Exhibit 10.25
**Montpelier Reinsurance Ltd.**
**amended and restated deferred Compensation Plan**
1.  **Establishment of Plan**    MONTPELIER REINSURANCE LTD., a Bermuda corporation, hereby establishes the MontpelierReinsurance Ltd. Deferred Compensation Plan (the “**Plan**”), effective as of 31 December 2003,to permit eligible employees to defer the receipt of compensation otherwise payable to sucheligible employees in accordance with the terms of the Plan. The Plan is unfunded and ismaintained primarily for the purpose of providing deferred compensation to a select group ofmanagement or highly compensated employees. 2.  **Definitions** 2.1  “**Account**” means the bookkeeping accounts established pursuant to Section 6.1 and maintainedby the Administrator in the names of the respective Participants, to which all amountsdeferred, Company Contributions and earnings allocated under the Plan shall be credited, andfrom which all amounts distributed under the Plan shall be debited. 2.2  “**Administrator**” means the Board or the person or person(s) appointed by the Board. 2.3  “**Affiliate**” means, with respect to a Person, a Person that directly or indirectly controls,or is controlled by, or is under common control with such Person. 2.4  “**Annual Bonus”**means the amount identified by the Company as a cash bonus earned by anEligible Employee based on achievement of individual and Company performance goals. 2.5  “**Base Salary”**means an Eligible Employee’s regular salary. 2.6  “**Board**” means the Board of Directors of the Company. 2.7  “**Code**” means the Internal Revenue Code of 1986, as amended. 2.8  “**Company”**means Montpelier Reinsurance Ltd. 2.9  “**Company Contributions**” means amounts contributed by the Company to the Plan. 2.10  “**Compensation**” means the Base Salary and Annual Bonus earned by an Eligible Employee.
 

 

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2.11  “**Earnings Rate**” means the investment gains and losses, as determined by the Administrator,that are applied to a Participant’s Account no less frequently than annually. 2.12  “**Election**” means a written election on a form provided by the Administrator, filed with theAdministrator in accordance with Article 3, pursuant to which an Eligible Employee (a) electsto defer a percentage of the Compensation earned for the performance of service as an EligibleEmployee following the time that such Election is filed and (b) elects the manner in whichpayments under the Plan shall be made. 2.13  “**Eligible Employee**” means each employee of a Company who is a citizen of the United Statesand subject to federal income taxation under the provisions of the Code and is eligible forparticipation in the Plan on the date on which an Election is filed with the Administrator. 2.14  “**Hardship**” means a Participant’s serious financial hardship, as determined by theAdministrator on a uniform and nondiscriminatory basis pursuant to the Participant’s requestunder Section 5.3. 2.15  “**Participant**”
 2.15.1  “**Participant**” means each individual who has an undistributed amount credited to anAccount under the Plan.  2.15.2  “**Active Participant**” means each Participant who is actively employed by the Companyas an Eligible Employee.
2.16  “**Period of Service**” means an individuals’ period of service from such individuals’ date ofhire by the Company, a Parent Company or a Subsidiary Company to the date of termination ofemployment with the Company and all parent Companies and Subsidiary Companies. 2.17  “**Person**” means an individual, a corporation, a partnership, an association, a trust or anyother entity or organization. 2.18  “**Plan**” means the Montpelier Reinsurance Ltd. Deferred Compensation Plan. 2.19  “**Plan Year**” means the calendar year. 2.20  “**Severance Pay**” means any amount identified by the Company as severance pay, or any amountwhich is payable on account of periods beginning after the last date on which an employee (orformer employee) is required to report for work for the Company. 2.21  “**Termination Event**” means the liquidation of the Company or a change of control as determinedby the Board.
 

 

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2.22  “**Trust**” means the trust established by the Company to hold the funds of the Plan and“Trustee” means the trustee or trustees fro the time being of the Trust. 3.  **Election to Defer Compensation** 3.1  **General**
 3.1.1  **Election**. Each Eligible Employee shall have the right to defer a percentageof the aggregate Compensation which he or she may earn in a Plan Year by filing anElection at the time and in the manner described in this Article 3; *provided that*Severance Pay shall not be included as “Compensation” for purposes of this Article 3and *provided further*that an Eligible Employee may file separate Elections for BaseSalary and Annual Bonus. In addition, on the first such Election (unless the Companyshall provide otherwise), the Eligible Employee shall elect the form in which benefitspayable under the Plan shall be paid, as further set forth in Section 5.1.  3.1.2  **Withholding of Compensation Subject to an Election**. Except as the Company mayotherwise provide, the amount of Compensation deferred by a Participant for a Plan Yearpursuant to an Election shall be withheld on a pro-rata basis from each periodicpayment of the Participant’s Compensation (in accordance with the general pay practicesof the Company) and credited to the Participant’s Account in accordance with Section6.1, *provided that*separate Elections may apply to Base Salary and Annual Bonus.  3.1.3  **Irrevocability of Election**. Any Election with respect to a Plan Year filedpursuant to this Article 3 shall be irrevocable; *provided that*the form of distributionmay be modified in accordance with the rules prescribed in Section 5.2.
3.2  **Filing of Elections**. The Election shall be made on the form provided by the Administratorfor this purpose. Except as provided in Section 3.3 or otherwise by the Administrator, noElection with respect to Base Salary or Annual Bonus shall be effective unless it is filedwith the Administrator on or before the close of business on December 31 preceding the PlanYear as to which the Election applies. 3.3  **Filing of Elections for First Year as an Eligible Employee**. Notwithstanding Section 3.2, inthe Plan year an employee first becomes an Eligible Employee, the Eligible Employee may electto defer all or any portion of his or her Compensation to be earned in such Plan Yearbeginning with the payroll period next following the filing of an Election with theAdministrator and before the close of such Plan Year, by making and filing the Election withthe Administrator within 30 days of the date such employee becomes an
 

 

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   Eligible Employee. Elections by such Eligible Employee for succeeding Plan years shallotherwise be made in accordance with Section 3.1 and Section 3.2. 3.4  **Plan Years to which Elections May Apply**. A separate Election may be made for each Plan Yearas to which an Eligible Employee desires to defer all or any portion of his or herCompensation, but the failure of an Eligible Employee to make an Election for any Plan Yearshall not affect such Eligible Employee’s right to make an Election for any other Plan Year. 4.  **Vesting**    **Vesting in Deferrals**. Participants will be immediately vested in their deferrals underSection 3.1. 5.  **Distributions** 5.1  **Distribution Date and Form of Distribution**. The vested amount credited to a Participant’sAccount shall be distributed beginning as soon as practicable following the earlier of thedate designated by the employee in his or her Election or the date the employee terminatesemployment. Distribution shall be made in either a single lump sum or in installments overnot more than ten years, as elected by the Participant pursuant to the initial Election, inaccordance with Section 3.1.1. 5.2  **Modification of Election as to Form of Distribution**. Each Active Participant who haspreviously made an Election may elect to change the form of distribution by filing an Election(“Modification Election”) with the Administrator on or before the close of the Plan Yearpreceding the Plan Year in which the distribution would otherwise be made. In the event theActive Participant terminates employment prior to the end of the Plan Year in which theModification Election is made, the form of distribution shall be the form of distributionelected by the Active Participant prior to the Modification Election. 5.3  **Hardship Distributions**. Notwithstanding the terms of an Election, if, at the Participant’srequest, the Administrator determines that the Participant has incurred a Hardship, the Boardmay, in its discretion, authorize the immediate distribution of the portion of theParticipant’s Account reasonably needed to satisfy the Hardship. 6.  **Book Accounts** 6.1  **Establishment of Account**. An Account shall be established for each Eligible Employee whensuch Eligible Employee becomes a Participant. Compensation deferred pursuant to the Planshall be credited to the Account on the date such Compensation would otherwise have beenpayable to the Participant. Company Contributions shall be credited to the
 

 

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   Accounts as of the last day of each Plan Year, or more frequently, as determined by theAdministrator. Earnings shall be credited to the Account as provided in Section 6.2. 6.2  **Crediting of Earnings on Accounts**. The Administrator shall credit Accounts, not lessfrequently than annually, with income, gains and losses at the Earnings Rate, including duringthe period extending from a Participant’s employment termination date to the date theParticipant’s Account is distributed in full; *provided that*the Administrator may provide thatthe Earnings Rate for the Account of Participants who are receiving installment distributionsmay be different from the Earnings Rate applied to the Accounts of Active Participants. 6.3  **Status of Deferred Amounts**. Regardless of whether or not the Company is a Participant’semployer, all Compensation deferred under this Plan shall continue for all purposes to be apart of the general funds of the Company. 6.4  **Participants’ Status as General Creditors**. Regardless of whether or not the Company is aParticipant’s employer, an Account shall at all times represent the general obligation of theCompany. The Participant shall be a general creditor of the Company with respect to thisobligation, and shall not have a secured or preferred position with respect to his or herAccounts. Nothing contained herein shall be deemed to create an escrow, trust, custodialaccount or fiduciary relationship of any kind. 6.5  Nothwithstanding the foregoing, the assets of the Plan will be held, invested and disposed ofby the Trustee in accordance with these Rules to the extent they do not conflict with any ofthe trusts, powers or provisions of the Trust. In case of any conflict between these Rulesand the trusts, powers or provisions of the Trust, the Trust shall prevail. 7.  **Non-Assignability, etc****.**    The right of each Participant in or to any Account, benefit or payment hereunder shall notbe subject in any manner to attachment or other legal process for the debts of suchParticipant; and no Account, benefit or payment shall be subject to anticipation,alienation, sale, transfer, assignment or encumbrance. 8.  **Death of Participant** 8.1  **Death before Commencement of Distributions**. If a Participant’s employment is terminated byreason of death before the distribution of any portion of his Account has begun, the Companyshall, within ninety (90) days of the date of such termination distribute the Account to thebeneficiary or beneficiaries selected by the Participant. Distributions under this Section8.1 shall be made in a single sum.
 

 

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8.2  **Designation of Beneficiaries**. Each Participant shall have the right to designate one or morebeneficiaries to receive distributions in the event of the Participant’s death by filing withthe Administrator a beneficiary designation on the form provided by the Administrator for suchpurpose. The designation of beneficiary or beneficiaries may be changed by a Participant atany time prior to his or her death by the delivery to the Administrator of a new beneficiarydesignation form. If no beneficiary shall have been designated, or if no designatedbeneficiary shall survive the Participant, the Participant’s estate shall be deemed to be thebeneficiary. 9.  **Interpretation**    The Board shall have full and exclusive authority to construe, interpret and administer thisPlan and the Board’s construction and interpretation thereof shall be binding and conclusiveon all persons for all purposes. 10.  **Terminating Event**    The Administrator shall give Participants at least thirty (30) days’ notice (or, if notpracticable, such shorter notice as may be reasonably practicable) prior to the anticipateddate of a Terminating Event. The Administrator may, in its discretion, provide in suchnotice that notwithstanding any other provision of the Plan or the terms of any Election,upon the consummation of a Terminating Event, the Account balance of each Participant shallbe distributed in full. 11.  **Amendment or Termination**    The Company, by action of the Board or the Administrator, reserves the right at any time, orfrom time to time, to amend or modify this Plan. The Company, by action of the Board,reserves the right at any time, or from time to time, to terminate this Plan. 12.  **Miscellaneous Provisions** 12.1  **No Right to Continued Employment**. Nothing contained herein shall be construed as conferringupon any Participant the right to remain in the employment of the Company as an executive orin any other capacity. 12.2  **Governing Law**. This Plan shall be interpreted under the laws of the State of Delaware in theUnited States, except to the extent such law is pre-empted by federal law in the UnitedStates. 13.  **Effective Date**    The effective date of the Plan is 31 December 2003.