Form of Restricted Share Agreement

THIS RESTRICTED SHARE AGREEMENT (this “Agreement”) is made by and between
[                ] (“Grantee”) and Endurance Specialty Holdings Ltd., an
exempted company organized under the laws of Bermuda (the “Company”), as of
[       ] [   ], 2007

WHEREAS, Grantee is currently an [employee/executive/director] of the Company or
a subsidiary of the Company, and the Company desires to increase the incentive
of the Grantee to exert his or her utmost efforts to improve the business and
increase the assets of the Company; and

NOW, THEREFORE, in consideration of the Grantee’s services to the Company and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

1. Grant of Restricted Stock. Company hereby grants to Grantee [        ] shares
(the “Restricted Shares”) of the Company’s ordinary shares, par value $0.01 (the
“Ordinary Shares”), pursuant to and subject to the terms and provisions of the
Company’s 2007 Equity Plan (the “Plan”) and this Agreement.

2. Incorporation by Reference, Etc. The provisions of the Plan are hereby
incorporated herein by reference. Except as otherwise expressly set forth
herein, this Agreement shall be construed in accordance with the provisions of
the Plan and any capitalized terms not otherwise defined in this Agreement shall
have the definitions set forth in the Plan. The Administrator shall have final
authority to interpret and construe the Plan and this Agreement and to make any
and all determinations thereunder, and its decision shall be binding and
conclusive upon the Grantee and his/her legal representative in respect of any
questions arising under the Plan or this Agreement. No amendment or termination
of the Plan may, without the prior written consent of the Grantee, adversely
affect the rights of the Grantee under this Agreement.

3. Escrow of Restricted Shares. To insure the availability for delivery of the
Grantee’s Restricted Shares, the Grantee hereby appoints the Secretary of the
Company, or any other person designated by the Administrator as escrow agent, as
its attorney-in-fact to assign and transfer unto the Company such Restricted
Shares, if any, forfeited by the Grantee pursuant to Section 6 below and shall,
upon execution of this Agreement, deliver and deposit with the Secretary of the
Company, or such other person designated by the Company, the Restricted Shares,
together with the stock assignment duly endorsed in blank, attached hereto as
Exhibit A, whether the Restricted Shares are held in certificated form or in
book entry.

The Restricted Shares and stock assignment shall be held by the Secretary in
escrow, pursuant to the Joint Escrow Instructions of the Company and the Grantee
attached hereto as Exhibit B, until the Restricted Period (as defined below) has
lapsed with respect to the Restricted Shares, or until such time as this
Agreement no longer is in

 

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effect. Upon such time as the Restricted Period has lapsed pursuant to the
schedule set forth in Section 4 below and subject to the forfeiture provisions
of Section 6 below, the escrow agent shall promptly deliver to the Grantee the
Restricted Shares in the escrow agent’s possession belonging to the Grantee in
accordance with the terms of the Joint Escrow Instructions, either in
certificated or book entry form, and the escrow agent shall be discharged of all
further obligations hereunder; provided, however, that the escrow agent shall
nevertheless retain such Restricted Shares if so required pursuant to other
restrictions imposed pursuant to this Agreement.

4. Restrictions and Restricted Period.

a. Restrictions. Restricted Shares granted hereunder may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of by the Grantee
except, in the event of an Employee’s death, by will or the laws of descent and
distribution. Restricted Shares granted hereunder shall be subject to a risk of
forfeiture as described in Section 6 below until the lapse of the Restricted
Period (as defined below).

b. Restricted Period. Unless the Restricted Period is previously terminated
pursuant to Section 6 of this Agreement or there is an earlier Change in Control
as described in Subsection 4(c) below, the restrictions set forth above shall
lapse and the Restricted Shares shall become fully and freely transferable
(provided, that such transfer is otherwise in accordance with federal and state
securities laws) and non-forfeitable on the dates (the “Restricted Period”) and
in the amounts as set forth below:

 

Date of Release

 

Number of Shares Released

[Date]

 

[Number]

[Date]

 

[Number]

[Date]

 

[Number]

[Date]

 

[Number]

c. Change in Control. In the event of a Change in Control and the termination of
the Grantee’s employment with the Company, a subsidiary of the Company (or a
successor company as a result of the Change of Control) within 24 months
following such Change in Control, the restrictions set forth above shall lapse
as of the date of such termination of employment.

d. Withholding of Restricted Shares for Taxes. The release of the Restricted
Shares hereunder shall be conditioned upon Grantee making adequate provision for
federal, state or other tax withholding obligations, if any, which arise upon
the release of the Restricted Shares from the Restricted Period (unless a
Section 83(b) election has been filed), as set forth in Section 9 hereof.

5. Rights of a Shareholder. From and after the Date of Grant and for so long as
the Restricted Shares are held by or for the benefit of the Grantee, the Grantee

 

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shall have all the rights of a shareholder of the Company with respect to the
Restricted Shares, including, but not limited to, the right to receive dividends
and the right to vote such Restricted Shares.

6. Termination of Employment.

a. General. In the event the Grantee’s employment with the Company or any
subsidiary of the Company is terminated for any reason other than [a Change in
Control], the Grantee’s death, Disability or Retirement, the Restricted Shares
and any and all accrued but unpaid dividends that at that time have not been
released from the Restricted Period, shall be forfeited to the Company without
payment of any consideration by the Company, and neither the Grantee nor any of
his successors, heirs, assigns, or personal representatives shall thereafter
have any further rights or interests in such Restricted Shares or certificates.

b. Death or Disability. In the event the Grantee’s employment with the Company
or any subsidiary of the Company is terminated as a result of the Grantee’s
death or Disability, or if the Grantee shall die or become subject to a
Disability within 30 days of the Grantee’s termination of employment other than
for Cause, the Restricted Shares shall continue to be the property of the
Grantee and the restrictions on such Restricted Shares shall continue to lapse
in accordance with the Restricted Period Schedule set forth in Section 4 until
the second anniversary of the Grantee’s date of termination of employment with
the Company or any subsidiary of the Company. On such second anniversary of the
Grantee’s date of termination, the Restricted Shares and any and all accrued but
unpaid dividends that at that time have not been released from the Restricted
Period, shall be forfeited to the Company without payment of any consideration
by the Company, and neither the Grantee nor any of his successors, heirs,
assigns, or personal representatives shall thereafter have any further rights or
interests in such Restricted Shares or certificates.

c. Retirement. In the event the Grantee is eligible for Retirement, the
restrictions on the Restricted Shares as of the date of such eligibility shall
immediately lapse.

7. Certificates. Restricted Shares granted herein may be evidenced in such
manner as the Administrator shall determine. If certificates representing the
Restricted Shares are registered in the name of the Grantee, then the Company
shall retain physical possession of the certificate.

8. Legends. All certificates representing any of the Restricted Shares subject
to the provisions of this Agreement shall have endorsed thereon the following
legend:

“The transferability of this certificate and the ordinary shares represented
hereby are subject to the restrictions, terms and conditions (including
forfeiture provisions and restrictions against transfer) contained in the 2007
Equity Incentive Plan of Endurance

 

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Specialty Holdings Ltd. and an Agreement entered into between the registered
owner of such shares and the Company. A copy of the Plan and Agreement is on
file in the office of the Secretary of the Company, Wellesley House, 90 Pitts
Bay Road, Pembroke HM 08, Bermuda.”

9. Tax Withholding. It shall be a condition to the obligation of the Company to
issue Ordinary Shares to the Grantee upon the lapse of restrictions on the
Restricted Shares that the Grantee pay to the Company, upon demand, such amount
as may be requested by the Company for the purpose of satisfying any liability
to withhold income or other taxes. In the event any such amount so requested is
not paid, the Company may refuse to issue Ordinary Shares to Grantee upon the
lapse of restrictions on the Restricted Shares. Unless the Administrator shall
in its discretion determine otherwise, payment for taxes required to be withheld
may be made in cash, or in whole or in part, in accordance with such rules as
may be adopted by the Administrator from time to time, (i) by withholding
Restricted Shares having a Fair Market Value equal to the minimum tax
withholding liability and/or (ii) tendering to the Company Ordinary Shares held
by the Grantee having a Fair Market Value equal to the tax withholding
liability.

10. Section 83(b) Election. The Grantee hereby acknowledges that the Grantee has
been informed that, with respect to the grant of Restricted Shares, an election
in the form attached hereto as Exhibit C may be filed by the Grantee with the
Internal Revenue Service, within 30 days of the Date of Grant, electing pursuant
to Section 83(b) of the Internal Revenue Code of 1986, as amended, to be taxed
currently on the Fair Market Value of the Restricted Shares on the Date of
Grant.

The Grantee acknowledges that it is the Grantee’s sole responsibility and not
the Company’s to file the election under Section 83(b) of the Code on a timely
basis.

By signing this Agreement, the Grantee represents that the Grantee has reviewed
with the Grantee’s own tax advisors the federal, state, local and foreign tax
consequences of the transactions contemplated by this Agreement and that the
Grantee is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents. The Grantee understands and
agrees that the Grantee (and not the Company) shall be responsible for any tax
liability that may arise as a result of the transactions contemplated by this
Agreement.

11. Termination of this Agreement. This Agreement shall terminate upon the
earliest to occur of (a) the termination of the Restricted Period with respect
to all of the Restricted Shares in accordance with Section 4 of this Agreement,
(b) the forfeiture of the Restricted Shares in accordance with Section 6 of this
Agreement or (c) the termination of this Agreement by an instrument in writing
signed by the parties hereto. Upon termination of this Agreement, all rights and
obligations of the Grantee and the Company hereunder shall cease.

12. Agreement to Perform Necessary Acts. Each party to this Agreement agrees to
perform any further acts and execute and deliver any documents that

 

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may be reasonably necessary to carry out the provisions of this Agreement and
the Plan.

13. Registration of Shares. The Company shall use commercially reasonable
efforts to file and maintain an effective Registration Statement on Form S-8
under the United States Securities Act of 1933, as amended, with respect to the
Restricted Shares.

14. No Limitation on Rights of the Company. This Agreement shall not in any way
affect the right or power of the Company to make adjustments, reclassifications
or changes in its capital or business structure or to merge, consolidate,
dissolve, liquidate, sell or transfer all or any part of its business or assets.

15. Miscellaneous.

a. Notices. Any notice or other communication required or permitted hereunder
shall be in writing and shall be delivered personally or sent by certified,
registered, or express mail, postage prepaid. Any such notice shall be deemed
given when delivered to each party at the following addresses (or to such other
address as may be designated in a notice given in accordance with this Section):

(i) if to the Company:

Endurance Specialty Holdings Ltd.

Wellesley House

90 Pitts Bay Road

Pembroke HM 08

Bermuda

Attn: General Counsel

(ii) if to the Grantee, to the most recent primary residence address listed for
the Grantee in the employment records of the Company.

b. Failure to Enforce Not a Waiver. The failure of the Company or the Grantee to
enforce at any time any provision of this Agreement shall in no way be construed
to be a waiver of such provision or of any other provision hereof.

c. Governing Law. This Agreement shall be governed by and construed according to
the laws of Bermuda without giving effect to the choice of law principles
thereof. The Grantee submits to the non-exclusive jurisdiction of the courts of
Bermuda in respect to matters arising hereunder.

d. Arbitration. All disputes, controversies or claims arising out of, relating
to or in connection with this Agreement, the Plan or the Restricted Shares, or
the breach, termination or validity thereof, shall be finally settled by
arbitration. The arbitration shall be conducted in accordance with the rules of
the International Chamber of Commerce except as same may be modified herein or
by mutual agreement of the parties. The seat of the arbitration shall be Bermuda
and it shall be conducted in the

 

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English language. The arbitration shall be conducted by one arbitrator who shall
be selected by BIBA (Bermuda International Business Association), in the event
that the parties fail to agree. The arbitral award shall be in writing, shall
state reasons for the award, and shall be final and binding on the parties. The
award may include an award of costs, including reasonable attorneys fees and
disbursements. Judgment on the award may be entered by any court having
jurisdiction thereof or having jurisdiction over the parties or their assets.

e. Amendments. This Agreement may be amended or modified at any time by an
instrument in writing signed by the parties hereto.

f. Investment Intent. Recipient represents that the Restricted Shares are being
acquired by him for investment and that he has no present intention to transfer,
sell or otherwise dispose of the Restricted Shares, except in compliance with
applicable securities laws, and the parties agree that the Restricted Shares are
being acquired in accordance with and subject to the terms, provisions and
conditions of this Agreement.

g. Adjustment of Restricted Shares. The Company hereby confirms that (i) in the
event the outstanding Ordinary Shares of the Company shall be changed into an
increased number of shares, through a share dividend or a split-up of shares, or
into a decreased number of shares, through a combination of shares, then
immediately after the record date for such change, the number of Restricted
Shares then subject to this Agreement shall be proportionately increased, in
case of such stock dividend or split-up of shares, or proportionately decreased,
in case of such combination of shares; and (ii) in the event that, as result of
a reorganization, sale, merger, amalgamation, consolidation or similar
occurrence, there shall be any other change in the Ordinary Shares of the
Company, or of any shares or other securities into which such Ordinary Shares
shall have been changed, or for which it shall have been exchanged, then
equitable adjustments to the Restricted Shares then subject to this Agreement
(including, but not limited to, changes in the number or kind of shares then
subject to this Agreement) shall be made.

h. Agreement Not a Contract of Employment. This Agreement is not a contract of
employment, and the terms of employment of the Grantee or the relationship of
the Grantee with the Company or any subsidiary of the Company shall not be
affected in any way by this Agreement except as specifically provided herein.
The execution of this Agreement shall not be construed as conferring any legal
rights upon the Grantee for a continuation of employment or relationship with
the Company or any subsidiary of the Company, nor shall it interfere with the
right of the Company or any subsidiary of the Company to discharge the Grantee
and to treat the Grantee without regard to the effect which that treatment might
have upon the Grantee as a holder of the Restricted Shares.

i. Entire Agreement; Plan Controls. This Agreement (including the Exhibits
hereto) and the Plan contain the entire understanding and agreement of the
parties hereto concerning the subject matter hereof, and supersede all earlier
negotiations

 

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and understandings, written or oral, between the parties hereto with respect
thereto. This Agreement is made under and subject to the provisions of the Plan,
and all of the provisions of the Plan are hereby incorporated by reference into
this Agreement. In the event of any conflict between the provisions of this
Agreement and the provisions of the Plan, the provisions of the Plan shall
govern. By signing this Agreement, the Grantee confirms that he has received a
copy of the Plan and has had an opportunity to review the contents thereof.

j. Captions. The captions and headings of the sections and subsections of this
Agreement are included for convenience only and are not to be considered in
construing or interpreting this Agreement.

k. Counterparts. This Agreement may be executed in counterparts, each of which
when signed by the Company or the Grantee will be deemed an original and all of
which together will be deemed the same agreement.

l. Assignment. The Company may assign its rights and delegate its duties under
this Agreement. If any such assignment or delegation requires consent of any
state securities authorities, the parties hereto agree to cooperate in
requesting such consent. This Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer herein set forth, be binding upon the Grantee, his heirs, executors,
administrators, successors and assigns.

m. Severability. This Agreement will be severable, and the invalidity or
unenforceability of any term or provision hereof will not affect the validity or
enforceability of this Agreement or of any other term or provision hereof.
Furthermore, in lieu of any invalid or unenforceable term or provision, the
parties hereto intend that there be added as a part of this Agreement a valid
and enforceable provision as similar in terms to such invalid or unenforceable
provision as may be possible.

[Execution Page Follows]

 

 

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

 

 

 

ENDURANCE SPECIALTY HOLDINGS LTD.

 

By: 

 

 

Name:

 

 

 

Title:

 

The undersigned hereby accepts and agrees to all the terms and provisions of the
foregoing Agreement.

 

 

 

 

 

 

 

[Grantee Name]

 

 

 

 

 

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EXHIBIT A

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED, [           ] (the “Grantee”) hereby assigns and transfers
unto Endurance Specialty Holdings Ltd., an exempted company organized under the
laws of Bermuda (the “Company”), [            ] shares of the Company’s ordinary
shares, par value $1.00 per share, standing in the Grantee’s name on the books
of said corporation represented either (i) in book entry form on the books and
records of the Company as maintained by the Company’s transfer agent or (ii) by
Certificate No. [          ] herewith, and does hereby irrevocably constitute
and appoint the Secretary of the Company to transfer the said shares on the
books of the Company with full power of substitution in the premises.

This Assignment Separate from Certificate may be used only in accordance with
the Restricted Share Agreement, dated [       ] [   ], 2007, between the Company
and the Grantee.

 

 

 

 

 

 

 

Dated: 

____________________, ____________

 

 

___________________________________

 

 

 

 

[                         ]

 

INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this Assignment Separate from Certificate is to return the shares
to the Company in the event the Grantee forfeits any of such shares as set forth
in the Agreement, without requiring additional signatures on the part of the
Grantee. If the Restricted Shares have been issued in certificated form, this
Assignment Separate from Certificate must be delivered to the Company with the
above Certificate No. [         ].

 

 

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EXHIBIT B

JOINT ESCROW INSTRUCTIONS

 

[                ] [  ], 2007

[  

]

Dear [  

]:

As Escrow Agent for both Endurance Specialty Holdings Ltd., an exempted company
organized under the laws of Bermuda (the “Company”), and [                ] (the
“Grantee”) of a certain number of the Company’s ordinary shares, $1.00 par value
per share (the “Restricted Shares”) granted by the Company to the Grantee
pursuant to the terms of that certain Restricted Share Agreement, dated as of
[         ] [   ], 2007, between the Company and Grantee (the “Agreement”), you
are hereby authorized and directed to hold the documents delivered to you
pursuant to the terms of the Agreement, in accordance with the instructions set
forth below. Except as otherwise expressly set forth herein, these instructions
shall be construed in accordance with the provisions of the Agreement and any
capitalized terms not otherwise defined herein shall have the definitions set
forth in the Agreement.

1. In the event that the Grantee forfeits any Restricted Shares pursuant to the
Agreement, you are directed (a) to date the Assignment Separate From Certificate
necessary for the transfer to the Company, (b) to fill in the number of
Restricted Shares being transferred, and (c) to deliver same, together with the
certificate evidencing the Restricted Shares to be transferred, if any, to the
Company or its assignee.

2. The Grantee hereby irrevocably authorizes the Company to deposit with you any
certificates evidencing the Restricted Shares to be held by you hereunder and
any additions and substitutions to the Restricted Shares as set forth in the
Agreement. The Grantee does hereby irrevocably constitute and appoint you as the
Grantee’s attorney-in-fact and agent for the term of this escrow to execute with
respect to the Restricted Shares all documents necessary or appropriate to make
the Restricted Shares negotiable and to complete any transaction herein
contemplated, including but not limited to, the filing with any applicable state
blue sky authority of any required applications for consent to, or notice of
transfer of, the Restricted Shares. Subject to the provisions of this Section 2,
the Grantee shall exercise all rights and privileges of a shareholder of the
Company while the Restricted Shares are being held by you. This paragraph 2
shall also apply if the Restricted Shares are held in book entry form with the
Company’s transfer agent.

3. Upon written request of the Grantee, unless the Grantee has forfeited
Restricted Shares pursuant to Section 6 of the Agreement, you will (i) if the
Restricted Shares are held in certificated form, deliver to Grantee a
certificate or certificates

 

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representing the aggregate number of Restricted Shares that are not then subject
to the Restricted Period free and clear of any restrictive legend or (ii), if
the Restricted Shares are held in book entry form, remove any restriction on the
Restricted Shares on the books and records of the Company and its transfer
agent. Within 60 days after Grantee’s Cessation of Service as defined in Section
6 of the Agreement, you will deliver to Grantee, or Grantee’s representative, as
the case may be, a certificate or certificates representing the aggregate number
of Restricted Shares held or issued pursuant to the Agreement and not forfeited
to the Company or its assignees pursuant to the Agreement.

4. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to the
Grantee, you shall deliver all of the same to the Grantee and shall be
discharged of all further obligations hereunder.

5. Your duties hereunder may be altered, amended, modified or revoked only by a
writing signed by all of the parties hereto.

6. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be liable for any action, omission or determination relating to the
Plan, and the Company shall indemnify (to the extent permitted under Bermuda law
and the Bye-Laws of the Company) and hold you harmless against any cost or
expense (including counsel fees) or liability (including any sum paid in
settlement of a claim with the approval of the Board) arising out of any action,
omission or determination taken by you relating to this Agreement, unless, in
either case, such action, omission or determination was taken or made by you in
bad faith and without reasonable belief that it was in the best interests of the
parties hereto.

7. You are hereby expressly authorized to disregard any and all warnings given
by any of the parties hereto or by any other person or corporation, excepting
only orders or process of courts of law and are hereby expressly authorized to
comply with and obey orders, judgments or decrees of any court. In case you obey
or comply with any such order, judgment or decree, you shall not be liable to
any of the parties hereto or to any other person, firm or corporation by reason
of such compliance, notwithstanding any such order, judgment or decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.

8. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.

9. You shall not be liable for the outlawing of any rights under the statute of
limitations with respect to these Joint Escrow Instructions or any documents
deposited with you.

 

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10. You shall be entitled to employ such legal counsel and other experts as you
may deem necessary and proper to advise you in connection with your obligations
hereunder, may rely upon the advice of such counsel, and may pay such counsel
reasonable compensation therefor.

11. Your responsibilities as Escrow Agent hereunder shall terminate if you shall
cease to be an officer or agent of the Company or if you shall resign by written
notice to each party. In the event of any such termination, the Company shall
appoint a successor Escrow Agent.

12. If you reasonably require other or further instruments in connection with
these Joint Escrow Instructions or obligations in respect hereto, the necessary
parties hereto shall join in furnishing such instruments.

13. It is understood and agreed that should any dispute arise with respect to
the delivery and/or ownership or right of possession of the securities held by
you hereunder, you are authorized and directed to retain in your possession
without liability to anyone all or any part of said securities until such
disputes shall have been settled either by mutual written agreement of the
parties concerned or by a final order decree or judgment of a court of competent
jurisdiction after the time for appeal has expired and no appeal has been
perfected, but you shall be under no duty whatsoever to institute or defend any
such proceedings.

14. Any notice or other communication required or permitted hereunder shall be
in writing and shall be delivered personally or sent by certified, registered,
or express mail, postage prepaid. Any such notice shall be deemed given when
delivered to each party at the following addresses (or to such other address as
may be designated in a notice given in accordance with this Section):

If to Company or to the

Escrow Agent:

Endurance Specialty Holdings Ltd.

Attention: Secretary

Wellesley House

90 Pitts Bay Road

Pembroke HM08

Bermuda

 

If to the Grantee:

 

To the most recent primary residence address listed for the Grantee in the
employment records of the Company.

15. By signing these Joint Escrow Instructions, you become a party hereto only
for the purpose of said Joint Escrow Instructions; you do not become a party to
the Agreement.

16. These Joint Escrow Instructions will be severable, and the invalidity or
unenforceability of any term or provision hereof will not affect the validity or

 

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enforceability of these Joint Escrow Instructions or of any other term or
provision hereof. Furthermore, in lieu of any invalid or unenforceable term or
provision, the parties hereto intend that there be added as a part of these
Joint Escrow Instructions a valid and enforceable provision as similar in terms
to such invalid or unenforceable provision as may be possible.

17. All disputes, controversies or claims arising out of, relating to or in
connection with these Joint Escrow Instructions, or the breach, termination or
validity thereof, shall be finally settled by arbitration. The arbitration shall
be conducted in accordance with the rules of the International Chamber of
Commerce except as same may be modified herein or by mutual agreement of the
parties. The seat of the arbitration shall be Bermuda and it shall be conducted
in the English language. The arbitration shall be conducted by one arbitrator
who shall be selected by BIBA (Bermuda International Business Association), in
the event that the parties fail to agree. The arbitral award shall be in
writing, shall state reasons for the award, and shall be final and binding on
the parties. The award may include an award of costs, including reasonable
attorneys fees and disbursements. Judgment on the award may be entered by any
court having jurisdiction thereof or having jurisdiction over the parties or
their assets.

18. These Joint Escrow Instructions shall terminate upon the earliest to occur
of (a) the termination of the Restricted Period with respect to all of the
Restricted Shares in accordance with Section 4 of the Agreement, (b) the
forfeiture of the Restricted Shares in accordance with Section 6 of the
Agreement or (c) the termination of the Agreement by an instrument in writing
signed by the parties hereto. Upon termination of this Agreement, all rights and
obligations of the parties hereunder shall cease.

19. These Joint Escrow Instructions may be amended or modified at any time by an
instrument in writing signed by the parties hereto.

20. These Joint Escrow Instructions, the Agreement and the Plan contain the
entire understanding and agreement of the parties hereto concerning the subject
matter hereof, and supersede all earlier negotiations and understandings,
written or oral, between the parties hereto with respect thereto. These Joint
Escrow Instructions are made under and subject to the provisions of the Plan,
and all of the provisions of the Plan are hereby incorporated by reference into
these Joint Escrow Instructions. In the event of any conflict between the
provisions of these Joint Escrow Instructions and the provisions of the Plan,
the provisions of the Plan shall govern.

21. These Joint Escrow Instructions may be executed in counterparts, each of
which when signed by the parties hereto will be deemed an original and all of
which together will be deemed the same agreement.

22. The Company may assign its rights and delegate its duties under these Joint
Escrow Instructions. If any such assignment or delegation requires consent of
any state securities authorities, the parties hereto agree to cooperate in
requesting such consent. These Joint Escrow Instructions shall be binding upon
and inure to the benefit of the parties hereto, and their respective successors
and permitted assigns.

 

 

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23. These Joint Escrow Instructions shall be governed by the internal
substantive laws, but not the choice of law rules, of Bermuda. The Grantee
submits to the non-exclusive jurisdiction of the courts of Bermuda in respect to
matters arising hereunder.

[Execution Page Follows]

 

 

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ENDURANCE SPECIALTY HOLDINGS LTD.

 

By: 

[Grantee Name]

 

 

Name: 

 

 

 

 

Title:

 

 

ESCROW AGENT:

 

 

 

 

 

 

 

 

 

Name: 

John V. Del Col
General Counsel & Secretary
Endurance Specialty Holdings Ltd.

 

 

 

 

 

B-6

 

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EXHIBIT C

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in taxpayer’s gross income
for the current taxable year the amount of any compensation taxable to taxpayer
in connection with taxpayer’s receipt of the property described below:

1. The name address, taxpayer identification number and taxable year of the
undersigned are as follows:

NAME OF
TAXPAYER:____________________________________________________________________________

NAME OF SPOUSE:
______________________________________________________________________________

ADDRESS:
_____________________________________________________________________________________

IDENTIFICATION NO. OF TAXPAYER:
_______________________________________________________________

IDENTIFICATION NO. OF SPOUSE:
__________________________________________________________________

TAXABLE YEAR: _____________________________

2. The property with respect to which the election is made is described as
follows: _______ Ordinary Shares (the “Restricted Shares”) of Endurance
Specialty Holdings Ltd. (the “Company”).

3. The date on which the property was transferred is: ________________, ____.

4. The property is subject to the following restrictions:

The Restricted Shares may not be transferred and are subject to forfeiture under
the terms of an agreement between the taxpayer and the Company. These
restrictions lapse upon the satisfaction of certain conditions in such
agreement.

5. The fair market value at the time of transfer, determined without regard to
any restriction other than a restriction which by its terms will never lapse, of
such property is: $ ______________.

6. The amount (if any) paid for such property is: $ ______________.

The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned’s receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.

 

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The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.

 

 

 

 

 

 

Dated: 

_________________, ______

 

 

________________________________

 

 

 

 

Signature of Taxpayer

 

The undersigned spouse of taxpayer joins in this election.

 

 

 

 

 

 

Dated: 

_________________, ______

 

 

________________________________

 

 

 

 

Signature of Spouse
of Taxpayer

 

C-2

 

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