Document:

abwn_ex101.htm

EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is made and entered into as December 28, 2017, effective January 1, 2018 by and between Airborne Wireless Network, a Nevada corporation (the “Company”), and Kevin L. Spence (“Employee”). 

 

1. Engagement and Responsibilities

 

1.1 Upon the terms and subject to the conditions set forth in this Agreement, the Company hereby engages and employs Employee as an employee of the Company, with the title and designation “Chief Financial Officer.” Employee hereby accepts such engagement and employment. Employee may also have additional titles as determined from time to time by the Board with Employee's consent. 

 

1.2 Employee’s duties and responsibilities shall be those that are normally and customarily vested in such position of a corporation. In addition, Employee’s duties shall include those duties and services for the Company as the Board or the Company’s officers shall, in their sole and absolute discretion, from time to time reasonably direct which are not inconsistent with Employee’s position described in Section 1.1.

1.3 Employee agrees to devote all of Employee’s business time, energy and efforts to the business of the Company and will use Employee’s best efforts and abilities faithfully and diligently to promote the Company’s business interests. For so long as Employee is employed by the Company, Employee shall not, directly or indirectly, either as an employee, employer, consultant, agent, investor, principal, partner, manager, lender, stockholder (except as the holder of less than 1% of the issued and outstanding stock of a publicly held corporation), corporate officer or director, or in any other individual or representative capacity, engage or participate in any business that is in competition in any manner whatsoever with the business of the Company, as such businesses are now or hereafter conducted during Employee’s employment with the Company. Subject to the foregoing prohibition and provided such services or investments do not violate any applicable law, regulation or order, or materially interfere with the faithful and diligent performance by Employee of the services to the Company otherwise required or contemplated by this Agreement, the Company expressly acknowledges that Employee may:

 

(a) make and manage personal business investments of Employee’s choice; and

 

(b) serve in any capacity with any non-profit civic, educational or charitable organization.

 

1.4 Covenants of Employee 

 

(a) Reports. Employee shall use his best efforts and skills to truthfully, accurately, and promptly make, maintain, and preserve all records and reports that the Company may, from time to time, request or require, fully account for all money, records, equipment, materials, or other property belonging to the Company of which he may have custody, and promptly pay and deliver the same whenever he may be directed to do so.

 

	 
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(b) Expertise. Employee shall make available to the Company any and all information of which he has knowledge that is relevant to the Company's business and shall make all suggestions and recommendations that he believes will be of benefit to the Company.

 

(c) Opportunities. Employee shall make all business opportunities of which he becomes aware that are relevant to the Company’s business available to the Company, and to no other Person or to himself individually.

 

(d) Compliance. Employee shall use his best efforts and skills to cause the Company to comply with all of its contractual obligations and commitments, as well as all applicable laws, rules and regulations and investor and insurer guidelines.

 

1.5 Office Location

 

Employee’s services hereunder shall be performed at the Company’s offices in Simi Valley, California, except for reasonable travel on behalf of the Company consistent with the requirements of his duties and positions. Employee will undertake appropriate business travel as reasonably required by the Company. 

 

2. Definitions

 

2.1 “Board” shall mean the Board of Directors of the Company.

 

2.2 “Company” shall mean the Company.

 

2.3 "For Cause” shall mean, in the context of a basis for termination of Employee’s employment with the Company, that:

 

(a) Employee breaches any material obligation, duty or agreement under this Agreement, which breach is not cured or corrected within 15 days of written notice thereof from the Company (except for breaches of Sections 1.3 and/or 6, which cannot be cured and for which the Company need not give any opportunity to cure); 

 

(b) Employee is grossly negligent in the performance of services to the Company, or commits any act of personal dishonesty, fraud, undisclosed conflict of interest, breach of fiduciary duty or trust that, in the reasonable judgment of the Board renders Employee unsuitable for his position; or

 

(c) Employee is indicted for, convicted of, or pleads guilty or nolo contendere with respect to, theft, fraud, a crime involving moral turpitude, or a felony under federal or applicable state law; or

 

(d) Employee commits any act of personal conduct that, in the reasonable opinion of the Board, gives rise to a material risk of liability under federal or applicable state law for discrimination or sexual or other forms of harassment or other similar liabilities to subordinate employees; or

 

	 
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(e) Employee commits continued or repeated substantive violations of specific written directions of the Board, which directions are consistent with this Agreement and Employee’s position as an employee or continued or repeated substantive failure to perform duties assigned by or pursuant to this Agreement; provided that no discharge shall be deemed for Cause under this subsection (e) unless Employee first receives written notice from the Company advising him of the specific acts or omissions alleged to constitute violations of written directions or a material failure to perform his duties, and such violations or material failure continue after he shall have had a reasonable opportunity to correct the acts or omissions so complained of; or

 

(f) Employee is found liable in any SEC or other civil or criminal securities law action or entering any cease and desist order with respect to such action (regardless of whether or not Employee admits or denies liability); or

 

(g) Employee breaches his fiduciary duties to the Company or engages in intentional misconduct with respect to working for the Company and such breach(es) or misconduct may reasonably be expected to have a material adverse effect on the Company; or

 

(h) Employee (a) obstructs or impedes, (b) endeavors to influence, obstruct or impede, or (iii) fails to materially cooperate with, any investigation authorized by the Board or any governmental or self-regulatory entity (an “Investigation”); or (c) removes, conceals, destroys, purposely withholds, alters or by any other means falsifies any material that is requested in connection with an Investigation, provided that Employee’s failure to waive attorney-client privilege relating to communications with Employee’s attorney in connection with an Investigation shall not constitute “Cause.”

 

2.4 “Invention and Confidentiality Agreement” shall mean that certain Innovation, Proprietary Information and Confidentiality Agreement between Employee and the Company, entered into concurrently herewith.

 

2.5 “Person” shall mean an individual or a partnership, corporation, trust, association, limited liability company, governmental authority or other entity.

 

3. Compensation and Benefits.

 

3.1 Salary. Employee shall be entitled to an initial base salary in the amount of $120,000 per year. The base salary shall be payable in installments in the same manner and at the same times the Company pays base salaries to other employees of the Company, but in no event, less frequently than monthly. In the event the Company is unable to pay the base salary for financial reasons as determined in good faith by the Board in its sole discretion, the unpaid portion of the base salary will be accrued each pay period and paid to Employee at the end of each calendar quarter. No interest will apply to any portion of the accrued base salary. 

 

3.2 Bonus. Employee shall not be entitled to a guaranteed bonus or a performance bonus. However, the Board, in its sole discretion, may from time to time award a bonus to Employee. 

 

3.3 Expense Reimbursement. Employee shall be entitled to reimbursement from the Company for the reasonable costs and expenses that Employee incurs in connection with the performance of Employee’s duties and obligations under this Agreement in a manner consistent with the Company’s practices and policies therefor. Employee shall travel in at least business class on Employee’s airline of choice and shall receive accommodations of at least a four-star hotel (if possible).

 

	 
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3.4 Employee Benefit Plans. Employee shall be entitled to participate in any pension, savings and group term life, medical, dental, disability and other group benefit plans which the Company makes available to its employees generally. Employee acknowledges that the Company presently does not have any employee benefit plans, including medical insurance, and does intend to adopt any such plans for the foreseeable future.

 

3.5 Vacation. While he is an employee of the Company, Employee shall be entitled paid vacation that accrues at a rate of 1.66 days for each month worked (20 days per calendar year). Employee shall have the right to carryover unused vacation from one calendar year to the next, to the extent permitted by the Company’s policy from time to time in effect, up to a maximum of 50 carryover days. 

 

3.6 Withholding. The Company may deduct from any compensation payable to Employee (including payments made pursuant to Section 3 in connection with or following termination of employment) amounts sufficient to cover Employee’s share of applicable federal, state and/or local income tax withholding, old-age and survivors’ and other social security payments, state disability and other insurance premiums and payments.

 

3.7 Incentive Stock Options. The Company and Employee will agree upon an option plan; however, it is specifically agreed that the Employee shall receive a minimum of 1,750,000 stock options upon effective date of this Agreement and shall receive at least 1,750,000 stock options on January 15, 2018, 2019 and 2020 if Employee remains employed by the Company on such dates. The Options shall be priced at once cent above the closing price of the common stock on January 14, 2018 for those issued in 2018, $1.75 for those issued in 2019, and $2.50 for those issued in 2020. These options shall vest on the issuance date. The exercise period for each option shall be five years from issuance. All stock options will be made available to Employee in accordance with the Company’s policy in effect from time to time, subject to approval of the Board of Directors and the Compensation Committee. 

 

3.8 Quarterly Reviews. Within ten (10) days of the end of each calendar quarter, or at such other time as the Company may establish in its discretion, the Board will review the Employee’s compensation and the Company's financial circumstances and needs and determine in its discretion if any change is merited based upon Employee’s performance and the total cash compensation paid by comparable companies to employees with comparable experience and responsibilities. 

 

4. Term of Employment.

 

Employee’s employment pursuant to this Agreement shall commence on the date of this Agreement and shall terminate on the earliest to occur of the following:

 

4.1 upon the death of Employee;

 

4.2 upon delivery to Employee of written notice of termination by the Company if Employee shall suffer a physical or mental disability which renders Employee, in the reasonable judgment of the Board, unable to perform his duties and obligations under this Agreement for either 60 consecutive days or 120 days in any 12-month period;

 

	 
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4.3 upon 30 days’ prior written notice from Employee to the Company;

 

4.4 upon delivery to Employee of written notice of termination by the Company (i) For Cause, or (ii) without cause following receipt of written notice of termination from Employee pursuant to Section 4.3 of this Agreement; or

 

4.5 upon delivery to Employee of written notice of termination by the Company without cause.

 

5. Termination of Employment.

 

5.1 Upon termination of Employee’s employment for any reason: (a) Employee shall be entitled to base salary accrued through the date of termination of employment; (b) Employee shall be entitled to any bonus that has been approved by the Board and remains unpaid; (c) Employee shall be entitled to reimbursement of expenses incurred prior to termination of employment that are payable in accordance with Section 3.3; (d) Employee shall be entitled to any benefits accrued or earned in accordance with the terms of any applicable benefit plans and programs of the Company and (e) [shall receive and immediately vest options to the extent provided for in Section 3.7].

 

5.2 In the event that (a) the Company terminates Employee’s employment for any reason, (b) such termination of employment results in Employee incurring a “separation from service” as defined under Treasury Regulation 1.409A-1(h); (c) Employee complies with the post-employment terms in this Agreement and any other written agreements with the Company or its affiliates; and (d) Employee signs within 21 days of receipt from the Company and does not revoke a full and general release of claims relating to all matters, prepared by and in form and substance satisfactory to the Company, then Employee shall be entitled to receive $10,000 per month, less applicable withholdings, for thirty-six (36) months following the termination. The first installment of such severance pay will be on the Company’s first regular payday that is 60 days after the last day of Employee’s employment and will cover the period from the last day of employment with the Company through the payment date. The remaining installments will be paid over time pursuant to the Company’s payroll practices. The severance pay under this Agreement shall be in lieu of and replace Employee’s right to severance pay under any other Company agreement, plan, or program.

 

5.3 In the event of termination of Employee’s employment pursuant to Section 4.4(i) (Termination For Cause), and subject to applicable law and regulations, the Company shall be entitled to offset against any payments due Employee the loss and damage, if any, which shall have been suffered by the Company as a result of the direct acts or omissions of Employee giving rise to termination under Section 4.4(i). 

 

5.4 Employee acknowledges that the Company has the right to terminate Employee’s employment without cause. 

 

	 
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5.5 Notwithstanding the termination of Employee's employment, Employee shall be entitled to all rights of indemnification from the Company pursuant to the Certificate of Incorporation and By-Laws of the Company. 

 

5.6 Notwithstanding the timing of payments set forth in the Agreement, if the Company determines that Employee is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and that, as a result of such status, any portion of the payment under this Agreement would be subject to additional taxation, the Company will delay paying any portion of such payment until the earliest permissible date on which payments may commence without triggering such additional taxation (with such delay not to exceed six months), with the first such payment to include the amounts that would have been paid earlier but for the above delay.

 

6. Covenant Not To Solicit. During the period from the date Employee’s employment with the Company terminates through the second anniversary of such date, Employee will not directly or indirectly, either alone or by action in concert with others: (a) induce or attempt to influence any employee of the Company to engage in any activity in which Employee is prohibited from engaging by Section 1.3 or to terminate his or her employment with the Company; (b) offer employment to any person who was employed by the Company at the time of termination of Employee’s employment with the Company; or (c) use the Company’s trade secrets to induce or attempt to induce any customer, supplier, licensee or other business relationship of the Company to cease or reduce its business with the Company, or in any way unlawfully interfere with the relationship between any such customer, supplier, licensee or business relationship and the Company. 

 

7. Specific Performance. Employee acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Sections 1.3 or 6 would be inadequate and, in recognition of this fact, and notwithstanding Section 10, Employee agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to obtain equitable relief from a court or arbitrator in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

 

8. Employee’s Cooperation. For so long as Employee is employed by the Company, and thereafter, Employee shall cooperate, at the Company’s cost and expense (which shall consist solely of travel, lodging, meals and a reasonable per diem for lost time if Employee is not an employee of the Company), with the Company in any internal investigation, any administrative, regulatory or judicial investigation or proceeding or any dispute with a third party as reasonably requested by the Company (including Employee being available to the Company upon reasonable notice for interviews and factual investigations, appearing at the Company’s request to give testimony without requiring service of a subpoena or other legal process, volunteering to the Company all pertinent information and turning over to the Company all relevant documents which are or may come into Employee’s possession, all at times and on schedules that are reasonably consistent with Employee’s other permitted activities and commitments).

 

	 
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9. Miscellaneous.

 

9.1 Notices. All notices, requests, demands and other communications (collectively, “Notices”) given pursuant to this Agreement shall be in writing, and shall be delivered by personal service, courier, facsimile transmission, email or by United States first class, registered or certified mail, postage prepaid, addressed: (i) if to the Company, at the address set forth on the signature page of this Agreement to the attention of the Board or, if the Company has a President who is not Employee, to the President or another designee identified on the signature page (or if by email, to the latest email address the sender has for the recipient or, if the recipient is an entity, for the officer or other person designated to receive notices); and (ii) if the Employee, to the last known address or email address for Employee on the books and records of the Company. Any Notice, other than a Notice sent by registered or certified mail, shall be effective when received; a Notice sent by registered or certified mail, postage prepaid return receipt requested, shall be effective on the earlier of when received or the third day following deposit in the United States mails. Any party may from time to time change its address for further Notices hereunder by giving notice to the other party in the manner prescribed in this Section.

 

9.2 Entire Agreement. This Agreement contains the sole and entire agreement and understanding of the parties with respect to the entire subject matter of this Agreement, and any and all prior discussions, negotiations, commitments and understandings, whether oral or otherwise, related to the subject matter of this Agreement are hereby merged herein.

 

9.3 Governing Law. This Agreement, and all questions relating to its validity, interpretation, performance and enforcement, as well as the legal relations hereby created between the parties hereto, shall be governed by and construed under, and interpreted and enforced in accordance with, the laws of the State of California, notwithstanding any California or other conflict of law provision to the contrary.

 

9.4 Severability. Whenever possible each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be or become prohibited or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

9.5 Captions. The various captions of this Agreement are for reference only and shall not be considered or referred to in resolving questions of interpretation of this Agreement. References in this Agreement to Sections shall mean Sections of this Agreement unless otherwise specified.

 

9.6 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by email delivery of a “pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “pdf” signature page was an original thereof.

 

	 
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9.7 Advice from Independent Counsel. The parties hereto understand that this Agreement is legally binding and may affect such party’s rights. Each party represents to the other that it has received legal advice from counsel of its choice regarding the meaning and legal significance of this Agreement to which it is a party and that it is satisfied with its legal counsel and the advice received from it.

 

9.8 Judicial Interpretation. Should any provision of this Agreement require judicial interpretation, it is agreed that a court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against any Person by reason of the rule of construction that a document is to be construed more strictly against the Person who itself or through its agent prepared the same, it being agreed that all parties have participated in the preparation of this Agreement.

 

9.9 Waiver of Jury Trial. IF NOTWITHSTANDING THE AGREEMENT THAT ALL DISPUTES BE SUBMITTED TO BINDING ARBITRATION, A DISPUTE IS SUBMITTED TO A COURT, EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY DISPUTE IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, AND AGREES TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

9.10 No Assignment. Employee may not assign any of his rights or obligations under this Agreement except that Employee’s benefits may be assigned by will or by the laws of descent and distribution. 

 

9.11 Construction. No term or provision of this Agreement shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision of this Agreement and any present or future statute, law, ordinance, or regulation, the latter shall prevail, but in such event the affected provision of this Agreement shall be curtailed and limited only to the extent necessary to bring such provision within the requirements of the law.

 

10. Submission to Arbitration.

 
10.1 IN CONSIDERATION FOR AND AS A MATERIAL CONDITION OF EMPLOYMENT WITH THE COMPANY, EMPLOYEE AGREES THAT FINAL AND BINDING ARBITRATION UNDER THE THEN APPLICABLE RULES AND PROCEDURES OF JAMS/ENDISPUTE SHALL BE THE EXCLUSIVE MEANS FOR RESOLVING ANY DISPUTE WHICH ARISES UNDER OR RELATING TO THIS AGREEMENT (EXCEPT THOSE LISTED IN SECTION 10.4). NO OTHER ACTION MAY BE BROUGHT IN COURT OR IN ANY OTHER FORUM. THIS AGREEMENT IS A WAIVER OF ALL RIGHTS TO A CIVIL COURT ACTION FOR A COVERED CLAIM. ONLY AN ARBITRATOR, NOT A JUDGE OR JURY, WILL DECIDE THE CLAIM.
 

10.2 Employee or the Company shall begin the arbitration process by delivering a written request for arbitration to the other party within the time limits that would apply to the filing of a civil court action. Failure to deliver a timely written request for arbitration shall preclude the aggrieved party from instituting any legal, arbitration or other proceeding and shall constitute a complete waiver of all such claims. Statutory claims can be raised within the limitations period provided by the applicable statute.

 

	 
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10.3 Claims covered by this provision include, but are not limited to, the following: (a) alleged violations of federal, state and/or local constitutions, statutes, regulations or ordinances, including, but not limited to, laws dealing with unlawful discrimination and harassment; (b) claims based on any purported breach of contractual obligation, including but not limited to breach of the covenant of good faith and fair dealing, wrongful termination or constructive discharge; (c) violations of public policy; (d) claims relating to a transfer, reassignment, denial of promotion, demotion, reduction in pay, or any other term or condition of employment; (e) claims based on contract or tort; and (f) any and all other claims arising out of Employee’s employment with or termination by the Company. This includes, but is not limited to, claims brought under Title VII of the Civil Rights act of 1964; California Government Code Section 12960 et seq.; and any other federal, state or local anti-discrimination laws relating to discrimination, including, but not limited to, those based on the following protected categories: genetic information or characteristics; sex and gender; race; religion; national origin; mental or physical disability (including claims under the Americans With Disabilities Act); medical condition; veteran or military status; marital status; sexual orientation or preference; age; pregnancy; and retaliation or wrongful termination in violation of public policy for alleging or filing or participating in any grievance or otherwise complaining of any wrong relating to the aforementioned categories or any public policy.

 

10.4 The following claims are expressly excluded and not covered by this Agreement for final and binding arbitration: (a) claims related to Workers’ Compensation and Unemployment Insurance; (b) administrative filings with governmental agencies such as the California Department of Fair Employment & Housing, the Equal Employment Opportunity Commission, the U.S. Department of Labor or the National Labor Relations Board; (c) claims that are expressly excluded by statute or are expressly required to be arbitrated under a different procedure pursuant to the terms of an employee benefit plan; and (d) claims within the jurisdictional limits of small claims court. Nor does this Agreement preclude either party from seeking appropriate interim injunctive relief pursuant to the California Code of Civil Procedure or applicable federal law before arbitration or while arbitration proceedings are pending.

 

10.5 Any claim arising between Employee and the Company covered by the arbitration provisions of this Agreement shall be submitted to final and binding arbitration in the rules and procedures of JAMS/Endispute, or any successor entity thereto, in effect upon the date the claim is submitted in writing to the Company, to which rules and procedures the parties hereby expressly agree. The Rules allow for discovery by each party as ordered by the arbitrator. The arbitrator must allow discovery adequate to arbitrate all claims, including access to essential documents and witnesses. In making his or her award, the Arbitrator shall have the authority to make any finding and provide any remedy.

 

10.6 The Arbitrator must issue a written award. The Arbitrator shall, in the award or separately, make specific findings of fact, and set forth such facts in support of his or her decision, as well as the reasons and basis for his or her opinion. Should the Arbitrator exceed the jurisdiction or authority here conferred, any party aggrieved thereby may file a petition to vacate, amend or correct the Arbitrator’s award in a court of competent jurisdiction, pursuant to applicable law.

 

	 
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10.7 The Company shall pay the arbitrator’s fees and other administrative costs of arbitration, and other reasonable costs as specified by the arbitrator under applicable law so that Employee does not have to bear any cost which he would not have to bear in court beyond any amount which would have to be paid as a filing fee in a municipal or superior court. The arbitrator shall at his or her discretion award attorneys’ fees and costs to the prevailing party; provided, however, that each party shall be responsible for the payment of its own attorneys’ fees; and provided further, that if the claim of one party against the other is monetary, prior to the commencement of the arbitration each party shall submit to the other party and to the arbitrator a written settlement offer (i.e. the amount the claimant would be willing to accept to resolve the claim and the amount the party against whom the claim has been made (the "defendant") would be willing to pay to resolve the claim), and if the arbitration award is less than or equal to the amount that is the midpoint between the two such amounts, the defendant shall be deemed to be the prevailing party in the arbitration and if the arbitration award is greater than the midpoint between the two such amounts, the claimant shall be deemed to be the prevailing party.
 

IN WITNESS WHEREOF, this Agreement has been made and entered into as of the date and year first above written.

	 	Airborne Wireless Network 	
	 	 	 	 
		By:	/s/ Michael J. Warren 	
	
 
	
 
	Michael J. Warren, CEO	 
	 	 		 
	
 
	
 
	
 
	
 

	
 
	
Address:
	
 

	
 
	
4115 Guardian Street, Suite C
	
 

	
 
	
Simi Valley, CA 93063
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
EMPLOYEE
	
 

	 	 	 	 
	
 
	
/s/ Kevin L. Spence 
	
 

	
 
	
Kevin L. Spence
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Address:
	
 

	
 
	
4115 Guardian Street, Suite C
	
 

	
 
	
Simi Valley, CA 93063
	
 

 

 

 

	- 10 -Exhibit

EXHIBIT 10.1.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
  AGGREGATE CATASTROPHE EXCESS OF LOSS AND 
PER OCCURRENCE CATASTROPHE EXCESS OF LOSS 
REINSURANCE CONTRACT
Issued to
EMC REINSURANCE COMPANY

    

	
					
	AGGREGATE CATASTROPHE EXCESS OF LOSS AND PER OCCURRENCE CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT

TABLE OF CONTENTS

	Article
	 
	Page

	 
	 
	 
	 
	 

	 
	 
	Preamble   
	3
	 

	1
	 
	Agreement   
	4
	 

	2
	 
	Retentions and Limits   
	4
	 

	3
	 
	Term (Continuous Contract)   
	4
	 

	4
	 
	Commutation   
	5
	 

	5
	 
	Territory   
	5
	 

	6
	 
	Exclusions   
	5
	 

	7
	 
	Trade and Economic Sanctions
	5
	 

	8
	 
	Premium   
	5
	 

	9
	 
	Definitions
	6
	 

	10
	 
	Commencement & Termination
	7
	 

	11
	 
	Extra Contractual Obligations/Excess of Policy Limits   
	8
	 

	12
	 
	Net Retained Liability
	8
	 

	13
	 
	Original Conditions
	9
	 

	14
	 
	No Third Party Rights
	9
	 

	15
	 
	Disputes
	9
	 

	16
	 
	Jurisdiction
	9
	 

	17
	 
	Currency
	9
	 

	18
	 
	Indemnification and Errors and Omissions
	10
	 

	19
	 
	Insolvency
	10
	 

	20
	 
	Savings/Severability
	11
	 

	21
	 
	Offset
	11
	 

	22
	 
	Governing Law
	11
	 

	23
	 
	Entire Agreement
	11
	 

	24
	 
	Non-Waiver
	12
	 

	25
	 
	Mode of Execution
	12
	 

	 
	 
	Company Signing Block
	13
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Attachments
	 
	 
	 

	 
	 
	Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.   
	14
	 

	 
	 
	 
	 
	 

2

AGGREGATE CATASTROPHE EXCESS OF LOSS AND PER OCCURRENCE CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT

This Aggregate Catastrophe Excess of Loss and Per Occurrence Catastrophe Excess of Loss Reinsurance Contract (the “Contract”) is hereby made by and between Employers Mutual Casualty Company ("EMCC") as the Reinsurer and EMC Reinsurance Company ("EMC Re") as the Reinsured or Company. 

3

ARTICLE 1
AGREEMENT
The Reinsured (EMC Re) agrees to cede and the Reinsurer (EMCC) agrees to accept premium and liability that may accrue as a result of Ultimate Net Loss to the extent further defined as follows involving loss or losses caused by any natural or man caused perils, including North American crop losses, on business in force at the inception date of this Contract, or written or renewed during the term of this Contract, subject to the terms and conditions herein contained. 
ARTICLE 2
RETENTIONS AND LIMITS
		
	A.
	Annual Catastrophe Aggregate.  The Reinsurer shall be liable in respect of Cat Loss Occurrences and excess North American crop losses during the Contract Year for Ultimate Net Loss over and above an initial Ultimate Net Loss of Twenty Million Dollars ($20,000,000.00) (the “Catastrophe Aggregate Retention”), subject to a limit of liability to the Reinsurer of 80% of One Hundred Million Dollars ($100,000,000.00) of Ultimate Net Loss (the “Annual Catastrophe Aggregate Limit”).  Thus, the Reinsurer’s maximum liability under this annual catastrophe aggregate coverage is Eighty Million Dollars ($80,000,000.00) of Ultimate Net Loss.    

		
	B.
	Per Occurrence.  The Reinsurer shall be liable in respect of each Cat Loss Occurrence during the Contract Year for Ultimate Net Loss over and above an initial Ultimate Net Loss of Ten Million Dollars ($10,000,000.00) (the “Per Occurrence Retention”), subject to a limit of liability to the Reinsurer of 80% of Ten Million Dollars ($10,000,000.00) of Ultimate Net Loss from each Cat Loss Occurrence (the “Per Occurrence Limit”).  The limit of liability to the Reinsurer from Ultimate Net Loss under this per occurrence reinsurance is Eight Million Dollars ($8,000,000.00), regardless of the number of Cat Loss Occurrences. 

Any amount retained by the Reinsured under the per occurrence reinsurance (including the Reinsured’s 20% co-participation) described in Article 2 Section B will be counted as Ultimate Net Loss under the annual catastrophe aggregate reinsurance in Article 2 Section A.  
ARTICLE 3
TERM (CONTINUOUS CONTRACT)

This Contract shall take effect at 12:01 A.M. on January 1, 2016, for (a) Cat Loss Occurrences commencing during the term of this Contract and for (b) North American Crop losses for which crops were intended to be harvested or were harvested during the term of this Contract. The Contract shall remain in effect for each Contract Year thereafter until cancelled.

4

ARTICLE 4
COMMUTATION
Commutation of amounts due under this Contract will be accomplished through mutual agreement of the parties within 2 years of the Contract inception, and subsequent annual renewal(s).

ARTICLE 5
TERRITORY
The territorial limits of this Contract shall be identical to the territory limits of the original Reinsurance Treaties.
ARTICLE 6
EXCLUSIONS
This Contract shall not apply to and specifically excludes:
		
	A.
	Loss or damage occasioned by war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, martial law or confiscation by order of any government or public authority, but not excluding loss or damage which would be covered under a standard form of Policy containing a standard war exclusion clause or specific War Coverage provided in Marine policies;

		
	B.
	Mold, other than as a result of a covered peril.

ARTICLE 7
TRADE AND ECONOMIC SANCTIONS
Whenever potential coverage provided by this Contract is considered in violation of any applicable economic or trade sanctions, any such coverage will be modified to conform to applicable law.

ARTICLE 8
PREMIUM
		
	A.
	The Company shall pay the Reinsurer a premium of Three Million One Hundred Forty Thousand Dollars ($3,140,000.00) for the annual catastrophe aggregate reinsurance protection provided under Article 2 Section A of this Contract (the “Annual Catastrophe Aggregate Premium”).  The Annual Catastrophe Aggregate Premium will be renegotiated on an annual basis for each Contract Year the Contract remains in place.  The Annual Catastrophe Aggregate Premium is to be paid quarterly.  Balances will be settled during the duration of the Contract via intercompany balance transfers.

5

		
	B.
	The Company shall pay the Reinsurer a premium of One Million Nine Hundred Forty Thousand Dollars ($1,940,000.00) for the per occurrence reinsurance protection provided under Article 2 Section B of this Contract (the “Per Occurrence Premium”).  The Per Occurrence Premium will be renegotiated on an annual basis for each Contract Year the Contract remains in place.  The Per Occurrence Premium is to be paid quarterly.  Balances will be settled during the duration of the Contract via intercompany balance transfers.

		
	C.
	The Company shall furnish the Reinsurer with such information as may be required by the Reinsurer for completion of its financial statements.

ARTICLE 9
DEFINITIONS
		
	A.
	1.    “Ultimate Net Loss” means the catastrophe losses paid by the Reinsured or which the Reinsured becomes liable to pay arising out of "Reinsurance Treaties."  Such loss includes Loss Adjustment Expense, Extra Contractual Obligations and any Loss in Excess of Policy Limits as defined in the Extra Contractual Obligations/Excess of Policy Limits Article, less any reinsurance recoveries. 

Additionally, “Ultimate Net Loss” to the annual catastrophe aggregate coverage set out in Article 2 Section A includes only Cat Loss Occurrences in which the Reinsured’s ultimate net loss exceeds $500,000 (“Franchise Deductible”), it being understood that once a Cat Loss Occurrence exceeds $500,000 of net loss, the entire amount of net loss from that Cat Loss Occurrence shall be included in the definition.  “Ultimate Net Loss” to the annual catastrophe aggregate coverage set out in Article 2 Section A also includes North American crop losses incurred by the Reinsured in excess of a $10,000,000 crop loss deductible.     
		
	2.
	Salvages and all recoveries (including amounts due from all other reinsurance contracts that inure to the benefit of this Contract), shall be first deducted from such loss to arrive at the amount of liability attaching hereunder.

		
	3.
	All salvages, recoveries or payments recovered or received subsequent to loss settlement hereunder shall be applied as if recovered or received prior to the aforesaid settlement, and all necessary adjustments shall be made by the parties hereto.

		
	4.
	The Company shall be deemed to be “liable to pay” a loss when a judgment has been rendered that neither the Company [for direct reinsurance business] nor EMCC [for assumed reinsurance business] plans to appeal, and/or the Company or EMCC has obtained a release, and/or the Company or EMCC has accepted a proof of loss.

		
	5.
	Nothing in this clause shall be construed to mean that losses are not recoverable hereunder until the Company’s Ultimate Net Loss has been ascertained.

		
	B.
	“Loss Adjustment Expense” means costs and expenses incurred or assumed by the Company in connection with the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a specific claim or loss, or alleged loss, including but not limited to:

		
	1.
	court costs;

6

		
	2.
	costs of supersedeas and appeal bonds;

		
	3.
	monitoring counsel expenses;

		
	4.
	legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto, including but not limited to declaratory judgment actions;

		
	5.
	post-judgment interest;

		
	6.
	pre-judgment interest, unless included as part of an award or judgment; and

		
	7.
	subrogation, salvage and recovery expenses.

“Loss Adjustment Expense” does not include salaries and expenses of EMCC’s employees, and office and other overhead expenses.
		
	C.
	1.    "Cat Loss Occurrence(s)" shall mean any one accident, casualty, disaster, or occurrence or series of accidents, casualties, disasters or occurrences arising out of or following from one event and coded as such in EMCC’s claims and/or accounting system records.

         2      A “Cat Loss Occurrence” must be composed of more than one Reinsurance Treaty.      
D.     “Contract Year” means the period from January 1, 2016 through December 31, 2016, and each respective 12-month period thereafter that this Contract continues in force shall be a separate Contract Year.  If this Contract is terminated, however, the final Contract Year shall be from the beginning of the then current Contract Year through the date of termination.  In the event this Contract expires or is terminated on a run-off basis, the run-off period shall be considered part of the Contract Year ending on the date of expiration or termination.
E    “Reinsurance Treaty(ies)” means any binder or contract of reinsurance issued, accepted or held covered provisionally or otherwise, by or on behalf of the Company, and any reinsurance business assumed by the Company through its quota share agreement with EMCC.
 
ARTICLE 10
COMMENCEMENT AND TERMINATION
A.    This Contract shall take effect at 12:01 A.M. on January 1, 2016, applying to losses occurring, or claims made, as applicable, during the term of this Contract and shall remain in force for an indefinite period but may be terminated on any January 1 by either party giving to the other party 90 days’ prior notice.
B.    At termination of this Contract, the Reinsurer shall be released from liability for losses occurring after termination.
C.    In the event that this Contract is terminated for any reason, the Reinsurer shall notify the Iowa Insurance Division.  

7

ARTICLE 11
EXTRA CONTRACTUAL OBLIGATIONS/EXCESS OF POLICY LIMITS
		
	A.
	This Contract shall cover Extra Contractual Obligations, as provided in the definition of Ultimate Net Loss.  “Extra Contractual Obligations” shall be defined as those liabilities not covered under any other provision of this Contract and that arise from the handling of any claim on business covered hereunder, such liabilities arising because of, but not limited to, the following:  failure by the Company or EMCC to settle within the policy limit, or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement, or in the preparation of the defense or in the trial of any action against its insured or reinsured, or in the preparation or prosecution of an appeal consequent upon such action.

		
	B.
	This Contract shall cover Loss in Excess of Policy Limits, as provided in the definition of Ultimate Net Loss.  “Loss in Excess of Policy Limits” shall be defined as Loss in excess of the policy limit, having been incurred because of, but not limited to, failure by the Company or EMCC to settle within the policy limit or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement, or in the preparation of the defense or in the trial of any action against its insured or reinsured, or in the preparation or prosecution of an appeal consequent upon such action.

		
	C.
	An Extra Contractual Obligation and/or Loss in Excess of Policy Limits shall be deemed to have occurred on the same date as the loss covered under the Company's or EMCC’s policy, and shall constitute part of the original loss.

		
	D.
	For the purposes of the Loss in Excess of Policy Limits coverage hereunder, the word “Loss” shall mean any amounts for which the Company or EMCC would have been contractually liable to pay had it not been for the limit of the original policy.

		
	E.
	Loss Adjustment Expense in respect of Extra Contractual Obligations and/or Loss in Excess of Policy Limits shall be covered hereunder in the same manner as other Loss Adjustment Expense.

		
	F.
	However, this Article shall not apply where the loss has been incurred due to final legal adjudication of fraud of a member of the Board of Directors or a corporate officer of the Company or EMCC acting individually, collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

		
	G.
	In no event shall coverage be provided to the extent not permitted under law.

ARTICLE 12
NET RETAINED LIABILITY
This Contract applies only to that portion of any loss that the Company retains net for its own account.

8

ARTICLE 13
ORIGINAL CONDITIONS
All reinsurance under this Contract shall be subject to the same terms, conditions, waivers and interpretations, and to the same modifications and alterations as the respective Reinsurance Treaties of EMCC and the Reinsured.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.
ARTICLE 14
NO THIRD PARTY RIGHTS
This Contract is solely between the Reinsured and the Reinsurer, and in no instance shall any insured, claimant or other third party have any rights under this Contract except as may be expressly provided otherwise herein.
ARTICLE 15
DISPUTES
Any disputes arising out of the interpretation of this Contract shall be submitted to the respective Inter-Company Committees of the boards of directors of EMCC and EMC Insurance Group Inc. pursuant to the terms of the charters of the Inter-Company Committees then in effect for final and binding resolution.

ARTICLE 16
JURISDICTION
If EMCC, as the assuming reinsurer, fails to perform its obligations under the terms of this Contract then EMCC, at EMC Re’s request, shall agree (a) to submit itself to the jurisdiction of any state court in the State of Iowa, as state courts in the State of Iowa shall have jurisdiction over any dispute between the parties related to this Contract, (b) to comply with all requirements necessary to give the court jurisdiction, and (c) to abide by the final decision of the court or any appellate court if there is an appeal.   
ARTICLE 17
CURRENCY
		
	A.
	Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United States Dollars, and all payments hereunder shall be in United States Dollars.

		
	B.
	For purposes of this Contract, where the Company or EMCC receives premiums or pays losses in currencies other than United States Dollars, such premiums or losses shall be converted into United States Dollars at the actual rates of exchange at which these premiums or losses are entered in EMCC’s books.

9

ARTICLE 18
INDEMNIFICATION AND ERRORS AND OMISSIONS
		
	A.
	The Reinsurer is reinsuring, subject to the terms and conditions of this Contract, the obligations assumed by the Reinsured under any Reinsurance Treaties.  The Reinsurer shall be bound by the judgment of the Company as to the obligation(s) and liability(ies) of the Company under any Reinsurance Treaties.

		
	B.
	Any inadvertent error, omission or delay in complying with the terms and conditions of this Contract shall not be held to relieve either party hereto from any liability that would attach to it hereunder if such error, omission or delay had not been made, provided such error, omission or delay is rectified immediately upon discovery.

ARTICLE 19
INSOLVENCY
		
	A.
	In the event of insolvency and the appointment of a conservator, liquidator or statutory successor of the Company, the portion of any risk or obligation assumed by the Reinsurer shall be payable to the conservator, liquidator or statutory successor on the basis of claims allowed against the insolvent Company by any court of competent jurisdiction or by any conservator, liquidator or statutory successor of the Company having authority to allow such claims, without diminution because of that insolvency, or because the conservator, liquidator or statutory successor has failed to pay all or a portion of any claims.

		
	B.
	Payments by the Reinsurer as above set forth shall be made directly to the Company or to its conservator, liquidator or statutory successor, except as provided by applicable law and regulation in the event of the insolvency of the Company.

		
	C.
	In the event of the insolvency of the Reinsurer, the liquidator, receiver, conservator or statutory successor of the Reinsurer shall notify the Company of the pendency of a claim against the insolvent Reinsurer on the Contract or contracts reinsured within a reasonable time after such claim is filed in the insolvency proceeding and, during the pendency of such claim, the Company may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses which it may deem available to the Reinsurer or its liquidator, receiver, conservator or statutory successor.  

		
	D.
	The original reinsured or policyholder shall not have any rights against the Reinsurer which are not specifically set forth in this Contract, or in a specific agreement between the Reinsurer and the original reinsured or policyholder.

  

10

ARTICLE 20
SAVINGS/SEVERABILITY
If any provision of this Contract shall be rendered illegal or unenforceable by the laws, regulations or public policy of any state, such provision shall be considered void in such state, but this shall not affect the validity or enforceability of any other provision of this Contract, nor the enforceability of such provision in any other jurisdiction.  In no event shall coverage be provided to the extent that such coverage is not permitted under Iowa law.  However, no provisions under this Article shall render any provisions of paragraph B of the Exclusions Article inoperable.

 ARTICLE 21
OFFSET
EMCC and EMC Re shall have the right to offset any balance or amounts due from one party to the other under the terms of this Contract and the quota share agreement described in Article 9 Section E of this Contract.  The party asserting the right of offset may exercise such right any time whether the balances due are on account of premiums or losses or otherwise. In the event of the insolvency of any party, offset shall be as permitted by applicable law.

ARTICLE 22
GOVERNING LAW
This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Iowa, exclusive of conflict of law rules.  However, with respect to credit for reinsurance, the rules of all applicable states shall apply.

ARTICLE 23
ENTIRE AGREEMENT
This Contract sets forth all of the duties and obligations between the Company and the Reinsurer and supersedes any and all prior or contemporaneous written agreements with respect to matters referred to in this Contract.  This Contract may not be modified or changed except by an amendment to this Contract in writing signed by both parties, and any modification or amendment to this Contract must receive prior approval from the Iowa Insurance Division to be effective.  However, this Article shall not be construed as limiting the admissibility of evidence regarding the formation, interpretation, purpose or intent of this Contract.

11

ARTICLE 24
NON-WAIVER
The failure of the Company or the Reinsurer to insist on compliance with this Contract or to exercise any right or remedy shall not constitute a waiver of any rights contained in this Contract nor prevent either party from thereafter demanding full and complete compliance nor prevent either party from exercising such remedy in the future.

ARTICLE 25
MODE OF EXECUTION
		
	A.
	This Contract may be executed by:

		
	1.
	an original written ink signature of paper documents;

		
	2.
	an exchange of facsimile copies showing the original written ink signature of paper documents;

		
	3.
	electronic signature technology employing computer software and a digital signature or digitizer pen pad to capture a person’s handwritten signature in such a manner that the signature is unique to the person signing, is under the sole control of the person signing, is capable of verification to authenticate the signature and is linked to the document signed in such a manner that if the data is changed, such signature is invalidated.

		
	B.
	The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract.  This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

In WITNESS WHEREOF, the parties hereto, by their respective duly authorized officers, have executed this Aggregate Catastrophe Excess of Loss and Per Occurrence Catastrophe Excess of Loss Reinsurance Contract on the dates recorded below.

EMC Reinsurance Company                               Employers Mutual Casualty Company      

12

By:   /s/ Ron D. Hallenbeck                        By:   /s/ Bruce G. Kelley                          
    
Ron D. Hallenbeck                    Bruce G. Kelley
President                        President & CEO

Date:  February 15, 2016                                   Date:   February 15, 2016                       

13

NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE - U.S.A.
		
	1.
	This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

		
	2.
	Without in any way restricting the operation of paragraph (1) of this clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

		
	I.
	Nuclear reactor power plants including all auxiliary property on the site, or

		
	II.
	Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and “critical facilities” as such, or

		
	III.
	Installations for fabricating complete fuel elements or for processing substantial quantities of “special nuclear material”, and for reprocessing, salvaging, chemically separating, storing or disposing of “spent” nuclear fuel or waste materials, or

		
	IV.
	Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

		
	3.
	Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate:

		
	(a)
	where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

		
	(b)
	where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused. However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

		
	4.
	Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

		
	5.
	It is understood and agreed that this clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

		
	6.
	The term “special nuclear material” shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

		
	7.
	Reassured to be sole judge of what constitutes:

14

		
	(a)
	substantial quantities, and

		
	(b)
	the extent of installation, plant or site.

Note:  Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that
		
	(a)
	all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

		
	(b)
	with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57
NMA 1119

		
	NOTES:
	Wherever used herein the terms:

		
	“Reassured”
	shall be understood to mean “Company”, “Reinsured”, “Reassured” or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

		
	 “Reinsurers”
	shall be understood to mean “Reinsurers”, “Underwriters” or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

15

First Amendment to the 
Aggregate Catastrophe Excess of Loss and 
Per Occurrence Catastrophe Excess of Loss 
Reinsurance Contract 

The Aggregate Catastrophe Excess of Loss and Per Occurrence Catastrophe Excess of Loss Reinsurance Contract (the "Contract"), executed by and between EMC Reinsurance Company, an Iowa corporation, and Employers Mutual Casualty Company, an Iowa corporation, on February 15, 2016 with an effective date of January 1, 2016 is amended effective January 1, 2017 as follows:

Article 8 Section A of the Contract: The listed premium of "Three Million One Hundred Forty Thousand Dollars ($3,140,000.00)" is replaced with "Three Million One Hundred Seventy Thousand Dollars ($3,170,000.00)."     

Article 8 Section B of the Contract: The listed premium of "One Million Nine Hundred Forty Thousand Dollars ($1,940,000.00)" is replaced with "One Million Six Hundred Eighty Thousand Dollars ($1,680,000.00)."  

Except as amended herein, all terms and conditions in the Contract shall remain in full force and effect.

In WITNESS WHEREOF, the parties hereto, by their respective duly authorized officers, have executed this First Amendment to the Aggregate Catastrophe Excess of Loss and Per Occurrence Catastrophe Excess of Loss Reinsurance Contract on the dates recorded below.

EMC Reinsurance Company                 Employers Mutual Casualty Company

By:      /s/ Vicki L. Freese                            By:     /s/ Bruce G. Kelley                  
Vicki L. Freese                    Bruce G. Kelley
President                     President and CEO

Date:     January 3, 2017                              Date:     January 3, 2017                     

16

Second Amendment to the 
Aggregate Catastrophe Excess of Loss and 
Per Occurrence Catastrophe Excess of Loss 
Reinsurance Contract 

The Aggregate Catastrophe Excess of Loss and Per Occurrence Catastrophe Excess of Loss Reinsurance Contract (the "Contract"), executed by and between EMC Reinsurance Company, an Iowa corporation, and Employers Mutual Casualty Company, an Iowa corporation, on February 15, 2016 with an effective date of January 1, 2016, was first amended on January 3, 2017, retroactively effective January 1, 2017, and is now amended effective January 1, 2018 as follows:

Article 8 Section A of the Contract: The listed premium of "Three Million One Hundred Seventy Thousand Dollars ($3,170,000.00)" is replaced with "Three Million Six Hundred Twenty Thousand Dollars ($3,620,000.00)."     

Article 8 Section B of the Contract: The listed premium of "One Million Six Hundred Eighty Thousand Dollars ($1,680,000.00)" is replaced with "One Million Six Hundred Thirty Thousand Dollars ($1,630,000.00)."  

Except as amended herein, all terms and conditions in the Contract shall remain in full force and effect.

In WITNESS WHEREOF, the parties hereto, by their respective duly authorized officers, have executed this Second Amendment to the Aggregate Catastrophe Excess of Loss and Per Occurrence Catastrophe Excess of Loss Reinsurance Contract on the dates recorded below.

EMC Reinsurance Company                 Employers Mutual Casualty Company

By:      /s/ Vicki L. Freese                            By:     /s/ Bruce G. Kelley                  
Vicki L. Freese                    Bruce G. Kelley
President                     President and CEO

Date:     January 2, 2018                              Date:     January 2, 2018                     

17

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