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Medical Defense Services Corp

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Sectors: Insurance
Governing Law: Missouri, View Missouri State Laws
Effective Date: January 01, 1998
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MEDICAL DEFENSE SERVICES CORP.

EXECUTIVE COMPENSATION PLAN II


This Executive Compensation Plan is established this 15th day of December, 1997, by Medical Defense Services Corp.


WITNESSETH:


WHEREAS, Medical Defense Services Corp. desires to make executive compensation benefits available to certain of its employees to compensate them for their loyalty to Medical Defense Services Corp. and it desires to establish this Plan to implement and carry out said compensation benefits.


NOW, THEREFORE, in consideration of the premises, Medical Defense Services Corp. agrees as follows:


ARTICLE I
DEFINITIONS


1.01 "Plan" means the executive compensation plan established by the Employer
designated as the Medical Defense Services Corp. Executive Compensation
Plan II.


1.02 "Employer" means Medical Defense Services Corp.
1.03 "Employee" means any employee of the Employer.


1.04 "Participant" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01.


1.05 "Beneficiary" is a person designated by a Participant who is or may become
entitled to Benefits under the Plan. A Beneficiary who becomes entitled to
Benefits under the Plan remains a Beneficiary under the Plan until the
Employer has fully distributed Benefits to him. A Beneficiary's right to
(and the Employer's duty to provide to the Beneficiary) information or
data concerning the Plan does not arise until he first becomes entitled to
receive Benefits under the Plan.


1.06 "Nonforfeitable" means a Participant's or Beneficiary's unconditional
claim, legally


enforceable against the Plan, to a Participant's Benefit under the Plan.


1.07 "Plan Year" means the fiscal year of the Plan, a 12 consecutive month
period ending every December 31.


1.08 "Effective Date" of the Plan shall be January 1, 1998.


1.09 "Accounting Date" is the last day of the Plan Year.


1.10 "Trust" means each separate trust maintained by each Participant under the
Plan.


1.11 "Trustee" means the trustee of each separate Trust, which shall be
Commerce Bank, N.A.


1.12 "Code" means the Internal Revenue Code of 1986, as amended.


1.13 A related group is a controlled group of corporations (as defined in Code
(S)414(b)), trades or businesses (whether or not incorporated) which are
under common control (as defined in Code (S)414(c)) or an affiliated
service group (as defined in Code (S)414(m) or in Code (S)414(o)). If the
Employer is a member of a related group, the term "Employer" includes the
related group members for purposes of the definition of Employee, for
purposes of Section 1.15 of this Plan and for any other purpose required
by a Plan provision.


1.14 "Benefits" mean the executive compensation benefits, if any, which are
available to each Participant under this Plan in each Plan Year.


1.15 "Change in Control" means control of the Employer is transferred, there is
a transfer of any kind of more than twenty-five percent (25%) of the
assets or liabilities of the Employer, Medical Defense Associates, a stock
Missouri insurance company is downsized for any reason (determined by
either the decrease in number of insureds measured in any twelve (12)
month period of more than twenty-five percent (25%) from the initial
measuring date of January 1, 1998, or the decrease in number of insureds
in existence as of January 1, 1998, measured by report form "Count of
Insureds Per Class/Limits", by more than fifty percent (50%) during the
term of this Plan) or a majority of the members of any Employer's Board of
Directors are replaced during any twenty-five (25) month period beginning
after January 1, 1998, by directors whose appointment or election is not
endorsed by a majority of the members of such Employer's Board of
Directors prior to the date of said appointment or election.


ARTICLE II
EMPLOYEE PARTICIPATION


2.01 Each Employee designated by the Employer by resolutions of its Board of
Directors shall immediately become a Participant in the Plan.


2.02 A Participant shall cease being a Participant in the Plan on the date that
he terminates employment with the Employer.


ARTICLE III
EXECUTIVE COMPENSATION BENEFITS


3.01 For the Plan Years ending December 31, 1998 1999, 2000, 2001 and 2002, the
Employer shall make Benefits available to each Participant who has
satisfied the accrual of benefit requirements in Section 3.05.


3.02 The Employer by resolutions of its Board of Directors shall determine the
amount of Benefits to be made available for each Participant.


3.03 The Employer shall notify each Participant of his Benefit available for
each Plan Year on or before the next following January 10.


3.04 The Employer will not make any forfeiture allocation under this Plan.


3.05 A Participant shall not be entitled to receive any Benefit for a Plan Year
unless he is employed by the Employer on the Accounting Date of the Plan
Year.


3.06 The Employer shall provide for accelerated Benefits to be available for
Participants who are employed by the Employer on the day before the
effective date of a Change in Control. The Employer shall notify such
Participant of the proposed acceleration of Benefits at least 20 days
before the effective date of the Change in Control, if date is known.


ARTICLE IV
PARTICIPANT ELECTION


4.01 A Participant who is entitled to receive Benefits for a Plan Year may
elect for each Plan Year to receive all or any portion of the Benefit in
cash or to defer all or any portion of the receipt of such Benefit by
directing the Employer to pay all or any portion of such Benefit in cash
directly to the Trustee of the Trust maintained between the Participant
and the Trustee pursuant to the terms of this Plan. The Participant shall
make this election for each Plan Year by notifying the Employer, on forms
prescribed by the Employer, of such election on or before the next
following January 20. The payment of the Benefit either to the Participant
or to the Trustee shall be made as soon as administratively possible after
Participant's election.


4.02 A Participant who is entitled to receive Benefits due to acceleration
because of a Change in Control shall not be entitled to any election to
receive cash or to defer such receipt. The Employer will pay such Benefit
(due to acceleration because of a Change in Control) in cash directly to
the Participant on the day before such Change in Control.


4.03 The Employer, regardless if the Benefits are paid to the Participant or to
the Trustee, shall withhold from the Benefit any taxes required by law to
be withheld.


ARTICLE V
VOLUNTARY/ROLLOVER CONTRIBUTIONS


5.01 The Plan does not permit any voluntary contributions other than as
provided in Article IV.


5.02 A Participant, with the Employer's and the Trustee's written consent, may
contribute as a "Rollover Contribution" to the Participant's Trust all or
any portion of the cash or property received by the Participant from the
Participant's Executive Compensation Trust dated October 15, 1993 with
Commerce Bank, N.A., as trustee. This Rollover Contribution shall become a
portion of the Participant's Benefit.


ARTICLE VI
PARTICIPANT VESTING


6.01 A Participant's Benefit which becomes payable is 100% Nonforfeitable at
all times.


ARTICLE VII
PARTICIPANT'S TRUST


7.01 A Participant's right to Benefits held by the Participant's Trust shall be
paid to the Participant or Beneficiary upon the terms and conditions as
set forth in the Participant's Trust.


7.02 The Participant's Trust shall be in the form attached hereto, marked as
Exhibit A and incorporated herein by this reference.


7.03 The Employer will not be a party to Participant's Trust and will have no
right or interest in the Participant's Trust.


7.04 The Employer must supply current information to the Trustee as to the
name, date of employment, and date of termination of each Participant,
together with any other information which the Trustee deems necessary for
the administration of the Trusts.
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