	/s/ Ken Diekroeger
	Name:	 	Ken Diekroeger
	Title:	 	Vice President

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