Document:

Employment Agreement

 Exhibit 10.1 
  
 EMPLOYMENT AGREEMENT 
  
 THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made by and between Vesta Insurance Group, Inc. (the “Company”) and David W.
Lacefield, an individual resident of Birmingham, Alabama (the “Executive”), and is joined in by J. Gordon Gaines, Inc. a Delaware corporation and Vesta Fire Insurance Corporation, an Alabama corporation, effective the 10th day of February, 2006 (the “Effective Date”). 
  
 RECITALS: 
  
 A. Vesta Insurance Group, Inc. is a holding company for a group of property and casualty insurance subsidiaries which offer primary insurance primarily on
personal risks; 
  
 B. The Executive will serve as President and
Chief Executive Officer of the Company; 
  
 C. The Company wishes
to assure itself of the continued services of the Executive so that it will have the continued benefit of his ability, experience and services, and the Executive is willing to enter into an agreement to that end, upon the terms and conditions
hereinafter set forth; and 
  
 D. Certain capitalized terms used
in this Agreement shall have the meanings given them in Section 16 hereof. 
  
 NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Company and the Executive hereby agree as follows: 
  
 1. Employment 
  
 (a) The Company hereby agrees to employ the Executive as President and Chief Executive Officer of the Company and any other position agreed upon by the
parties; the Company agrees to use its best efforts to cause the Executive to be elected as a member of the Board; and Executive hereby agrees to serve the Company in the foregoing capacities, upon the terms and conditions set forth herein. The
Executive shall have such authority and responsibilities consistent with his position that may be set forth in the Company’s Bylaws or assigned by the Board from time to time. 
  
 (b) The Executive agrees to devote his full time and attention during normal business hours to the business and affairs of
the Company and to use the Executive’s best efforts to carry out faithfully and efficiently the responsibilities assigned to the Executive hereunder; provided, however, that nothing in this Agreement shall preclude the Executive from devoting
reasonable periods required for (i) participating in professional, educational, philanthropic, public interest, charitable, social or community activities, (ii) subject to the Company’s policies regarding such matters, serving as a
director or member of an advisory committee of any corporation or other entity that is not in competition with the Company, or (iii) managing his personal investments, provided that such activities do not materially interfere with the
Executive’s performance of his duties and responsibilities hereunder. 

 (c) The Company, in its sole discretion, may require that the Executive be designated an employee of one
or more of the Company’s subsidiaries or affiliates for such purposes as payroll and benefits administration. The employment of the Executive by any such subsidiary or affiliate to facilitate the Company’s internal administrative purposes
shall be considered employment by the Company within the meaning of this Agreement and shall not otherwise affect any of the rights or responsibilities of the Company or the Executive hereunder. 
  
 2. Term. Unless earlier terminated as provided herein, the
Executive’s employment under this Agreement shall be for a term (the “Term”) initially of three (3) years from the Effective Date. At the end of the initial three (3) year Term and at the end of each one (1) year
extension thereof, the Term shall be automatically extended for a one (1) year period unless written notice of non-extension is provided by either party to the other party at least 90 days prior to the end of the initial three (3) year
Term or any such one (1) year period. In the event such notice of non-extension is provided by either party in accordance with this Section 2, this Agreement shall terminate at the end of the remaining Term then in effect and the Company
shall have no further obligation to the Executive; provided, however that the Company shall pay to the Executive within thirty (30) days after the end of the remaining Term then in effect a lump sum cash payment equal to all Accrued
Compensation plus the Pro Rata Bonus. 
  
 3. Compensation and
Benefits. In consideration of the services rendered by the Executive during the Term, the Company shall pay or provide to the Executive the amounts and benefits set forth below. 
  
 (a) Salary. Executive shall receive an annual base salary of $450,000. The base salary shall be paid in accordance
with the Company’s normal payroll practices. The Executive’s base salary shall be reviewed at least annually for consideration of appropriate merit increases and, once established, the base salary shall not be decreased during the Term.

  
 (b) Other Incentive Plans. The Executive shall
participate in all annual and long-term bonus or incentive plans or arrangements in which substantially all other executives of the Company of a comparable level are eligible to participate from time to time, including, without limitation, the
Company’s Cash Bonus Plan. The Executive’s incentive compensation opportunities under such plans and arrangements shall be determined from time to time by the Compensation Committee. 
  
 (c) Equity Incentives. 
  
 (i) Simultaneously with the execution of this Agreement, the Company shall
grant to the Executive a ten (10) year option to purchase 485,000 shares of common stock of the Company at an exercise price equal to the fair market value of such common stock on the date of grant with vesting to occur twenty percent
(20%) per year on each anniversary of the Effective Date (thus, one hundred percent (100%) at the end of five years), subject to the Executive’s continued employment through such date. 
  

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 (ii) In addition to the option granted in Section 2(c)(i) above, the Executive shall be given
consideration, at least annually, for the grant of additional options to purchase shares of the common stock of the Company. In addition, the Executive shall be given consideration to receive awards under any stock option, stock purchase or
equity-based incentive compensation plan or arrangement adopted by the Company from time to time for which executives of the Company of a comparable level are eligible to participate. The Executive’s awards under such plans and arrangements
shall be determined from time to time by the Compensation Committee. 
  
 (d) Employee Benefits. The Executive shall be entitled to participate in employee benefit plans, programs, practices or arrangements of the Company in which substantially all other executives of the Company of a comparable level are
eligible to participate from time to time, including, without limitation, any qualified or non-qualified pension, profit sharing and savings plans, any death benefit and disability benefit plans, and any medical, dental, health and welfare plans.
Without limiting the generality of the foregoing, the Company shall provide the Executive with the following: 
  
 (i) long-term disability insurance coverage in an amount and on terms consistent with the coverage in place for other management personnel
of the Company; and 
  
 (ii) continued provision
of life insurance coverage in an amount and on terms consistent with the coverage in place for other management personnel of the Company; 
  
 (e) Fringe Benefits and Perquisites. The Executive shall be entitled to all fringe benefits and perquisites which are generally made available to
executives of the Company of a comparable level from time to time. Without limiting the generality of the foregoing, the Company shall provide the Executive with the following: 
  
 (i) provision of offices and secretarial staff; 
  
 (ii) vacation in accordance with the Company’s policy
for other executives of a comparable level; 
  
 (iii) an automobile owned or leased by the Company of a make and model appropriate for the Executive’s position or, in lieu thereof, provision of a non-accountable automobile allowance in an amount to be determined from time to time by
the Board or the Compensation Committee; 
  
 (iv)
reimbursement of dues for Old Overton Country Club and payment of dues for a reasonable number of professional associations of which Executive is a member in furtherance of his duties hereunder; and 
  

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 (v) reimbursement of all reasonable travel and other business expenses and disbursements
incurred by the Executive in the performance of his duties under this Agreement, upon proper accounting in accordance with the Company’s normal practices and procedures for reimbursement of business expenses. 
  
 4. Termination. 
  
 (a) The Executive’s employment under this Agreement may be terminated
prior to the end of the Term only as follows: 
  
 (i) upon the resignation or death of the Executive; 
  
 (ii) by the Company due to the Disability of the Executive upon delivery of a Notice of Termination to the Executive; 
  
 (iii) by the Company for Cause or without Cause, in either event upon delivery of a Notice of Termination to the Executive; or 

 
 (iv) by the Executive for Good Reason after a Change in
Control upon delivery of a Notice of Termination to the Company. 
  
 (b) If the Executive’s employment with the Company is terminated during the Term (i) by reason of the Executive’s resignation or death, or (ii) by the Company for Disability or Cause, the Company shall pay to the
Executive (or in the case of his death, the Executive’s estate) within thirty (30) days after the Termination Date a lump sum cash payment equal to the Accrued Compensation and, if such termination is other than as a result of
Executive’s resignation or by the Company for Cause, the Pro Rata Bonus. 
  
 (c) If the Executive’s employment with the Company is terminated by the Company without Cause or by the Executive for Good Reason, the Executive shall be entitled to the following: 
  
 (i) the Company shall pay the Executive in cash within
thirty (30) days of the Termination Date an amount equal to all Accrued Compensation and the Pro Rata Bonus; 
  
 (ii) for a period of the greater of (A) the remainder of the Term then in effect, (B) twelve (12) months following the
Termination Date, or (C) twenty-four (24) months following the Termination Date if the Executive’s employment is terminated by the Company without Cause after a Change in Control or by the Executive for Good Reason, (the
“Continuation Period”), the Company shall, at the end of each 30-day period following the Termination Date, pay to the Executive in cash an amount equal to one-twelfth of the sum of the Base Amount (including any increases in base salary)
plus the Bonus Amount (including any increases in bonus amount); and 
  

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 (iii) during the Continuation Period, or for such longer period as any plan, program,
practice or policy may provide, the Company shall continue benefits to the Executive and/or the Executive’s family at least equal to those which would have been provided to them in accordance with the Company’s plans, programs, practices
and policies providing medical, dental, health, death and disability benefits if the Executive’s employment had not been terminated in accordance with the most favorable plans, practices, programs or policies of the Company and its affiliated
companies as in effect and applicable generally to other peer executives and their families during the 90-day period immediately preceding the Executive’s termination of employment; provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive medical and other welfare benefits under another employer-provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan
during such applicable period of eligibility. 
  
 If, prior to a Change in
Control, any event or condition described in the definition of Change in Control, Section 16(g), occurs or the Executive’s employment is terminated by the Company without Cause, and the Executive reasonably demonstrates that such event,
condition or termination occurred (A) at the request of a third party who has indicated an intention or taken steps reasonably calculated to effect a Change in Control and who effectuates a Change in Control, or (B) otherwise in connection
with, or in anticipation of, a Change in Control which actually occurs, then the occurrence of such event or condition described in Section 16(g) shall constitute Good Reason for purposes of this Agreement, and such event, condition or
termination shall be treated as occurring after the Change in Control for purposes of this Section 4(c), notwithstanding that it occurred prior to the Change in Control. 
  
 5. Confidentiality; Non-Competition and Non-Solicitation. 
  
 (a) During the Term and for twelve (12) months thereafter, the
Executive agrees that he will not divulge to anyone (other than the Company or any persons employed or designated by the Company) any knowledge or information of a confidential nature relating to the business of the Company or any of its
subsidiaries or affiliates, including, without limitation, all types of trade secrets (unless readily ascertainable from public or published information or trade sources) and confidential commercial information, and the Executive further agrees not
to disclose, publish or make use of any such knowledge or information without the consent of the Company; provided, however that any common law duty of confidentiality the Executive may have with respect to such confidential information and any
fiduciary duty the Executive owe to the Company as a result of the Executive’s membership on the Board shall not be limited, curtailed or otherwise affected by this Section 5(a). All confidential information, records, files, documents and
materials and copies thereof regardless of the medium in which they are preserved, relating to the Company’s business which the Executive shall prepare or use, or come into contact with, shall be and remain the sole property of the Company and
shall be immediately returned to the Company by the Executive upon the Executive’s termination of employment with the Company and on demand at any time by the Company. 
  

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 (b) During the Term and thereafter for a period of time equal to the Continuation Period, the Executive
agrees that he will not, directly or indirectly (i) enter into or engage in any phase of the business conducted by the Company in any state in which the Company is conducting business on the Termination Date, either as an individual for his own
account, as partner or joint venturer, or as an employee, agent, consultant, advisor, officer, director, owner of an entity or otherwise; (ii) engage in the design, development, distribution, or sale of a product or service in competition with
any product or service being marketed by the Company or planned by the Company; (iii) solicit or induce any employee of the Company to terminate such employment or to become an employee of any other person or entity; (iv) solicit business
from any person, entity or organization which has contracted with the Company, which has been doing business with the Company, from which the Company was soliciting business at the time of the Termination Date, or from which the Executive knew or
has reason to know that the Company planned to solicit business at the time of the Termination Date; or (v) in any way interfere with the relationship of the Company and any of its respective employees, customers, policyholders, suppliers,
contractual parties or any other person with whom the Company has had business relations. 
  
 (c) The Executive agrees that the covenants set forth above in Section 5(b) are reasonable with respect to duration, geographical area and scope. In the event of a breach by the Executive of any covenant set
forth in Section 5(b) of this Agreement, the term of such covenant shall be extended by the period of the duration of such breach. In the event that, any of the provisions of Section 5(b) shall be declared by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions thereof shall nevertheless continue to be valid and enforceable as though said invalid or unenforceable provisions had not been included therein. In the event that any provision
of Sections 5(b) shall be declared by a court of competent jurisdiction to exceed the maximum restrictiveness such court deems reasonable and enforceable, the term, condition or aspect deemed reasonable and enforceable by the court shall be
incorporated into the applicable section of this Agreement, shall replace the term, condition or aspect deemed by the court to be unreasonable and unenforceable, and shall remain enforceable to the fullest extent permitted by law. 
  
 (d) The Executive and the Company recognize and agree that the violation of
the provisions of Sections 5(a) and (b) cannot be adequately or reasonably compensated in damages and that, in addition to any other relief to which the Company may be entitled by reason of such violation, it shall also be entitled to permanent
and temporary injunctive and equitable relief. In addition to the foregoing sentence and notwithstanding any other provision in this Agreement to the contrary, if the Executive breaches the restrictive covenants set forth in Section 5(b), then
the Executive shall forfeit all rights to any and all payments and benefits provided under Section 4(c)(ii) and (iii) then remaining; provided, however that the Executive shall remain subject to the restrictive covenants set for in
Section 5(b) notwithstanding any such forfeiture. 
  
 (e)
Sections 5(a) through (d) shall survive the termination of this Agreement and the termination of the Executive’s employment with the Company. 
  

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 6. Successors, Binding Agreement. 
  
 (a) This Agreement shall be binding upon and shall inure to the benefit of the Company (including each of its subsidiaries),
its successors and assigns and any person, firm, corporation or other entity which succeeds to all or substantially all of the business, assets or property of the Company. The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of the business, assets or property of the Company, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this Agreement, the “Company” shall mean the Company as hereinbefore defined and any successor to its business, assets or property as aforesaid which executes and
delivers an agreement provided for in this Section 6 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. 
  
 (b) This Agreement and all rights of the Executive hereunder shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amounts are due and payable to him hereunder, all such amounts, unless
otherwise provided herein, shall be paid to the Executive’s designated beneficiary or, if there be no such designated beneficiary, to the legal representatives of the Executive’s estate. 
  
 7. Fees and Expenses. 
  
 (a) In the event that the Executive’s employment is terminated for any
reason prior to a Change in Control, then the parties agree that in the event it becomes necessary to seek judicial remedies for the breach of this Agreement, the prevailing party will be entitled, in addition to all other legal and equitable
remedies, to recover from the non-prevailing party all costs of such judicial action, including but not limited to reasonable attorneys’ fees and expenses incurred in enforcing the terms of this Agreement. 
  
 (b) In the event that the Executive’s employment is terminated for any
reason after a Change in Control, the Company shall reimburse the Executive for any reasonable attorneys’ fees, expenses and court costs incurred by the Executive as a result of any litigation by the Executive regarding the validity,
enforceability or interpretation of any provision of this Agreement (including as a result of any litigation by the Executive regarding the benefits payable to the Executive pursuant to this Agreement) upon receipt of proof of such expenses
regardless of which party, if any, prevails in the contest. 
  
 8.
Notice. All notices and other communications provided for in this Agreement (including the Notice of Termination) shall be in writing and shall be deemed to have been duly given upon personal delivery or receipt when sent by certified mail,
return receipt requested, postage prepaid, or by a nationally recognized overnight courier service that provides written proof of delivery, and shall be addressed as follows (or to such other address as either party shall have furnished to the other
in writing in accordance herewith): 
  

			
	If to the Executive:	  	David W. Lacefield
	 	  	8145 Castlehill Road
	 	  	Birmingham, Alabama 35242
		
	If to the Company:	  	Vesta Insurance Group, Inc.
	 	  	3760 River Run Drive
	 	  	Birmingham, Alabama 35243
	 	  	Attention: Chairman of the Board
	 	  	Copy to: General Counsel

  

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 9. Settlement of Claims. Except as otherwise expressly provided in this Agreement, the
Company’s obligation to make the payments provided for in this Agreement and to otherwise perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment,
defense or other right which the Company may have against the Executive or others. The Company may, however, withhold from any benefits payable under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or
governmental regulation or ruling. 
  
 10. Modification and
Waiver. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and the Company. No waiver by any party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. 
  
 11. Governing Law. This Agreement
shall be governed by and construed and enforced in accordance with the laws of the State of Alabama without giving effect to the conflict of laws principles thereof. 
  
 12. Severability. The provisions of this Agreement shall be deemed severable, and the invalidity or unenforceability
of any provision shall not affect the validity or enforceability of the other provisions hereof. 
  
 13. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreement, if any,
understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof, 
  
 14. Headings. The headings of Sections herein are included solely for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement. 
  
 15.
Counterparts. This Agreement may be executed in one or more counterparts, each shall be deemed an original but all of which together shall constitute one and the same instrument. 
  

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 16. Definitions. For purposes of this Agreement, the following terms shall have the following
meanings: 
  
 (a) “Accrued Compensation” shall mean an
amount which shall include all amounts earned or accrued through the Termination Date but not paid as of the Termination Date, including without limitation, (i) base salary, (ii) deferred compensation accumulated under any plan,
arrangement or agreement; provided that any payment of such deferred compensation be made in accordance with such plan, arrangement or agreement and, provided further that such payment of any deferred compensation does not violate Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), (iii) reimbursement for reasonable and necessary expenses incurred by the Executive on behalf of the Company prior to Termination Date, and (iv) bonuses and incentive
cash compensation (other than the Pro Rata Bonus). 
  
 (b)
“Base Amount” shall mean the greater of the Executive’s annual base salary (i) at the rate in effect on the Termination Date or (ii) the highest rate in effect at any time during the 90-day period prior to a Change in
Control, and shall include all amounts of his base salary that are deferred under any plans, arrangements or agreements of the Company or any of its affiliates. 
  

(c) “Board” shall mean the Board of Directors of the Company. 
  
 (d) “Bonus Amount” shall mean the greater of (i) the most recent annual cash bonus paid or payable to the
Executive, or, if greater, the annual cash bonus paid or payable for the year ended prior to the fiscal year during which a Change in Control occurred, or (ii) the average of the annual cash bonuses paid or payable during the three full fiscal
years ended prior to the Termination Date, or, if greater, the three full fiscal years prior to a Change in Control (or, in each case, such lesser period for which annual bonuses were paid or payable to the Executive). 
  
 (e) The “Cash Bonus Plan” shall mean the Company’s
discretionary cash bonus incentive program as in effect from time to time. 
  
 (f) “Cause” shall mean (i) any act of misconduct or dishonesty that is injurious to the Company; (ii) any act of fraud, embezzlement, theft or any crime of moral turpitude (without necessity of
formal civil or criminal proceedings being initiated); (iii) violation of a material Company policy or procedure that results in injury to the Company; (iv) suspension and/or a temporary prohibition from participating in conduct of the
Company’s or an affiliate’s affairs by reason of an applicable law or regulation; (v) impeding or endeavoring to influence, obstruct or impede or failing to materially cooperate with an investigation authorized by the Board, a
self-regulatory organization or a governmental department or agency; (vi) failure to perform any material aspect of the duties and obligations assigned to the Executive with a level of competence and diligence required by the Company; or
(vi) any material breach of this Agreement by the Executive. 
  

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 (g) A “Change in Control” shall mean the occurrence during the Term of any of the following:

  
 (i) when any “person” as such term
is used in Section 13(d) and 14(d) of the Exchange Act is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly of securities of the Company representing fifty percent
(50%) or more of the combined voting power of the Company’s then outstanding securities; provided, however, that the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company or any
entity controlled by or with the Company (excluding an acquisition by virtue of the exercise of a conversion privilege), (ii) any acquisition by the Company, or (iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the Company; 
  
 (ii) when, during any period of two (2) consecutive years during the Term, the individuals who, at the beginning of such period,
constitute the Board cease, for any reason other than death, to constitute at least a majority thereof, unless each director who was not a director at the beginning of such period was elected by, or on the recommendation of, a majority of the
directors at the beginning of such period; or 
  
 (iii) the occurrence of a transaction requiring approval by the holders of the Company’s voting securities for the acquisition of the Company (or substantially all of its assets) by an entity other than the Company through purchase of
assets, or by merger, or otherwise, unless following such transaction more than fifty percent (50%) of the combined voting power of the entity resulting from such transaction is owned, directly or indirectly, by individuals or entities who were
beneficial owners of voting securities of the Company prior to such transaction. 
  
 (h) “Compensation Committee” shall mean the Compensation Committee of the Board. 
  
 (i) “Disability” shall mean the inability of the Executive to perform his duties to the Company on account of physical or mental illness for a
period of six consecutive full months, or for a period of eight full months during any 12-month period. The Executive’s employment shall terminate in such a case on the last day of the applicable period; provided, however, in no
event shall the Executive be terminated by reason of Disability unless (i) the Executive is eligible for the long-term disability benefits set forth in Section 3(d)(i) hereof and (ii) the Executive receives written notice from the
Company, at least 30 days in advance of such termination, stating its intention to terminate the Executive for reason of Disability and setting forth in reasonable detail the facts and circumstances claimed to provide a basis for such termination.

  
 (j) “Effective Date” shall mean the day and year
first above written. 
  
 (k) “Exchange Act” shall mean
the Securities Exchange Act of 1934, as amended. 
  

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 (l) “Good Reason” shall mean the occurrence at any time within two (2) years following a
Change in Control of any of the events or conditions described in subsections (i) through (viii) hereof: 
  
 (i) (A) a change in the Executive’s status, office, title, position or responsibilities (including reporting responsibilities)
which represents a material adverse change from his status, office, title, position or responsibilities as in effect at any time within 90 days preceding the date of a Change in Control or at any time thereafter; (B) the assignment to the
Executive of any duties or responsibilities which are materially inconsistent with his status, office, title, position or responsibilities as in effect at any time within 90 days preceding the date of a Change in Control or at any time thereafter;
(C) any removal of the Executive from, or failure to reappoint or reelect him to, any such status, office, title, position or responsibility; or (D) any other change in condition or circumstances that makes it materially more difficult for
the Executive to carry out the duties and responsibilities of his office that existed at any time within 90 days preceding the date of a Change in Control or at any time thereafter; 
  
 (ii) a reduction in the Executive’s base salary or any failure to pay the Executive any compensation or
benefits to which he is entitled within thirty days of the date due; 
  
 (iii) the Company’s requiring the Executive to be based at any place outside a 30-mile radius from the executive offices occupied by the Executive immediately prior to a Change in Control, except for reasonably
required travel on the Company’s business which is not materially greater than such travel requirements prior to the Change in Control; 
  
 (iv) the failure by the Company to (A) continue in effect (without reduction in benefit level and/or reward opportunities) any
material compensation or employee benefit plan in which the Executive was participating at any time within ninety (90) days preceding the date of a Change in Control or at any time thereafter, unless such plan is replaced with a plan that
provides substantially equivalent compensation or benefits to the Executive or (B) provide the Executive with compensation and benefits, in the aggregate, at least equal (in terms of benefit levels and/or reward opportunities) to those provided
for under each other employee benefit plan, program and practice in which the Executive was participating at any time within 90 days preceding the date of a Change in Control or at any time thereafter; 
  
 (v) any material breach by the Company of this Agreement;

  
 (vi) any purported termination of the
Executive’s employment for Cause by the Company which does not comply with the terms of this Agreement; or 
  
 (vii) the failure of the Company to comply with and satisfy its obligations under Section 6(a) hereof. 
  
 The Executive’s right to terminate his employment for Good Reason shall not be affected
by his incapacity due to physical or mental illness. 
  
 (m)
“Notice of Termination” shall mean a written notice of termination from the Company or the Executive which specifies an effective date of termination and indicates the specific termination provision in this Agreement relied upon.

  

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 (n) “Pro Rata Bonus” shall mean an amount equal to the Bonus Amount multiplied by a fraction
the numerator of which is the number of days in the applicable year through the Termination Date and the denominator of which is 365. 
  
 (o) “Termination Date” shall mean, in the case of the Executive’s death, his date of death, and in all other cases, the date specified in
the Notice of Termination. 
  
 17. Section 409A of the
Code. This Agreement is intended to comply with the requirements of Section 409A of the Code (to the extent applicable) and the Company agrees to interpret, apply and administer this Agreement in the least restrictive manner necessary to
comply with such requirements and without resulting in any diminution in the value of payments or benefits to the Executive. To the extent that any payments or benefits to be provided to the Executive under this Agreement result in the deferral of
compensation under Section 409A of the Code, and if the Executive is a “Key Employee” as defined in Section 409A(a)(2)(B)(i) of the Code, then any such payments or benefits shall not be paid or provided to the Executive until the
earlier of (i) six months and one day after the Executive’s separation from service or (ii) any other date permitted under Section 409A of the Code. 
  
 [SIGNATURES ON FOLLOWING PAGE] 
  

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 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officer thereunto duly
authorized, and the Executive has signed this Agreement, effective as of the date first above written. 
  

			
	VESTA INSURANCE GROUP, INC.
	  
 Vesta Insurance Group, Inc.

	By:	 	 /s/ Donald W. Thornton

	Its:	 	 Sr. V. P.

	
	J. GORDON GAINES, INC.
	
	 J. Gordon Gaines, Inc.

	By:	 	 /s/ Donald W. Thornton

	Its:	 	 Sr. V. P.

	
	VESTA FIRE INSURANCE CORPORATION
	
	 Vesta Fire Insurance

	By:	 	 /s/ Steven P. Russell

	Its:	 	 Sr. V. P.

	
	EXECUTIVE:
	
	 /s/ David W. Lacefield

	David W. Lacefield

  

 13Press Release dated February 13, 2006

 Exhibit 10.1 
  
 VSNL COMPLETES ACQUISITION OF TELEGLOBE 
  
 Next-Generation Global Communications Provider 
  
 Expands Reach and Service Portfolio 
  
 MUMBAI, India and HAMILTON, Bermuda, February 13, 2006 – Videsh Sanchar Nigam Limited, VSNL (NYSE: VSL), the leading
provider of international communication solutions, announced today the completion of its acquisition of Teleglobe International Holdings Ltd. By leveraging Teleglobe’s extensive global reach, established operational strengths, and depth of
carrier relationships worldwide, VSNL’s international division, VSNL International, is poised to deliver a comprehensive portfolio of next-generation carrier and enterprise solutions. 
  
 The new combined company will own and operate one of the world’s largest international
mobile, data, and voice networks with coverage to more than 240 countries and territories. The foundation of the new company’s capability will be the integration of VSNL’s leading pan-India presence and unequalled cable diversity to and
from India, the world’s largest designed global backbone capacity, and Teleglobe’s network. 
  
 With its acquisition of Teleglobe, the company’s wholesale customers will benefit from superior network reach, and scalability from a single partner worldwide for voice, data and mobile services. As part of its
strategy to deliver next-generation solutions to Fortune 1000 customers, VSNL International will leverage Teleglobe’s network and capabilities to further expand services offered through its Global Business Pathway providing the world’s
leading businesses with diversified multi-technology connectivity, significant commercial flexibility, and innovative managed services. 
  
 “The Teleglobe acquisition is a critical step toward our vision to become a global industry leader providing customers with converged communications solutions,”
comments Mr. N. Srinath, Executive Director, VSNL. “Our focus in recent years has been to expand our presence into new markets and provide a complete portfolio of solutions to our global client base. We are now a key player in the
international wholesale market, supporting more than 1,400 customers. Our complementary networks and capabilities will further drive mobile, data and voice innovation for our enterprise customers.” 
  
 Liam Strong, President and Chief Executive Officer, Teleglobe, states, “The integration
of assets, strengths, and resources will benefit our customers and employees. As a new VSNL company and member of the TATA Group, Teleglobe will gain unprecedented financial stability, the ability to enhance our offerings to the marketplace, and
capacity to further its 50-year strong commitment to the wholesale sector.” 
  
 The combined company will operate under the name of VSNL International, and will provide the wholesale and enterprise sectors with key mobile, data and voice offerings. Teleglobe will continue to serve as the product brand for the Voice,
Mobile and IP Transit wholesale services. VSNL International will remain the product brand for the company’s wholesale IPL and Ethernet offerings, as well as the full Enterprise portfolio. 
  
 Complementary Networks, Product Suites, Legacy, and Shared Culture of Quality

  
 “Our decision to pursue the Teleglobe acquisition was based on
several key areas of synergy, including complementary global infrastructure and product offerings, as well as a shared culture dedicated to quality performance and committed to long-term industry growth,” adds Mr. N. Srinath. 

 
 The combined company represents: 
  
 People 
  

	 	•	 	Representation in more than 35 countries 

  

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 Relationship Assets 
  

	 	•	 	Global Customer base of 1,400 wholesale customers and more than 650 enterprise customers 

  
 Global Infrastructure 
  

	 	•	 	Global, robust and scalable network capacity and seamless connectivity, that includes 206,356 km of terrestrial network fiber and subsea cable 

  

	 	•	 	275 PoPs in 25 Countries and access to 5 geo-stationary satellites through more than 30 dedicated earth stations 

  

	 	•	 	Ownership in 100+ sub sea and terrestrial cable systems 

  

	 	•	 	Full ownership of Tata Indicom Cable (Chennai – Singapore) 

  

	 	•	 	Network Administrator role and partial ownership in SEA-ME-WE4 (South East Asia-Middle East -Western Europe) 

  
 Voice 
  

	 	•	 	World’s largest international wholesale carrier with more than 415 combined direct and bilateral relationships with leading international voice telecommunications providers and
more than 17 billion minutes annually of international wholesale voice traffic 

  

	 	•	 	Principal provider of public international telecommunications services in India, linking the domestic network to over 240 territories worldwide 

  
 Data 
  

	 	•	 	Legacy-free, global MPLS network with reach throughout India 

  

	 	•	 	Global, India and India Metros Ethernet over MPLS and SONET capabilities 

  

	 	•	 	Tier One IP service provider 

  

	 	•	 	International IPv6 connectivity leader 

  

	 	•	 	Principal provider of International data services in India 

  
 Mobile 
  

	 	•	 	Connection to over 400 mobile operators worldwide 

  

	 	•	 	Principal provider of signaling conversion services to enable GSM roaming to and from North America 

  

	 	•	 	Content delivery services 

  
 Acquisition Details 
  
 Teleglobe
was acquired for about $239 million, comprising payment of $4.50 per share to Teleglobe shareholders and assumption of net debt. At Teleglobe’s current revenue levels, the acquisition could increase VSNL’s annual revenues by upto 200% in
2006-07. 
  
 Shares of Teleglobe common stock, which prior to the merger traded on
the Nasdaq National Market under the symbol “TLGB”, were delisted from trading as of the close of the market today. 
  
 About VSNL 
  
 Videsh Sanchar Nigam Limited (VSNL), a part of the Tata Group, is a leading international telecommunications company. VSNL has, with the acquisition of Teleglobe, become one of the world’s largest carriers of
international voice complementing its emergence as the largest provider of submarine cable bandwidth. VSNL has a global presence including operations in USA, Canada, UK, South Africa, Singapore, Sri Lanka and India making it the first Indian truly
global telecommunications company. Its range of service offerings include wholesale voice, private leased circuits, IP MPLS VPN, Internet access, hosting, mobile signaling and several other IP services. The company is now poised to offer managed
data services 
  

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 and deliver end-to-end telecommunications solutions to carriers and enterprises globally. VSNL, a pioneer in offering
Internet services to individual customers now offers a full slew of retail products in India like high-speed broadband, dial-up Internet, Wi-FI, net telephony and calling cards under the Tata Indicom brand name, and continues to be one of the
leading retail Internet players in India. 
  
 VSNL is listed on the major stock
exchanges in India and also has its ADRs listed on the New York Stock Exchange. (www.vsnl.in) 
  
 Forward-looking and cautionary statements 
  
 Certain words and statements in this release concerning VSNL and its prospects, and other statements relating to VSNL’s expected financial position, business strategy, the future development of VSNL’s
operations and the general economy in India, are forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements of VSNL, or industry results,
to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding VSNL’s present and future business strategies and the environment in which VSNL
will operate in the future. The important factors that could cause actual results, performance or achievements to differ materially from such forward-looking statements include, among others, changes in government policies or regulations of India
and, in particular, changes relating to the administration of VSNL’s industry, and changes in general economic, business and credit conditions in India. Additional factors that could cause actual results, performance or achievements to differ
materially from such forward-looking statements, many of which are not in VSNL’s control, include, but are not limited to, those risk factors discussed in VSNL’s various filings with the United States Securities and Exchange Commission.
These filings are available at www.sec.gov. 
  
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