EX-10.21



 





Exhibit 10.21




Dated                                          2007




TALBOT UNDERWRITING SERVICES LTD




- and -




Michael Edward Arscott Carpenter




 






SERVICE AGREEMENT




 








 









 








THIS AGREEMENT is made on                     




BETWEEN





	(1)	 	TALBOT UNDERWRITING SERVICES LTD (Company No. 03043304), whose registered office is
Gracechurch House, 55 Gracechurch Street, London, EC3V 0JP (the “Company”); and
	 
	(2)	 	Michael Edward Arscott Carpenter of 14 Dynevor Road, Richmond, Surrey TW10 6PF (the
“Executive”)





WHEREBY IT IS AGREED as follows: -





	1.	 	Definitions
	 
	 	 	In this Agreement:





	 	 	 
	Accrued Bonus

	 	means in respect of the Executive’s bonus allocated for the 2006 Year and in
respect of the Executive’s bonus awarded in May 2007, conditional upon the sale of
Talbot Holdings Ltd to Validus Holdings, Ltd as set out in Appendix 3.
	 
	 	 
	Associated Company

	 	means any company with which the Company is connected in accordance with
section 839 of the Income and Corporation Taxes Act 1988.
	 
	 	 
	Board

	 	means the Board of Directors for the time being of Talbot Holdings Ltd.
	 
	 	 
	Commencement Date

	 	01 June 2001.
	 
	 	 
	Good Leaver

	 	means if, at the time of the Executive’s termination of employment, the
Executive’s employment has terminated other than due to one of the following reasons:
	 
	 	 
	 

	 	(i) he has ceased to be an Employee before the date of 2
July 2007
	 
	 	 
	 

	 	(ii) he has ceased to be an Employee after 2 July 2007 in
circumstances justifying summary dismissal without notice
	 
	 	 
	 

	 	(iii) he has been dismissed for material or persistent
breaches of his duties as employee or
	 
	 	 
	 

	 	(iv) he has given notice of termination of his employment
before or after 2 July 2007 except in circumstances where he
has been advised by his employer of a materially ad-






			
	 	 	 
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	 	verse change to his position in the Group or the terms and conditions of his
employment.
	 
	 	 
	Termination Date

	 	means the date of termination of the Executive’s employment under this
Agreement.
	 
	 	 
	Warranties

	 	means the Warranties as defined in the Share Sale Agreement dated 15 May 2007
between (1) the persons named in Schedule 1 (2) Talbot Holdings Limited and (3) Validus
Holdings, Ltd.
	 
	 	 
	Year

	 	is as defined in the Talbot Group Staff Profit Share Plan







	2.	 	Term of Appointment
	 
	2.1	 	The Executive shall be employed by the Company subject to the terms and conditions set out in
this Agreement as Chief Executive of the Talbot Group.
	 
	2.2	 	The Executive’s employment commenced on the Commencement Date and shall continue, subject to
the remaining terms of this Agreement, until terminated by either party giving the other not
less than 12 months’ prior notice in writing. If the Executive has any previous employment
which counts as part of their continuous period of employment for the purposes of this
employment, the Commencement Date of their previous employment will be shown above.
	 
	2.3	 	Notwithstanding Clause 2.2, the Company may, in its sole and absolute discretion, terminate
the Executive’s employment with immediate effect by paying a sum in lieu of notice (“Payment
in Lieu”) equal to the base salary (as at the Termination Date) which the Executive would have
been entitled to receive under this Agreement during the notice period referred to at Clause
2.2 (or, if notice has already been given, during the remainder of the notice period) less
applicable income tax and National Insurance contributions. For the avoidance of doubt, the
Payment in Lieu shall not include any element in relation to:






	 	(i)	 	any bonus or commission payments that might otherwise have been due during the
period for which the Payment in Lieu is made other than any unpaid amount of the
Accrued Bonus if the Executive is a Good Leaver; and
	 
	 	(ii)	 	any payment in respect of benefits (excluding pension) which the Executive
would have been entitled to receive during the period for which the Payment in Lieu is
made.






	2.4	 	The Executive’s employment shall terminate on the date on which the Executive reaches the age
of 65. This is the subject to the Company complying with the relevant provisions of the
Employment Equality (Age) Regulations 2006 relating to retirement.





			
	 	 	 
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	3.	 	Powers and Duties
	 
	3.1	 	The Executive’s position is contained in clause 2.1 above. The Executive may be reasonably
required by the Company to undertake such other duties within their range of experience and
skills as may be necessary from time to time.
	 
	3.2	 	The Executive shall:
	 
	3.2.1	 	comply with all reasonable directions from, and all regulations of, the Company or, as
appropriate, any Associated Company;
	 
	3.2.2	 	report to the The Board of Talbot Holdings Ltd and shall at all times promptly give to the
The Board of Talbot Holdings Ltd or to their nominated representative (in writing if so
requested) all information, advice and explanations as they may reasonably require in
connection with matters relating to their employment or directorship under this Agreement or
in relation to the business of the Company or any Associated Company generally;
	 
	3.2.3	 	devote the whole of their time, attention and abilities during their working hours to
carrying out their duties under this agreement in a proper, loyal and efficient manner;
	 
	3.2.4	 	at all times promote the interests of and maintain the goodwill of the Company and any
Associated Company and not knowingly do or willingly permit to be done anything that may
result in loss, other than in the normal course of business, or harm to the Company or any
Associated Company; and
	 
	3.2.5	 	not at any time make any untrue or misleading statement relating to the Company or any
Associated Company.
	 
	4.	 	Hours of Work
	 
	4.1	 	The Executive is normally required to work 40 hours per week including a daily lunch break of
one hour. There will be no additional payment for hours worked in excess of the Executive’s
normal hours of work.
	 
	4.2	 	The normal hours of work will be 9.30am to 5.30pm, Monday to Friday or such other hours as
may from time to time be notified to the Executive in writing.
	 
	4.3	 	The Executive may also be required to work such additional hours as may be necessary for the
proper performance of their duties but that will not exceed an average of 48 hours in any 17
week period.
	 
	5.	 	Place of Work
	 
	5.1	 	The Executive’s normal place of work shall be 55 Gracechurch Street, London, EC3V 0JP or at
such other place within London as the Company may from time to time determine.





			
	 	 	 
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	5.2	 	In addition, the Executive shall, in the proper performance of his duties and for the purpose
of business trips, travel to such places both within the United Kingdom and abroad as the
Company may from time to time require. The Company does not envisage at the present time that
the Executive will be required to work outside the United Kingdom for a continuous period of
more than one month during their employment. The Executive will be given written notification
if there is a change in this position.
	 
	6.	 	Salary
	 
	6.1	 	The Executive shall receive a base salary of £270,400 per annum (subject to normal PAYE
deductions) payable in arrears by twelve monthly instalments by direct credit transfer to the
Executive’s bank account by no later than the 24th day of each month.
	 
	6.2	 	It is the policy of the Company to review salaries annually in April although there is no
obligation on the Company to increase them. You will be notified in writing of any change to
your salary.
	 
	6.3	 	The Executive shall be eligible to be considered for a discretionary bonus at the sole
discretion of the board of directors of Validus Holdings, Ltd (“Validus”). The portion of the
Executive’s bonus for 2006 payable in April 2008, if any, shall be paid in accordance with
existing Talbot Group Staff Profit Share Plan. In addition the Executive’s bonus for 2007
shall be calculated and be payable in accordance with the existing Talbot Group Staff Profit
Share Plan. The Executive shall not be entitled to receive any bonus, other than any unpaid
amount of his Accrued Bonus if he is a Good Leaver, if, on the date such bonus is due to be
paid, the Executive is under notice of termination (regardless of whether the Company or the
Executive has given such notice), he is on garden leave pursuant to Clause 17 or if his
employment has terminated.
	 
	6.4	 	The Executive shall not be entitled to any other salary or fees as an ordinary or executive
director or employee of the Company or any Associated Company and the Executive shall, as the
Company may direct, either waive his right to any such salary or fees or account for the same
to the Company.
	 
	7.	 	Restricted Shares
	 
	7.1	 	The Executive shall be awarded 43,478 restricted shares of Validus under the Validus Long
Term Incentive Plan. The terms of this award are subject to the Restricted Share Agreement
between the Executive and Validus at Appendix 2 (“RSA”), which the Executive is required to
enter into before the shares are awarded.
	 
	8.	 	Pension
	 
	8.1	 	During each year of the Executive employment, the Company shall contribute an amount equal to
20% of the Executive’s base salary in equal monthly instalments in arrears to the Talbot
Underwriting Services Ltd Group Personal Pension Plan or such other scheme that the Company
may put in place from time to time. The Company’s contributions to such scheme shall be
subject to the rules of the scheme and the tax relief and exemptions available from HMRC, as
amended from time to time.





			
	 	 	 
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	8.2	 	No contracting out certificate under the Pensions Schemes Act 1993 is in force in respect of
the Executive’s employment under this Agreement.
	 
	9.	 	Other Benefits
	 
	9.1	 	The Executive will be eligible to participate in the private medical insurance scheme
operated by the Company which provides cover for the Executive, their spouse, civil partner or
long term partner and dependent children, subject to cover being accepted by the insurance
company and to any conditions that the insurance company may impose.
	 
	9.2	 	The Executive shall be entitled to participate in the Company’s life assurance scheme which
shall pay to the Executive’s dependents, if the Executive dies during his employment, a sum
equal to: four times the Executive’s salary if the Executive’s marital status is single; or
eight times the Executive’s salary if the Executive is married or has a civil partner or long
term partner. Participation is subject to:






	 	(i)	 	the terms of the Company’s life assurance scheme, as amended from time to time;
	 
	 	(ii)	 	the rules or the insurance policy of the relevant insurance provider, as
amended from time to time; and
	 
	 	(iii)	 	the Executive satisfying the normal underwriting requirements of the relevant
insurance provider.






	9.3	 	The Executive will be eligible to join the permanent health insurance plan operated by the
Company from time to time and the premium in connection with such plan will be paid for by the
Company. Benefit will be payable only in accordance with the terms of the plan. If benefit
is refused by the insurer there will be no obligation on the Company to make any payment to
the Executive. If the insurer accepts a claim under the terms of the plan from time to time
in force, the Executive shall, from the date of such acceptance, no longer be eligible to
receive any base salary but the Executive will continue to be eligible to participate in the
private medical insurance scheme pursuant to Clause 9.1 above, subject to cover being accepted
by the insurance company and to any conditions that the insurance company may impose. Further
details are set out in the Staff Handbook.
	 
	9.4	 	Details of other benefits to which the Executive may be entitled are set out in the Staff
Handbook.
	 
	10.	 	Expenses
	 
	10.1	 	The Company shall reimburse to the Executive against production of receipts, if requested,
all reasonable traveling (other than to and from the usual place of work), hotel,
entertainment and other out-of-pocket expenses which the Executive may from time to time be
authorised to incur in the execution of his duties under this agreement. Further details are
set out in the Staff Handbook.





			
	 	 	 
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	11.	 	Holidays
	 
	11.1	 	In addition to normal bank and public holidays applicable in England the Executive will be
entitled to 30 working days paid holiday in every calendar year, which are to be taken at such
time or times as may be approved by the Executive’s direct report as set out in Clause 3.2.2.
If the Executive is working part-time, the amount of paid holiday will be calculated on a pro
rata basis and notified to them.
	 
	11.2	 	The Company’s holiday year runs from 1 January to 31 December.
	 
	11.3	 	Upon termination the Company may at its discretion require the Executive to take, during his
notice period, any holiday entitlement which has accrued by the Termination Date but which has
not been taken.
	 
	11.4	 	If the Executive’s employment commences or terminates part way through a holiday year, the
Executive’s entitlement to holiday during that year will be assessed on a pro rata basis.
Subject to the Company’s discretion at Clause 11.2 above, payment for holiday entitlement
accrued but not taken will only be made on termination of employment. If, on termination, the
Executive has taken more holiday than his accrued holiday entitlement, he will be required to
reimburse to the Company in respect of the excess days taken and the Executive hereby
authorises the Company to make deductions in respect of the same from his final salary
payment. For the avoidance of doubt, a day’s holiday pay is 1/260 of the Executive’s base
salary.
	 
	11.5	 	Further details regarding holidays are set out in the Staff Handbook.
	 
	12.	 	Confidential Information
	 
	12.1	 	For the purposes of this Clause 12, confidential information means, without limitation:






	 	(i)	 	trade secrets;
	 
	 	(ii)	 	any inventions or improvements which the Executive may from time to time make
or discover in the course of his duties;
	 
	 	(iii)	 	details of clients including insureds and reinsureds, premiums charged to them
and premiums paid to reinsurers, claims, account information, the services provided and
the Company’s or any Associated Company’s terms of business with clients, brokers,
coverholders and other agents;
	 
	 	(iv)	 	business marketing plans, budgets and accounts;
	 
	 	(v)	 	any proposals relating to the future of the Company or any Associated Company
or its or their business or any part thereof;
	 
	 	(vi)	 	details of employees and officers of the Company or any Associated Company and
of the remuneration and other benefits paid to them;





			
	 	 	 
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	 	(vii)	 	information relating to business matters, corporate plans, management systems,
finances, marketing or sales of any past, present or future products or services,
processes, designs, know how, pitch lists, policy wordings, broker lists, intermediary
lists, customer lists, analyses, data, spreadsheets, models, software, applications and
technical information relating to the creation, production or supply of any past,
present or future products or services of the Company or any Associated Company, any
information given to the Company or any Associated Company in confidence by clients,
insureds, reinsureds, brokers, agents, intermediaries, coverholders or other persons
and any other information (whether or not recorded in documentary form, or on computer
disk or tape) which is confidential or commercially sensitive and is not in the public
domain; and
	 
	 	(viii)	 	any other information which is notified to the Executive as confidential.






	12.2	 	The Executive shall not, either during his employment or thereafter, except in the proper
course of his duties or as required by law or regulation/regulators, use for his own or
another party’s benefit, or divulge or disclose to any person any Confidential Information
concerning the business or affairs of the Company or any Associated Company, or any of its or
their clients, customers, insureds, reinsureds, brokers, agents, intermediaries or
coverholders which may have come to his knowledge at any time during his employment by the
Company or any Associated Company. This Clause will cease to apply to information which
enters the public domain other than (directly or indirectly) through the acts or omissions of
the Executive.
	 
	13.	 	Competitive Activities
	 
	13.1	 	During the term of this Agreement the Executive shall not (unless otherwise agreed in writing
by the Company) undertake any other business or profession or be or become an employee or
agent of any other firm, company or other person or assist, be concerned in or have any
financial interest, whether directly or indirectly, in any other business or profession
including a business that is not trading that is in competition with the Company or any
Associated Company. The Executive may hold or acquire not more than 4%, by way of bona fide
investment only, of the shares or other securities of any company in competition with the
Company or any Associated Company which are listed or dealt in on any recognised Stock
Exchange, provided that the Executive promptly discloses such holding or acquisition to the
Company or Associated Company. The Company may require the Executive to divest of any
investment in any particular case on the ground that such other company is or may be carrying
on a business competing or intending to compete with the business of the Company or any
Associated Company or may cause a conflict of interests between those of the Company or any
Associated Company and those of such company or the Executive or may breach any law or
regulation binding on the Company, any Associated Company or the Executive.
	 
	13.2	 	In addition the Executive shall be entitled to engage in such activities as may be
appropriate in order to manage his personal investments in so far as such activities do not
materially interfere or conflict with the Executive’s performance of his duties under this
Agreement.





			
	 	 	 
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	14.	 	Post-Termination Restrictions
	 
	14.1	 	The Executive will not, directly or otherwise or on behalf of any other person, without the
prior written consent of the Board, for the Restricted Period, in respect of any business
which is in competition with any Restricted Business, offer employment to or otherwise
endeavour to entice away from the Company or any Associated Company any Restricted Executive.
	 
	 	 	In the above Clause 14.1 the following words and phrases have the following meanings:
	 
	 	 	“Restricted Business” means those of the businesses of the Company and any Associated
Company with which the Executive was involved to a material extent at any time during the
period of 12 months ending on the Termination Date;
	 
	 	 	“Restricted Executive” means any person who at the Termination Date was an employee of the
Company or any Associated Company (excluding secretarial, administrative and clerical
staff), who could materially damage the interests of the Company or any Associated Company
if he became engaged or employed in any business concern in competition with any Restricted
Business and with whom the Executive worked closely during the period of 12 months ending on
the Termination Date;
	 
	 	 	“Restricted Period” means the period of 12 months after the Termination Date, less:






	 	(i)	 	any period that the Executive has spent on garden leave pursuant to this
Agreement; and
	 
	 	(ii)	 	any period between the date of notice and the Termination Date during which the
Executive was not on garden leave.






	14.2	 	The Executive agrees and acknowledges that before entering into this Agreement he had the
opportunity to obtain independent legal advice on the restrictions in this Clause 14 that the
restrictions set out above are no wider or more restrictive than is reasonably necessary for
the protection of the legitimate business interests of the Company and/or any Associated
Company and further that the effect of those restrictions is not such as to prevent the
Executive from earning a living.
	 
	14.3	 	The Executive agrees that the restrictions contained in Clause 14 of this Agreement shall be
read and construed independently of the others and that all such restrictions are considered
reasonable by the parties to this Agreement. In the event that any such restriction shall be
found or held to be void in circumstances where it would be valid if some part of it were
deleted or the period scope or distance of application reduced the parties to this Agreement
agree that such restriction shall apply with such modification as may be necessary to make it
valid and effective and that any such modification shall not affect the validity of any other
restriction contained in this Agreement.
	 
	14.4	 	Without prejudice to the Company’s right to enforce this Agreement in respect of any
Associated Company it is agreed that the covenants contained in this Clause 14 shall inure for
the benefit of any relevant Associated Company and that the same shall be





			
	 	 	 
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	 	 	enforceable against the Executive by that Associated Company as if it were a party to this
Agreement.
	 
	15.	 	Return of Property
	 
	15.1	 	For the purposes of this Clause 15, Property means keys, computer equipment, all lists of
clients or customers, correspondence and all other documents, papers and records (including,
without limitation, any records stored by electronic means, together with any codes or
implements necessary to give full access to such records), system designs, software designs,
software programmes (in whatever media), presentations, proposals or specifications which may
have been prepared by the Executive or have come into their possession, custody or control in
the course of their employment.
	 
	15.2	 	The Executive shall promptly whenever requested by the Company and in any event upon the
termination of their employment or during any period of garden leave pursuant to Clause 18
deliver up to the Company all Property of the Company or any Associated Company and the
Executive shall not be entitled to and shall not retain any copies thereof.
	 
	16.	 	Sickness
	 
	16.1	 	If the Executive is unable to work due to illness or injury, they should inform the HR
Manager by 9.30am on the first day of absence. The Executive must also comply with the
absence procedures set out in the Staff Handbook.
	 
	16.2	 	Subject to the Executive complying with Clause 16.1, the number of working days for which the
Company will pay their base salary while they are absent due to sickness or injury is set out
in the Staff Handbook. Such remuneration shall include any sums the Company is obliged to pay
to the Executive pursuant to any social security or sick pay legislation. The Company may
reduce remuneration during incapacity by an amount equal to the benefit (excluding any lump
sum benefit) which the Executive would be entitled to claim during such incapacity under the
then current social security legislation (whether or not such benefit is claimed by the
Executive).
	 
	16.3	 	If the Executive either:






	 	(i)	 	becomes entitled to payment of benefit under the terms of any permanent health
insurance scheme from time to time in force; or
	 
	 	(ii)	 	is refused benefit under that scheme,






	 	 	all entitlement to base salary shall cease from the earlier of the commencement of the
payment of such benefit or the expiry of the relevant period referred to in Clause 16.2.
	 
	16.4	 	If the Executive is unable to work due to illness or injury the Company may require the
Executive from time to time to undergo a medical examination by a medical practitioner
nominated by the Company. The Company shall bear the cost of any such examination. The
Executive agrees that this Agreement shall be taken as the Executive’s written





			
	 	 	 
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	 	 	authorisation to the nominated medical practitioner to disclose to and discuss with the
Company the results of the examination and the matters which arise from it so that the
Company can be notified of any matters it considers might impair the Executive’s ability
properly to discharge his duties. The Company undertakes that, where such information is
disclosed to it, it shall be disclosed at the same time to the Executive. The Company shall
keep such information confidential and shall limit disclosure of such medical information to
only those officers and employees of the Company who have a proper and necessary need to be
given the information.
	 
	17.	 	Garden Leave
	 
	17.1	 	Once notice to terminate the Executive’s employment has been given by the Company or the
Executive pursuant to Clause 2.2, the Company shall be under no obligation to vest in or
assign to the Executive any powers or duties or to provide any work for the Executive and may
exclude the Executive from any premises of the Company or any Associated Company.
	 
	17.2	 	During any period of Garden Leave the Executive shall:






	 	(i)	 	continue to receive their salary and all contractual benefits in the usual way
subject to clause 6.3 and subject to the terms of any benefit arrangement;
	 
	 	(ii)	 	remain an employee of the Company and bound by the terms of this Agreement; and
	 
	 	(iii)	 	not, without the prior written consent of the Company, contact or deal with
any consultant, client, customer, supplier, agent, distributor, shareholder, adviser or
other business contact of the Company or any Associated Company.






	18.	 	Summary Termination of Employment
	 
	18.1	 	The Company may terminate the employment of the Executive, without notice or payment in lieu
of notice, if the Executive:






	 	(i)	 	is convicted of any criminal offence (other than a motoring offence for which
no custodial sentence is given to him) which in the reasonable opinion of the Company
demonstrated unsuitability for further employment with the Company; or
	 
	 	(ii)	 	shall be or become prohibited by law from being a director (applicable only to
directors); or
	 
	 	(iii)	 	shall be guilty of fraud, dishonestly or serious misconduct (which, for the
avoidance of doubt, includes any conduct which tends to bring the Company or any
Associated Company into disrepute) or shall commit any serious or persistent breach of
any of his obligations (for which warnings have been given to the Executive) to the
Company or any Associated Company (under this Agreement); or
	 
	 	(iv)	 	shall be guilty of fraud or wilful default in relation to the Warranties.





			
	 	 	 
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	18.2	 	Any delay or forbearance by the Company in exercising any right of termination under this
Clause shall not constitute a waiver of it.
	 
	18.3	 	In order to investigate a complaint of misconduct against the Executive the Company is
entitled to suspend the Executive on full pay. The Company shall ensure that any suspension
is kept for as short a time as is possible.
	 
	19.	 	Intellectual Property
	 
	19.1	 	The definitions in this Clause apply in this Agreement:






	 	(i)	 	“Intellectual Property Rights” means patents, rights to Inventions, copyright
and related rights, trade marks, trade names and domain names, rights in get-up, rights
in goodwill or to sue for passing off, rights in designs, computer software, analyses,
data, spreadsheets, models, software, applications, technical information, confidential
information (including know-how and trade secrets) and any other intellectual property
rights, in each case whether registered or unregistered and including all applications
(or rights to apply) for, and renewals or extensions of, such rights and all similar or
equivalent rights or forms of protection which may now or in the future subsist in any
part of the world; and
	 
	 	(ii)	 	“Inventions” means inventions, ideas and improvements, whether or not
patentable, and whether or not recorded in any medium.






	19.2	 	The Executive shall give the Company full written details of all Inventions and of all works
embodying Intellectual Property Rights made wholly or partially by him at any time during the
course of the Executive’s employment which relate to, or are reasonably capable of being used
in, the business of the Company or any Associated Company. The Executive acknowledges that
all Intellectual Property Rights subsisting (or which may in the future subsist) in all such
Inventions and works shall automatically, on creation, vest in the Company absolutely. To the
extent that they do not vest automatically, the Executive holds them on trust for the Company.
The Executive agrees promptly to execute all documents and do all acts as may, in the opinion
of the Company, be necessary to give effect to this Clause 19.2.
	 
	19.3	 	The Executive hereby irrevocably waives all moral rights under the Copyright, Designs and
Patents Act 1988 (and all similar rights in other jurisdictions) which he has or will have in
any existing or future works referred to in Clause 19.2.
	 
	19.4	 	The Executive hereby irrevocably appoints the Company to be his attorney to execute and do
any such instrument or thing and generally to use his name for the purpose of giving the
Company or its nominee the benefit of this Clause 19 and acknowledges in favour of a third
party that a certificate in writing signed by any Director or the Secretary of the Company
that any instrument or act falls within the authority conferred by this Clause 20 shall be
conclusive evidence that such is the case.





			
	 	 	 
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	20.	 	Other Agreements
	 
	20.1	 	The following documents have been superseded by this Agreement:






	 	(i)	 	the letter dated 18 May 2007 from Michael Carpenter to the Executive concerning
the restricted shares referred to in Clause 7; and
	 
	 	(ii)	 	the Executive’s former contract of employment with the Company.






	20.2	 	The Executive acknowledges and warrants that there are no agreements or arrangements whether
written, oral or implied between the Company or any Associated Company and the Executive
relating to the employment of the Executive other than those expressly set out in this
Agreement, the Staff Handbook and the RSA and that they the Executive is not entering into
this Agreement in reliance on any representation not expressly set out in this Agreement, the
Staff Handbook or the RSA.
	 
	21.	 	Waiver of Rights
	 
	 	 	If the Executive’s employment is terminated:






	 	(i)	 	by reason of liquidation of the Company for the purpose of amalgamation or
reconstruction; or
	 
	 	(ii)	 	as part of any arrangement for the amalgamation of the undertaking of the
Company not including liquidation or the transfer of the whole or part of the
undertaking of the Company to any Associated Company; and
	 
	 	(iii)	 	the Executive is offered suitable alternative employment with the amalgamated
or reconstructed company and on terms not generally less favourable to the Executive
than the terms of this Agreement,






	 	 	the Executive will have no claim against the Company under this Agreement in respect of that
termination.
	 
	22.	 	Data Protection
	 
	22.1	 	The Executive consents to the Company or any Associated Company holding and processing both
electronically and manually the data it collects which relates to the Executive for the
purposes of the administration and management of its employees and its business and for
compliance with applicable procedures, laws and regulations. The Executive also consents to
the transfer of such personal information (save in respect of sensitve personal data) to other
offices the Company may have or to an Associated Company or to other third parties whether or
not outside the European Economic Area for administration purposes and other purposes in
connection with the Executive’s employment where it is necessary or desirable for the Company
to do so.





			
	 	 	 
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	23.	 	Communications
	 
	23.1	 	Telephone calls made and received by the Executive using the Company’s equipment and use of
the Company’s e-mail system to send or receive personal correspondence may be recorded by the
Company on its communications systems. Any recordings made shall at all times remain the
property of the Company and, if necessary, will be used as evidence in the case of disputes
with employees or clients.
	 
	24.	 	Severability
	 
	24.1	 	If any provision of this Agreement is determined to be void, invalid, unenforceable or
against public policy, such provisions shall be deemed severable from the Agreement, and the
remaining provisions of the Agreement will remain unaffected and in full force and effect.
	 
	25.	 	Confirmation of Agreement
	 
	25.1	 	The Executive represents and warrants that he has read and understood each and every
provision of this Agreement, and the Executive understands that he has the right to obtain
legal advice, if necessary and desired, in order to interpret any and all provisions of this
Agreement, and that he has freely and voluntary entered into this Agreement.
	 
	26.	 	Miscellaneous Matters
	 
	26.1	 	The Company’s grievance procedures apply to the Executive and are outlined in the Appendix.
For the avoidance of doubt, these procedures are not contractual.
	 
	26.2	 	The Company’s disciplinary procedures apply to the Executive and are contained in the Staff
Handbook. For the avoidance of doubt, these procedures are not contractual.
	 
	26.3	 	There are no collective agreements which directly affect the terms and conditions set out in
this Agreement.
	 
	26.4	 	At any time during the period of this Agreement, and, in any event, upon the termination of
the Executive’s employment (for whatever reason and howsoever arising) the Executive shall
immediately repay all outstanding debts or loans due to the Company or any Associated Company
and the Company is hereby authorised to deduct from any payment of wages due to the Executive
a sum in repayment of all or any part of such debts or loans.
	 
	27.	 	Notices
	 
	27.1	 	Any notice may be given personally to the Executive or to the Secretary of the Company (as
the case may be) or may be posted to the Company (for the attention of its Secretary) at its
registered office for the time being or to the Executive either at his address given above or
at his last known address. Any such notice sent by post shall be deemed served forty-eight
hours after it is posted and in proving such service it shall be sufficient to prove that the
notice was properly addressed and put in the post.





			
	 	 	 
	Service Agreement July 2007
	 	-13-






 









 







	28.	 	Variation
	 
	28.1	 	The Company reserves the right, at any time and from time to time, to make reasonable
non-material changes to any of the Executive’s terms and conditions of employment.
	 
	28.2	 	The Executive will be notified of minor changes by way of a general written notice to all
employees and any such changes will take effect from the date of the notice.
	 
	28.3	 	The Executive will be given not less than one month’s notice of any significant changes.
Such changes will be deemed to be accepted unless the Executive notifies the Company in
writing of any objections before the expiry of that notice period.
	 
	29.	 	Governing Law
	 
	29.1	 	This Agreement shall be governed by and construed under English law and each of the parties
hereby irrevocably agrees for the exclusive benefit of the Company that the Courts of England
are to have jurisdiction to settle any disputes which may arise out of or in connection with
this Agreement.




IN WITNESS whereof this Agreement has been signed by or on behalf of the parties hereto the day and
year first before written.




	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED on behalf of the Company:

	 	Signature
	 	/s/ ND Wachman
	 	 
	 

	 	 	 	 	 	 
	 

	 	
	 	Name ND Wachman
	 	 
	 

	 	
	 	Title    Finance Director	 	 
	 

	 	Date
	 	12 July 2007	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED by the Executive

	 	Signature
	 	MEA Carpenter	 	 
	 

	 	 	 	 	 	 
	 

	 	
	 	Name Michael Carpenter
	 	 
	 
	 	 	 	 	 	 
	In the presence of:

	 	Signature
	 	/s/ Jane Williams	 	 
	 

	 	 	 	 	 	 
	 

	 	
	 	Name Jane Williams	 	 
	 

	 	Date
	 	 12 July 2007	 	 
	 

	 	 	 	 	 	 





			
	 	 	 
	Service Agreement July 2007
	 	-14-






 









 






Appendix 1




Grievance Procedure



If the Executive has any grievance relating to this employment, they should refer the matter
initially to either their immediate supervisor or director or the person to whom they are required
to report. In the event the grievance relates to a complaint of victimisation or harassment and
the person to whom the Executive should report the matter is involved in the complaint, they should
refer the complaint to the HR Manager. The Executive may be required to set out their grievance in
writing. A formal meeting will normally be arranged at which the Executive will have the right to
be accompanied by a work colleague. The grievance will be considered and the Executive will be
notified in writing of the decision. If the Executive considers that decision is not satisfactory,
they may then appeal in writing to the Chief Executive or Chief Operating Officer, whose decision
will be final and binding. An appeal should be raised within 5 working days of the original
decision and should set out full grounds explaining the basis of the appeal. In most cases after
the Executive’s employment has ended, the procedure outlined above will continue to apply.
However, in certain circumstances a shorter process may be used if the Executive and the Company
agree. Further details can be obtained from the HR Manager.




			
	 	 	 
	Service Agreement July 2007
	 	-15-






 









 






Appendix 2




Restricted Share Agreement




VALIDUS HOLDINGS, LTD.

RESTRICTED SHARE AGREEMENT




          THIS AGREEMENT, dated as of                         , 2007, between Validus Holdings, Ltd. (the
“Company”), a Bermuda Corporation, and Michael Edward Arscott Carpenter (the “Employee”).




          WHEREAS, the Employee has been granted the following award under the Company’s Amended and
Restated 2005 Long Term Incentive Plan (the “Plan”);




          NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and
for other good and valuable consideration, the parties hereto agree as follows.





	1.	 	Award of Shares. Pursuant to the provisions of the Plan, the terms of which are
incorporated herein by reference, the Employee is hereby awarded 43,478 Restricted Shares (the
“Award”), subject to the terms and conditions of the Plan and those herein set forth. The
Award is granted on                     , 2007 (the “Date of Grant”). Capitalized terms used herein
and not defined shall have the meanings set forth in the Plan. In the event of any conflict
between this Agreement and the Plan, the Plan shall control.
	 
	2.	 	Terms and Conditions. It is understood and agreed that the Award of Restricted
Shares evidenced hereby is subject to the following terms and conditions:






	 	(a)	 	Vesting of Award. Subject to the provisions of this Section 2 below
and the other terms and conditions of this Agreement, this Award shall become vested in
two (2) equal annual installments, on July 2, 2008 and on July 2, 2009. All dividends
and other amounts receivable in connection with any adjustments to the Shares under
Section 4(b) of the Plan shall be subject to the vesting schedule herein and shall be
paid to the Employee upon any vesting of the Restricted Shares hereunder in respect of
which such dividends or other amounts are payable. Except as otherwise provided in
Sections 2 (b) and (c) below, any portion of the Award that is not vested on the date
of Termination of Service of the Employee shall be forfeited by the Employee and become
the property of the Company. Notwithstanding any provision of the Plan to the
contrary, the Employee shall be considered to have incurred a Termination of Service
for purposes hereof on the date notice of termination of the Employee’s employment is
given either by the Employee or the Company, a Subsidiary or an Affiliate unless the
Employee remains actively employed with the Company, a Subsidiary or an Affiliate after
such date, in which case a Termination of Service will be deemed to occur hereunder on
the date the Employee ceases to be so actively employed.





			
	 	 	 
	Service Agreement July 2007
	 	-16-






 









 







	 	(b)	 	The Award shall become fully vested if the Employee is a “Good Leaver”, which
means the Employee’s employment has terminated due to one of the following reasons (and
no Termination of Service for the purposes of clause 2(a) above shall be deemed to have
incurred):






	 	1.	 	agreed termination of employment;
	 
	 	2.	 	injury, ill-health, disability or redundancy;
	 
	 	3.	 	his/her death;
	 
	 	4.	 	wrongful or unfair dismissal by the relevant “Validus Group
Company” (meaning the Company or any of its subsidiaries);
	 
	 	5.	 	the company in which he/she is employed ceasing to be a Validus
Group Company;
	 
	 	6.	 	the entire or substantially the whole of the business carried
on by the Company being transferred to a person other than a Validus Group
Company; or
	 
	 	7.	 	retirement at the normal retirement age of the relevant Validus
Group Company or early retirement on the grounds of ill health or with the
consent of the board of the relevant Validus Group Company and in accordance
with the terms of the pension plan of which the Employee is a member.






	 	(c)	 	Change in Control. Notwithstanding any provision of this Agreement to
the contrary, if, within two years following a Change in Control, the Employee’s
employment is terminated by the Company not for Cause, the Award shall become
immediately vested in full upon such termination of employment. For purposes of this
Agreement, “Change in Control” shall have the meaning set forth in the Plan. For
purposes of this Agreement, “Cause” means (a) conviction of the Employee of any
criminal offence (other than a motoring offence for which no custodial sentence is
given to him) which in the reasonable opinion of the Company demonstrates unsuitability
for further employment with the Company; (b) the Employee shall be or become prohibited
by law from being a director (applicable only to directors); (c) the Employee shall be
guilty of fraud, dishonestly or serious misconduct (which, for the avoidance of doubt,
includes any conduct which tends to bring the Company or any Affiliate into disrepute)
or shall commit any serious or persistent breach of any of his obligations (for which
warnings have been given to the Employee) to the Company or any Affiliate; or (d) the
Employee shall be guilty of fraud or wilful default in relation to the Warranties (as
defined in the service agreement between the Employee and Talbot Underwriting Services
Limited).
	 
	 	(d)	 	Certificates. Each certificate or other evidence of ownership issued
in respect of Restricted Shares awarded hereunder shall be deposited with the Company,
or its





			
	 	 	 
	Service Agreement July 2007
	 	-17-






 









 







	 	 	 	designee, together with, if requested by the Company, a stock power executed in
blank by the Employee, and shall bear a legend disclosing the restrictions on
transferability imposed on such Restricted Shares by this Agreement (the
“Restrictive Legend”). Upon the vesting of Restricted Shares pursuant to Section 2
hereof and the satisfaction of any withholding tax liability pursuant to Section 5
hereof, the certificates evidencing such vested Shares, not bearing the Restrictive
Legend (but still bearing the legend set forth in Section 7(d) below), shall be
delivered to the Employee or other evidence of vested Shares shall be provided to
the Employee.
	 
	 	(e)	 	Rights of a Stockholder. Prior to the time a Restricted Share is fully
vested hereunder, the Employee shall have no right to transfer, pledge, hypothecate or
otherwise encumber such Restricted Share. During such period, the Employee shall have
all other rights of a stockholder, including, but not limited to, the right to vote and
to receive dividends (subject to Section 2(a) hereof) at the time paid on such
Restricted Shares.
	 
	 	(f)	 	No Right to Continued Employment. This Award shall not confer upon the
Employee any right with respect to continuance of employment by the Company nor shall
this Award interfere with the right of the Company to terminate the Employee’s
employment.






	3.	 	Transfer of Shares. Any vested Shares delivered hereunder, or any interest therein,
may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any
other manner, in whole or in part, only in compliance with the terms, conditions and
restrictions as set forth in the governing instruments of the Company, the provisions of this
Agreement, applicable federal and state securities laws or any other applicable laws or
regulations and the terms and conditions hereof.
	 
	4.	 	Expenses of Issuance of Shares. The issuance of stock certificates hereunder shall
be without charge to the Employee. The Company shall pay, and indemnify the Employee from and
against any issuance, stamp or documentary taxes (other than transfer taxes) or charges
imposed by any governmental body, agency or official (other than income taxes) by reason of
the issuance of Shares.
	 
	5	 	Withholding. No later than the date of vesting of (or the date of an election by the
Employee under Section 83(b) of the Code with respect to) the Award granted hereunder, the
Employee shall pay to the Company or make arrangements satisfactory to the Committee regarding
payment of any federal, state or local taxes of any kind required by law to be withheld at
such time with respect to such Award and the Company shall, to the extent permitted or
required by law, have the right to deduct from any payment of any kind otherwise due to the
Employee, federal, state and local taxes of any kind required by law to be withheld at such
time.
	 
	6.	 	Market Stand Off Period. The Employee covenants and agrees that he or she shall not,
without the prior written consent of the Company, sell or otherwise dispose of any shares of
stock of the Company during such period (a “Market Stand Off Period”) as the Com-





			
	 	 	 
	Service Agreement July 2007
	 	-18-






 









 







	 	 	pany or its underwriters shall establish in connection with the filing of a registration
statement in connection with an initial public offering of the stock of the Company (an
“Initial Public Offering”).
	 
	7.	 	Purchase Option. The Employee’s Shares are subject to repurchase as provided below
in subsections (a) through (g) below:






	 	(a)	 	If the Employee’s active service with the Company or a Subsidiary is terminated
by the Employee or by the Company for Cause, the Company and/or its designee(s) shall
have the option (the “Purchase Option”) to purchase, and if the Purchase Option is
exercised, the Grantor (as defined below) shall sell to the Company and/or its
assignee(s), all or any portion (at the Company’s option) of the Shares held by the
Grantor (such Shares collectively being referred to as the “Purchasable Shares”).
	 
	 	(b)	 	The Company shall give notice in writing to the Grantor of the exercise of the
Purchase Option within one (1) year after the date of Termination of Service of the
Employee. Such notice shall state the number of Purchasable Shares to be purchased by
the Company and the determination of the purchase price of such Purchasable Shares. If
no notice is given within the time limit specified above, the Purchase Option shall be
deemed to have terminated.
	 
	 	(c)	 	The purchase price to be paid for the Purchasable Shares purchased pursuant to
the Purchase Option shall be the Book Value (as defined below) per share as of the date
of the notice of exercise of the Purchase Option times the number of Shares being
purchased. The purchase price for the Purchasable Shares shall be paid in cash or by
wire transfer of immediately available funds. The closing of such purchase shall take
place at the Company’s principal executive offices within ten (10) days after the
purchase price has been determined. At such closing, the Grantor shall deliver to the
purchaser(s) the certificates or instruments evidencing the Purchasable Shares being
purchased, duly endorsed (or accompanied by duly executed stock powers) and otherwise
in good form for delivery, against payment of the purchase price by check of the
purchaser(s). In the event that, notwithstanding the foregoing, the Grantor shall have
failed to obtain the release of any pledge or other encumbrance on any Purchasable
Shares by the scheduled closing date, at the option of the purchaser(s) the closing
shall nevertheless occur on such scheduled closing date, with the cash purchase price
being reduced to the extent of, and paid to the holder of, all unpaid indebtedness for
which such Purchasable Shares are then pledged or encumbered.
	 
	 	(d)	 	To ensure the enforceability of the Company’s rights hereunder, each
certificate or instrument representing Shares shall bear a conspicuous legend in
substantially the following form:
	 
	 	 	 	“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN OPTION TO REPURCHASE
PROVIDED UNDER THE PROVISIONS OF THE COMPANY’S 2005 LONG TERM INCENTIVE





			
	 	 	 
	Service Agreement July 2007
	 	-19-






 









 







	 	 	 	PLAN AND A STOCK OPTION AGREEMENT ENTERED INTO PURSUANT THERETO. A COPY OF SUCH
LONG TERM INCENTIVE PLAN AND STOCK OPTION AGREEMENT ARE AVAILABLE UPON WRITTEN
REQUEST TO THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.”
	 
	 	(e)	 	The Company’s rights under this Section 7 shall terminate upon the consummation
of an Initial Public Offering.
	 
	 	(f)	 	“Book Value” shall mean the book value of a Share at the end of the fiscal
quarter in which the termination of active service occurs, as determined on a fully
diluted basis by the Board of Directors in good faith. Such determination shall be
conclusive and binding on all persons.
	 
	 	(g)	 	“Grantor” shall mean, collectively, the Employee, the Employee’s assignee, the
executor or the administrator of the Employee’s estate in the event of the Employee’s
death, and the Employee’s legal representative in the event of the Employee’s
incapacity.






	8.	 	Forfeiture Upon Breach of Certain Other Agreements. The Employee’s breach of any
nonhire, nonentice, confidentiality, assignment of inventions, or other intellectual property
agreement that he may be a party to with the Company or a Subsidiary, in addition to whatever
other equitable relief or monetary damages that the Company or a Subsidiary may be entitled
to, shall result in automatic rescission, forfeiture, cancellation, and return of any Shares
(whether or not otherwise vested) held by the Employee or Grantor, and all profits, proceeds,
gains, or other consideration received through the sale or other transfer of the Shares shall
be promptly returned and repaid to the Company.
	 
	9.	 	Shareholders’ Agreement. If any Restricted Shares are scheduled to vest hereunder at
a time when the Company is not a publicly-traded entity and the Employee is not a party to the
Shareholders’ Agreement by and among the Company and its shareholders, as the same may be
amended from time to time (the “Shareholders’ Agreement”), the Employee shall, as a condition
to the Employee’s right to have such Restricted Shares vest, become a party to the
Shareholders’ Agreement by execution of a joinder agreement in form and substance satisfactory
to the Company.
	 
	10.	 	References. References herein to rights and obligations of the Employee shall apply,
where appropriate, to the Employee’s legal representative or estate without regard to whether
specific reference to such legal representative or estate is contained in a particular
provision of this Agreement.
	 
	11.	 	Notices. Any notice required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been given when delivered personally or by courier, or
sent by certified or registered mail, postage prepaid, return receipt requested, duly
addressed to the party concerned at the address indicated below or to such changed address as
such party may subsequently by similar process give notice of:





			
	 	 	 
	Service Agreement July 2007
	 	-20-






 









 






               If to the Company:




               Validus Holdings, Ltd.

               Mintflower Place

               8 Par-La-Ville Road, Third Floor

               Hamilton HMO8 Bermuda




               Attn.: Chief Financial Officer




               If to the Employee:





	 	 	 	At the Employee’s most recent address shown on the Company`s corporate records, or
at any other address which the Employee may specify in a notice delivered to the
Company in the manner set forth herein.






	12.	 	Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of Bermuda, without giving effect to principles of conflict of laws.
	 
	13.	 	Counterparts. This Agreement may be executed in two counterparts, each of which
shall constitute one and the same instrument.
	 
	 	 	IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above
written.





	 	 	 	 	 
	 	VALIDUS HOLDINGS, LTD.

 	 
	 	By:  	/s/ EJ Noonan
 	 
	 	 	Edward Noonan 	 
	 	 	Chief Executive Officer and Chairman 	 
	 




	 	 	 	 	 
	 	/s/ MEA Carpenter
 	 
	 	(Employee) 	 
	 	 	 
	 



			
	 	 	 
	Service Agreement July 2007
	 	-21-






 









 






Appendix 3




Accrued Bonus: Michael Carpenter



In respect of Executive’s bonus allocated for the 2006 year $801,150




			
	 	 	 
	Service Agreement July 2007
	 	-22-