2003 EXECUTIVE CONTINGENT SALARY PLAN(CSP)
EMC Reinsurance Company (EMC Re)
Purpose - To provide special incentive for participants to contribute to the success of EMC Reinsurance
Company and EMC Insurance Companies and to provide a means to participate in the favorable underwriting
results of the companies.
Plan Year - Calendar year beginning January 1, 2003 and ending December 31, 2003.
Eligible Participants -
Ronnie D. Hallenbeck, President - EMC Reinsurance Company
Subject Compensation - base salary and wages paid during the plan year in the eligible position
Contingent Salary Percentage - based on (1) the Consolidated Combined Trade Ratio for EMC Insurance
Companies and (2) the adjusted Combined Trade Ratio for EMC Re computed according to the formula below.
Calculations will be to the nearest 1/10th of 1%.
Determination of adjusted Combined Trade Ratio for EMC Re
Step One: The actual combined trade ratio is adjusted for the profit or loss incurred by EMCC under the
occurrence cap protection.
Step Two: The adjusted combined trade ratio from Step One is compared to that of the reinsurance industry as
published by the Reinsurance Association of America. If it is greater than the RAA combined, no further
adjustment is made. If it is lower than the RAA combined ratio, the adjusted combined trade ratio is reduced by
the difference, subject to a maximum reduction of three points.
Contingent Salary Percentage =
Consolidated Combined Trade Ratio Component (A)
+ Adjusted EMC Re Combined Trade Ratio Component (B)
(subject to maximum of 50.0%)
The Contingent Salary Payment for the plan year will be made to eligible participants as soon as all necessary
information is available and calculations have been completed and verified and will be equal to -
Contingent Salary Percentage X Subject Compensation
(A) = (105.5 - Consolidated Combined Trade Ratio) X 2.0%
(subject to maximum of 20.0% and minimum of 0.0%)
(B) = (105.5 - ad