Exhibit 10.31
EMPLOYMENT AGREEMENT
(As amended and restated effective as of May 1, 2009)
     This Amended and Restated Employment Agreement (“Agreement”) is effective
as of May 1, 2009, by and between Odyssey Re Holdings Corp., a Delaware
Corporation (“Employer”), and Andrew Barnard (“Executive”).
WITNESSETH
     WHEREAS, Executive is the Chief Executive Officer of the group of
reinsurance and insurance companies constituted by Odyssey America Reinsurance
Corporation and its subsidiaries; and
     WHEREAS, Executive entered into the Agreement effective as of June 30,
2005;
     WHEREAS, the parties desire to amend and restate the Agreement as of the
date hereof so as to contain the terms and conditions set forth below and to
govern the employment of Executive in the capacity described in the first
recital above.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:

 

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ARTICLE I
EMPLOYMENT AND DUTIES; COMPENSATION
Section 1:     Duties
     During the term of this Agreement, Executive shall be employed by and shall
serve Employer in the capacity of President and Chief Executive Officer and/or
such other positions as may be mutually agreed upon between Executive and the
Board of Directors of Employer during the term hereof, and shall be employed by
and/or shall serve such subsidiaries of Employer in such capacities as Employer
shall from time to time designate and as are consistent with Executive’s
position as President and Chief Executive Officer of Employer. Executive shall
devote substantially all of his business time to the business and affairs of
Employer and shall use his best efforts, skills, and energy to promote
Employer’s interests.
Section 2:     Term of Employment
      The term of employment of Executive by Employer under the Agreement
commenced as of June 30, 2005 (the “Commencement Date”) and shall continue until
May 1, 2016 (the “Term”). At any time prior to the expiration of the Term,
Employer and Executive may, by mutual written agreement, extend Executive’s
employment under the terms of this Agreement for such additional periods as they
may agree.

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Section 3:     Salary, Benefits and Additional Compensation
     As compensation and consideration for the performance by Executive of his
duties and responsibilities pursuant to this Agreement, Employer agrees to pay,
and/or to cause one or more of its subsidiaries to pay Executive, and Executive
agrees to accept the following amounts and benefits (all Dollar amounts referred
to herein are in United States Dollars):
(a)  Base Salary:  An Annual Base Salary of One Million Dollars ($1,000,000),
pro rated for any calendar year within the Term for which employment does not
extend for the entire calendar year. The Annual Base Salary shall be paid to
Executive in equal bi-weekly installments.
(b)  Bonus Pool:  Executive shall participate to the extent of the percentage
determined by the Board of Directors of Employer in the bonus pool (the “Bonus
Pool”) created with respect to each accident underwriting year, consisting of
that portion of the underwriting profit for such year designated by the Board of
Directors of Employer.
(c)  Restricted Stock Grant:
     (i)  Executive shall receive as of the execution date hereof an award of
that number of restricted shares (the “Restricted Shares”) of Employer,
consisting of its Common Stock, par value $.01 per share, which when multiplied
by the simple average of the closing prices of such common stock on the New York
Stock Exchange on the twenty (20) business days next preceding May 1, 2009,
yields the aggregate sum of Five Million Dollars ($5,000,000). Subject to
subparagraphs (ii) and (iii) below, the foregoing grant shall be subject to the
terms of Employer’s Restricted Share Plan. Executive shall become fully vested
in the shares granted pursuant to the foregoing sentence, and all restrictions
shall lapse, on May 1, 2016.

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     (ii)  An award document evidencing the foregoing Restricted Share grant
(the “Award Document”) shall be provided to Executive by Employer within 30 days
of the date of execution hereof. The Award Document shall provide that (1) upon
Employee’s Termination of Employment as a result of death, disability, reaching
retirement age, Change in Control (as defined in Article II, Section 6 below) or
termination by Employer for reasons other than For Cause (as defined in
Article II, Section 3 below) the restricted period applicable to any Restricted
Shares granted to Executive shall terminate and Executive shall become fully
vested in the Award; and (2) if the stock of Employer at any time during the
restricted period ceases to be publicly traded, then Employee shall have the
option to receive a cash payment, payable by Employer within ten (10) days
following written notice from Executive no later than thirty (30) days following
the delisting of Employer stock from the exchange, equal to the number of shares
of Restricted Stock of Employer held by Executive as of the delisting of the
stock, times the greater of (a) the share price of Employer stock as of the
close of business forty-five (45) trading days prior to its delisting and
(b) the average share price of Employer stock (based on end of business day
values) over the forty-five (45) trading day period prior to delisting. To the
extent the cash payment exceeds the fair market value of the stock at the time
of payment and Executive is a “specified employee” as defined in Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”), the excess amount
shall be paid the earlier of (A) six (6) months following termination of
employment or (B) death. The foregoing subparagraph (2) shall not apply if the
stock of Employer ceases to be publicly traded as a result of Employer having
made a general assignment for the benefit of creditors, been adjudicated as
bankrupt or insolvent, or having filed a voluntary petition in bankruptcy, a
petition or answer seeking an arrangement with

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creditors or to take advantage of any insolvency law or having filed an answer
admitting the material allegations of a petition filed against Employer in
bankruptcy.
     (iii)  Employer will take whatever action necessary, including, without
limitation, amendment of the Odyssey Re Holdings Corp. Restricted Share Plan, to
ensure that the issuance of Restricted Shares by Employer to Executive does not
exceed the maximum number of shares available for such purpose.
(d)  Previously Awarded Restricted Stock:
     (i)  On June 14, 2001, Executive was granted 27,778 Restricted Shares (the
“IPO Award”) of Employer’s common stock in connection with Employer’s initial
public offering. Pursuant to the terms of the grant, the IPO Award was scheduled
to become fully vested on June 14, 2011, at which time all restrictions would
have lapsed on the 27,778 Employer Restricted Shares.
     (ii)  On August 11, 2001, Executive was granted 62,432 Restricted Shares
(the “2001 Award”) of Employer’s common stock pursuant to Employer’s Restricted
Share Plan in consideration for cancelling all rights to 6,500 Restricted Shares
of the 13,000 Restricted Shares of Financial Holdings Limited (“Fairfax”) common
stock that were originally granted to Executive on September 1, 1996 in
connection with his employment by Fairfax (the “1996 Award”). Executive retained
his rights to the remaining 6,500 Fairfax Restricted Shares granted under the
1996 Award. Executive was originally scheduled to become fully vested with
respect to both the 1996 Award and the 2001 Award on September 1, 2006, at which
time all restrictions would have lapsed on the remaining 6,500 Fairfax
Restricted Shares and the 62,432 Employer Restricted Shares.

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     Pursuant to the terms of Executive’s employment agreement with Employer,
effective as of June 30, 2005 (the “2005 Employment Agreement”), (A) the vesting
period applicable to the remaining 6,500 Fairfax Restricted Shares granted under
the 1996 Award was extended from September 1, 2006 until June 30, 2010 and
(B) the vesting period applicable to the 62,432 Employer Restricted Shares was
extended from September 1, 2006 until June 30, 2010.
     (iii)  As consideration for entering into the 2005 Employment Agreement,
Executive was granted 202,135 Restricted Shares (the “2005 Award”) of Employer’s
common stock pursuant to Employer’s Restricted Share Plan. Pursuant to the terms
of the grant, the 2005 Award was originally scheduled to vest with respect to
twenty percent (20%) of the Restricted Shares on June 30, 2006, and on each
anniversary thereafter with respect to an additional twenty percent (20%), such
that on June 30, 2010 all restrictions would have lapsed on the 202,135 Employer
Restricted Shares.
     (iv)  Upon the execution of this Agreement, each of the (A) 27,778
outstanding and unvested Employer Restricted Shares under the IPO Award,
(B) remaining 6,500 outstanding and unvested Fairfax Restricted Shares under the
1996 Award, (C) 62,432 outstanding and unvested Employer Restricted Shares under
the 2001 Award, and (D) remaining 80,854 outstanding and unvested Employer
Restricted Shares under the 2005 Award shall fully vest and all restrictions
shall lapse.
(e)  Additional Benefits:
     During the term of this Agreement, Executive shall be entitled to the
following fringe benefits:

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     (i)  Executive Benefits.  Executive shall be eligible to participate in
such benefits and perquisites as are now generally available or later made
generally available to executive officers of Employer or its subsidiaries.
     (ii)  Vacation.  Executive shall be entitled to vacation time consistent
with his position as President and Chief Executive Officer of Employer.
     (iii)  Life Insurance.  Executive shall be eligible to participate in any
life insurance program available to executive officers of Employer or its
subsidiaries on terms at least as favorable as those generally made available to
such executive officers.
     (iv)  Disability Insurance.  Executive shall be eligible to participate in
any disability insurance program available to executive officers of Employer or
its subsidiaries on terms at least as favorable as those generally made
available to such executive officers.
     (v)  Automobile.  Executive shall be provided with the exclusive use of an
automobile appropriate to his position as President and Chief Executive Officer
of Employer (with all operating costs, such as insurance, maintenance and fuel,
paid for by Employer).
     (vi)  Membership Fees.  Employer shall pay Executive’s membership and usage
fees of the St. Andrews Golf Club (or of a comparable country club of
Executive’s choosing).
     (vii)  Reimbursement for Expenses.  Employer shall reimburse Executive for
reasonable and properly documented out-of-pocket business and/or entertainment
expenses incurred by Executive in connection with his duties under this
Agreement.
     (viii)  Reimbursement of Attorney’s Fees.  Employer shall pay all
reasonable attorney’s fees and disbursements incurred by Executive in drafting
and negotiating this Agreement;

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payment shall be made either to Executive upon submission of paid invoices for
such legal work or directly to the attorney chosen by Executive.
     (ix)  Tax Reimbursement.  Employer shall reimburse Executive for all
federal, state and local income taxes incurred by Executive as a result of the
inclusion in income of any of the benefits provided by Employer to Executive
pursuant to this paragraph (e)(v) and (e)(vi). The determination of such taxes
shall be based upon all applicable state, local and federal taxes (computed at
the highest marginal income tax rate) including any taxes payable pursuant to
Section 4999 of the Internal Revenue Code of 1986, as amended. Employer shall
remit to Executive the amount of such taxes no later than April 15th of the year
following inclusion in income of any of the benefits for which tax reimbursement
is provided herein.
ARTICLE II
TERMINATION OF EMPLOYMENT
Section 1:     Termination Due to Death
     The employment of Executive under this Agreement shall terminate upon
Executive’s death. In the event of Executive’s death during Executive’s
employment hereunder, the estate or other legal representative of Executive
shall be entitled to receive the following:
(a)  Base Salary.  Employer shall pay to Executive’s estate or other legal
representative of Executive, his Base Salary for the period ending three months
following the month in which Executive dies. Such an amount and all other
amounts payable under this Section 1 of Article II

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shall be paid by Employer in a lump sum within thirty (30) days of the date of
death, provided however, that the amounts due with respect to the Bonus Pool
shall be paid when such amounts would ordinarily be paid.
(b)  Payment from Bonus Pool.  Employer shall pay to the estate or other legal
representative of Executive, (i) all amounts accrued in the Bonus Pool by
Executive with respect to years preceding the year in which the death of
Executive occurs and (ii) the pro-rated bonus payable with respect to the year
in which the death of Executive occurs.
(c)  Restricted Stock.  Upon the death of Executive, the restricted period with
respect to all Restricted Stock previously awarded to Executive including,
without limitation, Restricted Stock of Employer awarded pursuant to this
Agreement, shall terminate and Executive’s estate or other legal representative
shall become fully vested in all Restricted Stock previously awarded to
Executive.
Section 2:     Termination by Reason of Disability
     If, during the term of this Agreement, Executive, in the judgment of the
Board of Directors of Employer, has failed to perform his duties under this
Agreement on account of illness or physical or mental incapacity, and such
illness or incapacity continues for a period of more than (i) six
(6) consecutive months or (ii) one hundred eighty three (183) days in any
consecutive three hundred sixty-five (365) day period, Employer shall have the
right to commence process to terminate Executive’s employment under this
Agreement on account of

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disability. Employer shall send written notice to Executive of (i) its intention
to commence such process, (ii) a medical doctor chosen by Employer to make the
determination referred to in the next sentence, and (iii) Executive’s right
within ten (10) days of receipt of the notice to choose a second medical doctor
to make such determination. The purpose of the process shall be to determine
whether Executive is unable on account of illness or physical or mental
incapacity to perform his duties under this Agreement. Executive shall fully
cooperate in this process, including by making himself available for and
consenting to all examinations and tests required by any doctor making the
aforesaid determination. The aforesaid determination shall be made by the
medical doctor chosen by Executive, if he exercises his foregoing right to
choose a doctor, and the medical doctor chosen by Employer. If the determination
is being made by two medical doctors and they cannot agree within fifteen
(15) days of their both being chosen, they shall as soon as reasonably possible
select a third medical doctor to make the determination, who shall make the
determination within fifteen (15) days of being chosen. The determination made
by the foregoing process shall be conclusive. In the event Executive’s
employment is terminated on account of disability, Executive’s rights to
compensation and benefits shall be as follows:
(a)  Base Salary.  Executive shall be paid his Base Salary, less any benefits
paid to him under disability insurance policies maintained by Employer, until
his termination on account of disability.
(b)  Payment from Bonus Pool.  Employer shall pay to Executive, when the same
would ordinarily be paid, (i) all amounts accrued in the Bonus Pool by Executive
with respect to years

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preceding the year in which termination due to disability of Executive occurs
and (ii) the pro-rated bonus payable with respect to the year in which
termination due to the disability of Executive occurs.
(c)  Restricted Stock.  The restricted period with respect to all restricted
stock previously awarded to Executive shall terminate and Executive shall become
fully vested in all Restricted Stock previously awarded to Executive, including,
without limitation, Restricted Stock awarded pursuant to this Agreement.
Section 3:     Termination for Cause
     “Termination for Cause” shall mean termination by Employer of Executive’s
employment by Employer by reason of:
     (i)  a willful failure by Executive in bad faith to substantially perform
his duties with Employer resulting in material harm to Employer; or
     (ii)  Executive’s conviction of a felony involving moral turpitude.
     Executive must be given written notice that Employer intends to terminate
his employment for Cause. Such written notice shall specify the particular act
or failure to act constituting the basis of the intention to so terminate
employment. In the case of a Termination for Cause under clause (i) above,
Executive shall be given the opportunity, within twenty (20) days of the receipt
of such notice, to meet with the Board of Directors of Employer to refute or
explain such act or failure to act. If such act or failure to act is found in
violation of clause (i),

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Executive shall be given ten (10) days after such meeting to correct such act or
failure to act, and upon failure of Executive within such ten (10) day period to
correct such act or failure to act, Executive’s employment by Employer shall be
terminated. In the case of Termination for Cause under clause (ii) above,
Executive’s employment shall be terminated as of the date such notice is given.
     In the event the Board of Directors shall terminate Executive’s employment
for Cause, Executive shall be entitled to receive the following:
(a)  Base Salary.  Within thirty (30) days of the date of Executive’s
Termination for Cause, he shall be paid his Base Salary through the date of
termination of employment.
(b)  Payment from Bonus Pool.  Executive shall forfeit all rights to payments
from the Bonus Pool.
Section 4:     Constructive Termination and Termination by Employer other than
for Cause
     Notwithstanding anything in this Agreement to the contrary, Executive’s
employment hereunder may be terminated by Employer without Cause and Executive
may terminate his employment hereunder in the case of a Constructive Termination
as defined in this section, provided, however, that in the event that
Executive’s employment is so terminated, Executive shall be entitled to receive
the following:

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(a)  Base Salary.  Within thirty (30) days of his termination of employment,
Employer shall pay to Executive a lump sum payment equal to:
     (i)  his Base Salary for the month in which termination occurs, and
     (ii)  Eighty Three Thousand Three Hundred and Thirty Three Dollars
($83,333) times the number of months from the month immediately following the
month in which termination occurs to the end of the Term, or any extension
thereto, inclusive.
(b)  Payment from Bonus Pool.  Employer shall pay to Executive, within thirty
(30) days following termination of employment, (i) all amounts accrued in the
Bonus Pool by Executive with respect to years preceding the year in which
termination of employment of Executive occurs and (ii) the pro-rated bonus
determined under the Bonus Pool with respect to the year in which termination of
employment of Executive occurs.
(c)  Restricted Stock.
     (i)  The restricted period applicable to all Restricted Stock previously
awarded to Executive shall terminate and Executive shall become fully vested in
all Restricted Stock previously awarded to Executive. Executive shall, upon such
termination, have the option to take cash in lieu of Restricted Stock with
respect to all, or any portion, of the Restricted Shares that vest as a result
of this subparagraph based on a share price for such stock which is the greater
of (a) the share price of Employer as of the close of business on the business
day next preceding the date of termination of employment and (b) the share price
ten (10) business days prior to the date determined under paragraph (a) above
(or the closing price of the next preceding

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business day, if such date does not fall on a business day). To the extent the
cash payment exceeds the fair market value of the stock at the time of payment
and Executive is a “specified employee” as defined in Section 409A of the Code,
the excess amount shall be paid the earlier of (A) 6 months following
termination of employment or (B) death.
     (ii)  Executive shall give Employer written notice within ten (10) business
days following termination of employment under this Section 4 specifying the
number of Restricted Shares with respect to which Executive has elected to take
cash in lieu of Restricted Shares. Employer shall within thirty (30) days of
receipt of such notice deliver to Executive a check in payment of the value of
the Restricted Shares as determined in the immediately preceding sentence and
share certificates evidencing the remaining Restricted Shares which have vested
as a result of termination of employment under this Section 4 and with respect
to which Executive has not exercised his election to take cash in lieu of
shares.
     For purposes of this Agreement “Constructive Termination” shall mean the
termination of employment by Executive following written notice to Employer for
any of the following reasons:
     (i)  without Executive’s express written consent, the loss of Executive’s
position described in Article I, Section 1 or a material alteration in
Executive’s position and responsibility as so described;
     (ii)  without Executive’s express written consent, a breach by Employer of
any of its material obligations set forth in this Agreement;

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     (iii)  any failure by a successor to Employer to assume Employer’s
obligations under this Agreement, either expressly or by operation of law, or,
if Employer sells all or substantially all of its assets, or as a result of a
sale by Fairfax of all of Employer or a controlling interest in Employer and in
either case, as a result thereof, any failure by the purchaser to assume
Employer’s obligations under this Agreement; or
     (iv)  without Executive’s express written consent, relocation of
Executive’s work situs to a location that is not in the New York Metropolitan
area.
     Executive must give written notice to Employer within ninety (90) days
following the initial existence of one or more of the reasons listed above if he
intends to terminate his employment because of the occurrence of one of the
circumstances constituting Constructive Termination under this Section 4. Such
written notice shall specify the particular act or failure to act constituting
the basis of Executive’s claim that Constructive Termination has occurred.
Employer shall be given the opportunity, within thirty (30) days of the receipt
of such notice, to fully cure any such act or failure to act.
     Notwithstanding any provision of this Agreement to the contrary, if, at the
time of Executive’s termination of employment with Employer, he is a “specified
employee” as defined in Section 409A of the Code, and one or more of the
payments or benefits received or to be received by Executive pursuant to this
Agreement would constitute deferred compensation subject to Section 409A of the
Code, no such payment or benefit shall be provided under this Agreement until
the earliest of (A) the date which is six (6) months after his “separation from
service” for any reason or (B) death. If any payment is delayed pursuant to the
above sentence,

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the first payment after such delay expires shall include all amounts not
previously paid as a result of such delay. The determination of whether
Section 409A of the Code requires any such delay shall be made by Employer,
after consultation with Executive’s tax counsel. The provisions of this
paragraph shall only apply to the extent required to avoid any person’s
incurrence of any penalty tax or interest under Section 409A of the Code. In
addition, if any provision of this Agreement would cause any person to incur any
penalty tax or interest under Section 409A of the Code, Employer shall reform
such provision to maintain to the maximum extent practicable the original intent
of the applicable provision without violating the provisions of Section 409A of
the Code.
Section 5:     Voluntary Termination
     Executive may terminate his employment under this Agreement voluntarily by
giving two (2) years written notice to Employer of his intention to voluntarily
terminate his employment with Employer. “Voluntary Termination” shall mean
termination by Executive of Executive’s employment by Employer other than
(i) Constructive Termination as described in Section 4, (ii) “Termination Upon a
Change in Control,” as described in Section 6, or (iii) termination by reason of
Executive’s death or disability as described in Sections 1 and 2.
     In the event that Executive’s employment is voluntarily terminated by
Executive, Executive’s rights to compensation and benefits shall be identical to
those to which he would be entitled had he been Terminated for Cause, except
that Employer shall pay to Executive, when the same would ordinarily be paid,
(i) all amounts accrued in the Bonus Pool by Executive with respect to years
preceding the year in which the Voluntary Termination of Executive occurs and

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(ii) the prorated bonus determined under the Bonus Pool with respect to the year
in which termination of Executive occurs.
Section 6:     Termination Upon a Change of Control
     “Termination Upon a Change in Control” shall mean (i) a termination by
Executive, by written notice given to Employer, of Executive’s employment with
Employer following a “Change in Control”, or (ii) the termination of Executive’s
employment by Employer or the successor company (otherwise than for Cause as
provided in Section 3 of this Article), in either case within one year following
a Change in Control.
     In the event that Executive’s employment is Terminated Upon a Change in
Control, Executive’s rights to compensation, Restricted Stock and benefits shall
be identical to those to which he would be entitled had he been terminated by
Employer other than for Cause pursuant to Section 4.
     Notwithstanding any provision of this Agreement to the contrary, if, at the
time of Executive’s termination of employment with Employer, he is a “specified
employee” as defined in Section 409A of the Code, and one or more of the
payments or benefits received or to be received by Executive pursuant to this
Agreement would constitute deferred compensation subject to Section 409A of the
Code, no such payment or benefit shall be provided under this Agreement until
the earliest of (A) the date which is six (6) months after his “separation from
service” for any reason or (B) death. If any payment is delayed pursuant to the
above sentence, the first payment after such delay expires shall include all
amounts not previously paid as a result of such delay. The determination of
whether Section 409A of the Code requires any such delay

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shall be made by Employer, after consultation with Executive’s tax counsel. The
provisions of this paragraph shall only apply to the extent required to avoid
any person’s incurrence of any penalty tax or interest under Section 409A of the
Code. In addition, if any provision of this Agreement would cause any person to
incur any penalty tax or interest under Section 409A of the Code, Employer shall
reform such provision to maintain to the maximum extent practicable the original
intent of the applicable provision without violating the provisions of
Section 409A of the Code.
     “Change in Control” shall mean (i) the time that Employer or its ultimate
parent, Fairfax, first determines that any person and all other persons who
constitute a group (within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934 (“Exchange Act”)) have, at a time when no other person or
group directly or indirectly beneficially owns securities carrying more than
forty-five percent (45%) of the votes attached to all outstanding securities of
Employer or Fairfax, acquired direct or indirect beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act) of outstanding securities of
Employer or Fairfax carrying more than twenty percent (20%) of the votes
attached to all outstanding securities of Employer or Fairfax, unless a majority
of the “Continuing Directors” approves the acquisition not later than ten
(10) business days after Employer or Fairfax makes that determination, or
(ii) the first day on which a majority of the members of Employer’s or Fairfax’s
Board of Directors are not “Continuing Directors”, or (iii) the time that the
Controlling Shareholder of either Employer or Fairfax no longer is the
controlling shareholder, or (iv) the arm’s length sale of a majority interest in
Employer by Fairfax. For purposes of (iii) in the preceding sentence, the
“Controlling Shareholder” of Fairfax is one or more of V. Prem Watsa, his
family, corporations controlled by, or trusts whose

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beneficiaries are, V. Prem Watsa or his family, the estate of V. Prem Watsa
(including the executors and administrators), and any persons to whom shares are
distributed or sold upon the death or by the estate of V. Prem Watsa or his
family.
     “Continuing Directors” shall mean, as of any date of determination, any
member of the Board of Directors of Employer or Fairfax who (i) was a member of
that Board of Directors on the date of this Agreement, (ii) has been a member of
that Board of Directors for the two years immediately preceding such date of
determination, or (iii) was nominated for election or elected to the Board of
Directors by the Controlling Shareholder or with the affirmative vote of all, or
one less than all, of the Continuing Directors who were members of the Board at
the time of such nomination or election.
ARTICLE III
MISCELLANEOUS PROVISIONS
Section 1:     Payment Obligations
     The obligation of Employer to pay Executive the compensation and to make
the arrangements provided herein shall be unconditional, and Executive shall
have no obligation whatsoever to mitigate damages hereunder. If litigation after
a Change in Control (otherwise than in connection with a Termination for Cause
which is ultimately upheld in litigation) shall be brought to enforce or
interpret any provision contained herein, Employer, to the extent permitted by
applicable law, hereby indemnifies Executive for Executive’s reasonable
attorney’s fees and disbursements incurred in such litigation.

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Section 2:     Confidentiality
     Executive agrees that all confidential and proprietary information relating
to the business of Employer shall be kept and treated as confidential both
during and after the term of this Agreement, except as may be permitted in
writing by Employer’s Board of Directors or as such information is within the
public domain or comes within the public domain without any breach of this
Agreement.
Section 3:     Arbitration
     Any dispute or controversy arising under or in connection with this
Agreement that cannot be mutually resolved by the parties hereto shall be
settled exclusively by arbitration in New York, New York under the employment
arbitration rules of the American Arbitration Association before a single
arbitrator of exemplary qualifications and stature, who shall be selected
jointly by Employer and Executive, or, if Employer and Executive cannot agree on
the selection of the arbitrator, shall be selected by the American Arbitration
Association. Judgment may be entered on the arbitrator’s award in any court
having jurisdiction. The parties hereby agree that the arbitrator shall be
empowered to enter an equitable decree mandating specific enforcement of the
terms of this Agreement. The party that prevails in any arbitration hereunder
shall be reimbursed by the other party hereto for any reasonable legal fees and
out of pocket expenses directly attributable to such arbitration, and such other
party shall bear all expenses of the arbitrator.

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Section 4:     Withholdings
     All compensation and benefits to Executive hereunder shall be reduced by
all federal, state, local and other withholdings and similar taxes and payments
required by applicable law.
Section 5:     Parachute Payments
     Notwithstanding anything in this Agreement to the contrary, the amount of
any payment or benefit to be received by Executive pursuant to this Agreement or
otherwise which would be subject to the excise tax imposed by Section 4999 of
the Code shall be reduced (but not below zero) by the amount, if any, necessary
to prevent any part of any such payment or benefit received or to be received by
Executive (such foregoing payments or benefits referred to collectively as the
“Total Payments”), from being subject to such excise tax, but only if and to the
extent such reduction will also result in, after taking into account all
applicable state and Federal taxes (computed at the highest applicable marginal
rate), including any taxes payable pursuant to Section 4999 of the Code, a
greater after-tax benefit to Executive than the after-tax benefit to Executive
of the Total Payments computed without regard to any such reduction. For
purposes of the foregoing, (a) no portion of the Total Payments shall be taken
into account which in the opinion of tax counsel selected by Executive (“Tax
Counsel”) does not constitute a “parachute payment” within the meaning of
Section 280G(b)(2) of the Code; (b) any reduction in payments or benefits
pursuant to this Agreement shall be computed by taking into account, in

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accordance with Section 280G(b)(4) of the Code, that portion of the Total
Payments which is reasonable compensation, within the meaning of
Section 280G(b)(4) of the Code, in the opinion of Tax Counsel; (c) the value of
any non-cash benefits or of any deferred or accelerated payments or benefits
included in the Total Payments shall be determined by a public accounting firm,
selected by Executive, in accordance with the principles of Section 280G(d)(3)
and (4) of the Code and the Treasury Regulations promulgated thereunder; and
(d) in the event of any uncertainty as to whether a reduction in Total Payments
to Executive is required pursuant hereto, Employer shall initially make all
payments otherwise required to be paid to Executive hereunder, and any amounts
so paid which are ultimately determined not to have been payable hereunder
(other than as a loan to Executive), either (x) upon mutual agreement of
Executive and Employer, or (y) upon Tax Counsel furnishing Executive with its
written opinion setting forth the amount of such payments not to have been so
payable (other than as a loan to Executive under this Section 5), or (z) in the
event a portion of the Total Payments shall be determined by a court or an
Internal Revenue Service proceeding to have otherwise been an “excess parachute
payment,” the amount so determined in clause (x), (y) or (z) shall constitute a
loan by Employer to Executive under this Section 5, and Executive shall repay to
Employer, within ten (10) business days after the time of such mutual agreement,
such opinion is so furnished to Executive, or of such determination, as
applicable, the amount of such loan plus interest thereon at the rate provided
in Section 1274(b)(2)(B) of the Code for the period from the date of the initial
payments to Executive to the date of such repayment by Executive. All fees and
expenses of any Tax Counsel or accounting firm selected under this Section 5
shall be borne solely by Employer.

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Section 6:     Indemnification
     In addition to any rights to indemnification to which Executive is entitled
under Employer’s Articles of Incorporation and Bylaws, Employer shall indemnify
Executive at all times during and after the term of this Agreement to the
maximum extent permitted under the Delaware General Corporation Law and any
successor provision thereof and any other applicable corporate law, and shall
pay Executive’s expenses in defending any civil or criminal action, suit or
proceeding in advance of the final disposition of such action, suit or
proceeding and any appeal thereof, to the maximum extent permitted under such
applicable laws.
Employer shall use reasonable efforts to maintain at all times Directors and
Officers Coverage comparable to its existing Directors and Officers Coverage, if
the same can be obtained at a reasonable cost in comparison to the cost of the
then existing coverage, to cover all or a portion of the foregoing liability.
Section 7:     Notices
     Any notices permitted or required under this Agreement shall be deemed
given upon the date of personal delivery, addressed to Employer at:
Odyssey Re Holdings Corp.
   Attn: General Counsel
300 First Stamford Place
Stamford, Connecticut 06902
and addressed to Executive at: the address on file with Employer;
or at any other address as either party may, from time to time, designate by
notice given in compliance with this Section.

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Section 8:     Law Governing
     This Agreement shall be governed by and construed in accordance with the
substantive laws of the State of New York.
Section 9:     Titles and Captions
     All sections titles or captions contained in this Agreement are for
convenience only and shall not be deemed part of the context nor affect the
interpretation of this Agreement.
Section 10:     Entire Agreement
     This Agreement contains the entire understanding between the parties, and
supersedes any prior understandings and agreements between Executive and
Employer and/or any affiliate of Employer, including the Prior Agreement,
respecting the subject matter of this Agreement.
Section 11:     Agreement Binding
     The Agreement shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties hereto.
Section 12:     Attorney Fees
     In the event a suit or action is brought by Executive under this Agreement
to enforce any of its terms, or in any appeal therefrom, it is agreed that
Executive shall be entitled to reasonable attorney’s fees to be fixed by the
trial court and/or appellate court.

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Section 13:     Computation of Time
     In computing any period of time pursuant to this Agreement, the day of the
act, event or default from which the designated period of time begins to run
shall be included, unless it is a Saturday, Sunday or a legal holiday, in which
event the period shall begin to run on the next day which is not a Saturday,
Sunday or legal holiday, and if the period ends on a Saturday, Sunday or legal
holiday, the period shall run until the end of the next day thereafter which is
not a Saturday, Sunday or legal holiday.
Section 14:     Pronouns and Plurals
     All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural as the identity of the person or
persons may require.
Section 15:     Presumption
     This Agreement or any section thereof shall not be construed against any
party due to the fact that said Agreement or any section thereof was drafted by
said party.
Section 16:     Further Action
     The parties hereto shall execute and deliver all documents, provide all
information and take or forbear from all such action as may be necessary or
appropriate to achieve the purposes of this Agreement.

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Section 17:     Parties in Interest
     Nothing herein shall be construed to be to the benefit of any third party,
nor is it intended that any provision shall be for the benefit of any third
party.
Section 18:     Savings Clause
     If any provision of this Agreement, or the application of such provision to
any person or circumstance, shall be held invalid, the remainder of this
Agreement, or the application of such provisions to persons or circumstances
other than those as to which it is held invalid, shall not be affected thereby.
Section 19:     Failure to Enforce and Waiver
     The failure to insist upon strict compliance with any of the terms,
covenants or conditions of this Agreement shall not be deemed a waiver of such
terms, covenants or conditions, and the waiver or relinquishment or any right or
power under this
Agreement at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.
Section 20:     Section 409A Compliance
     (i)  Anything in this Agreement to the contrary notwithstanding, any
reimbursement payable to Executive pursuant to any provisions of this Agreement,
shall be paid no later than the last day of the calendar year following the
calendar year in which the related expense was

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incurred, except to the extent that the right to reimbursement does not provide
for a “deferral of compensation” subject to Section 409A of the Code. No amount
reimbursed during any calendar year shall affect the amounts eligible for
reimbursement in any other calendar year, and the right to reimbursement or
in-kind benefits shall not be subject to liquidation or exchange for another
benefit.
     (ii)  Anything in this Agreement to the contrary notwithstanding, any
payment that is delayed as a result Executive being a “specified employee” as
defined in Section 409A of the Code shall commence earlier in the event of
Executive’s death prior to the six-month anniversary of the date of Executive’s
termination of employment. Whenever a payment under this Agreement specifies a
payment period with reference to a number of days ( e.g., “payment shall be made
within thirty (30) days following the date of termination”), the actual date of
payment within the specified period shall be within the sole discretion of
Employer.
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Date: May 29, 2009

         
 
ODYSSEY RE HOLDINGS CORP.
 
      By:   /s/ V. Prem Watsa       V. PREM WATSA, CHAIRMAN                     
/s/ Andrew Barnard     ANDREW BARNARD               
FAIRFAX FINANCIAL HOLDINGS LIMITED
(AS TO ARTICLE I, SECTION 3(d) ONLY)
 
      By:   /s/ Eric Salsberg       ERIC SALSBERG, VICE PRESIDENT,       
CORPORATE AFFAIRS       

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