Employment
Agreement




between




Flagstone
Reassurance Suisse SA


Rue du
College 1, CH-1945 Martigny




(the
“Company”)




and




Guy
Swayne












This
Employment Agreement shall be subject to the competent authorities issuing the
work and residence permits required for the Employee under Swiss law, if
any.


















1.
              FUNCTION
      AND FIELD OF ACTIVITY




The
Employee is employed as Chief Executive for the Company. The description of the
Employee’s field of activity as well as his duties and responsibilities, is an
integral part of this Agreement (ANNEX 1).




The
Company has the right to assign other duties and responsibilities to the
Employee which are in accordance with the Employee’s education and
knowledge.






2.
            RELEVANCE
      OF ARTICLES OF INCORPORATION AND
REGULATIONS




The
Company’s articles of incorporation and regulations, to be issued by the board
and as amended from time to time, are an integral part of this Agreement. These
articles are to be provided to the Employee.






3.
            REPORTING




The
Employee shall regularly report to the Board.




The
Employee will also report functionally to the Group CEO.






4.
            CONFLICT
      OF INTERESTS




The
Employee shall not engage in any activities which might lead to a conflict of
interests with respect to his position with the Company. In particular, the
Employee shall refrain from operating, working for, or participating in any
business which competes with the Company.




The
Employee shall not engage in any other business activities without a written
board resolution. In case of non-remunerated activities a written board
resolution shall only be required in case such activities could affect the
Company’s interests or the Employee’s performance.















The
participation as a shareholder in the share capital of another company which is
not in competition with the Company is authorized if no entrepreneurial
influence is exercised. The
Employee is obliged to inform the board of transactions in the shares of other
insurers/reinsurers.






5.
            TERM
      AND STARTING DATE




This
Employment Agreement is concluded for a fixed term of two years commencing
September 1, 2007.




This
Employment Agreement may be terminated by either party upon three months’
notice, effective as of the end of the month. The Company will not give notice
before December 31, 2008, other than for Cause.






6.
            PROBATION
      PERIOD




None.






7.
            WORKING
      HOURS




The
Employee shall devote his full working capacity exclusively to the
Company.






8.
            SALARY




The gross
salary amounts to CHF 400,000 per year, payable in 12 monthly
installments.




This
amount includes all compensation for overtime.




Additionally,
for all months in which the Employee leases or owns a residence in Switzerland,
the Employee will be paid a gross housing allowance of CHF 7,000 per
month.






9.
            BONUS




The
Employee may be considered for a bonus in the range 0 – 25 % of his gross salary
earned, which is discretionary and conditional upon his performance, conduct and
the profitability of the Company. The bonus settlement will not normally take
place before the year end result is approved by the general assembly. As the
employment will end during a fiscal year, the Company may it its option pay the
final bonus on termination.
















10.
            EXPENSES




The
Company shall cover all reasonable expenses (traveling and hotel expenses,
expenses for invitations etc.) which arise in connection with the Employee’s
activities for the Company. The Staff Policy Manual as amended from time to time
contains further rules regarding reimbursement of expenses.






11.
            SOCIAL
      SECURITY CONTRIBUTIONS




The
Employee and the Company shall each pay half of the contributions for AHV (Old
Age and Survivors’ Insurance), IV (Invalidity Insurance), EO (Loss of Earnings)
and ALV (Unemployment Insurance). The Employee’s contributions are deducted by
the Company from his gross salary and a possible bonus payment.






12.
            PENSION
      PLAN




Unless he
elects otherwise consistent with Swiss law, the Employee shall participate in
the Company’s pension plan. The Plan is detailed in Staff Policy
Manual.






13.
            ILLNESS




In case
of the Employee’s inability to perform his duties under this Employment
Agreement due to illness, the Employee shall continue to receive his salary for
a maximum period of three months. In no case shall the Employee be entitled to
receive salary after the end of this Employment Agreement.






14.
            ACCIDENT




The
Employee is insured for occupational as well as non-occupational accidents
according to the mandatory Swiss accident insurance (UVG). The contributions for
the non-occupational accident insurance shall be paid by the Employee. The
Company may deduct the Employee’s contributions from his gross
salary.




The
continuation of salary payment in case of accident is determined by Art. 324a
and 324b of the Swiss Code of Obligations. In no case shall the Employee be
entitled to receive salary after the end of this Employment
Agreement.
















15.
            DEATH




In case
of the Employee’s death the Company shall pay to his wife or his minor children,
or, in the absence of these heirs, other persons to whom the Employee fulfilled
an obligation of support, the salary for the month of death and for the three
consecutive months. Such payment shall include the Company’s obligations under
Art. 338 of the Swiss Code of Obligations.






16.
            VACATION




The
Employee is entitled to 5 weeks of paid vacation (25 working days) per year.
Vacation is pro-rated for the first year.




The
Employee shall further be entitled to receive his salary at public holidays
which apply in the Canton of Valais.






17.
            CONFIDENTIALITY,
      TRADE SECRETS




All
manufacturing or trade secrets including customer base, technical,
organizational and financial information and all other information directly or
indirectly related to the business of the Company or to the business of any
customer of the Company, which is disclosed to the Employee by the Company or
any of its employees and which the Employee gets acquainted with during the
employment relationship with the Company, shall be treated as confidential
information. At all times, both during the employment and after the termination
thereof, the Employee shall keep such information secret and shall refrain from
disclosing it or using it in any way for his own benefit or for the benefit of
any person other than the Company.






18.
            INTELLECTUAL
      PROPERTY RIGHTS




Inventions,
designs, developments and improvements which the Employee makes while performing
his employment activity and contractual duties or to which the Employee
contributes belong to the Company, regardless of their
protectability.




Inventions
and designs which the Employee makes while performing his employment activity
but not during the performance of his contractual duties or to which the
Employees contributes are assigned to the Company without further formalities.
The Employee shall inform the Company of such inventions or designs. The Company
shall inform the Employee in writing within 6 months whether it wishes to keep
the rights to the invention or the design or to release them to the Employee. In
case that the invention or the design is not
released to the Employee, the Company shall pay him a special appropriate
compensation within the meaning of Art. 332 (4) of the Swiss Code of
Obligations.
















The
rights to works of authorship (drafts, models, plans, drawings, texts) which the
Employee creates while performing his employment activity, whether during the
performance of his contractual duties or not, including the right to uses not
yet known at this time, are transferred completely and exclusively to the
Company.






19.
            MISCELLANEOUS




This
Agreement together with Annexes and any other signed agreements of like date
form the entire contract between the Employee and the Company. Amendments to
this Employment Agreement shall only be valid if made in writing. E-mails shall
not form any part of this contract or any amendment thereto; however documents
exchanged electronically but signed by hand shall constitute valid contracts and
amendments.




Should
any provision of this Employment Agreement be fully or partially invalid or
ineffective, the other provisions or parts shall remain valid and in full force
and effect. In such event, the invalid or ineffective provision or part shall be
replaced by a provision which best reflects the economic intentions of the
parties without being invalid or ineffective, having due regard to the subject
and purposes of this Employment Agreement.




This
Agreement replaces in its entirety any previous Agreements between the Employee
and the Company, which are hereby rendered null and void.






20.
            APPLICABLE
      LAW




This
Employment Agreement is subject to Swiss law.
















Annex
1




Description
of Field of Activity as well as Duties and Responsibilities




1.
            Head
      of FSRS Operations in Switzerland.




2.
            Development
      of business related to various clients and regions and lines of
      Business.




3.
            Assistance
      to Board in development of strategy for Swiss
  operations.




4.
            Close
      cooperation with Flagstone Re employees and teams, especially with
      Martigny CUO, Group CEO and Group
Chairman.




5.
            Underwriting
      within such limits as are allocated by the Board from time to
      time.




6.
            Supervision
      of Underwriters within such limits as are allocated by the Board from time
      to time.




7.
            Participate
      in overall relationship management with
PRS.




8.
            Attendance
      at conferences and meetings in capacity as a senior representative of
      FSRS.




9.
            Recruiting,
      hiring, training, motivating, and evaluating Switzerland
      staff.




10.
            Recruiting/developing
      an internal or external replacement CEO within two
  years.




Before
conclusion of legal matters or completion of measures which are not part of the
normal business activity, the CUO/CEO has to refer to the Board for completion.
Such activity or measures are to be of high relevance or constitute a high risk
potential.




The
general guidance above notwithstanding, the following activities and issues are
always to be submitted to the Board:




1.
            Investments
      or yearly expenses which exceed CHF
100.000.--




2.
            relevant
      contracts such as cooperation with third parties,
  leasing.




3.
            guarantees,
      credits, leases, participations,
etc.




4.
            hiring
      of personnel




5.
            real
      estate transactions




6.
            creation
      of branches or business centers




7.
            conclusion
      of contracts with impact exceeding the normal business activity or which
      are of vital importance for the
company




8.
            conclusion
      of all business which are board power
reserved




-----------ENDS------------
















21.
            ANNEXES




The
agreements and regulations attached to this Employment Agreement, as amended
from time to time, form an integral part of this Agreement.




Place,
Date:     Bermuda 20 July
07








/s/ Mark
Byrne


Mark
Byrne


Director
and Chairman








/s/ Guy
Swayne


Employee


















ANNEXES




Staff
Policy Manual