Exhibit 10.31

RETIREMENT AND CONSULTING AGREEMENT

     THIS RETIREMENT AND CONSULTING AGREEMENT (the “Agreement”) is entered into
as of June 15, 2004, by and among Bruce A. Esselborn (“Executive”), Fairfax
Financial Holdings Limited, a Canadian corporation (“FFH”), Fairfax Inc., a
Wyoming corporation (“Fairfax”), and Crum & Forster Holdings Corp., a Delaware
corporation (the “Company”) (collectively, the “Companies”).

     WHEREAS, Executive was employed as Chief Executive Officer and Chairman of
the Board of Directors (the “Board”) of Crum & Forster Holding Inc. (“C&F
Holding”) and the insurance operating companies of the Company (the “Operating
Companies”);

     WHEREAS, Executive resigned as (i) Chief Executive Officer of C&F Holding
and the Operating Companies effective April 2, 2004, and (ii) Chairman of the
Board of C&F Holding and the Operating Companies effective June 15, 2004;

     WHEREAS, Executive retired from active employment with C&F Holding and the
Operating Companies effective June 15, 2004; and

     WHEREAS, Executive has agreed to provide consulting services to Fairfax as
requested from July 1, 2004 through December 31, 2004.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
described below, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties hereto agreed as follows:

I.   Employment and Retirement

  1.   Effective Date. This Agreement shall be effective as of the Retirement
Date, as defined below.     2.   Resignation and Retirement. Executive hereby
confirms his previously announced resignation as Chairman of the Board and Chief
Executive Officer of C&F Holding and the Operating Companies and retires from
active employment therewith effective as of June 15, 2004 (the “Retirement
Date”). C&F Holding and the Operating Companies have accepted Executive’s
retirement from active employment effective as of the Retirement Date.     3.  
2004 Cash Bonus. Executive will receive from the Company a pro-rata 2004 cash
bonus for services rendered during the 2004 calendar year as determined by
Fairfax in its sole discretion (the “2004 Bonus”). Executive is entitled to
receive the 2004 Bonus only if all members of the Company’s executive management
team are granted a 2004 cash bonus.

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  4.   Restricted Stock. The FFH restricted common stock granted to Executive
pursuant to his Employment Agreement dated October 1, 1999, will continue to
vest in accordance with the vesting schedule provided therein, pursuant to which
all such shares of FFH restricted common stock will be fully vested on
October 1, 2004. All such shares of FFH restricted common stock will be
delivered to Executive by FFH net of withholding taxes.     5.   Benefits.

  (a)   Life Insurance and Medical Benefits. Following the Retirement Date, the
Company will provide Executive with (i) life insurance equal to the maximum
amount available to the Executive under the Operating Companies’ basic life
insurance coverage prior to the Retirement Date and (ii) medical benefits
substantially similar to those medical benefits provided to Executive prior to
the Retirement Date with continued contributions toward such medical benefits by
Executive in a manner and percentage similar to that prior to the Retirement
Date. To the extent Executive becomes eligible for life insurance or medical
benefits through a new employer, Executive shall promptly advise the Company in
writing and the obligations to provide life insurance or medical benefits in
accordance with this Section shall immediately cease.     (b)   Income Tax
Preparation. The Companies will reimburse Executive for the cost of the
preparation of Executive’s 2004 income tax returns.

II.   Consulting Relationship

  1.   Consulting Services. In recognition of the significant value to Fairfax
of the availability of a person of Executive’s experience, Fairfax hereby agrees
to engage Executive as a consultant to it for the period beginning July 1, 2004
through December 31, 2004 (the “Consulting Period”), and Executive hereby
commits to serve Fairfax as a consultant during the Consulting Period. During
the Consulting Period, Executive will consult with management of Fairfax as
requested from time to time. During the Consulting Period, Executive will be
free to pursue and accept any employment or consulting arrangement with any
other entity, so long as that entity is not a Competitor, as defined in
Section III.2 of this Agreement.     2.   Compensation. Executive will be paid
by Fairfax a retainer fee equal to $250,000 U.S. for consulting services
rendered during the Consulting Period (the “Retainer Fee”), subject to further
payment for extraordinary engagements as mutually agreed upon by Fairfax and
Executive. The Retainer Fee will be paid by check either in lump sum or other
periodic payments as determined by Fairfax.     3.   Reimbursement of Expenses.
Fairfax will pay or reimburse Executive for all reasonable business expenses
actually incurred or paid by the Executive during the Consulting Period under
this Agreement in performance of Executive’s

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      consulting services hereunder, in accordance with the customary
reimbursement policies of Fairfax for its senior executive employees.

III.   General Provisions

  1.   Indemnity. The Companies and/or one or more of their subsidiaries will
indemnify and provide a defense to Executive to the fullest extent permitted by
law and their respective by-laws with respect to any claims arising out of the
performance of Executive’s duties as an employee, director or officer of, or
consultant to, any of such indemniters, consistent with the indemnity and
defense provided to other officers, directors or consultants of the Companies.  
  2.   Non-Competition. During the Consulting Period, Executive shall not,
without the prior written consent of Fairfax, engage in any business or activity
in competition with the Companies, whether as an employee, consultant, partner,
principal, agent, representative or in any other individual, corporate or
representative capacity, or render any services or provide any advice to any
business, activity or person engaged in the business of insurance (including
reinsurance) or the provision of insurance related services (a “Competitor”).  
  3.   Miscellaneous Provisions.

  (a)   Assignability; Binding Nature. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors, heirs and
assigns. No rights or obligations under this Agreement may be assigned or
transferred except upon prior written approval of all parties hereto.     (b)  
Notices. Notices and all other communications contemplated by this Agreement
shall be in writing and shall be deemed to have been duly given when personally
delivered or, if sent by prepaid overnight courier or by U.S. registered or
certified mail, return receipt requested and postage prepaid, on the later of
delivery or two (2) business days after being so sent. In the case of Executive,
mailed notices shall be addressed to Executive at the home address that
Executive most recently communicated to the Companies in writing. In the case of
the Companies, mailed notices shall be addressed to their respective corporate
headquarters, and all notices shall be directed to the attention of their Chief
Executive Officers.     (c)   Governing Law. This Agreement shall be deemed to
be made in, and in all respects be interpreted, construed and governed by and in
accordance with the laws of, the State of New Jersey.     (d)   Modifications;
Waivers. The waiver by any party hereto of a breach of any provision of this
Agreement by any other party hereto shall not operate or be construed as a
waiver of any prior or subsequent breach of

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      the same provision by the other party. No waiver or modification of any
provision of this Agreement shall be valid unless in writing and duly executed
by each of the parties hereto.     (e)   Entire Agreement. This Agreement is
intended by the parties hereto to be the final expression of their agreement
with respect to the subject matter hereof and is the complete and exclusive
statement of the terms thereof, notwithstanding any representations, statements
or agreements to the contrary heretofore made.     (f)   Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original but all of which together shall constitute one and the same
instrument.

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

      Crum & Forster Holdings Corp.   Fairfax Financial Holdings Limited By: /s/
Mary Jane Robertson

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Name: Mary Jane Robertson
Title: Senior Executive Vice President,
          Chief Financial Officer & Treasurer   By: /s/ Eric P. Salsberg

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Name: Eric P. Salsberg
Title: Vice President     Fairfax Inc. /s/ Bruce A. Esselborn

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Bruce A. Esselborn   By: /s/ Eric P. Salsberg

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Name: Eric P. Salsberg
Title: Vice President

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