EMPLOYMENT AGREEMENT
 
EMPLOYMENT AGREEMENT (this “Agreement”), dated as of July 27, 2011 by and among
Greenlight Capital Re, Ltd. (the “Company”), Greenlight Reinsurance, Ltd. (the
“Subsidiary”, and together with the Company, the “Employer”) and Barton Hedges
(“Executive”).
 
WHEREAS, the Subsidiary previously entered into an amended and restated
employment agreement with Executive dated as of December 30, 2008 (the “Prior
Agreement”) pursuant to which the Executive serves as the President and Chief
Underwriting Officer of the Subsidiary; and
 
WHEREAS, the Employer desires retain the services of Executive as CEO of each of
the Company and the Subsidiary (the “CEO”) as of the August 15, 2011 (the
“Effective Date”) and Executive desires to be employed by the Employer in such
capacity as of the Effective Date; and
 
WHEREAS, the parties hereto desire that this Agreement automatically supersede
the Prior Agreement on August 15, 2011.
 
NOW, THEREFORE, IN CONSIDERATION of the premises and the mutual covenants set
forth below, the parties hereby agree as follows:
 
1. Employment.  The Employer hereby agrees to employ Executive as the CEO, and
Executive hereby accepts such employment, on the terms and conditions
hereinafter set forth.
 
2. Employment Period.  The period of employment of Executive by the Company
under this Agreement (the “Employment Period”) shall commence on the Effective
Date and shall continue until terminated by the Employer or the Executive in
accordance with Section 6 of this Agreement.  Executive’s employment shall at
all times be “at will” and not for a definite duration, and nothing contained
herein shall confer upon Executive any contractual right to continued
employment.
 
3. Position and Duties.  During the Employment Period, Executive shall serve as
CEO and shall report directly to the Board of Directors of the Company (the
“Board”). Executive shall have those powers and duties normally associated with
the position of CEO of entities comparable to the Employer and such other powers
and duties as may be prescribed by the Board; provided that, such other powers
and duties are consistent with Executive’s position as CEO and do not violate
any applicable laws or regulations.  Executive shall perform his duties to the
best of his abilities and shall devote all of his working time, attention and
energies to the performance of his duties for the Employer.  During the
Employment Period, it is anticipated that Executive shall also serve as a member
of the Board for no additional compensation, subject to his continued election
to serve on the Board by the Company’s shareholders.  If requested by the Board,
Executive shall also serve as an officer and/or director of other subsidiaries
or affiliates of the Employer for no additional compensation.
 
4. Place of Performance.  The Employer’s principal place of business is the
Cayman Islands.  Executive shall be required to maintain a residence in the
Cayman Islands as necessary to perform his duties hereunder.  During the
Employment Period, Executive shall comply with all Company policies, as may be
amended from time to time, including, without limitation, conducting the
business affairs of the Employer such that neither entity is deemed to be
engaging in a trade or business within the United States.
 
5. Compensation and Related Matters.
 
(a) Base Salary and Bonus.  During the Employment Period, the Subsidiary shall
pay Executive a base salary at the rate of not less than US $500,000 per year
(“Base Salary”).  Executive’s Base Salary shall be paid in equal installments in
accordance with the Subsidiary’s customary payroll practices.  The Board shall
periodically review Executive’s Base Salary for increase (but not decrease),
consistent with the compensation practices and guidelines of the Subsidiary.  If
Executive’s Base Salary is increased by the Board, such increased Base Salary
shall then constitute the Base Salary for all purposes of this Agreement.  In
addition to Base Salary, during the Employment Period, Executive shall be
eligible for an annual bonus based on pre-established individual and Company
performance metrics established by the Board (the “Bonus”).  Executive shall be
eligible to receive a discretionary Bonus with a target of 100% of Base
Salary.  Any Bonus earned during a calendar year shall be paid in accordance
with the bonus payment provisions of the Company’s applicable compensation plan
(the “Compensation Plan”), as amended from time to time, and shall be subject to
such other terms and conditions as are set forth therein.
 
(b) Expenses.  During the Employment Period, the Subsidiary shall promptly
reimburse Executive for all reasonable out-of-pocket expenses incurred by
Executive in the ordinary course of the Employer’s business and properly
incurred and reported to the Subsidiary in accordance with its expense
reimbursement policies and procedures. Notwithstanding anything herein to the
contrary or otherwise, except to the extent any expense, reimbursement or
in-kind benefit provided pursuant to this Section 5(b) does not constitute a
“deferral of compensation” within the meaning of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) : (i) the amount of expenses
eligible for reimbursement or in-kind benefits provided to Executive during any
calendar year will not affect the amount of expenses eligible for reimbursement
or in-kind benefits provided to Executive in any other calendar year, (ii) the
reimbursements for expenses for which Executive is entitled to be reimbursed
shall be made on or before the last day of the calendar year following the
calendar year in which the applicable expense is incurred and (iii) the right to
payment or reimbursement or in-kind benefits hereunder may not be liquidated or
exchanged for any other benefit.
 
(c) Vacation.  During the Employment Period, Executive shall be entitled to five
(5) weeks of paid vacation per year to be used and accrued in accordance with
the Employer’s policies as they may be established from time to time.  In
addition to vacation, Executive shall be entitled to the number of sick days,
personal days and national holidays per year to which other senior executive
officers of the Employer with similar tenure are entitled under the Employer’s
policies, but in no event less than the minimum days mandated by Cayman Islands
statutory requirements.
 
(d) Welfare and Pension Plans; Tax Preparation. During the Employment Period,
Executive shall be entitled to participate in such employee benefit plans and
insurance programs offered by the Employer (including, without limitation, the
Subsidiary’s statutory pension plan), or which it may adopt from time to time,
for its employees, in accordance with Cayman Islands Laws and regulations from
time to time in force and in accordance with the eligibility requirements for
participation therein.  In addition, during the Employment Period, the
Subsidiary shall promptly reimburse Executive for his reasonable expenses
incurred in having an accountant assist and prepare his annual tax return (such
reimbursements to be made in accordance with Section 5(b) above).
 
(e) Housing Allowance.  During the Employment Period, Executive shall be
entitled to receive a Cayman Islands housing allowance of US $6,000 per month,
payable no later than the end of the next succeeding calendar month after the
month to which the payment relates.  Executive will be responsible for any taxes
due on such allowance.
 
(f) Stock Options.
 
(i) As soon as practicable following the Effective Date, the Company will grant
Executive a stock option (an “Option”) to acquire 100,000 shares of the
Company’s Class A Ordinary Shares, $0.10 par value per share (“Shares”) at an
exercise price per Share equal to the fair market value per Share as of the date
of grant under such terms and conditions as provided for under the Company’s
existing stock incentive plan (the “Plan”) which are not inconsistent with
clauses (ii) and (iii) below.
 
(ii) The Options described herein shall be granted subject to the following
terms and conditions:  (A) the Options shall be granted under and subject to the
Plan; (B) the exercise price per Share subject to the Options shall be equal to
the fair market value per Share as of the date of grant; (C) the Options shall
be vested 25% on the date of grant and as to 25% of the Shares subject thereto
on each of the first three anniversaries of the date of grant; provided, that,
the Options shall cease to vest upon Executive’s termination of employment with
the Employer; (D) the Options shall be exercisable for the ten (10) year period
following the date of grant; provided, that, except as otherwise provided
herein, upon Executive’s termination of employment with the Employer for any
reason, any unvested portion of the Options shall automatically terminate and
the vested portion of the Options shall remain exercisable for 90 days after
Executive’s termination of employment with the Employer; and (E) the Options
shall be evidenced by, and subject to, a stock option agreement whose terms and
conditions are consistent with the terms hereof.
 
(iii) The Options shall provide that upon a termination of employment by the
Employer for Cause (as defined below), the Options (whether or not vested) shall
terminate.  Upon a termination of employment due to Executive’s death or
Disability (as defined below), any unvested portion of the Options shall
terminate and any vested portion shall remain exercisable for the remainder of
its term.  Upon a termination of employment by the Employer without Cause or by
Executive for Good Reason (as defined below), any unvested portion of the
Options shall vest, and the Options (including the portion which becomes vested
pursuant to this clause (iii)) shall remain exercisable for the remainder of
their term.
 
(iv) Subject to Executive's continuing employment with the Employer on the
relevant date of grant, for each year after 2011, on the third Nasdaq trading
day following the Company’s release of earnings results for the quarterly
periods ended on each of June 30, the Company shall grant Executive an
additional Option as of such date with a Black-Scholes value of $500,000.  All
Options granted pursuant to this Section 5(f)(iv) shall be subject to the same
terms and conditions as provided in Section 5(f) (ii) – (iii) above.
 
(g) Equity Compensation. Executive shall be eligible to receive discretionary
long-term incentive equity awards in accordance with Company practice.
 
6. Termination.  Executive’s employment hereunder may be terminated under the
following circumstances:
 
(a) Death.  Executive’s employment hereunder shall terminate upon his death.
 
(b) Disability.  If, as a result of Executive’s incapacity due to physical or
mental illness, Executive shall have been substantially unable to perform his
duties hereunder for an entire period of at least 90 consecutive days or 180
non-consecutive days within any 365-day period, the Employer shall have the
right to terminate Executive’s employment hereunder for “Disability,” and such
termination in and of itself shall not be, nor shall it be deemed to be, a
breach of this Agreement.
 
(c) Cause.  The Employer shall have the right to terminate Executive’s
employment for Cause, and such termination in and of itself shall not be, nor
shall it be deemed to be, a breach of this Agreement.  For purposes of this
Agreement, “Cause” shall mean Executive’s (i) habitual drug or alcohol use which
impairs the ability of Executive to perform his duties hereunder; (ii)
conviction by a court of  competent jurisdiction, or plea of “no contest”  or
guilty to a felony; (iii) engaging in fraud, embezzlement or any other willful
misconduct with respect to the Employer or any of its affiliates (collectively,
the “Group”); (iv) willfully violating the Restrictive Covenants set forth in
Section 9 of this Agreement; (v) willfully failing or refusing to perform his
duties hereunder (other than such failure caused by Executive’s Disability or
while on vacation) after a written demand for performance is delivered to
Executive by the Board which specifically identifies the manner in which the
Board believes that Executive has failed or refused to perform his duties; or
(vi) breach of any material provision of this Agreement or any Group policies
related to conduct which is not cured, if curable, within ten (10) days after
written notice thereof.  The Employer shall have the right to suspend Executive
with pay in order to investigate any event which it reasonably believes may
provide a basis to terminate Executive’s employment for Cause and such action
shall not give Executive Good Reason to terminate his employment.
 
(d) Good Reason.  Executive may terminate his employment with the Employer for
“Good Reason” within thirty (30) days after Executive has knowledge of the
occurrence, without Executive’s written consent, of one of the following events
that has not been cured, if curable, within thirty (30) days after written
notice thereof has been given by Executive to the Employer and such termination
in and of itself shall not be, nor shall it be deemed to be, a breach of this
Agreement.  “Good Reason” shall be limited to the following:  (i) any material
and adverse change to Executive’s title or duties which is inconsistent with his
duties set forth herein, (ii) a reduction of Executive’s Base Salary, (iii) a
failure by the Employer to comply with any other material provisions of this
Agreement, or (iv)  a Change in Control of the Company (as defined below).  For
purposes of this Agreement, the term “Change in Control of the Company” means
the occurrence of one of the following events: (i) any “person” or “group”
becomes the “beneficial owner” (as such terms are used in Rule 13d-3 promulgated
under the U.S. Securities Exchange Act of 1934, as amended, except that a person
or group shall be deemed to have “beneficial ownership” of all securities that
such person or group has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of 51%
or more of the Shares (measured by voting power rather than number of Shares);
provided, however, that an event described in this clause (i) shall not be
deemed to be a Change in Control of the Company if any of following becomes such
a beneficial owner: (A) any tax-qualified, broad-based employee benefit plan
sponsored or maintained by the Employer or any other member of the Group, (B)
any Company underwriter temporarily holding securities pursuant to an offering
of such securities, or (C) any person or group pursuant to a Non-Qualifying
Transaction (as defined in clause (ii)); or (ii) the Company consolidates or
merges with or into any other person or group or sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially all of its
assets and the assets of the Company’s direct and indirect subsidiaries (on a
consolidated basis) to any other person or group, in either one transaction or a
series of related transactions which occur within six months, other than a
consolidation or merger or disposition of assets: (A) of or by the Company into
or to a 100% owned subsidiary of the Company, or (B) pursuant to a transaction
in which the outstanding Shares are changed into or exchanged for securities or
other property with the effect that the beneficial owners of the outstanding
Shares immediately prior to such transaction, beneficially own, directly or
indirectly, at least a majority of the Shares (measured by voting power rather
than number of shares) of the surviving corporation or the person or group to
whom the Company’s assets are transferred immediately following such transaction
(any transaction which satisfies the criteria specified in (A) or (B) above
shall be deemed to be a “Non-Qualifying Transaction”).
 
(e) Without Cause.  The Employer shall have the right to terminate Executive’s
employment hereunder without Cause at any time by providing Executive with a
Notice of Termination and such termination shall not in and of itself be, nor
shall it be deemed to be, a breach of this Agreement.
 
(f) Without Good Reason.  Executive shall have the right to terminate his
employment hereunder without Good Reason by providing the Employer with a Notice
of Termination at least one hundred and eighty (180) days prior to such
termination, and such termination shall not in and of itself be, nor shall it be
deemed to be, a breach of this Agreement.
 
7. Termination Procedure.
 
(a) Notice of Termination.  Any termination of Executive’s employment by the
Employer or by Executive (other than termination pursuant to Section 6(a)) shall
be communicated by written Notice of Termination to the other party hereto in
accordance with Section 13 of this Agreement.  For purposes of this Agreement, a
“Notice of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision so indicated.
 
(b) Date of Termination.  “Date of Termination” shall mean (i) if Executive’s
employment is terminated by his death, the date of his death, (ii) if
Executive’s employment is terminated pursuant to Section 6(b), thirty (30) days
after Notice of Termination (provided that Executive shall not have returned to
the substantial performance of his duties on a full-time basis during such
thirty (30) day period), (iii)  if Executive’s employment is terminated pursuant
to Section 6(f), one hundred and eighty (180) days after Notice of Termination
and (iv) if Executive’s employment is terminated for any other reason, the date
on which a Notice of Termination is given or any later date that is within
seventy-five (75) days after the giving of such notice as set forth in such
Notice of Termination; provided, that, if applicable, the Notice of Termination
shall not be effective until the cure period has expired and such event or
events leading to such termination have not yet been cured.
 
8. Compensation Upon Termination.  In the event Executive’s employment is
terminated other than due to the Executive’s death, the Subsidiary shall provide
Executive with the payments set forth below and shall not be required to provide
any other payments or benefits to Executive upon such termination.  Executive
acknowledges and agrees that the payments set forth in this Section 8 constitute
liquidated damages for termination of his employment and that prior to receiving
any such payments under this Section 8, other than the Accrued Obligations (as
defined below), and as a material condition thereof, Executive shall, if
requested by the Employer, sign and agree to be bound by a general release of
claims (a “Release”) against the Employer and its affiliates related to
Executive’s employment (and termination of employment) with the Employer in such
form as the Board reasonably determines; provided, that, if Executive should
fail to execute such Release within 45 days following the later of (i)
Executive’s Date of Termination or (ii) the date Executive actually receives an
execution copy of such Release (which shall be delivered to Executive within ten
(10) business days following his Date of Termination and if not timely
delivered, this release condition will be deemed waived by the Company with
respect to payments under this Section 8), the Subsidiary shall not have any
obligations to provide the payments contemplated under this Section 8; provided
further, that such release shall not limit, release or waive Executive’s right
to indemnification as provided for under Section 11 of this Agreement or
otherwise by law or contract and shall not impose additional restrictive
covenants of the type provided for under Section 9 of this Agreement.  Upon
Executive’s termination of employment for any reason, upon the request of the
Board, he shall resign any membership or positions that he then holds with the
Employer or any of its affiliates.
 
(a) Termination By the Employer without Cause or By Executive for Good
Reason.  If Executive’s employment is terminated by the Employer without Cause
or by Executive for Good Reason:
 
(i) the Subsidiary shall pay to Executive: (A) his (1) accrued, but unpaid Base
Salary earned through the Date of Termination and any accrued, but unused
vacation pay through the Date of Termination payable as soon as practicable
following such termination, but in no event later than two and one half months
following the Date of Termination, and (2) earned, but unpaid Bonus earned under
the terms of the Compensation Plan for years prior to the year in which the Date
of Termination occurs payable in accordance with the terms of such plan
(collectively, the “Accrued Obligations”); (B) the target Bonus Executive would
have earned for the year of termination assuming targets had been achieved,
pro-rated based on the number of days Executive was employed by the Employer
during the year over the number of days in such year (the “Pro-Rated Bonus”)
payable as soon as practicable following such termination, but in no event later
than two and one half months following the Date of Termination; and
 
(ii) commencing on the Severance Payment Date (as defined below) and provided
Executive does not breach Section 9 of this Agreement following his termination
in which case all payments under this clause (ii) shall cease, the Subsidiary
pay to Executive an amount equal to the sum of his annual rate of Base Salary
and target Bonus (assuming targets had been achieved) payable over twelve (12)
months in substantially equal monthly installments (the “Severance
Payment”).  For purposes of this Agreement, the “Severance Payment Date” shall
mean the 60th day following the  Date of Termination.  Notwithstanding the
foregoing, if the Board (or its delegate) determines in its discretion that
severance payments due under this Section 8(a)(ii) are “nonqualified deferred
compensation” subject to Section 409A of the Code and that Executive is a
“specified employee” as defined in Section 409A(a)(2)(B)(i) of the Code and the
regulations and other guidance issued thereunder, then such severance payments
shall commence on the first payroll date following the six month anniversary of
the Date of Termination (the “Specified Employee Severance Payment Date”) (with
the first such payment being a lump sum equal to the aggregate severance
payments Executive would have received during the prior six-month period if no
such delay had been imposed).  In no event will the last installment payment be
made later than December 31 of the year following the year in which such
severance amounts are no longer subject to a substantial risk of forfeiture
(within the meaning of Section 457A of the Code).  For purposes of this
Agreement, whether Executive is a “specified employee” will be determined in
accordance with the written procedures adopted by the Board which are
incorporated by reference herein; and
 
(iii) the Subsidiary shall provide Executive, his spouse and his dependents with
the health insurance benefits that they were receiving immediately prior to the
Date of Termination (the “Continued Benefits”), for one year following the Date
of Termination; provided, that, if the Subsidiary  is unable to continue the
health insurance benefits following the Date of Termination, the Subsidiary
shall pay Executive the cost of similar health insurance benefits, not to exceed
the cost the Subsidiary would incur if Executive had continued to remain in the
Subsidiary’s health plans, such payments to be made no later than the one year
anniversary of the Date of Termination;
 
(iv) the Subsidiary shall promptly reimburse Executive pursuant to Section 5 for
reasonable expenses incurred, but not paid prior to such termination of
employment; and
 
(v) Executive shall be entitled to any other rights, compensation and/or
benefits as may be due to Executive in accordance with the terms and provisions
of any agreements, plans or programs of the Employer.
 
(b) Termination By the Employer for Cause or By Executive Without Good
Reason.  If Executive’s employment is terminated by the Employer for Cause or by
Executive (other than for Good Reason):
 
(i) the Subsidiary shall pay Executive, in accordance with the relevant payment
provisions set forth in Section 8(a)(i), the Accrued Obligations;
 
(ii) the Subsidiary shall promptly reimburse Executive pursuant to Section 5 for
reasonable expenses incurred, but not paid prior to such termination of
employment; and
 
(iii) Executive shall be entitled to any other rights, compensation and/or
benefits as may be due to Executive in accordance with the terms and provisions
of any agreements, plans or programs of the Employer.
 
(c) Disability.  During any period that Executive fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness
(“Disability Period”), Executive shall continue to receive his full compensation
and benefits under this Agreement until his employment is terminated pursuant to
Section 6(b), the cash portion of which shall be off-set, on a dollar for dollar
basis, by any insurance or social security payments made to Executive relating
to such disability.  In the event Executive’s employment is terminated for
Disability pursuant to Section 6(b):
 
(i) the Subsidiary shall pay to Executive as soon as practicable following such
termination, the Accrued Obligations and the Pro-Rated Bonus, in accordance with
the relevant payment provisions set forth in Section 8(a)(i); and
 
(ii) commencing on the Severance Payment Date, the Subsidiary shall continue to
pay Executive, in monthly installments, his annual rate of Base Salary for the
lesser of (A) one year following the Date of Termination or (B) until such time
as any Employer long-term disability benefit plan becomes available to
Executive.  Notwithstanding the foregoing, if the Board (or its delegate)
determines in its discretion that payments due under this Section 8(c)(ii) are
“nonqualified deferred compensation” subject to Section 409A of the Code and
that Executive is a “specified employee” as defined in Section 409A(a)(2)(B)(i)
of the Code and the regulations and other guidance issued thereunder, then such
payments shall commence on the Specified Employee Severance Payment Date (with
the first such payment being a lump sum equal to the aggregate severance
payments Executive would have received during the prior six-month period if no
such delay had been imposed).  In no event will the last installment payment be
made later than December 31 of the year following the year in which such
severance amounts are no longer subject to a substantial risk of forfeiture
(within the meaning of Section 457A of the Code); and
 
(iii) the Subsidiary shall provide Executive, his spouse and his dependents with
the Continued Benefits for the lesser of (A) one year following the Date of
Termination or (B) until such time as any Employer long-term disability benefit
plan becomes available to Executive; provided, that, if the Subsidiary  is
unable to continue the health insurance benefits following the Date of
Termination, the Subsidiary shall pay Executive the cost of similar health
insurance benefits, not to exceed the cost the Subsidiary would incur if
Executive had continued to remain in the Subsidiary’s health plans, such
payments to be made no later than the one year anniversary of the Date of
Termination; and
 
(iv) the Subsidiary shall promptly reimburse Executive pursuant to Section 5 for
reasonable expenses incurred, but not paid prior to such termination of
employment; and
 
(v) Executive shall be entitled to any other rights, compensation and/or
benefits as may be due to Executive in accordance with the terms and provisions
of any agreements, plans or programs of the Employer.
 
(d) Death.  If Executive’s employment is terminated by his death:
 
(i) the Subsidiary shall pay to Executive’s beneficiary, legal representatives
or estate, as the case may be, the Accrued Obligations and Pro-Rated Bonus, in
accordance with the relevant payment provisions set forth in Section 8(a)(i);
and
 
(ii) the Subsidiary shall promptly reimburse Executive’s beneficiary, legal
representatives, or estate, as the case may be, pursuant to Section 5 for
reasonable expenses incurred, but not paid prior to such termination of
employment; and
 
(iii) Executive’s spouse and dependents shall be entitled to continue receiving
health insurance benefits that they were receiving as of the Date of Termination
for one (1) year following Executive’s death; provided, that, if the Subsidiary
is unable to continue the health insurance benefits following the Date of
Termination, the Subsidiary shall pay Executive’s spouse and dependents the cost
of similar health insurance benefits, not to exceed the cost the Company would
incur if Executive had continued to remain in the Subsidiary’s health plans,
such payments to be made no later than the one year anniversary of the Date of
Termination; and
 
(iv) Executive’s beneficiary, legal representatives or estate, as the case may
be, shall be entitled to any other rights, compensation and benefits as may be
due to any such persons or estate in accordance with the terms and provisions of
any agreements, plans or programs of the Employer.
 
9. Restrictive Covenants.
 
(a) Acknowledgments.  Executive acknowledges that:  (i) as a result of
Executive’s employment by the Employer, Executive has obtained and will obtain
Confidential Information (as defined below); (ii) the Confidential Information
has been developed and created by the Group at substantial expense and the
Confidential Information constitutes valuable proprietary assets; (iii) the
Group will suffer substantial damage and irreparable harm which will be
difficult to compute if, during the Employment Period and thereafter, Executive
should enter a Competitive Business (as defined herein) in violation of the
provisions of this Agreement; (iv) the nature of the Group’s business is such
that it could be conducted anywhere in the world and that it is not limited to a
geographic scope or region; (v) the Group will suffer substantial damage which
will be difficult to compute if, during the Employment Period or thereafter,
Executive should solicit or interfere with the Group’s employees, clients or
customers or should divulge Confidential Information relating to the business of
the Group; (vi) the provisions of this Agreement are reasonable and necessary
for the protection of the business of the Group; (vii) the Employer would not
have hired or continued to employ Executive and the Company would not have
granted the Options unless he agreed to be bound by the terms hereof; and (viii)
the provisions of this Agreement will not preclude Executive from other gainful
employment.  “Competitive Business” as used in this Agreement shall mean any
business which competes, directly or indirectly, with any aspect of the Group’s
business.  “Confidential Information” as used in this Agreement shall mean any
and all confidential and/or proprietary knowledge, data, or information of the
Group including, without limitation, any: (A) trade secrets, drawings,
inventions, methodologies, mask works, ideas, processes, formulas, source and
object codes, data, programs, software source documents, works of authorship,
know-how, improvements, discoveries, developments, designs and techniques, and
all other work product of the Group, whether or not patentable or registrable
under trademark, copyright, patent or similar laws; (B) information regarding
plans for research, development, new service offerings and/or products,
marketing, advertising and selling, distribution, business plans, business
forecasts, budgets and unpublished financial statements, licenses, prices and
costs, suppliers, customers or distribution arrangements; (C) any information
regarding the skills and compensation of employees, suppliers, agents, and/or
independent contractors of the Group; (D) concepts and ideas relating to the
development and distribution of content in any medium or to the current, future
and proposed products or services of the Group; (E) information about the
Group’s investment program, trading methodology, or portfolio holdings; or (F)
any other information, data or the like that is labeled confidential or orally
disclosed to Executive as confidential.
 
(b) Confidentiality.  In consideration of the benefits provided for in this
Agreement, Executive agrees not to, at any time, either during the Employment
Period or thereafter, divulge, use, publish or in any other manner reveal,
directly or indirectly, to any person, firm, corporation or any other form of
business organization or arrangement and keep in the strictest confidence any
Confidential Information, except (i) as may have been disclosed by the Executive
in the good faith performance of his duties hereunder, (ii) with the Employer’s
express written consent, (iii) to the extent that any such information is in or
becomes in the public domain other than as a result of Executive’s breach of any
of his obligations hereunder, or (iv) where required to be disclosed by court
order, subpoena or other government process and in such event, Executive shall
cooperate with the Employer in attempting to keep such information
confidential.  Upon the request of the Employer, Executive agrees to promptly
deliver to the Employer the originals and all copies, in whatever medium, of all
such Confidential Information.
 
(c) Non-Compete.  In consideration of the benefits provided for in this
Agreement, Executive covenants and agrees that during the Employment Period and
for a period of six (6) months following the termination of his employment for
whatever reason, or following the date of cessation of the last violation of
this Agreement, or from the date of entry by a court of competent jurisdiction
of a final, unappealable judgment enforcing this covenant, whichever of the
foregoing is last to occur, he will not, for himself, or in conjunction with any
other person, firm, partnership, corporation or other form of business
organization or arrangement (whether as a shareholder, partner, member,
principal, agent, lender, director, officer, manager, trustee, representative,
employee or consultant), directly or indirectly, be employed by, provide
services to, in any way be connected, associated or have any interest in, or
give advice or consultation to any Competitive Business.
 
(d) Non-Solicitation of Employees. In consideration of the benefits provided for
in this Agreement, Executive covenants and agrees that during the Employment
Period and for a period of one (1) year thereafter, Executive shall not, without
the prior written permission of the Employer, (i) directly or indirectly
solicit, employ or retain, or have or cause any other person or entity to
solicit, employ or retain, any person who is employed or is providing services
to the Group at the time of his termination of employment or was or is providing
such services within the twelve (12) month period before or after his
termination of employment or (ii) request or cause any employee of the Group to
breach or threaten to breach any terms of said employee’s agreements with the
Group or to terminate his employment with the Group.
 
(e) Non-Solicitation of Clients and Customers.  In consideration of the benefits
provided for in this Agreement, Executive covenants and agrees that during the
Employment Period and for a period of one (1) year thereafter, he will not, for
himself, or in conjunction with any other person, firm, partnership, corporation
or other form of business organization or arrangement (whether as a shareholder,
partner, member, lender, principal, agent, director, officer, manager, trustee,
representative, employee or consultant), directly or indirectly:  (i) solicit or
accept any business that is directly related to the business of the Group from
any person or entity who, at the time of, or at the time during the twenty-four
(24) month period preceding, termination was an existing or prospective customer
or client of the Group; (ii) request or cause any of the Group’s clients or
customers to cancel or terminate any business relationship with the Group
involving services or activities which were directly or indirectly the
responsibility of Executive during his employment or (iii) pursue any Group
project known to Executive upon termination of his employment that the Group is
actively pursuing (or was actively pursuing within six months of termination)
while the Group is (or is contemplating) actively pursuing such project.
 
(f) Post-Employment Property. The parties agree that any work of authorship,
invention, design, discovery, development, technique, improvement, source code,
hardware, device, data, apparatus, practice, process, method or other work
product whatever (whether patentable or subject to copyright, or not, and
hereinafter collectively called “discovery”) related to the business of the
Group that Executive, either solely or in collaboration with others, has made or
may make, discover, invent, develop, perfect, or reduce to practice during the
Employment Period, whether or not during regular business hours and created,
conceived or prepared on the Group’s premises or otherwise shall be the sole and
complete property of the Group.  More particularly, and without limiting the
foregoing, Executive agrees that all of the foregoing and any (i) inventions
(whether patentable or not, and without regard to whether any patent therefor is
ever sought), (ii) marks, names, or logos (whether or not registrable as trade
or service marks, and without regard to whether registration therefor is ever
sought), (iii) works of authorship (without regard to whether any claim of
copyright therein is ever registered), and (iv) trade secrets, ideas, and
concepts ((i) - (iv) collectively, “Intellectual Property Products”) created,
conceived, or prepared on the Group’s premises or otherwise, whether or not
during normal business hours, shall perpetually and throughout the world be the
exclusive property of the Group, as shall all tangible media (including, but not
limited to, papers, computer media of all types, and models) in which such
Intellectual Property Products shall be recorded or otherwise fixed.  Executive
further agrees promptly to disclose in writing and deliver to the Employer all
Intellectual Property Products created during his engagement by the Employer,
whether or not during normal business hours.  Executive agrees that all works of
authorship created by Executive during his engagement by the Employer shall be
works made for hire of which the Group is the author and owner of copyright. To
the extent that any competent decision-making authority should ever determine
that any work of authorship created by Executive during his engagement by the
Employer is not a work made for hire, Executive hereby assigns all right, title
and interest in the copyright therein, in perpetuity and throughout the world,
to the applicable Group entity.  To the extent that this Agreement does not
otherwise serve to grant or otherwise vest in the Group all rights in any
Intellectual Property Product created by Executive during his engagement by the
Employer, Executive hereby assigns all right, title and interest therein, in
perpetuity and throughout the world, to the Employer.  Executive agrees to
execute, immediately upon the Employer’s reasonable request and without charge,
any further assignments, applications, conveyances or other instruments, at any
time after execution of this Agreement, whether or not Executive is engaged by
the Employer at the time such request is made, in order to permit the Group
and/or its respective assigns to protect, perfect, register, record, maintain,
or enhance their rights in any Intellectual Property Product; provided, that,
the Employer shall bear the cost of any such assignments, applications or
consequences.   Upon termination of Executive’s employment with the Employer for
any reason whatsoever, and at any earlier time the Employer so requests,
Executive will immediately deliver to the custody of the person designated by
the Employer all originals and copies of any documents and other property of the
Employer in Executive’s possession, under Executive’s control or to which he may
have access.
 
(g) Non-Disparagement. Executive acknowledges and agrees that he will not defame
or publicly criticize the services, business, integrity, veracity or personal or
professional reputation of the Group and its respective officers, directors,
partners, executives or agents thereof in either a professional or personal
manner at any time during or following the Employment Period.
 
(h) Enforcement.  If Executive commits a breach, or threatens to commit a
breach, of any of the provisions of this Section 9, the Employer shall have the
right and remedy to have the provisions specifically enforced by any court
having jurisdiction, it being acknowledged and agreed by Executive that the
services being rendered hereunder to the Employer are of a special, unique and
extraordinary character and that any such breach or threatened breach will cause
irreparable injury to the Group and that money damages will not provide an
adequate remedy to the Group.  Such right and remedy shall be in addition to,
and not in lieu of, any other rights and remedies available to the Employer at
law or in equity.  Accordingly, Executive consents to the issuance of an
injunction, whether preliminary or permanent, consistent with the terms of this
Agreement.  In addition, the Employer shall have the right to cease making any
payments or provide any benefits to Executive under this Agreement in the event
he breaches any of the provisions hereof (and such action shall not be
considered a breach under the Agreement).
 
(i) Blue Pencil.  If, at any time, the provisions of this Section 9 shall be
determined to be invalid or unenforceable under any applicable law, by reason of
being vague or unreasonable as to area, duration or scope of activity, this
Agreement shall be considered divisible and shall become and be immediately
amended to only such area, duration and scope of activity as shall be determined
to be reasonable and enforceable by the court or other body having jurisdiction
over the matter and Executive and the Employer agree that this Agreement as so
amended shall be valid and binding as though any invalid or unenforceable
provision had not been included herein.
 
(j) EXECUTIVE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS SECTION 9 AND HAS HAD
THE OPPORTUNITY TO REVIEW ITS PROVISIONS WITH ANY ADVISORS AS HE CONSIDERED
NECESSARY AND THAT EXECUTIVE UNDERSTANDS THIS AGREEMENT’S CONTENTS AND SIGNIFIES
SUCH UNDERSTANDING AND AGREEMENT BY SIGNING BELOW.
 
10. Resolution of Differences Over Breaches of Agreement.  The parties shall use
good faith efforts to resolve any controversy or claim arising out of, or
relating to this Agreement or the breach thereof, first in accordance with the
Employer’s internal review procedures, except that this requirement shall not
apply to any claim or dispute under or relating to Section 9 of this
Agreement.  If despite their good faith efforts, the parties are unable to
resolve such controversy or claim through the Employer’s internal review
procedures, then such controversy or claim shall be resolved by binding
arbitration for resolution in New York, New York in accordance with the rules
and procedures of the Employment Dispute Resolution Rules of the American
Arbitration Association then in effect.  The decision of the arbitrator shall be
final and binding on both parties, and any court of competent jurisdiction may
enter judgment upon the award.  Each party shall pay its own expenses, including
legal fees, in such dispute and shall split the cost of the arbitrator and the
arbitration proceedings.
 
11. Indemnification.  The Employer agrees that if Executive is made a party or
threatened to be made a party to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that Executive
is or was a director or officer of the Employer or any other entity within the
Group or is or was serving at the request of the Employer or any other member of
the Group as a director, officer, member, employee or agent of another
corporation or a partnership, joint venture, trust or other enterprise (each
such event, an “Action”), Executive shall be indemnified and held harmless by
the Employer to the fullest extent permitted by applicable law and authorized by
the Company’s or the Subsidiary’s by-laws and/or charter, as the same exists or
may hereafter be amended, against all expenses incurred or suffered by Executive
in connection therewith, except for willful misconduct or any acts (or
omissions) of gross negligence by Executive.
 
12. Successors; Binding Agreement.  The rights and benefits of Executive
hereunder shall not be assignable, whether by voluntary or involuntary
assignment or transfer by Executive.  This Agreement shall be binding upon, and
inure to the benefit of, the successors and assigns of the Employer, and the
heirs, executors and administrators of Executive, and shall be assignable by the
Employer to any entity acquiring substantially all of the assets of the Company
and/or the Subsidiary, whether by merger, consolidation, sale of assets or
similar transactions.
 
13. Notice.  For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered either personally or by overnight,
certified or registered mail, return receipt requested, postage prepaid,
addressed, in the case of Executive, to the last address on file with the
Employer and if to the Employer, to its executive offices or to such other
address as any party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.
 
14. Governing Law.  This Agreement is governed by, and is to be construed and
enforced in accordance with, the laws of the State of New York without regard to
principles of conflicts of laws.  If, under such law, any portion of this
Agreement is at any time deemed to be in conflict with any applicable statute,
rule, regulation or ordinance, such portion shall be deemed to be modified or
altered to conform thereto or, if that is not possible, to be omitted from this
Agreement, and the invalidity of any such portion shall not affect the force,
effect and validity of the remaining portion hereof.
 
15. Amendment.  No provisions of this Agreement may be amended, modified, or
waived unless such amendment or modification has been approved by the Board and
is agreed to in a writing signed by Executive and a member of the Board
(excluding Executive or any other member of the Board who is also an employee of
the Employer), and such waiver is set forth in writing and signed by the party
to be charged.  No waiver by either party hereto at any time of any breach by
the other party hereto of any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
 
16. Survival.  The respective obligations of, and benefits afforded to,
Executive and the Employer as provided in Section 9 and Section 11 of this
Agreement shall survive the termination of this Agreement.
 
17. No Conflict of Interest.  During the Employment Period, Executive shall not,
directly or indirectly, render service, or undertake any employment or
consulting agreement with another entity without the express written consent of
the Board.
 
18. Counterparts.  This Agreement may be executed in two or more-counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
 
19. Entire Agreement.  This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto in respect of such subject matter.  Any
prior agreement of the parties hereto in respect of the subject matter contained
herein, including, without limitation, the Prior Agreement, is hereby terminated
and canceled as of the Effective Date.
 
20. Section Headings.  The section headings in this Agreement are for
convenience of reference only, and they form no part of this Agreement and shall
not affect its interpretation.
 
21. Withholding.  All payments hereunder shall be subject to any required
withholding of Federal, state and local taxes pursuant to any applicable law or
regulation.
 
22. Representation.  Executive represents and warrants to the Employer, and
Executive acknowledges that the Employer has relied on such representations and
warranties in employing Executive, that neither Executive’s duties as an
employee of the Employer nor his performance of this Agreement will breach any
other agreement to which Executive is a party, including without limitation, any
agreement limiting the use or disclosure of any information acquired by
Executive prior to his employment by the Employer.  In the course of
performing  Executive’s work for the Employer, Executive will not disclose or
make use of any information, documents or materials that Executive is under any
obligation to any other party to maintain in confidence.  In addition, Executive
represents and warrants and acknowledges that the Employer has relied on such
representations and warranties in employing Executive, that he has not entered
into, and will not enter into, any agreement, either oral or written, in
conflict herewith.  If it is determined that Executive is in breach or has
breached any of the representations set forth herein, the Employer shall have
the right to terminate Executive’s employment for Cause.
 
23. Section 409A of the Code.
 
(a) It is the intent of the parties to this Agreement that no payments under
this Agreement be subject to the additional tax on deferred compensation imposed
by Section 409A of the Code.  To the extent that the parties determine that
Executive would be subject to the additional 20% tax imposed on certain deferred
compensation arrangements pursuant to Section 409A of the Code as a result of
any provision of this Agreement, then the applicable provisions of Code Section
409A shall supersede such provision herein and such provision shall be deemed
amended in the manner that, in the parties’ judgment, fulfills the intent of the
parties and avoids application of such additional tax, and the parties hereby
agree to promptly execute any amendment reasonably necessary to implement this
Section 23. Notwithstanding the foregoing, the Employer does not guarantee that
any payment hereunder complies with or is exempt from Section 409A of the Code,
and neither the Employer, nor its executives, directors, officers, or affiliates
shall have any liability with respect to any failure of any payments or benefits
herein to comply with or be exempt from Section 409A of the Code. 
 
(b) Except as otherwise specifically provided, amounts payable under this
Agreement, other than those expressly payable on a deferred or installment
basis, will be paid as promptly as practicable after earned or vested and, in
any event, within two and one-half (2½) months after the end of the first
calendar year in which such amounts are no longer subject to a substantial risk
of forfeiture, as such term is defined in Section 409A of the Code.
 
(c) Each payment made under this Agreement will be treated as a separate payment
for purposes of Section 409A of the Code and the right to a series of
installment payments under this Agreement is to be treated as a right to a
series of separate payments.
 
(d) To the extent required by Section 409A of the Code, “termination of
employment” (or any similar terms) shall mean “separation from service” (as
defined in Treasury Regulations Section 1.409A-1(h) and the default presumptions
thereof).
 
(e) With regard to any provision herein that provides for reimbursement of costs
and expenses or in-kind benefits, except as permitted by Section 409A of the
Code, (i) the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit, (ii) the amount of expenses
eligible for reimbursement, or in-kind benefits, provided during any taxable
year shall not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other taxable year, and (iii) such payments
shall be made on or before the last day of Employee’s taxable year following the
taxable year in which the expense was incurred.
 
(f) In no event will Employee be permitted to elect the year of payment with
respect to any compensation payable hereunder.
 
24. Review by Counsel.  Executive represents and warrants that this Agreement is
the result of full and otherwise fair faith bargaining over its terms following
a full and otherwise fair opportunity to have legal counsel for Executive review
this Agreement and to verify that the terms and provisions of this Agreement are
reasonable and enforceable.  Executive acknowledges that he has read and
understands the foregoing provisions and that such provisions are reasonable and
enforceable.  This Agreement has been jointly drafted by both parties.
 
[SIGNATURE PAGE FOLLOWS]

 
 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.
 

GREENLIGHT CAPITAL RE, LTD.

By:    /s/ Ian M Isaacs    
                                                            
Name: Ian M. Isaacs
Title: Director

GREENLIGHT REINSURANCE, LTD.

By:   /s/ Ian M
Isaacs                                                                                                                              
Name: Ian M. Isaacs
Title: Director

/s/ Barton Hedges    
    Barton Hedges

 

 
 
 

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