Employment Agreement with J. Adam Abram
First Amendment to the Employment Agreement
Second Amendment to the Employment Agreement
 
 
                              EMPLOYMENT AGREEMENT
 
 
         THIS AGREEMENT dated and effective as of November 15, 2002, between
James River Group, Inc., a Delaware corporation ("Company") and J. Adam Abram
("Executive").
 
                                   WITNESSETH:
 
         WHEREAS, the Board of Directors of the Company has employed the
Executive as President and Chief Executive Officer effective as of November 15,
2002 ("Effective Date") and the Executive has agreed to be so employed; and
 
         WHEREAS, the parties desire to set forth herein the terms of such
employment;
 
         NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties agree as follows.
 
         1. EMPLOYMENT AND TERM. The Company hereby employs Executive as
President and Chief Executive Officer, and Executive hereby accepts such
employment on the terms hereinafter set forth. The term of this Agreement shall
commence as of the Effective Date and shall continue until the third anniversary
of the Effective Date. The term of this Agreement shall thereafter be
automatically be renewed for additional three (3) year periods unless written
notice to the contrary shall be given by either party to the other not less than
one hundred eighty (180) days prior to the end of the initial or any renewal
term that the term shall not thereafter be renewed. The initial term plus any
renewals thereof shall hereafter be referred to as the "Term".
 
         2. COMPENSATION. Executive shall be paid a base salary of not less than
three hundred fifty thousand dollars ($350,000) per year, payable in periodic
installments in accordance with the Company's regular payroll practices.
Executive shall be eligible to receive such discretionary bonuses as the Board
of Directors of the Company ("Board"), in its discretion, may determine. Within
one hundred eighty (180) days after the close of each fiscal year of the Company
during the Term, the Board shall review Executive's performance during such
fiscal year and decide whether to increase Executive's base salary and award any
discretionary bonus to Executive. Executive shall also be entitled, during the
Term to participate in all retirement, disability, pension, savings, health,
medical, dental, insurance and other fringe benefits or plans of the Company
generally available to executive employees including specifically the following
at the Company's expense:
 
                           (a) six (6) weeks of paid vacation per annum (not
         subject to rollover);
 
                           (b) coverage under the Company's current health care
         insurance plans, including coverage for Executive's dependents, on the
         same terms and
         conditions, including any required payment of premiums or other costs
         by Executive, as are applicable to other executive employees; and,
 
                           (c) coverage under the Company's group term life and
         accidental death and dismemberment and long term disability coverage,
         all on the same terms and conditions, including any required payment of
         premiums or other costs by Executive, as are applicable to other
         executive employees.
 
         3. DUTIES. Executive shall perform all duties normally associated with
the position of President and Chief Executive Officer, and such other reasonable
duties as may be assigned to him by the Board. Executive will devote sufficient
time and effort to discharge his duties. Executive may perform duties for and
receive compensation from business ventures in addition to the Company, but in
no event may Executive perform duties for and receive compensation from any
Competitive Business as defined hereafter. Executive shall not engage in full
time employment or full time consulting for any business entity other than the
Company.
 
         4. PRIVILEGED INFORMATION.
 
                  (a) Executive will not at any time during the Term or
thereafter:
 
                           (i) reveal, divulge or make known to any person,
firm or corporation or use for his personal benefit or the benefit of others
(except the Company), directly or indirectly, any confidential or proprietary
information received or developed by him during the course of his employment.
For the purposes of this Section 4(a)(i) confidential and proprietary
information ("Privileged Information") shall be defined to mean (1) all
historical and pro forma projections of loss ratios incurred by the Company and
any of its direct or indirect subsidiaries (hereinafter referred to as
"Affiliates"), (2) all historical and pro forma actuarial data relating to the
Company and any of the Affiliates, (3) historical and pro forma financial
results, revenue statements, and projections for the Company and its Affiliates,
(4) all information relating to the Company's or the Affiliates' systems and
software (other than the portion thereof provided by the vendor to all
purchasers of such systems and software), (5) all information relating to the
Company's unique underwriting approach, (6) all information relating to plans
for acquisitions of any business entities or blocks of business, (7) non-public
business plans, and (8) all other information relating to the financial,
business or other affairs of the Company and its Affiliates, including their
customers. Section 4(a)(i) shall not apply to Executive following the
termination of his employment with the Company or its Affiliates with respect to
any Privileged Information known or made generally available to the general
public or within the industry.
 
                           (ii) reveal, divulge or make known to any person,
firm or corporation, or use for his personal benefit or the benefit of others
(except the Company), directly or indirectly, the name or names of any customers
of the Company or any of its Affiliates, nor will he reveal, divulge or make
known to any person, firm or corporation, or use for his personal benefit or the
benefit of others (except the Company), directly or indirectly, any trade
secrets or any knowledge or information, or any fact concerning any
business methods or operational procedures engaged in by the Company or its
Affiliates (collectively, "Privileged Information"); provided, however, the
restrictions set forth in this Section 4(a)(ii) shall not apply to Executive
following the termination of his employment with the Company or its Affiliates
with respect to any Privileged Information known or made generally available to
the general public or within the industry.
 
         5.  NONCOMPETITION.
 
                  (a) Executive acknowledges and agrees that as the Company's
President and Chief Executive Officer (i) he is responsible for and directly
involved in developing customer goodwill and relationships for the benefit of
the Company, including personal contact with customers and supervising others
who contact customers and develop customer goodwill and relationships, (ii) he
has knowledge of the Company's most Confidential and Privileged Information, and
has been and will be compensated for the development, and supervising the
development, of the same, and (iii) he has unique insight into and knowledge of
the skills, talents and capabilities of the Company's key employees. Executive
also acknowledges and agrees that at the inception of his employment with the
Company it was agreed that he would be bound by noncompetition restrictions, and
furthermore, execution of this Agreement provides changes in the terms and
conditions of his employment favorable to Executive that constitute sufficient
consideration for Executive's agreement to the noncompetition restrictions set
forth in this Section.
 
                  (b) Executive agrees that during his employment by the
Company, and for the restricted period ("Restricted Period") after his
employment with the Company ceases, he will not:
 
                           (i) compete against the Company by engaging in, or by
assisting any other person or entity to engage in, or by having an ownership
interest in, any Competitive Business in the Territory (as defined below);
 
                           (ii) compete against the Company by soliciting any
Customer (as defined below) of the Company or its Affiliates to provide any
goods or services in competition against the Company or its Affiliates;
 
                           (iii) induce or persuade any Customer of the Company
or its Affiliates not to do business with, or to switch business from, the
Company or its Affiliates;
 
                           (iv) solicit, or assist others in soliciting, Key
Employees (as defined below) to either leave the Company or to engage in a
Competitive Business.
 
                  (c) For purposes of this Agreement, the following capitalized
terms shall have the meanings set forth below:
 
                           (i) "Restricted Period" shall mean one (1) year,
unless a court with jurisdiction determines that such period is overbroad or
unenforceable in which case it shall mean either nine (9) months, six (6)
months, or three (3) months, whichever period is the maximum enforceable
Restricted Period.
 
                           (ii) "Competitive Business" shall mean the business
of acquiring, holding and/or operating excess and surplus line insurance
companies, and any other material business that the Company or any of its
Affiliates is engaged in as of the date of this Agreement and as the business of
the Company and its Affiliates evolves during its Term; provided, however, that
if a court with jurisdiction determines that such definition is overbroad or
unenforceable, it shall be further limited to the business of the Company and
its Affiliates regarding which Executive had Confidential or Privileged
Information during the last year of the Term, and if this narrowed definition is
still deemed by such court to be overbroad or unenforceable, it shall be further
limited to business of the Company under Executive's management and control
during the last year of the Term;
 
                           (iii) "Territory" shall mean each and every state or
other United States jurisdiction ("State(s)") where Company is licensed or
admitted at the end of the Term and/or is then in the process of seeking to be
licensed; provided, however, that if a court with jurisdiction determines that
such definition is overbroad or unenforceable, it shall be further limited to
States with respect to which Executive had Confidential or Privileged
Information regarding the Company's business or operations during the last year
of the Term, and if this narrowed definition is still deemed by such court to be
overbroad or unenforceable, it shall be further limited to States where
Executive conducted, or supervised the conduct of, Company business during the
last year of the Term;
 
                           (iv) "Customer" shall mean any customer of the
Company or its Affiliates that purchased products or services from the Company
during the last year of the Term; provided, however, that if a court with
jurisdiction determines that such definition is overbroad or unenforceable, it
shall be further limited to customers about which Executive either had
Confidential or Privileged Information or personal or management responsibility
for customer contact or service, and if this narrowed definition is still deemed
by such court to be overbroad or unenforceable, it shall be further limited to
customers of the Company with which Executive had direct contact during the last
six (6) months of the Term;
 
                           (v) "Key Employees" shall mean any executive,
managerial, sales, marketing, or supervisory level employee of the Company or
its Affiliates under Executive's management authority during the last year of
the Term.
 
                  (d) The restrictions contained in this Section 5 shall not
prevent the purchase of ownership by Executive of not more than three percent
(3%) of the securities of any class of any corporation, whether or not such
corporation is engaged in any Competitive Business, which are publicly traded on
any securities exchange or any "over the counter" market.
 
6.  TERMINATION.
 
                  Executive's employment hereunder shall terminate under the
following circumstances:
 
                  (a) Termination for Cause. With the assent of seventy five
percent (75%) the entire Board of Directors, excluding Executive, who will be
excused from voting, the Company may terminate the employment of Executive for
cause at any time upon written notice to Executive specifying the cause of the
termination. For the purposes of this Section, "for cause" shall include only
discharge resulting from a determination by the Company that: (i) Executive has
willfully violated Section 4 or 5 of this Agreement; (ii) Executive has grossly
neglected his duties hereunder; (iii) Executive has been convicted of a felony
or a crime involving moral turpitude (meaning a crime that includes the
commission of an act of depravity, dishonesty or bad morals); or (iv) Executive
has committed an act of dishonesty, fraud or embezzlement against the Company.
 
                  In the event that the Company provides written notice of
termination for cause, Executive shall first be entitled to cure any violation
of Section 4 or 5 of this Agreement or any alleged neglect of his duties within
thirty (30) days of receiving written notice from the Company specifying in
detail the factual basis for its belief that Executive willfully violated
Section 4 or 5 of this Agreement or grossly neglected his duties hereunder.
Following expiration of the opportunity to cure, the Company will provide
Executive with the opportunity to meet with the Board of Directors to address
the allegations and may be represented by counsel at this meeting. Following the
completion of Executive's presentation, the Board of Directors will take another
vote concerning termination and promptly notify Executive of its decision. If
Executive is terminated for cause, Executive's salary and right to receive
fringe benefits shall terminate on the date of the final vote by the Board of
Directors to terminate Executive.
 
                  (b) Termination for Performance. The Board of Directors
expects Executive to deliver financial results for the Company that are equal to
or greater than its peers. With the assent of seventy-five per cent (75%) of the
entire Board of Directors, excluding Executive, who will be excused from voting,
the Company may at its discretion terminate Executive for performance if the
Company's operating results as measured by either revenue or earning, are fifty
percent (50%) or less than the Company's approved budget targets.
 
                  (c) Expiration or Termination Without Cause. The Company may
terminate this Agreement at any time without cause or may elect to have the Term
of this agreement expire.
 
                  (d) Termination by Executive. Executive may, at his option,
terminate this Agreement for Good Reason. "Good Reason" shall mean the
occurrence of any one or more of the following events:
 
                           (i)    The assignment to the Executive of any duties
inconsistent in any material adverse respect with his position, authority or
responsibilities, or any other material adverse change in such position,
including titles, authority, or responsibilities;
 
                           (ii)   The failure by the Company to continue to
provide the Executive with substantially similar perquisites or benefits under
the Company's benefit programs; provided, that any amendment, modification or
discontinuation of any plans or benefits that generally affect substantially all
domestic salaried employees of the Company shall not be deemed to constitute
Good Reason;
 
                           (iii)  The Company's requiring the Executive to be
based at any office or location more than 35 miles from the location at which he
performs his services as of the Effective Date; or
 
                           (iv)   Any breach by the Company of any of the
provisions of this Agreement or any failure by the Company to carry out any of
its obligations hereunder, in either case, for a period of thirty (30) days
after receipt of written notice from the Executive and the failure by the
Company to cure such breach or failure during such thirty (30) day period.
 
                  (e) Termination due to Disability. The Company may terminate
Executive's employment if he is prevented from performing his responsibilities
under this Agreement for a consecutive period of six (6) months or longer during
any twelve (12) month period of the Term hereof, by reason of any accident,
illness, or mental or physical disability.
 
Executive shall not participate in any vote by the Board of Directors of the
Company relating to his employment.
 
 
7.  COMPENSATION AND BENEFITS UPON TERMINATION.
 
                  a. In the event that the Company terminates this Agreement
without cause or elects to have the Term of this Agreement expire, or if
Executive terminates this Agreement for Good Reason, Executive is entitled to
receive:
 
                           (i) an amount equal to Executive's base salary for a
period of thirty-six (36) months after the Termination Date in accordance with
the terms of Section 2 hereof;
 
                           (ii) the continuation at the Company's expense of
coverage under all plans, insurance policies and other fringe benefits described
in Section 2 hereof, for a period of twelve (12) months after the Termination
Date;
 
                           (iii) any discretionary bonus to which Executive is
entitled on the Executive's last day of employment; and
 
                           (iv) any unused vacation and any non reimbursed
reasonable business expenses.
 
 
                  b. If Executive is terminated for cause, or due to disability,
the Company shall have no further obligations to Executive, except as provided
in any stock option or other bonus or incentive plan to which Executive is
entitled, and Executive shall have no further rights hereunder.
 
                  c. If Executive is terminated for business performance,
Executive is entitled to receive:
 
                           (i) an amount equal to Executive's base salary for
eighteen (18) months after the Termination Date in accordance with the terms of
Section 2 hereof;
 
                           (ii) the continuation at the Company's expense of
coverage under all plans, insurance policies and other fringe benefits described
in Section 2 hereof, for a period of twelve months after the termination date;
 
                           (iii) any discretionary bonus to which Executive is
entitled on the Executive's last day of employment; and
 
                           (iv) any unused vacation and any non reimbursed
reasonable business expenses.
 
                  d. All compensation and benefits made pursuant to this Section
shall cease if Executive violates any of the terms of Sections 4 or 5 during the
twelve (12) months following his last day of employment. In addition to this
remedy, the Company shall have all other remedies provided by this Agreement and
by law for the breach of Section 4 or Section 5 hereof.
 
         8. UNIQUENESS OF SERVICES, ACKNOWLEDGEMENTS. Executive acknowledges
that the services to be rendered under the provisions of this Agreement are of a
special, unique and extraordinary character, involve access to and development
of confidential, proprietary and Privileged Information, and involve developing
and protecting customer relationships and goodwill, and that it would be
difficult or impossible to replace such services and that, by reason thereof,
Executive agrees and consents that if he violates any of the provisions of this
Agreement, the Company, in addition to any other rights and remedies available
under this Agreement or otherwise, shall be entitled to an injunction to be
issued by a tribunal of competent jurisdiction restricting Executive from
committing or continuing any violation of this Agreement.
 
         9. FURTHER ACKNOWLEDGEMENTS. Executive further acknowledges and agrees
that the restrictions contained in Sections 4 and 5 are reasonable and necessary
to protect the legitimate interest of the Company, in view of, among other
things, the short duration of the restrictions, the narrow scope of the
restrictions, the Company's interests in protecting its confidential,
proprietary, trade secret and Privileged Information (which
Executive agrees has a useful life of more than one (1) year) and its customer
relationships and goodwill, Executive's background and capabilities which will
allow him to seek and accept employment without violation of the restrictions,
Executive's substantial equity interest in the Company, and Executive's
entitlements under this Agreement. If any provision contained in Section 4 or 5
is adjudged unreasonable in any proceeding, then such provision shall be deemed
modified by reducing the period of time during which such provision is
applicable and/or, if applicable, the geographic area to which such provision
applies, to the extent necessary for such provision to be adjudged reasonable
and enforceable.
 
         10. NOTICES. Any notices provided for or permitted by this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
in person or three (3) days after it is deposited in a United States Postal
Depository, postage prepaid, registered or certified mail, return receipt
requested, addressed to the party for whom intended at such party's address set
forth below or to such other address as such party may designate by notice in
writing given in the manner provided below:
 
 
 
To Executive:              J. Adam Abram
                           James River Group, Inc.
                           1414 Raleigh Road
                           Suite 415
                           Chapel Hill, NC 27517
 
To Company:                James River Group, Inc.
                           1414 Raleigh Road
                           Suite 1414
                           Chapel Hill, NC 27517
 
 
         11. ENTIRE AGREEMENT: AMENDMENTS. This Agreement constitutes the entire
agreement and understanding between Executive and the Company with respect to
the subject matter hereof and shall supersede any all other prior agreements and
understandings, whether oral or written, relating thereto or the employment of
Executive by the Company. This Agreement may not be rescinded, modified or
amended except by an instrument in writing signed by the party hereto against
whom any such waiver is sought to be enforced.
 
         12. PARTIAL INVALIDITY. The invalidity or unenforceability, by statue,
court decision or otherwise, of any term or condition of this Agreement shall
not affect the validity or enforceability of any other term or condition hereof.
 
         13. GOVERNING LAW. This Agreement shall be construed and administered
in accordance with the laws of the State of North Carolina, without regard to
the principles of conflicts of law which might otherwise apply.
 
         14. ASSIGNABILITY. This Agreement may not be assigned by Executive, and
all its terms and conditions shall be binding upon and inure to the benefit of
the Company and its successors. Successors to the Company shall include, without
limitation, any corporation or corporations acquiring, directly or indirectly,
all or substantially all of the assets of the Company whether by merger,
consolidation, purchase or otherwise and such successor shall thereafter be
deemed the "Company" for purposes hereof.
 
         15. DISPUTE RESOLUTION.
 
                  (a)    Arbitration. In the event of disputes between the
parties with respect to the terms and conditions of this Agreement, such
disputes shall be resolved by and through an arbitration proceeding to be
conducted under the auspices of the American Arbitration Association (or any
like organization successor thereto); provided, however, that either party may
seek temporary, preliminary and or permanent injunctive relief with respect to
appropriate matters (including without limitation enforcement of Sections 4 and
5 of this Agreement) without resort to arbitration. Such arbitration proceeding
shall be conducted pursuant to the commercial arbitration rules (formal or
informal) of the American Arbitration Association in as expedited a manner as is
then permitted by such rules (the "Arbitration"). Both the foregoing agreement
of the parties to arbitrate any and all such claims, and the results,
determination, finding, judgment and/or award rendered through such Arbitration,
shall be final and binding on the parties hereto and may be specifically
enforced by legal proceedings.
 
                  (b)    Procedure. Such Arbitration may be initiated by written
notice from either party to the other which shall be a compulsory and binding
proceeding on each party. The Arbitration shall be conducted by an arbitrator
selected in accordance with the procedures of the American Arbitration
Association. Time is of the essence of this arbitration procedure, and the
arbitrator shall be instructed and required to render his or her decision within
thirty (30) days following completion of the Arbitration.
 
                  (c)    Venue and Jurisdiction. Any action to compel
arbitration hereunder or otherwise relating to this Agreement shall be brought
exclusively in a state court or federal court located in the City of Raleigh,
North Carolina provided that if a federal court has jurisdiction over the
subject matter thereof, then such action shall be brought in federal court, and
the Company and Executive hereby irrevocably submit with regard to any such
action or proceeding for itself and in respect to its property, generally and
unconditionally, to the jurisdiction of the aforesaid courts.
 
                  (d)    Waiver of Jury Trial. IN THE EVENT OF ANY LITIGATION
WITH RESPECT TO ANY MATTER CONNECTED WITH THIS AGREEMENT OR THE AGREEMENTS OR
TRANSACTIONS CONTEMPLATED HEREUNDER ALL OF THE PARTIES HERETO WAIVE ALL RIGHTS
TO A TRIAL BY JURY.
 
                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
 
                  THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH
MAY BE ENFORCED BY THE PARTIES.
 
 
 
                                       JAMES RIVER GROUP, INC.
 
 
 
                                       By: /s/ Richard W. Wright
                                          --------------------------------------
                                          Richard W. Wright
 
 
 
 
 
                                           /s/ J. Adam Abram
                                          --------------------------------------
                                          J. Adam Abram
 
 
#Top of the Document
 
 
                               FIRST AMENDMENT TO
                              EMPLOYMENT AGREEMENT
 
         FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment"), dated and
effective as of September 4, 2003, between James River Group, Inc., a Delaware
corporation (the "Company"), and J. Adam Abram (the "Executive").
 
                                   WITNESSETH:
 
         WHEREAS, the Company and the Executive are parties to that certain
Employment Agreement, dated as of November 15, 2002 (the "Employment
Agreement"), pursuant to which, among other things, the Company employed the
Executive as President and Chief Executive Officer and the Executive agreed to
be so employed.
 
         WHEREAS, the parties hereto desire to amend the Employment Agreement.
 
         NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged and agreed, the parties hereto hereby agree as
follows:
 
         1. Amendments to Employment Agreement. The Employment Agreement is
hereby amended as follows:
 
          (a) The first sentence of Section 2 of the Employment Agreement is
hereby deleted and the following substituted in lieu thereof:
 
          "Executive shall be paid a base salary of not less than four hundred
          seventy five thousand dollars ($475,000) per year (which base salary
          shall not be increased until August 2005), payable in periodic
          installments in accordance with the Company's regular payroll
          practices."
 
          (b) Section 3 of the Employment Agreement is hereby deleted in its
entirety and the following substituted in lieu thereof:
 
               "3. DUTIES. Executive shall perform all duties normally
          associated with the position of President and Chief Executive Officer,
          and such other reasonable duties as may be assigned to him by the
          Board. Executive will devote his entire working time, attention and
          energies to carry out and fulfill his duties and responsibilities
          under this Agreement. Executive may, with the permission of the
          Company (which permission shall not be unreasonably withheld), perform
          duties for and receive compensation from business ventures in addition
          to the Company, but in no event may Executive perform duties for and
          receive compensation from any Competitive Business (as hereinafter
          defined)."
 
 
 
          (c) The following Section 16 is hereby added to the Employment
Agreement:
 
          "16. OPTIONS TO PURCHASE SHARES OF COMMON STOCK.
 
               (a) Concurrently with the closing of each financing transaction
          after the date hereof that involves the issuance of common stock or
          securities convertible, exchangeable or exercisable for common stock
          of the Company, the Company shall grant to the Executive an option
          (each such option issued in such financing transaction, a "5% Option")
          to purchase the number of shares of common stock of the Company equal
          to 5% of the total number of shares of common stock issued or issuable
          in such financing transaction (including (i) common stock issuable on
          the exercise of the 5% Option to be issued in such financing and (ii)
          common stock issuable on conversion of any convertible securities or
          issuable on exercise of any warrants issued or issuable in such
          financing, but excluding any common stock issuable on exercise of any
          other options granted in such financing under the Company's incentive
          or stock option plan then in effect) at an exercise price per share
          equal to the purchase price for the common stock of the Company issued
          or issuable in such financing (including common stock underlying any
          convertible securities or warrants issued or issuable in such
          financing).
 
               (b) The Company shall have no obligation pursuant to this Section
          16 to grant any 5% Option to the Executive in connection with any
          financing transaction consummated after the Company has received
          aggregate gross proceeds equal to $250 million from financing
          transactions (excluding gross proceeds from nonconvertible debt
          financings and equity financings not convertible into common stock)
          consummated following the date of formation of the Company.
 
               (c) A 5% Option may, in the sole determination of the
          Compensation Committee of the Board of Directors, (i) be issued
          pursuant to the Company's incentive plan in effect from time to time
          (the "Plan") or outside the Plan and (ii) if issued pursuant to the
          Plan, be either "incentive stock options" intended to qualify as such
          under the provisions of Section 422 of the Internal Revenue Code of
          1986, as amended, or "nonqualified stock options."
 
               (d) In the event that the employment of Executive is terminated
          without "cause" (as defined in Section 6 of this Agreement), each 5%
          Option then outstanding, whether or not then exercisable, shall
          immediately vest and Executive shall be entitled to exercise his
          rights thereunder until (i) the first anniversary of such date of
          termination if such date of termination is after the initial public
          offering of the Company's common stock pursuant to an offering
          registered under the Securities Act of 1933, as amended, and (ii) the
          fifth anniversary of such date of termination if such date of
          termination is prior to such initial public
          offering, notwithstanding anything to the contrary in such 5% Option
          (or the Plan, if applicable)."
 
         2. Employment Agreement in Full Force and Effect; Entire Understanding.
Except as expressly modified hereby, the Employment Agreement shall remain
unchanged and in full force and effect as executed. The Employment Agreement, as
amended hereby, contains the entire understanding of and supersedes all prior
agreements, written and verbal, with respect to the subject matter hereof and
shall not be modified except in writing executed by the parties hereto.
 
         3. Miscellaneous. This Amendment (a) shall be governed by, and
construed and enforced in accordance with, the laws of the State of North
Carolina, without regard to the principles of conflict of law which might
otherwise apply, and (b) may be executed in counterparts, each of which shall be
deemed an original and together shall constitute one and the same instrument.
 
         IN WITNESS WHEREOF, Company and Executive have duly executed this
Amendment as of the date first above written.
 
                                            COMPANY:
 
                                            JAMES RIVER GROUP, INC.
 
 
                                            By: /s/ Richard W. Wright
                                               ---------------------------
                                               Name: Richard W. Wright
                                               Title: Chairman
 
                                            EXECUTIVE:
 
                                             /s/ J. Adam Abram
                                            ------------------------------
                                            J. Adam Abram
 
 
#Top of the Document
 

Exhibit 10.9

SECOND AMENDMENT TO
EMPLOYMENT AGREEMENT

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment"), dated and effective as of August 12, 2005, between James River Group, Inc., a Delaware corporation (the "Company"), and J. Adam Abram (the "Executive").

WITNESSETH:

WHEREAS, the Company and the Executive are parties to that certain Employment Agreement, dated as of November 15, 2002, as amended by that certain First Amendment to Employment Agreement, dated as of September 4, 2003 (collectively, the "Employment Agreement"), pursuant to which, among other things, the Company employed the Executive as President and Chief Executive Officer and the Executive agreed to be so employed; and

WHEREAS, the parties hereto desire to amend the Employment Agreement;

NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged and agreed, the parties hereto hereby agree as follows:

1.   Amendment to Employment Agreement.    The following paragraph is hereby added to the end of existing paragraph (a) under Section 16 of the Employment Agreement:

"Notwithstanding the foregoing, the following terms shall apply to any financing transaction that involves the issuance of common stock or securities convertible, exchangeable or exercisable for common stock of the Company which is consummated after August 12, 2005 (the "IPO Closing") (other than in connection with the exercise of the underwriters' over-allotment option with respect to the Company's initial public offering):

(i) The exercise price per share of any 5% Option granted pursuant to this Section 16(a) shall be equal to the fair market value of the Company's common stock on the date of the closing of the financing transaction.

(ii) The Company shall have no obligation pursuant to this Section 16(a) to grant any 5% Option to the Executive unless the Company's cumulative return on equity ("Cumulative ROE") exceeds 10%. Cumulative ROE shall be calculated as reported net income from June 30, 2005 to the end of the fiscal quarter immediately preceding the closing of such financing transaction, divided by the average of $176,765,645 and reported stockholders' equity at the end of the fiscal quarter immediately preceding the closing of such financing transaction.

(iii) If Cumulative ROE for such financing transaction exceeds 10%, the Executive shall receive (x) the 5% Option relating to that transaction, in accordance with the first paragraph of this Section 16(a), and (y) an additional 5% Option relating to each prior financing transaction following the IPO Closing, if any, that would have triggered a 5% Option but for the fact that Cumulative ROE at the time of such prior transaction did not exceed 10% (the "Look-Back 5% Option"). The Look-Back 5% Option shall be based on the number of shares issued or issuable in the relevant prior financing transaction, at an exercise price per share equal to the fair market value of the Company's common stock at the time the Look-Back 5% Option is granted."

2.   Employment Agreement in Full Force and Effect; Entire Understanding.    Except as expressly modified hereby, the Employment Agreement shall remain unchanged and in full force and effect as executed. The Employment Agreement, as amended hereby, contains the entire understanding of and supersedes all prior agreements, written and verbal, with respect to the subject matter hereof and shall not be modified except in writing executed by the parties hereto.

3.   Miscellaneous.    This Amendment (a) shall be governed by, and construed and enforced in accordance with, the laws of the State of North Carolina, without regard to the principles of conflict of law which might otherwise apply, and (b) may be executed in counterparts, each of which shall be deemed an original and together shall constitute one and the same instrument.

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IN WITNESS WHEREOF, Company and Executive have duly executed this Amendment as of the date first above written.

COMPANY:

JAMES RIVER GROUP, INC.

 

 

By: 

/s/ Richard W. Wright
Name: Richard W. Wright
Title: Chairman

 

EXECUTIVE:

/s/ J. Adam Abram
J. Adam Abram

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