Exhibit 10.40
(ALLIED WORD LOGO) [y89629y8962900.gif]
December 1, 2010
[       ]
27 Richmond Road
Pembroke HM 08, Bermuda

Re:    Employment Agreement Amendment

Dear [       ]:
     Reference is made to that certain (i) Amended and Restated Employment
Agreement by and among you, Allied World Assurance Company Holdings, Ltd, a
Bermuda corporation (“Holdings”), [and Allied World Assurance Company, Ltd, a
Bermuda corporation (“AWAC” and together with Holdings, the “Company”)], dated
as of [ ], as further amended (the “Employment Agreement”); and (ii) Benefit
Plan Assumption and General Amendment Agreement, dated as of December 1, 2010,
by and among Allied World Assurance Company Holdings, AG (“Allied World
Switzerland”), Allied World Assurance Company Holdings, Ltd, Allied World
Assurance Company, Ltd, and Newmarket Administrative Services, Inc. (the
“Assumption Agreement”), pursuant to which Allied World Switzerland adopts and
becomes a party to the Employment Agreement in lieu of [Holdings] [the Company].
The Assumption Agreement was entered into in connection with Holdings’
redomestication of its jurisdiction of incorporation from Bermuda to Switzerland
(the “Redomestication”).
     As you are aware, following the Redomestication you will be required to
work part-time in Switzerland. The purpose of this letter is to formally amend
the Employment Agreement to reflect your responsibility to work part-time in
Switzerland, to comply with certain other provisions of Swiss law referred to
below and to provide that [Holdings] [the Company] shall no longer be a party to
the Employment Agreement. Accordingly, the parties hereto hereby agree as
follows:

  1.   You shall be required to spend a minimum of 10% of your annual working
time in Switzerland subject to your receipt of any applicable Swiss work and
residence permits.     2.   The Employment Agreement shall be revised to replace
Holdings [and AWAC] with Allied World Switzerland, as applicable.     3.   You
shall be reimbursed for your reasonable business expenses incurred in carrying
out your duties in Switzerland in accordance with Section 7 of the Employment
Agreement.

 

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  4.   Any applicable contributions for AHV/IV/EO (federal retirement and
survivors’/disability/income replacement insurance), ALV (unemployment
insurance), BVG (occupational retirement, survivors’ and disability pension
plans), UVG (accident insurance) and applicable tax at source, payable by you in
accordance with Swiss law, may be deducted from your gross pay.     5.   By
execution hereof, you and [Holdings] [the Company] each hereby consent, in
satisfaction of the requirements under Section 17 of the Employment Agreement,
to the execution of this letter, and each hereby acknowledges that effective as
of December 1, 2010 Holdings [and AWAC] shall have no continuing obligations to
you under the Employment Agreement.

     All other provisions of the Employment Agreement that are not addressed in
this letter shall remain unchanged and in full force and effect. To confirm your
agreement with this amendment to the Employment Agreement, please execute both
copies of this letter where indicated below and return one executed copy to me
and retain one copy for your files.

          Sincerely,

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
    By:         Name:         Title:         Agreed and accepted as to paragraph
5 above:

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD
    By:         Name:         Title:           [ALLIED WORLD ASSURANCE COMPANY,
LTD
    By:         Name:         Title:   ]     

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          Agreed and accepted as of December 1, 2010:
        [       ]       

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