American Security Insurance Company Investment Plan Document

EXHIBIT 10.34

AMERICAN SECURITY INSURANCE COMPANY

INVESTMENT PLAN DOCUMENT 1. Purpose of the Plan . This plan shall be known as the American Security Insurance Company Investment Plan. The purpose of the Plan is to provide the benefits of an option plan in order to attract and retain the highest quality employees for positions of substantial responsibility and to provide additional incentives to designated officers, directors and employees of American Security Insurance Company, thereby promoting the continued success of the Company.

2. Definitions . As used herein, the following definition shall apply:

(a)" Administrator" shall mean the Board, or the person or persons appointed by the Board to serve under paragraph 16, below. (b)" Award Date" shall mean the effective date of the Participant' s Option Agreement, which, in the event of a Substitution, shall be the effective date of the new Option granted pursuant to the Substitution.

(c)" Board" shall mean the Board of Directors of American Security Insurance Company (" ASIC" ). (d)" Code" shall mean the Internal Revenue Code of 1986, as amended.

(e)" Company" shall mean American Security Insurance Company.

(f)" Eligible Compensation" shall mean compensation that an Employee or Director could agree to exchange for Options under this Plan. For an Employee, " Eligible Compensation" shall include (i) base pay, (ii) short term cash incentives, (iii) amounts payable under the Fortis Appreciation Incentive Rights (FAIR) Plan, (iv) cash payments under a change in control severance agreement, (v) other severance payments, (vi) other cash compensation payments, (vii) amounts payable under the Fortis Executive Pension and Executive 401(k) Plan, and (viii) accrued but unused vacation pay. A Participant who wishes to exchange Eligible Compensation for Options under the Plan must elect to do so by notifying the Committee in writing no less than six months prior to the start of the year in which the Eligible Compensation may be paid to the Participant.

Notwithstanding the foregoing, Eligible Compensation shall not include (x) any amounts payable as a lump sum later than the 90 th day following the Participant' s Termination of Employment; or (y) any amounts payable in installments following the Participant' s Termination of Employment.

(g)" Director" shall mean a member of the Board.

(h)" Disability" shall mean shall mean entitlement to income disability benefits as determined under the Company' s then current long term disability plan.

(i)" Employee" shall mean 1) any employee of the Company or 2) member of the Board. (j)" Fair Market Value" on any day of reference shall be the closing price of a Share on such date, unless the Administrator, in its sole discretion shall determine otherwise in a fair and uniform manner.

For this purpose, the closing price of the Share on any business day shall be (i) if the Share is listed or admitted for trading on any United States national securities exchange, the last reported sale price of the Share on such exchange, as reported in any newspaper of general circulation, (ii) if the Share is not listed or admitted for trading on any United States national securities exchange, the average of the high and low sale prices of the Share for such day reported on The Nasdaq SmallCap Market or a comparable consolidated transaction reporting system, or if no sales are reported for such day, such average for the most recent business day within five business days before such day which sales are reported, or (iii) if neither clause (i) nor (ii) is applicable, the average between the lowest bid and highest asked quotations for the Share on such day as reported by The Nasdaq SmallCap Market or the National Quotation Bureau, Incorporated, if at least two securities dealers have inserted both bid and asked quotations for the Share on at least 5 of the 10 preceding business days.

(k)" Option" shall mean an option granted pursuant to this Plan to purchase one or more Shares. The types of options that may be granted pursuant to this Plan are

(i) Taxed Non Benefit Eligible Options. (" Taxed NBE Options" ). These are Options that (A) have previously been included in the Participant' s FICA wages; and (B) are not treated as compensation for purposes of determining other employee benefits provided by the Company.


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(ii) Benefit Eligible Options (" BE Options" ). These are Options that (A) have not been included in the Participant' s FICA wages, and (B) in the year granted were treated as compensation for purposes of determining other employee benefits provided by the Company. (iii) Non Benefit Eligible Options (" NBE Options" ). These are Options that (A) have not been included in the Participant' s FICA wages, and (B) are not treated as compensation for purposes of determining other employee benefits provided by the Company.

(l)" Option Agreement" means the written agreement evidencing the award of an Option under the Plan. (m)" Participant" shall mean any Employee who receives an Option under the Plan, as evidenced by an Option Agreement entered into between such Employee and Fortis, Inc.

(n)" Plan" shall mean the American Security Insurance Company Investment Plan, as amended from time to time. (o)" Retirement" shall mean normal retirement as defined in the Company' s then current tax qualified deferred benefit pension plan, or, if there is no such retirement plan, " Retirement" shall mean voluntary termination of employment after age 55 with ten or more years service.

(p)" Shares" shall mean the shares of mutual funds, shares of common or preferred stock of a corporation listed or reported on a national securities exchange or quotation system, or shares of a regulated investment company, as designated and amended by the Administrator and referenced in Appendix A. Shares may include stock or other equity interest or bonds in American Security Insurance Company or any company related to American Security Insurance Company if so permitted by the Board. Shares do not include units of any money market funds or other cash equivalents. Shares subject to purchase pursuant to any Option shall also include any earnings and appreciation on such shares subsequent to the Award Date.

If a Participant does not select a specific share, the share subject to the Option shall be the share selected by the Administrator.


- 3 - (q)" Substitution" shall mean all exchanges of shares made within a single day.

(r)" Termination of Employment" shall mean an Employee' s termination of employment with the Company by reason of Retirement, resignation, discharge, death, Disability or other termination. The Administrator may, in its discretion, determine whether any leave or other absence from service constitutes a Termination of Employment for purposes of the Plan. In the case of a Director, " Termination of Employment" shall mean that the Director has ceased to serve as a member of the Board.

3. Term of Plan . The Plan shall become effective on the date it is adopted by the Board and shall continue in effect as amended from time to time until terminated pursuant to paragraph 18.

4. Shares Subject to the Plan . The aggregate number and type of Shares subject to Options will be fully described in each Option Agreement. 5. Eligibility . Employees and Directors who are designated as eligible and selected for inclusion in the Plan by the Administrator may receive Options under the Plan.

6. Grant of Options . The Administrator shall determine the n ...