| 1.01 | Flagstone      Reinsurance Holdings Limited (the “Company”) adopted this Amended and      Restated Flagstone Reinsurance Holdings Limited Employee Restricted Share      Unit Plan (the “Plan”), effective as of July 20th      2007 for the benefit of the Directors, officers, and Employees of the      Company.  The purpose of the Plan is to promote a proprietary      interest in the Company and its Subsidiaries among its Directors,      officers, and employees; encourage the Directors, officers, and Employees      of the Company to further the development of the Company; and to attract      and retain the key employees necessary for the Company’s long-term      success.  This Plan amends and restates in its entirety the      Flagstone Reinsurance Holdings Limited Employee Restricted Share Unit Plan      adopted on July 1, 2006 and amended in November,  2007. |
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| 2.01 | General      – Whenever the following terms are used in the Plan with the first letter      capitalized, they shall have the meanings specified below unless the      context clearly indicates to the contrary or as provided under Section 7      of the Plan. |
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| 2.02 | “Account”      of a Participant means his or her individual account, if any, or the      account of a Director’s employer, as established in accordance with      Section 6. |
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| 2.03   | “Beneficiary”      means the person or persons designated by a Participant, on a form      provided by the Plan Administrator, to receive payments under the Plan in      the event of the Participant’s death. |
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|   |                                                                                                                                                                                                                              |
| 2.04   | “Board”      means Board of Directors of theCompany.                                                                                                                                                                  |

| 2.05                                                 | “Cause”      shall mean (a) a material breach by a Participant of any contract between      the Participant and the Company or a Subsidiary; (b) the willful and      continued failure or refusal by the Participant to perform any duties      reasonably required by the Company or a Subsidiary, after notification by      the Company or the Subsidiary of such failure or refusal, and failure to      correct such behaviour within 20 days of such notification; (c) commission      by the Participant of a criminal offence or other offence of moral      turpitude; (d) perpetration by the Participant of a dishonest act or      common law fraud against the Company or a Subsidiary or a client of      either; or (e) the Participant willfully engaging in misconduct which is      materially injurious to the Company or a Subsidiary, including without      limitation, the disclosure of any trade secrets, financial models, or      computer software to persons outside the Company or a Subsidiary without      the consent of the Company or a Subsidiary. |
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| 2.07                                                 | “Compensation      Committee” means the Compensation Committee of the Board of Directors of      the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 2.08         | “Common      Stock” means common shares of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 2.09         | “Company”      means Flagstone Reinsurance Holdings Limited.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 2.10         | “Director”      means a member of the board of directors of the Company or its      Subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

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| 2.11                                                 | “Disability”      means a condition by which the Compensation Committee has determined that      the physical or mental condition of the Participant is such as would      entitle him to receive payment of monthly benefits under any disability      plan of the Company or a Subsidiary in which the individual      participates.                                                               |
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| 2.12         | “Employee”      means an employee of the Company or its Subsidiaries.                                                                                                                                                                                                                                                                                                                                |
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                                             |
| 2.13                                                 | “Grant      Certificate” means a certificate evidencing the credit of or grant to a      Participant of a Restricted Share Unit under the Plan (sample attached as      Appendix 5).                                                                                                                                                                                                                 |
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                                             |
| 2.14                                                 | “Inter      Vivos Designee” means any person or body of persons corporate or      unincorporate, association, trust, partnership or similar entity or      arrangement designated by a Participant, on a form provided by the Plan      Administrator, to hold such RSUs granted to the Participant under the Plan      and receive payments under the Plan during the life of the      Participant. |
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| 2.15                                                 | “Participant”      means any Employee, officer, or Director, except for Management Directors,      of the Company or its Subsidiaries who (1) are eligible for RSU credits or      grants under the Plan and (2) the Compensation Committee decides pursuant      to its authority under Section 3.01 of the Plan to grant or credit an RSU      award.                                              |
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                                             |
| 2.16                                                 | “Plan”      means the Flagstone Reinsurance Holdings Limited Employee Restricted Share      Unit Plan, as it may be amended from time to time.                                                                                                                                                                                                                                                       |
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                                             |
| 2.17                                                 | “Plan      Administrator” means the Compensation Committee, or the person or persons      appointed by the Compensation Committee to serve under Section 4 of the      Plan.                                                                                                                                                                                                                         |
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                                             |
| 2.18                                                 | “Restricted      Share Unit” (or “RSU”) means a right to receive a payment, in cash or in      actual Common Stock of the Company, of the value of Common Stock of the      Company, subject to the terms of this Plan and the respective Grant      Certificate.                                                                                                                        |
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|  2.19                                           | “Subsidiary”      means a subsidiary of the Company.                                                                                                                                                                                                                                                                                                                                                 |

| 3.01 | Under      the Plan, the Compensation Committee, in its sole discretion, may grant      RSUs to Participants or credit RSUs to Directors’ Accounts.  The      total stock credits or grants under the Plan shall not      exceed (a) that amount required to satisfy the Director requests      for fees to be paid in shares, plus (b) 0.2 percent of the total issued      and outstanding share capital of the Company per annum or as      decided by the Compensation Committee.  To the extent      that any RSU granted or credited under the Plan expires, terminates, or is      cancelled, such unissued stock credits or grants shall again be available      for grant or credit under the Plan. |
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| 3.02 | The      RSUs will normally be settled by delivery of Common Stock, but can be      settled to the Participant on distribution in cash, by issuance of shares      of Common Stock, or partly in cash and partly by issuance of shares of      Common Stock as determined by the Compensation Committee; provided that      Participants who are UK domiciled for tax purposes may only receive      distributions by issuance of shares of Common  Stock. |
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| 3.03 | The      amount of cash, if any, to be paid in lieu of issuance of shares of Common      Stock under the Plan shall be determined based on the net book value per      share of Common Stock (or market value, if the Company’s shares are freely      tradable on an exchange) as of the date on which a Participant becomes      entitled to payment, whether or not such payment is    deferred. |
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| 4.01 | The      Plan shall be administered by the Compensation Committee, and the      Compensation Committee shall have the sole authority to interpret the      Plan, to establish and revise rules and regulations relating to the Plan      (including this Plan document), and to make any other determinations that      it believes necessary or advisable for the administration of the      Plan.  All of the powers and responsibilities of the      Compensation Committee under the Plan may be delegated by the Compensation      Committee, in writing, to any Compensation Subcommittee or appropriate      Company personnel thereof.  The Board of Directors or the      Shareholders of the Company can overrule the Compensation      Committee. |
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| 5.01 | The      Management Committee of the Company will recommend, and the Compensation      Committee will approve, the Participants in the      Plan.  Participation in the Plan will be limited to officers,      Employees, and Directors (excluding Management Directors) of the Company      or its Subsidiaries.  Participants in the Plan may also      participate in the Flagstone Reinsurance Holdings Limited Performance      Share Unit Plan (the “PSU Plan”) sponsored by the Company, however such      persons shall not be eligible to receive grants of RSUs and Performance      Share Units in the same calendar year.  In addition,      participation in the Plan shall be limited only to those individuals who      are approved by the Compensation Committee and whose participation in the      Plan is evidenced by a Grant Certificate executed by the      Company. |
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| 6.01 | The      Compensation Committee may grant RSUs to a Participant pursuant to the      Plan.  In addition, a Director of the Company may elect to      substitute all or a percentage of his/her compensation for services      performed for the Company with RSUs issued under the Plan, such amount to      be credited to his/her Account as RSUs. A Director who serves on the Board      on behalf of his/her employer may stipulate that amounts be credited to      such employer’s Account as RSUs.  Grants or credits of RSUs      shall be evidenced by a Grant Certificate in such form as the Compensation      Committee shall from time to timeapprove. |
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| 6.02  | A      Director who is a Participant in the Plan shall elect no later than      December 31 of the year prior to the year with respect to which the      compensation is earned (or for the first year of the Plan, no later than      the last day of the month prior to the Plan’s effective date), the dollar      amount or percentage of compensation for such year to be converted into      RSUs and credited to his/her Account pursuant to the written terms of the      Plan and the Grant Certificate. |
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| 6.03 | Upon      a grant or credit of an award of RSUs under the Plan, as applicable, a      Participant’s Account shall be credited with the amount of such grant or      credit. |
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| 6.04 | Actual      shares of Company Common Stock or cash (as determined by the Committee),      equal in amount to the number of RSUs that have vested, will be      distributed to the Participant upon the earlier of the following: (a)      separation from service other than for cause, (b) satisfaction of the      applicable vesting period(s), (c) a specific date, or (d) such other time      as the Committee may in its sole discretion determine (collectively, the      “Distribution Dates”).  The Company shall deliver the shares of      Common Stock of the Company and/or cash to the Participant as soon as      administratively feasible after the identified date of      distribution. |
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| 6.05 | Grants      of RSUs under the Plan will normally fully vest on the date that is      specified in the applicable Grant Certificate, subject to the      following: |
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|   | 6.05.1         | Upon      a Participant’s death or Disability, he/she shall become fully vested in      all RSUs that have been credited or granted under the  Plan.                                                                                                                                                                                                                                                                                                    |
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|   |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | 6.05.2         | Except      as otherwise provided herein, the unvested RSU’s of Participants who are      Employees or Officers shall be canceled upon notice of termination from      the Employer to the Employee or the notice of resignation of the      Employee.                                                                                                                                                                                                  |
|   |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | 6.05.3         | Notwithstanding      6.06.2, at the discretion of the Compensation Committee, vesting of RSUs      that are granted under the Plan may continue for Employees who separate      from service with the Company after at least five years’      service.                                                                                                                                                                                                  |
|   |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | 6.05.4 – | If      an Employee is terminated for Cause all of his RSU’s will be automatically      canceled.                                                                                                                                                                                                                                                                                                                                                       |
|   |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | 6.05.5         | The      RSU’s of a Director shall normally vest on the date noted on the Grant      Certificate, unless accelerated under 6.04.1, and regardless of whether      that Director continues to serve. The Compensation Committee can cancel      the RSU’s of a Director, whether vested or not, if that director engages      in action deemed to be materially hostile to the interests of the Company,      as judged by the Board of Directors. |
|   |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | 6.05.6         | The      Compensation Committee may, in its sole discretion, accelerate the vesting      of any RSUs credited or granted under the Plan at any  time.                                                                                                                                                                                                                                                                                                         |

| 6.06 | RSUs      and the rights and privileges conferred therewith shall not be sold,      transferred, encumbered, hypothecated, or otherwise anticipated by the      Participant, except as provided for under the terms of the      Plan.  This Award is not liable for or subject to, in whole or      in part, the debts, contracts, liabilities, or torts of the Participant,      nor shall it be subject to garnishment, attachment, execution, levy, or      other legal or equitable process. |
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| 7.01 | The      Plan has special provisions which apply variously to citizens, residents,      domiciliaries, of certain countries, or employees of Company subsidiaries      located in certain countries. These provisions form part of this Plan and      are attached as Appendix 4. |
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| 7.02 | The      Company may extend or amend Appendix 4 from time to time in order to      accommodate the development of the Company in new countries, to maintain      the most tax-favorable status available in various countries under the      applicable laws and further modifications/amendments carried out from time      to time. Such technical amendments require the approval of the Management      Compensation Committee of the Company, and the Chairman of the      Compensation Committee. |
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| 8.01 – | Participants      shall be responsible for all individual tax consequences of the RSU grants      under the Plan.  Where feasible, the Plan will be interpreted      and administered to provide favorable tax treatment to the Participant,      subject to the compliance with the applicable laws of their respective      jurisdiction. |
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| 8.02      - | The Company reserves the right to      withhold shares or deduct from the Participant payroll any taxes or social      benefit costs to the Participant or the Company associated with the      vesting or fulfillment of theRSUs. |
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| 9.01 | A      Participant, by filing the prescribed form (the “Beneficiary Designation      Form”, sample attached as Appendix 2) with the Plan Administrator, or such      other person as the Plan Administrator may designate from time to time,      may designate one or more Beneficiaries and successor Beneficiaries who      shall be given the rights to the RSUs in accordance with the terms of the      Plan in the event of the Participant’s death.  A Participant may      change the designation of a Beneficiary at any time by completing a new      Beneficiary Designation Form that shall revoke and supersede all earlier      forms.  In the event a Participant does not file a Beneficiary      Designation Form designating one or more Beneficiaries, or no designated      Beneficiary survives the Participant, the RSUs shall be given to the      individual to whom such right passes by will or the laws of descent and      distribution and/or succession. |
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| 9.02   | A      Participant, by filing the prescribed form (the “Inter Vivos Designee      Form”, sample attached as Appendix 1) with the Plan Administrator, or such      other person as the Plan Administrator may designate from time to time,      may designate one or more Inter Vivos Designees and successor Inter Vivos      Designees who shall be given the rights to all past, present and future      grants or series of RSUs, or to one or more specific grants or series of      RSUs, designated within the Inter Vivos Designee Form during the life of      the Participant and in accordance with the terms of the Plan.  A      Participant may change the designation of any Inter Vivos Designee by      completing a new Inter Vivos Designation Form that shall revoke and      supersede all earlier forms. In the event a Participant does not file an      Inter Vivos Designation Form designating one or more Inter Vivos      Designees, or no Inter Vivos Designee survives the Participant, the RSUs      and any payment of shares in place of cash shall be given to the      Participant. |
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| 11.01 | In      general, any claim for benefits under the Plan shall be filed by the      Participant or beneficiary (“claimant”) on the form prescribed for such      purpose with the Plan Administrator.  If a claim for benefits      under the Plan is wholly or partially denied, notice of the decision shall      be furnished to the claimant by the Plan Administrator within a reasonable      period of time after receipt of the claim by the Plan      Administrator.  A Participant who is denied a claim for benefits      may appeal to the Compensation Committee for a review of the Plan      Administrator’s decision.  The decision of the Compensation      Committee shall be furnished to the Participant within a reasonable period      of receipt of the request for review and the decision of the Compensation      Committee shall be final and binding to the  Participant. |
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| 12.01 | The      Plan may be amended in whole or in part from time to time, or may be      terminated, by the Board in accordance with the bye-laws of the Company,      provided that in event of such amendment or termination, the rights of the      Participants related to an RSU that have been granted under the Plan shall      be preserved and maintained and no amendment may confer additional      benefits upon Participants without prior approval by the      Board.  Notice of any amendment or termination of the Plan shall      be given in writing to theParticipant. |
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| 13.01 | The      Plan shall become effective on the date it is adopted by the Company and      shall continue in effect as amended from time to time until terminated      pursuant to Section 12. |
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| 14.01 | No      Participant shall have any rights (including voting or dividend rights) as      a shareholder of the Company with respect to any Common Stock covered by,      or related to, any RSU granted or credited pursuant to the Plan until the      date of the delivery of a stock certificate with respect to such Common      Stock. |
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| 15.01 | In      the event of any change in the issued and outstanding shares of Common      Stock of the Company by reason of any share split, share dividend,      recapitalization, merger, consolidation, reorganization, amalgamation,      combination or exchange of shares of Common Stock or other similar event,      and if the Compensation Committee shall determine, in its sole discretion,      that such change equitably requires an adjustment in the number or kind of      shares of Common Stock of the Company that may be issued pursuant to RSUs      under the Plan pursuant to paragraph 6, then such adjustment shall be made      by the Compensation Committee and shall be conclusive and binding for all      purposes of the Plan. |
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| 15.02 - | Upon      the declaration by the Board of Directors of the Company of a dividend in      specie or in kind in favor of the holders of Common Shares in the Company,      the Compensation Committee shall determine, in its sole discretion, if      such dividend equitably requires an adjustment in the number or kind of      RSUs that may be issued to a Participant under the Plan in lieu of a      dividend payment. |
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| 16.01 | If      any provision of this Plan shall be held invalid or unenforceable, such      invalidity or unenforceability shall not affect any other provisions      hereof, and this Plan shall be construed and enforced as if such      provisions had not been included. |
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| 16.02 | Except      by will or the laws of descent and distribution and/or succession, a      Participant’s rights and interest under the Plan may not be assigned or      transferred in whole or in part either directly or by operation of law or      otherwise (except in the event of Participant’s  death),      including but not limited to, execution, levy, garnishment, attachment,      pledge, bankruptcy or in any other manner and no such right or interest of      any Participant in the Plan shall be subject to any obligation or      liability or such Participant; provided that Directors shall be permitted      to assign their rights under the Plan to their employer or an affiliate of      their employer, as approved by the Compensation  Committee. |
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| 16.03 | Except      to the extent specifically set forth in the Grant Certificate, the      Participant’s rights under the Plan shall be governed in all aspects by      the terms of the Plan, including the provisions that authorize the Plan      Administrator to administer and interpret the Plan and that provide that      the Plan Administrator’s decisions, determinations, and interpretations      with respect to the Plan are final and conclusive on all persons affected      hereby.  Additionally, This Plan shall be construed in      accordance with, and governed by the laws of the  Bermuda. |
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| 16.04 | Nothing      in this Plan, nor any action taken pursuant to this Plan, shall be deemed      to give any Participant any right to remain in the employ of the Company      or affect the right of the Company to terminate a Participant’s employment      at any time, with or without Cause. |
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| FLAGSTONE      REINSURANCE HOLDINGS LIMITED, |
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| By:                                          |   |
|                                         |   |
| Title:                                       |   |

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| (i) | Series/Year(s)      _____________________ |
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| (ii) | All      Grants      after:                   /                   /                    _______________ |
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| 1.   | The      aggregate number of RSUs which may be granted to Indian Participants under      this Plan shall not exceed 300,000 or as decided by the Compensation      Committee, and subject to the provisions of Section 3.01 hereof. RSU      credits or grants subject to increase in accordance with the terms of the      plan pursuant to the approval received from the Board of      Directors/Shareholders of theCompany |
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| 2.   | The      RSUs will be actually paid to the Indian Participants in accordance with      the Section 3.02 and 3.03 of thePlan. |
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| 3.   | The      approval of the Board of the Company to the Plan was accorded on 16 June      2006. The assent of the Board of the Company, approving the adoption of      the Plan including this Appendix, for the Indian Subsidiary was accorded      on 16 June 2006.  The assent of the board of directors of the      Indian Subsidiary approving the adoption of the Plan including this      Appendix, for the Indian Subsidiary was accorded on  [___]. |
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| 4.   | Participation      in the Plan and the grant of Awards shall be awarded to such Indian      Participant providing bona fide services to or for, one or more Indian      Subsidiary as may be selected by the Board or such Compensation Committee      as designated by the Board, in consultation with the board of directors of      the Indian Subsidiary, from time to time.  The Board may also      grant RSUs to individuals in connection with hiring, retention or      otherwise, prior to the date the individual first performs services for an      Indian Subsidiary, provided that such RSUs shall not become vested or      exercisable prior to the date the individual first commences performance      of such services.  Provided, however, that an Employee who is a      Promoter or belongs to the Promoter Group or a director who either by      himself or through his relative or through any body corporate, directly or      indirectly holds more than 10% of the outstanding shall not be eligible to      participate in the Plan |
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| 5.   | For      purposes of the above paragraph (4) |
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| a.   | “Promoter”      means – |
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| i.    | the      person or persons who are in over-all control of the Indian      Subsidiary;                                                                                                            |
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| ii.   | the      person or persons who are instrumental in the formation of the Indian      Subsidiary or programme pursuant to which shares of the Indian Subsidiary      may be offered to the public; |

| iii.   | the      person or persons who are named in the offer document (inviting      subscription from the public to the shares of the Indian Subsidiary) as      promoter(s), in the event the Indian Subsidiary decided to offer shares to      the public. |
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| b.   | “Promoter      Group” means: |
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| i.   | an      immediate relative of the Promoter (i.e. spouse of that person, or any      parent, brother, sister or child of the person or of the spouse);      and, |
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| ii.   | persons      whose shareholding is aggregated for the purpose of disclosing in the      offer document (inviting subscription from the public to the shares of the      Indian Subsidiary) "shareholding of the promoter  group" |
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|   | c. | “Relative”      means immediate relative namely spouse, parent, brother, sister or child      of the person or the spouse. |
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| 6.   | All      defined terms that are not otherwise defined under this Appendix shall      have the meaning attributed to them under the provisions of the      Plan. |
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| 7.   | Except      to the extent as set forth in this Appendix and where not contrary to the      meaning or intention herein, the provisions of the Plan shall apply to the      Indian Participants granted theRSU. |
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| RSU      Holder             | «Column1»                                                                                                                                                                                                                                                                                                                                                                                                                      |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Restricted      Share Units | «Column2»                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| RSU      Series             | [●]                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Grant      Date             | [●]                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Vesting      Date           | [Normal      Vesting: Grants of these RSUs under the Plan will fully vest on the date      that is two years after the Grant Date immediately above, except as may be      modified by section by the terms of the RSU Plan, and in particular      section [6.05].    -or-[The      Participant is a Director and is fully and immediately vested in RSUs that      are credited to his/her Account under thePlan.] |

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| Amendment        | Date     | Summary      of Changes                                                                                                                                            | Section | Approved      by   |
|------------------|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|-------------------------|
| Amendment      1 | 1/7/06   | Amended      and Restated                                                                                                                                          | Various | Board      of Directors |
| Amendment      2 | 11/9/06  | Section      5 clarified                                                                                                                                           | 5.01    | Board      of Directors |
| Amendment      3 | 16/11/06 | Amended      & Restated                                                                                                                                        | Various | Shareholders            |
| Amendment      4 | 20/7/07  | Amended      & Restated                                                                                                                                        | Various | Board      of Directors |
| Amendment      5 | 15/5/08  | Language      added regarding notification procedureof      beneficiary or Designee and ability for suchDesignations      to retroactively effect prior RSU grants | 9       | Board      of Directors |