duties and to the promotion of the business and interests of the Company and its Subsidiariesand of SRGL.               3.3 Location. The Employee shall perform his full-time services to the Company andits Subsidiaries and to SRGL in the Company’s London, UK office (the “Location”); providedthat the Employee shall be required to travel as necessary to perform his duties hereunder.               4. Compensation and Benefits by the Company. As compensation for all servicesrendered pursuant to this Agreement, the Company shall provide the Employee the following duringthe Term:               4.1 Base Salary. During the Term, the Company will pay to the Employee an annual basesalary of GBP275,000, payable in accordance with the customary payroll practices of the Company.The Employee’s annual base salary may be increased by the Company at its discretion and the Companyagrees to review such compensation not less frequently than annually during the Term. The BaseSalary as increased from time to time shall be referred to herein as “Base Salary”.               4.2 Bonuses. During the Term, the Employee shall be eligible to receive an annualbonus (“Bonus”) under a plan in the amount determined by the Board of Directors of the Company (the“Board”) based upon achievement of performance measures established by the Company and approved bythe Board. The employee’s target bonus shall be 75% of Base Salary. Notwithstanding theforegoing, for the calendar year ending on December 31, 2007 the Employee shall receive a Bonus ofnot less than fifty percent (50%) of the Base Salary. The Employee’s Bonus shall be payable atsuch times and in the manner consistent with the Company’s policies regarding compensation ofexecutive employees. In addition, the Company may pay such additional bonuses as it may establishwithin its direction.               4.3 Pension Equalization. The Company will contribute to the Executive’s pensionaccount, two (2) pension equalization payment of GBP75,000 on each of June 1, 2007 and June 1,2008. No further payments will be made under this clause after the payment in 2008.               4.4 Participation in Employee Benefit Plans. The Employee shall be entitled duringthe Term, if and to the extent eligible, to participate in all of the applicable benefit plans ofthe Company, which may be available to other senior executives of the Company. The Company may atany time or from time to time amend, modify, suspend or terminate any employee benefit plan,program or arrangement for any reason without the Employee’s consent if such amendment,modification, suspension or termination is consistent with the amendment, modification, suspensionor termination for other executives of the Company.               4.5 Equity Compensation. The Employee shall be eligible to receive stock options topurchase 350,000 ordinary shares of an affiliate of the Company pursuant to the 2007 Scottish ReGroup Limited Stock Option Plan, an equity incentive compensation plan established by an affiliateof the Company (the “Equity Incentive Plan”), pursuant to the terms of the Equity Incentive Planand any applicable agreements thereunder as determined from time to time by the Board.
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               4.6 Expense Reimbursement. During the Term, the Employee shall be entitled to receivereimbursement for all appropriate business expenses incurred by him in connection with his dutiesunder this Agreement in accordance with the policies of the Company as in effect from time to time.               4.7 [RESERVED]               4.8 Vacation and Holidays.               (a) The Employee will (in addition to the usual public and bank holidays) be entitled duringthe continuance of his employment to 30 working day’s paid holiday in each period of 12 monthscommencing on 1 January (the “Holiday Year”).               (b) Holiday shall be taken at such times as may be approved by the SRGL Chief ExecutiveOfficer.               (c) The Employee may not, without the prior written consent of the SRGL Chief ExecutiveOfficer carry forward more than six days unused holiday entitlement from one Holiday Year toanother.               (d) Onthe termination of his employment the Employee’s entitlement to accrued holiday paywill be calculated on a pro rata basis in respect of each completed month of service in the HolidayYear in which his employment terminates and the appropriate amount will be paid to the Employee;provided that, if the Employee shall have taken more days’ holiday than his accruedentitlement, the Company is hereby authorized to make an appropriate deduction from any amounts duefrom the Company to the Employee.               4.9 Legal Fees. The Company shall pay or reimburse the Employee for all reasonableattorneys’ fees and costs (not to exceed GBP 2,000) incurred by the Employee in connection withadvice pertaining to and negotiation of this Agreement upon presentation to the Company of billsfor such services and such other supporting information as the Company may reasonably require.               4.10 [RESERVED]          5. Termination of Employment.               5.1 By the Company for Cause or by the Employee Without Good Reason or Due to Death orDisability. If: (i) the Employee’s employment terminates due to his death; (ii) the Companyterminates the Employee’s employment with the Company for Cause (as defined below); (iii) theCompany terminates the Employee’s employment with the Company due to the Employee’s Disability (asdefined below); or (iv) Employee terminates his employment without Good Reason (as defined below);provided that the Employee shall be required to give the Company at least thirty (30) daysprior written notice of such termination, the Employee or the Employee’s legal representatives (asappropriate), shall be entitled to receive the following (the “Accrued Benefits”):                    (a) the Employee’s accrued but unpaid Base Salary and benefits set forth in Section 4.4, ifany, to the date of termination;
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                    (b) the unpaid portion of the Bonus, if any, relating to the calendar year prior to thecalendar year of the Employee’s death, Disability, termination by the Company for Cause or by theEmployee without Good Reason, payable in accordance with Section 4.2;                    (c) expenses reimbursable under Section 4.6 incurred but not yet reimbursed to the Employee tothe date of termination; and                    (d) in accordance with the Company’s policies, any accrued but unused vacation time or paidtime off.               For the purposes of this Agreement, “Disability” means a determination by the Company inaccordance with applicable law that as a result of a physical or mental injury or illness, theEmployee is unable to perform the essential functions of his job with or without reasonableaccommodation for a period of (i) ninety (90) consecutive days; or (ii) one hundred eighty (180)days in any one (1) year period.               Provided that the Company warrants that the Employee’s employment will not be terminated bythe Company (by reason of the Employee’s ill health) if the Employee is receiving benefits underthe Company PHI scheme or is awaiting a decision from the PHI scheme insurers in respect ofbenefits under the PHI scheme, where continuing employment is a prerequisite to the Employee’sreceipt of benefits under such scheme. This clause shall be without prejudice to the Company’sright to terminate the Employee’s employment for any reason which is unrelated to his ill health.               For the purposes of this Agreement, “Cause” means, as determined by the Board (or itsdesignee), with respect to conduct during the Employee’s employment with the Company, whether ornot committed during the Term, (i) commission of a felony by Employee; (ii) gross misconduct by theEmployee, (iii) acts of dishonesty by Employee resulting or intending to result in personal gain orenrichment at the expense of the Company or its Subsidiaries or SRGL; (iv) Employee’s materialbreach of his obligations under this Agreement; (v) conduct by Employee in connection with hisduties hereunder that is fraudulent, unlawful or grossly negligent; (vi) engaging in personalconduct by Employee (including but not limited to employee harassment or discrimination, the use orpossession at work of any illegal controlled substance) which seriously discredits or damages theCompany or its Subsidiaries or SRGL; (vii) contravention of specific reasonable lawful materialdirection from the person or entity to whom the Employee reports or continuing inattention to orcontinuing failure to adequately perform the material duties to be performed by Employee under theterms of Section 3.2 of this Agreement or (viii) breach of the Employee’s covenants set forth inSection 7 below before termination of employment; provided that the Employee shall havefifteen (15) days after notice from the Company to cure the deficiency leading to the Causedetermination (except with respect to (i) above), if curable. A termination for “Cause” shall beeffective immediately (or on such other date set forth by the Company).               For the purposes of this Agreement, “Good Reason” means, without the Employee’s consent, (i) amaterial adverse reduction in Employee’s responsibilities or duties; (ii) a reduction in theEmployee’s Base Salary or bonus opportunity; provided that the Company may at any time orfrom time to time amend, modify, suspend or terminate any bonus, incentive compensation or otherbenefit plan or program provided to the Employee for any reason and
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without the Employee’s consent if such modification, suspension or termination (x) is a resultof the underperformance of the Employee or the Company under its business plan, or (y) isconsistent with an “across the board” reduction for all similar level executive employees of theCompany, and, in each case, is undertaken in the Board’s reasonable business judgment acting ingood faith and engaging in fair dealing with the Employee; (iii) without the Employee’s priorwritten consent, relocation of the Employee’s Location of work to any location that is in excess of50 miles from the Location thereof on the Effective Date; or (iv) the Company’s material breach ofthe Agreement; provided that a suspension of the Employee and the requirement that theEmployee not report to work shall not constitute “Good Reason” if the Employee continues to receivethe compensation and benefits required by this Agreement. The Employee shall provide the Companywritten notice specifying such event or deficiency constituting Good Reason within sixty (60) daysfollowing the Employee’s knowledge of the occurrence of such event and the Company shall havethirty (30) days after receipt of such notice to cure the event or deficiency that would result inGood Reason.               5.2 By the Company Without Cause or By the Employee for Good Reason. If during theTerm the Company terminates Employee’s employment without Cause (which may be done at any timewithout prior notice) or Employee terminates his employment for Good Reason, upon at least thirty(30) days prior written notice, upon execution without revocation of a valid release agreement in aform reasonably acceptable to the Company (and valid to compromise statutory employment law claimsin the UK) and not in violation of any applicable laws (the “Release”), the Employee shall beentitled to receive:                    (a) the Accrued Benefits;                    (b) the pro-rata portion of the Bonus up to the date of termination relating to the calendaryear of the Employee’s termination, payable in accordance with Section 4.2;                    (c) (i) if prior to the expiration of the Initial Term, an amount equal to three (3) times thesum of (x) the highest Base Salary received by the Employee with respect to any calendar yearduring the previous two (2) calendar years of the Term and (y) the highest Bonus amount received bythe Employee with respect to any calendar year during the previous two (2) calendar years of theTerm, and (ii) if during any Renewal Term, an amount equal to the sum of (x) the highest BaseSalary received by the Employee with respect to any calendar year during the previous two (2)calendar years of the Term, and (y) the highest Bonus amount received by the Employee with respectto any calendar year during the previous two (2) calendar years of the Term, in each case payablein twelve (12) equal monthly installments, less standard income and payroll tax withholding andother authorized deductions; and                    (d) Any unpaid installments as described under Section 4.3.          The Company shall have no obligation to provide the benefits set forth above in the event thatEmployee breaches the provisions of Section 6. For purposes of clarity, the Company’s failure torenew the Term pursuant to Section 2 hereof, shall not constitute a termination of the Employee’semployment without Cause.               5.3 Following the Company’s Determination Not to Renew the Term. Should theEmployee’s employment with the Company terminate following the Company’s
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determination not to renew the Term pursuant to Section 2, upon execution without revocationof the Release, the Employee shall be entitled to receive:               (a) Accrued Benefits; and               (b) an amount equal to the sum of (x) the Employee’s Base Salary, and (y) the highest Bonusamount received by the Employee with respect to any calendar year during the previous two (2)calendar years of the Term, payable in a lump sum within thirty (30) days following the effectivedate of the Release, less standard income and payroll tax withholding and other authorizeddeductions.          The Company shall have no obligation to provide the benefits set forth above in the event thatEmployee breaches the provisions of Section 6.          5.4 No Mitigation; No Offset. The Employee shall be under no obligation to seek otheremployment after his termination of employment with the Company and the obligations of the Companyto the Employee which arise upon the termination of his employment pursuant to this Section 5 shallnot be subject to mitigation or offset.          5.5 Removal from any Boards and Position. If the Employee’s employment is terminatedfor any reason under this Agreement, he shall be deemed to resign (i) if a member, from the Boardor board of directors of any Subsidiary or SRGL of the Company or any other board to which he hasbeen appointed or nominated by or on behalf of the Company and (ii) from any position with theCompany or any Subsidiary or SRGL of the Company, including, but not limited to, as an officer ofthe Company and any of its Subsidiaries or SRGL.          6. Restrictions and Obligations of the Employee.               6.1 Confidentiality. (a) During the course of the Employee’s employment by theCompany (prior to and during the Term), the Employee has had and will have access to certain tradesecrets and confidential information relating to the Company and its Subsidiaries or to SRGL (the“Protected Parties”) which is not readily available from sources outside the Company. Theconfidential and proprietary information and, in any material respect, trade secrets of theProtected Parties are among their most valuable assets, including but not limited to, theircustomer, supplier and vendor lists, databases, competitive strategies, computer programs,frameworks, or models, their marketing programs, their sales, financial, marketing, training andtechnical information, their product development (and proprietary product data) and any otherinformation, whether communicated orally, electronically, in writing or in other tangible formsconcerning how the Protected Parties create, develop, acquire or maintain their products andmarketing plans, target their potential customers and operate their retail and other businesses.The Protected Parties invested, and continue to invest, considerable amounts of time and money intheir process, technology, know-how, obtaining and developing the goodwill of their customers,their other external relationships, their data systems and data bases, and all the informationdescribed above (hereinafter collectively referred to as “Confidential Information”), and anymisappropriation or unauthorized disclosure of Confidential Information in any form wouldirreparably harm the Protected Parties. The Employee acknowledges that such ConfidentialInformation constitutes valuable, highly confidential, special and unique property of the ProtectedParties. The Employee shall hold in a fiduciary capacity for the benefit of the Protected Partiesall Confidential Information relating to the Protected Parties and their
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businesses, which shall have been obtained by the Employee during the Employee’s employment bythe Company or its Subsidiaries or SRGL and which shall not be or become public knowledge (otherthan by acts by the Employee or representatives of the Employee in violation of this Agreement).Except as required by law or an order of a court or governmental agency with jurisdiction, theEmployee shall not, during the period the Employee is employed by the Company or its Subsidiariesor SRGL or at any time thereafter, disclose any Confidential Information, directly or indirectly,to any person or entity for any reason or purpose whatsoever, nor shall the Employee use it in anyway, except in the course of the Employee’s employment with, and for the benefit of, the ProtectedParties or to enforce any rights or defend any claims hereunder or under any other agreement towhich the Employee is a party; provided that such disclosure is relevant to the enforcementof such rights or defense of such claims and is only disclosed in the formal proceedings relatedthereto. The Employee shall take all reasonable steps to safeguard the Confidential Informationand to protect it against disclosure, misuse, espionage, loss and theft. The Employee understandsand agrees that the Employee shall acquire no rights to any such Confidential Information.                    (b) All files, records, documents, drawings, specifications, data, computer programs,evaluation mechanisms and analytics and similar items relating thereto or to the Business (for thepurposes of this Agreement, “Business” shall be as defined in Section 6.3 hereof), as well as allcustomer lists, specific customer information, compilations of product research and marketingtechniques of the Company and its Subsidiaries and SRGL, whether prepared by the Employee orotherwise coming into the Employee’s possession in connection with or relating to his employmentwith the Company, shall remain the exclusive property of the Company and its Subsidiaries and SRGL,and the Employee shall not remove any such items from the premises of the Company and itsSubsidiaries and SRGL, except in furtherance of the Employee’s duties under any employmentagreement.                    (c) It is understood that while employed by the Company or its Subsidiaries or SRGL, theEmployee will promptly disclose to it, and assign to it the Employee’s interest in any invention,improvement or discovery made or conceived by the Employee, either alone or jointly with others,which arises out of the Employee’s employment. At the Company’s request and expense, the Employeewill assist the Company and its Subsidiaries and SRGL during the period of the Employee’semployment by the Company or its Subsidiaries or SRGL and thereafter in connection with anycontroversy or legal proceeding relating to such invention, improvement or discovery and inobtaining domestic and foreign patent or other protection covering the same.                    (d) As requested by the Company and at the Company’s expense, from time to time and upon thetermination of the Employee’s employment with the Company for any reason, the Employee willpromptly deliver to the Company and its Subsidiaries or SRGL all copies and embodiments, inwhatever form, of all Confidential Information in the Employee’s possession or within his control(including, but not limited to, memoranda, records, notes, plans, photographs, manuals, notebooks,documentation, program listings, flow charts, magnetic media, disks, diskettes, tapes and all othermaterials containing any Confidential Information) irrespective of the location or form of suchmaterial. If requested by the Company, the Employee will provide the Company with writtenconfirmation that all such materials have been delivered to the Company as provided herein.
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               6.2 Non-Solicitation or Hire. During the Term and for a period of six (6) monthsfollowing the termination of the Employee’s employment for any reason, the Employee shall notdirectly or indirectly solicit or attempt to solicit or induce, directly or indirectly, (a) anyparty who is a customer of the Company or its Subsidiaries or the Holding Company, or who was acustomer of the Company or its Subsidiaries or the Holding Company at any time during the twelve(12) month period immediately prior to the date the Employee’s employment terminates, for thepurpose of marketing, selling or providing to any such party any services or products offered by oravailable from the Company or its Subsidiaries or the Holding Company, (b) any supplier to orcustomer or client of the Company or any Subsidiary or he Holding Company to terminate, reduce oralter negatively its relationship with the Company or any Subsidiary or the Holding Company or inany manner interfere with any agreement or contract between the Company or any Subsidiary or theHolding Company and such supplier, customer or client or (c) any employee of the Company or any ofits Subsidiaries or the Holding Company or any person who was an employee of the Company or any ofits Subsidiaries or the Holding Company during the twelve (12) month period immediately prior tothe date the Employee’s employment terminates (and in either case where the employee is a personfor whom the Employee had managerial responsibility (whether directly or indirectly) or materialcontact with in the course of his employment with the Company or its Subsidiaries or he HoldingCompany) to terminate such employee’s employment relationship with the Protected Parties in order,in either case, to enter into a similar relationship with the Employee, or any other person or anyentity in competition with the Business of the Company or any of its Subsidiaries or the HoldingCompany; provided that, if the Employee intends to solicit any such party referenced inthis Section 6.2 (a), (b) or (c) for any other purpose, he shall notify the Company of suchintention and receive prior written approval from the Company, which shall not be unreasonablywithheld.               6.3 Non-Competition. During the Term and for a period of six (6) months followingthe termination of Employee’s employment by the Company (for any reason) the Employee shall not,whether individually, as a director, manager, member, stockholder, partner, owner, employee,consultant or agent of any business, or in any other capacity, other than on behalf of the Companyor a Subsidiary or SRGL, organize, establish, own, operate, manage, control, engage in, participatein, invest in, permit his name to be used by, act as a consultant or advisor to, render servicesfor (alone or in association with any person, firm, corporation or business organization), orotherwise assist any person or entity that engages in or owns, invests in, operates, manages orcontrols any venture or enterprise which engages or proposes to engage in the reinsurance businessor any other business conducted by the Company or any of its Subsidiaries or SRGL on the date ofthe Employee’s termination of employment or within twelve (12) months of the Employee’s terminationof employment for which the Employee has performed services, in each case, in the geographiclocations where the Company and its Subsidiaries or SRGL engage or propose to engage in suchbusiness(es) (the “Business”). Notwithstanding the foregoing, nothing in this Agreement shallprevent the Employee from (a) owning for passive investment purposes not intended to circumventthis Agreement, less than five percent (5%) of the publicly traded common equity securities of anycompany engaged in the Business (so long as the Employee has no power to manage, operate, advise,consult with or control the competing enterprise and no power, alone or in conjunction with otheraffiliated parties, to select a director, manager, general partner, or similar governing officialof the competing enterprise other than in connection with the normal and customary voting powersafforded the Employee in connection with any permissible equity ownership), and (b) serving as
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an employee, consultant or advisor (or other similar capacity) to an entity engaged in theBusiness for a unit, division, affiliate or department of such entity that does not engage in theBusiness in any material respect, so long as the Employee is not directly or indirectly involved inthe Business activities performed by such entity; provided, however, that theEmployee may engage in the activities restricted by this Section 6.3 if he shall first notify andreceive prior written approval from the Company before engaging in such activities.               6.4 Property. The Employee acknowledges that all originals and copies of materials,records and documents generated by him or coming into his possession during his employment by theCompany or its Subsidiaries or SRGL are the sole property of the Company and its Subsidiaries orSRGL (“Company Property”). During the Term, and at all times thereafter, the Employee shall notremove, or cause to be removed, from the premises of the Company or its Subsidiaries or SRGL,copies of any record, file, memorandum, document, computer related information or equipment, or anyother item relating to the business of the Company or its Subsidiaries or SRGL, except infurtherance of his duties under the Agreement. When the Employee’s employment with the Companyterminates, or upon request of the Company at any time, the Employee shall promptly deliver to theCompany all copies of Company Property in his possession or control.          7. Remedies; Specific Performance. The Parties acknowledge and agree that theEmployee’s breach or threatened breach of any of the restrictions set forth in Section 6 willresult in irreparable and continuing damage to the Protected Parties for which there may be noadequate remedy at law and that the Protected Parties shall be entitled to equitable relief,including specific performance and injunctive relief as remedies for any such breach or threatenedor attempted breach. The Employee hereby consents to the grant of an injunction (temporary orotherwise) against the Employee or the entry of any other court order against the Employeeprohibiting and enjoining him from violating, or directing him to comply with any provision ofSection 6. The Employee also agrees that such remedies shall be in addition to any and allremedies, including damages, available to the Protected Parties against him for such breaches orthreatened or attempted breaches. In addition, without limiting the Protected Parties’ remediesfor any breach of any restriction on the Employee set forth in Section 6, except as required bylaw, the Employee shall not be entitled to any payments set forth in Section 5.2 hereof if theEmployee has breached the covenants applicable to the Employee contained in Section 6, the Employeewill immediately return to the Protected Parties any such payments previously received underSection 5.2 upon such a breach, and, in the event of such breach, the Protected Parties will haveno obligation to pay any of the amounts that remain payable by the Company under Section 5.2.          8. Other Provisions.               8.1 Notices. Any notice or other communication required or which may be givenhereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent byfacsimile transmission or sent by certified, registered or express mail, postage prepaid orovernight mail and shall be deemed given when so delivered personally, telegraphed, telexed, orsent by facsimile transmission or, if mailed, four (4) days after the date of mailing or one (1)day after overnight mail, as follows:                    (a) If the Company, to its registered office:
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Tower Bridge House