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Exhibit
10.1
NATIONAL INTERSTATE
CORPORATION
AMENDED AND
RESTATED
MANAGEMENT BONUS
PLAN
1. Purpose. The
purpose of this Management Bonus Plan (this “Plan”) is
to provide financial incentives to designated executives and other
key managers of National Interstate Corporation and its
subsidiaries (the “Company”) related to the achievement
of challenging financial and business goals. This Plan was
originally adopted on November 2, 2006, and is being amended
and restated effective September 21, 2007 to make certain
technical changes to conform to recently issued tax regulations
concerning deferred compensation.
2. Definitions. Terms
in this Plan that have initial capital letters and that are not
otherwise defined in this Plan shall have the meanings given to
such terms in Exhibit A.
3. Plan
Administration. The Compensation Committee of the Board (the
“Committee”) shall be responsible for administration of
the Plan. The Committee, by majority action, is authorized to
interpret the Plan, to prescribe, amend, and rescind regulations
relating to the Plan, to provide for conditions and assurances
deemed necessary or advisable to protect the interests of the
Company, and to make all other determinations necessary or
advisable for the administration of the Plan, but only to the
extent not contrary to the express provisions of the Plan.
Determinations, interpretations, or other actions made or taken by
the Committee pursuant to the provisions of the Plan shall be
final, binding and conclusive for all purposes and upon all
Participants. No member of the Committee shall be liable for any
such action or determination made in good faith. The Committee may
delegate to the chief executive officer or other officers of the
Company, subject to such terms as the Committee shall determine,
authority to perform certain functions, including administrative
functions, except that the Committee shall retain exclusive
authority to determine matters relating to the chief executive
officer. In the event of such delegation, all references to the
Committee in this Plan shall be deemed references to such officers
as it relates to those aspects of the Plan that have been
delegated.
4. Eligibility
. The chief executive officer will select and the
Committee shall approve which Employees will be eligible to
participate in the Plan for any given Performance Period. Eligible
Participants shall be notified in writing of such designation. An
Employee who is a Participant for a given Performance Period is
neither guaranteed nor assured of being selected for participation
in any subsequent Performance Period.
5. Bonus Pool and Target
Incentive Award . Following the beginning of each
Performance Period, the Committee shall establish (i) a
formula for determining the potential Bonus Pool for such
Performance Period, and (ii) a Target Incentive Award for such
Performance Period for each Participant. When establishing the
Target Incentive Awards for participants other than the chief
executive officer, the Committee shall consider the recommendations
of the chief executive officer. The chief executive officer will be
authorized to establish (subject, in the case of executive
officers, to the Committee’s approval) Target Incentive
Awards for newly hired or newly promoted Employees, which awards
may be based on performance during less than the full Performance
Period and may be pro rated in the discretion of the
Committee.
6. Determination of
Awards. As soon as administratively practicable following the
end of each Performance Period, the Committee shall determine the
total Bonus Pool available for allocation as Awards for such
Performance Period and shall determine the extent, if any, that the
Target Incentive Award for each Participant has been attained,
based on the Committee’s assessment (after considering the
recommendations of the chief executive officer for all Participants
other than the chief executive officer) of the Company’s and
the Participant’s performance to objectives during such
Performance Period. The amount of the Award payable under the Plan
to any Participant shall then be determined by the Committee based
on a percentage of the available Bonus Pool; provided ,
however , that in no event shall the aggregate of all Awards
to be made hereunder to all Participants for a Performance Period
exceed the amount of the Bonus Pool for such Performance Period.
The Committee may, in its sole discretion, increase or decrease the
amount of any Award otherwise payable to any Participant to reflect
such Participant’s individual performance or such other
factors as the Committee deems relevant, or in recognition of
changed or special circumstances.
7. Payment of Awards.
An Award to a Participant for a particular Performance Period shall
be paid by the Company in cash in three installments (without
interest) as follows: (i) Fifty percent (50%) of the
Award for such Performance Period shall be paid within 75 days
after the end of such Performance Period; (ii) Thirty five
percent (35%) of the Award for such Performance Period shall
be paid within 75 days after the first anniversary of the end of
such Performance Period; and (iii) fifteen percent
(15%) of the Award for such Performance Period shall be paid
within 75 days after the second anniversary of the end of such
Performance Period. For two years subsequent to such date (i.e.
until the fourth anniversary of the end of such Performance
Period), the Committee shall consider any favorable development for
such
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