Exhibit 10.1
	 

	 
		EMPLOYMENT AGREEMENT
	 

	 
		This Employment Agreement (this
		“Agreement”), is dated as of May 31, 2007 and is entered into between
		Endurance Specialty Holdings Ltd. (the “Company”), and Kenneth J.
		LeStrange (the “Executive”).
	 

	 
		WHEREAS, the Company desires to enter into
		this Agreement in order to embody the terms of the Executive’s continued
		employment and the Executive desires to enter into this Agreement and to accept
		such continued employment, subject to the terms and provisions of this
		Agreement.
	 

	 
		NOW, THEREFORE, in consideration of the
		premises and the mutual agreements contained herein, the Company and the
		Executive hereby agree as follows:
	 

	 
		ARTICLE I.
	 

	 
		Definitions
	 

	 
		1.1 “Board”
		shall mean the Board of Directors of the Company.
	 

	 
		1.2 “Business”
		shall mean the brokerage, underwriting, advising or consulting of or with
		respect to any line of property or casualty insurance or reinsurance
		underwritten by the Company or any of its divisions, subsidiaries or affiliates
		as an insurer or reinsurer during the Term.
	 

	 
		1.3 “Cause”
		shall mean:
	 

	 
		(a) any willful and material act of fraud,
		embezzlement or theft by the Executive in connection with his duties hereunder
		or in the course of his employment hereunder or the Executive’s admission
		or conviction of, or plea of nolo contendere to either, (i) a felony or (ii) a
		misdemeanor involving moral turpitude, fraud, embezzlement, theft or
		misrepresentation; 
	 

	 
		(b) any gross negligence or willful
		misconduct of the Executive resulting in a demonstrable and material economic
		loss to the Company or any of its subsidiaries; 
	 

	 
		(c) any willful breach by the Executive of
		any one or more of the covenants contained in Section 5.2, 5.3, 5.4 or 5.5
		hereof, provided the Executive has received 15 calendar days’ prior
		written notice of such breach in accordance with Section 7.3 of this Agreement;
		or 
	 

	 
		(d) any willful and material violation of
		any statutory or common law duty of loyalty to the Company or any of its
		subsidiaries. For purposes of determining Cause, no act or failure to act on
		the Executive’s part shall be deemed “willful” unless done, or
		omitted to be done, by the Executive not in good faith and without reasonable
		belief that the Executive’s act, or failure to act, was in the best
		interest of the Company.
	 

	 
		 
	 

	 
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		1.4 “Change in Control” shall mean:
	 

	 
		(a) the acquisition by any individual,
		entity or group (a “Person”), including any “person” within
		the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
		1934, as amended (the “Exchange Act”), of beneficial ownership within
		the meaning of Rule 13d-3 promulgated under the Exchange Act, of 50% or more of
		either (i) the then outstanding ordinary shares, par value $1.00 per share, of
		the Company (the “Outstanding Ordinary Shares”) or (ii) the combined
		voting power of the then outstanding securities of the Company entitled to vote
		generally in the election of directors pursuant to the Bye-Laws of the Company
		(the “Outstanding Voting Securities”); excluding,
		however, the following: (A) any acquisition directly from the Company
		(excluding any acquisition resulting from the exercise of an exercise,
		conversion or exchange privilege unless the security being so exercised,
		converted or exchanged was acquired directly from the Company), (B) any
		acquisition by the Company, (C) any acquisition by an employee benefit plan (or
		related trust) sponsored or maintained by the Company or any corporation
		controlled by the Company or (D) any acquisition by any corporation pursuant to
		a transaction which complies with clauses (i), (ii) and (iii) of subsection (c)
		of this definition of Change in Control; provided‚
		further‚ that for purposes of clause (B), if any Person
		(other than the Company or any employee benefit plan (or related trust)
		sponsored or maintained by the Company or any corporation controlled by the
		Company) shall become the beneficial owner of 50% or more of the Outstanding
		Ordinary Shares or 50% or more of the Outstanding Voting Securities by reason
		of an acquisition by the Company, and such Person shall, after such acquisition
		by the Company, become the beneficial owner of any additional Outstanding
		Ordinary Shares or any additional Outstanding Voting Securities and such
		beneficial ownership is publicly announced, such additional beneficial
		ownership shall constitute a Change in Control;
	 

	 
		(b) individuals who, as of the date hereof,
		constitute the Board (the “Incumbent Board”) cease for any reason to
		constitute at least a majority of such Board within a 24 month period;
		provided, that any individual who becomes a director of the
		Company subsequent to the date hereof whose election, or nomination for
		election by the Company’s shareholders, was approved by the vote of at
		least a majority of the directors then comprising the Incumbent Board shall be
		deemed a member of the Incumbent Board; and provided,
		further, that any individual who was initially elected as a
		director of the Company as a result of an actual or threatened solicitation by
		a Person other than the Board for the purpose of opposing a solicitation by any
		other Person with respect to the election or removal of directors, or any other
		actual or threatened solicitation of proxies or consents by or on behalf of any
		Person other than the Board shall not be deemed a member of the Incumbent
		Board;
	 

	 
		(c) the consummation of a reorganization,
		amalgamation, merger or consolidation or sale or other disposition of all or
		substantially all of the assets of the Company (a “Corporate
		Transaction”); excluding,
		however, a Corporate Transaction pursuant to which (i) all or
		substantially all of the individuals or entities who are the beneficial owners,
		respectively, of the Outstanding Ordinary Shares and the Outstanding Voting
		Securities immediately prior to such Corporate Transaction will beneficially
		own, directly or indirectly, more than 55% of, respectively, the outstanding
		shares of common 
	 

	 
		 
	 

	 
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		stock, and the combined voting power of the
		outstanding securities entitled to vote generally in the election of directors,
		as the case may be, of the corporation resulting from such Corporate
		Transaction (including, without limitation, a corporation which as a result of
		such transaction owns the Company or all or substantially all of the
		Company’s assets either directly or indirectly) in substantially the same
		proportions relative to each other as their ownership, immediately prior to
		such Corporate Transaction, of the Outstanding Ordinary Shares and the
		Outstanding Voting Securities, as the case may be, (ii) no Person (other than:
		the Company; any employee benefit plan (or related trust) sponsored or
		maintained by the Company or any corporation controlled by the Company; the
		corporation resulting from such Corporate Transaction; and any Person which
		beneficially owned, immediately prior to such Corporate Transaction, directly
		or indirectly, 50% or more of the Outstanding Ordinary Shares or the
		Outstanding Voting Securities, as the case may be) will beneficially own,
		directly or indirectly, 50% or more of, respectively, the outstanding shares of
		common stock of the corporation resulting from such Corporate Transaction or
		the combined voting power of the outstanding securities of such corporation
		entitled to vote generally in the election of directors and (iii) individuals
		who were members of the Incumbent Board will constitute at least a majority of
		the members of the board of directors of the corporation resulting from such
		Corporate Transaction; or
	 

	 
		(d) the consummation of a plan of complete
		liquidation or dissolution of the Company.
	 

	 
		1.5 “Change in Control Period” shall mean the period commencing six months prior
		to the date of a Change in Control and ending on the second annual anniversary
		of the date of a Change in Control.
	 

	 
		1.6 “Code” means
		the Internal Revenue Code of 1986, as amended.
	 

	 
		1.7 “Confidential Information” shall mean any confidential or proprietary
		information, trade secrets, customer lists, drawings, designs, information
		regarding product development, marketing plans, sales plans, manufacturing
		plans, management organization information, operating policies or manuals,
		business plans, financial records, packaging design or other financial,
		commercial, business or technical information relating to the Company or any of
		its divisions, subsidiaries or affiliates, or that the Company or any of its
		divisions, subsidiaries or affiliates may have received belonging to suppliers,
		customers or others who do business with the Company or any of its divisions,
		subsidiaries or affiliates.
	 

	 
		1.8 “Date of Termination” shall mean the following:
	 

	 
		(a) if the Executive’s employment is
		terminated for Cause, the date specified in the Notice of Termination; 
	 

	 
		(b) if the Executive’s employment is
		terminated by the Executive’s death, the date of the Executive’s
		death; 
	 

	 
		(c) if the Executive’s employment is
		terminated for Disability, 15 calendar days after the Notice of Termination is
		given (provided that the Executive shall not have 
	 

	 
		 
	 

	 
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		returned to the full-time performance of the
		Executive’s duties during such 15 calendar day period); 
	 

	 
		(d) if the Executive’s employment is
		terminated by the Executive with Good Reason, 30 calendar days after the Notice
		of Termination is given (provided that the Company shall not have cured the
		event giving rise to the Executive’s right to termination for Good Reason
		during such 30 calendar day period); and 
	 

	 
		(e) if the Executive’s employment is
		terminated by the Executive or the Company for any other reason, the date
		specified in the Notice of Termination (which, in the case of a termination by
		the Executive, shall not be less than 14 calendar days nor more than 30
		calendar days from the date such Notice of Termination is given).
	 

	 
		1.9 “Disability”
		shall mean any condition which (i) prevents the Executive from substantially
		performing his duties under this Agreement for a period of at least 120
		consecutive days, or 180 non-consecutive days within any 365-day period, and
		(ii) causes the Executive to become eligible for the Company’s long-term
		disability plan.
	 

	 
		1.10 “Good Reason” shall mean:
	 

	 
		(a) any action taken or failed to be taken
		by the Company or any of its officers which, without the Executive’s prior
		written consent, materially reduces the Executive’s position (including
		titles, other than any legally required separation of the positions of Chairman
		and Chief Executive Officer), authority, duties or responsibilities from those
		in effect, or materially reduces the Executive’s ability to carry out such
		duties and responsibilities; provided that Good Reason shall not be deemed to
		exist pursuant to the any of the foregoing actions occurring solely on account
		of the Company no longer being a publicly traded entity or on account of any
		change to the Executive’s position (including titles), authority, duties
		or responsibilities as a result of his physical or mental incapacity;
	 

	 
		(b) any failure by the Company to comply
		with any of the provisions of Article IV of this Agreement, other than an
		insubstantial or inadvertent failure which is remedied by the Company promptly
		after receipt of written notice thereof in accordance with Section 7.3 of this
		Agreement from the Executive;
	 

	 
		(c) the Company’s requiring the
		Executive to be employed at any location more than 50 miles further from his
		current principal residence than the location at which the Executive was
		previously employed; 
	 

	 
		(d) any failure by the Company to obtain the
		assumption of and agreement to perform this Agreement by a successor as
		contemplated by Section 7.2 of this Agreement; or
	 

	 
		(e) receipt by the Executive of notice of
		non-renewal of this Agreement in accordance with Section 3.1 delivered by the
		Company in accordance with Section 7.3.
	 

	 
		 
	 

	 
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		1.11 “Maximum Annual Incentive Compensation
		Percentage” shall mean the
		percentage set forth as the Maximum Annual Incentive Compensation Percentage in
		Exhibit A, subject to adjustment from time to time by the Board; provided that
		any such adjustment shall not cause the sum of the Maximum Annual Incentive
		Compensation Percentage plus the Maximum Long-Term Compensation Percentage to
		be lower than the sum of the Maximum Annual Incentive Compensation Percentage
		plus the Maximum Long-Term Compensation Percentage set forth in Exhibit
		A.
	 

	 
		1.12 “Maximum Long-Term Incentive Compensation
		Percentage” shall mean the
		percentage set forth as the Maximum Long-Term Incentive Compensation Percentage
		in Exhibit A, subject to adjustment from time to time by the Board; provided
		that any such adjustment shall not cause the sum of the Maximum Annual
		Incentive Compensation Percentage plus the Maximum Long-Term Compensation
		Percentage to be lower than the sum of the Maximum Annual Incentive
		Compensation Percentage plus the Maximum Long-Term Compensation Percentage set
		forth in Exhibit A.
	 

	 
		1.13 “Notice of Termination” shall mean a notice that shall indicate the
		specific termination provision in this Agreement relied upon and shall set
		forth in reasonable detail the facts and circumstances claimed to provide a
		basis for termination of the Executive’s employment under the provision so
		indicated.
	 

	 
		1.14 “Target Annual Incentive Compensation
		Percentage” shall mean the
		percentage set forth as the Target Annual Incentive Compensation Percentage in
		Exhibit A, subject to adjustment from time to time by the Board; provided that
		any such adjustment shall not cause the sum of the Target Annual Incentive
		Compensation Percentage plus the Target Long-Term Compensation Percentage to be
		lower than the sum of the Target Annual Incentive Compensation Percentage plus
		the Target Long-Term Compensation Percentage set forth in Exhibit A.
	 

	 
		1.15 “Target Long-Term Incentive Compensation
		Percentage” shall mean the
		percentage set forth as the Target Long-Term Incentive Compensation Percentage
		in Exhibit A, subject to adjustment from time to time by the Board; provided
		that any such adjustment shall not cause the sum of the Target Annual Incentive
		Compensation Percentage plus the Target Long-Term Compensation Percentage to be
		lower than the sum of the Target Annual Incentive Compensation Percentage plus
		the Target Long-Term Compensation Percentage set forth in Exhibit A.
	 

	 
		1.16 “Term” shall
		mean the term of employment of the Executive with the Company, which shall
		commence as of the date first written above and continue until the earlier of
		(a) the first anniversary of the date first written above or (b) the
		Executive’s Date of Termination, and shall be subject to successive one
		year renewals in accordance with Section 3.1.
	 

	 
		1.17 “Threshold Annual Incentive Compensation
		Percentage” shall mean the
		percentage set forth as the Threshold Annual Incentive Compensation Percentage
		in Exhibit A, subject to adjustment from time to time by the Board.
	 

	 
		 
	 

	 
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		1.18 “Threshold Long-Term Incentive Compensation
		Percentage” shall mean the
		percentage set forth as the Threshold Long-Term Incentive Compensation
		Percentage in Exhibit A, subject to adjustment from time to time by the
		Board.
	 

	 
		ARTICLE II.
	 

	 
		Employment, Duties and
		Responsibilities
	 

	 
		2.1 Employment.
		During the Term, the Company agrees to employ the Executive and the Executive
		hereby agrees to be employed as the Chairman of the Board, President and Chief
		Executive Officer of the Company upon the terms and subject to the conditions
		contained in this Agreement. 
	 

	 
		2.2 Duties and Responsibilities. The Executive shall report exclusively to the Board.
		The Executive shall have such duties and responsibilities during the Term as
		specified by the Board. The Executive’s duties and responsibilities may be
		modified by the Board from time to time in a manner consistent with the
		Executive’s position. The Executive agrees to continue to serve as a
		director and/or officer of any subsidiary of the Company at a level
		commensurate with his position as may be reasonably requested by the Board.
		
	 

	 
		2.3 Base of Operation. The Executive’s principal base of operation for
		the performance of his duties and responsibilities under this Agreement shall
		be the offices of the Company in Pembroke, Bermuda; provided,
		however, that the Executive shall perform such duties and
		responsibilities outside of Pembroke, Bermuda as shall from time to time be
		reasonably necessary to fulfill his obligations hereunder. The Company and the
		Executive may at any time during the Term mutually agree to change the
		principal base of operation for the performance of the Executive’s duties
		and responsibilities. The Executive’s performance of any duties and
		responsibilities shall be conducted in a manner consistent with any tax
		operating guidelines promulgated from time to time by the Board.
	 

	 
		ARTICLE III.
	 

	 
		Term
	 

	 
		3.1 Term. The
		employment of the Executive under this Agreement shall be for the Term. The
		Term shall be extended for successive one-year periods as of each annual
		anniversary date of the date first written above (each, a “Renewal
		Date”) unless, with respect to any such Renewal Date, either party hereto
		gives the other party at least 90 days prior written notice of its election not
		to so extend the Term.
	 

	 
		ARTICLE IV.
	 

	 
		Compensation and Expenses
	 

	 
		4.1 Salary, Bonuses, Incentive Awards and
		Benefits. As compensation and
		consideration for the performance by the Executive of his obligations under
		this Agreement, the Executive 
	 

	 
		 
	 

	 
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		shall be entitled, during the Term, to the
		following (subject, in each case, to the provisions of Article VI
		hereof):
	 

	 
		(a) Base Salary.
		During the Term, the Company shall pay to the Executive a base salary of
		$1,000,000 per annum, effective as of January 1, 2007 and subject to increase
		from time to time as determined by the Board (“Base Salary”). The
		Executive’s Base Salary shall be payable in accordance with the
		Company’s normal payroll procedures and shall not during the Term be
		reduced without the written consent of the Executive.
	 

	 
		(b) Annual Incentive Compensation. The Executive shall be eligible each calendar year for
		incentive compensation payable in cash (“Annual Incentive
		Compensation”), the amount of which shall be between the Threshold Annual
		Incentive Compensation Percentage and the Maximum Annual Incentive Compensation
		Percentage of the Executive’s Base Salary as of the immediately preceding
		December 31st and shall be determined by the Board. The Annual
		Incentive Compensation shall be based upon the performance of the Company,
		determined in accordance with performance criteria established by the Board
		(following consultation with the Executive) at the commencement of each
		calendar year. The performance criteria for the determination of the
		Executive’s Annual Incentive Compensation for the 2007 calendar are as set
		forth on Exhibit A attached hereto. The Annual Incentive Compensation payable
		to the Executive upon the Company attaining the target financial performance
		agreed by the Executive and the Board at the commencement of each calendar year
		shall be the Target Annual Incentive Compensation Percentage of the
		Executive’s Base Salary as of the immediately preceding December
		31st. The Annual Incentive Compensation shall be paid to the
		Executive at the same time as annual incentive compensation is paid to other
		employees of the Company in accordance with the Company’s normal payroll
		procedures and shall be conditioned upon the Executive’s continued
		employment with the Company through and including the scheduled date of payment
		of annual incentive compensation by the Company to its employees
		generally.
	 

	 
		(c) Equity Incentive Awards. The Executive shall also be eligible each calendar
		year during the Term for incentive compensation in the form of equity incentive
		awards (the “Equity Incentive Awards”), the amount of which shall be
		between the Threshold Long Term Incentive Compensation Percentage and the
		Maximum Long-Term Incentive Compensation Percentage of the Executive’s
		Base Salary as of the immediately preceding December 31st and shall
		be determined by the Board. The Equity Incentive Awards shall be based upon the
		performance of the Company, determined in accordance with performance criteria
		established by the Executive and the Board at the commencement of each calendar
		year. The performance criteria for the determination of the Executive’s
		Equity Incentive Award for the 2007 calendar are as set forth on Exhibit A
		attached hereto. The Equity Incentive Award deliverable to the Executive upon
		the Company attaining the target financial performance agreed by the Executive
		and the Board at the commencement of each calendar year shall be the Target
		Long-Term Incentive Compensation Percentage of the Executive’s Base Salary
		as of the immediately preceding December 31st. The Equity Incentive
		Awards shall be delivered to the Executive at the same time as equity incentive
		awards are delivered to other employees of the Company in accordance with the
		Company’s normal procedures and shall be conditioned upon the
		Executive’s continued employment with the Company through and 
	 

	 
		 
	 

	 
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		including the scheduled date of delivery of
		equity incentive awards by the Company to its employees generally. The Equity
		Incentive Awards shall be in a form determined by the Board, consistent with
		equity incentive awards to employees of the Company generally and shall be
		issued in accordance with the terms of the equity incentive plans of the
		Company, as amended through the date hereof and hereafter from time to time
		(the “Plans”). The Executive shall enter into separate award
		agreements with respect to such Equity Incentive Awards and his rights with
		respect to such Equity Incentive Awards shall be governed by the Plans and such
		award agreements. On June 1, 2007, the Company shall grant to the Executive an
		Equity Incentive Award determined in accordance with the formula set forth in
		Exhibit A, which shall vest in equal quarters on each of June 1, 2008, June 1,
		2009, June 1, 2010 and June 1, 2011, subject to the terms and conditions set
		forth in the Restricted Share Agreement attached hereto as Exhibit B.
	 

	 
		(d) Housing Expense Reimbursement. The Company shall reimburse the Executive for expenses
		relating to the rental and maintenance of the Executive’s residence in
		Bermuda which are properly and reasonably incurred by the Executive during the
		Term and are reimbursable under the Company’s housing expense
		reimbursement policy, as amended from time to time. Prior to such payment the
		Executive shall provide to the Company any written substantiation for such
		expenses requested by the Company. The maximum amount of rental and maintenance
		expenses the Company shall reimburse the Executive pursuant to this Section
		4.1(d) shall be $200,000 per 12 month period, which maximum amount shall be
		prorated if the Executive’s employment with the Company terminates prior
		to the scheduled expiration of the Term.
	 

	 
		(e) Travel Reimbursement. During the Term, the Company shall provide the
		Executive in connection with business travel (to and from Bermuda and elsewhere
		as required) with at least 400 hours of usage of a Learjet 60 or comparable
		private aircraft. If a private aircraft is not available for any one or more of
		the Executive’s business travels, in lieu thereof the Company shall
		reimburse the Executive for his cost of first class travel on a commercial
		airline during the Term. In connection therewith, the Executive shall be
		entitled to participate during the Term, at the Company’s expense, in an
		air travel club selected by the Executive. Prior to such payment the Executive
		shall provide to the Company any written substantiation for such expenses
		requested by the Company.
	 

	 
		(f) Tax Gross-Up. To
		the extent that the Executive incurs any United States federal or state
		ordinary income tax liability on account of the housing expense reimbursement
		and travel expense reimbursement specified in Section 4.1(d) and (e) hereof,
		the Company shall reimburse the Executive for all such tax liability incurred
		and all United States federal and state ordinary income tax liability incurred
		as a result of the tax gross-up payments specified pursuant to this Section
		4.1(f).
	 

	 
		(g) Tax Preparation Expense Reimbursement. The Company shall reimburse the Executive for the
		reasonable cost of the preparation of the Executive’s home country federal
		and state income tax returns by KPMG, or an alternate tax preparation service
		provider elected by the Executive and approved by the Company, for those
		calendar years falling entirely within the Term; provided that the maximum
		amount of tax 
	 

	 
		 
	 

	 
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		preparation expense reimbursable by the
		Company pursuant to this sentence shall be $2,500 per annum. Prior to such
		payment the Executive shall provide to the Company any written substantiation
		for such expenses requested by the Company.
	 

	 
		(h) Benefits. The Executive shall be
		eligible to participate in such 401(k) savings plan, life insurance, health
		insurance, disability insurance and major medical insurance benefits, and in
		such other employee benefit plans and programs for the benefit of the employees
		and officers of the Company generally, as may be maintained from time to time
		during the Term, in each case to the extent and in the manner available to
		other employees of the Company, subject to the terms and provisions of such
		plan or program.
	 

	 
		(i) Vacation. The Executive shall be
		entitled to 25 paid vacation days per annum, to be taken in the
		Executive’s discretion, in a manner consistent with the Executive’s
		obligations to the Company under this Agreement. Up to a maximum of 5 accrued
		and unused vacation days may be carried over each calendar year.
	 

	 
		(j) Indemnification/Liability
		Insurance. The Company shall indemnify the Executive as required by the
		Bye-laws of the Company, and may maintain customary insurance policies
		providing for indemnification of the Executive. In addition to the foregoing,
		the Executive and the Company agree to enter into the Indemnification Agreement
		attached hereto as Exhibit C concurrent with the execution and delivery of this
		Agreement.
	 

	 
		4.2 Expenses; Other Benefits. During the Term, the Company shall provide the
		Executive with the following expense reimbursements and perquisites:
	 

	 
		(a) Business Expenses. The Company will reimburse the Executive for
		reasonable business-related expenses incurred by the Executive in connection
		with the performance of the Executive’s duties hereunder during the Term,
		subject, however, to the Company’s policies relating to business-related
		expenses as in effect from time to time.
	 

	 
		(b) Other Benefits.
		The Company may also provide for or withdraw other benefits for the Executive
		as it determines from time to time during the Term, consistent with practices
		governing similarly situated senior executives of the Company.
	 

	 
		4.3 Tax Withholding.
		The Company shall be permitted to deduct from the amounts payable to the
		Executive pursuant to this Agreement the amount of taxes that the Company is
		required to withhold pursuant to applicable laws, rules and regulations.

	 

	 
		ARTICLE V.
	 

	 
		Exclusivity, Etc.
	 

	 
		5.1 Exclusivity. The
		Executive agrees to devote substantially all the Executive’s full working
		time, attention and energies during normal business hours to the performance of
		the Executive’s duties for the Company; provided that the Executive may
		engage in charitable, civic or community activities, serve on corporate boards
		or committees, manage personal investments, 
	 

	 
		 
	 

	 
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		and deliver lectures and fulfill speaking
		engagements, but only if, and to the extent that, such activities do not
		interfere with the Executive’s duties hereunder or violate the terms of
		any of the covenants contained in Sections 5.2, 5.3, 5.4 or 5.5 hereof.
	 

	 
		5.2 Non-Competition; Non-Solicitation. 
	 

	 
		(a) General. The
		Executive acknowledges that in the course of the Executive’s employment
		with the Company the Executive will become familiar with trade secrets and
		other confidential information concerning the Company and its subsidiaries and
		that the Executive’s services will be of special, unique and extraordinary
		value to the Company and its subsidiaries.
	 

	 
		(b) Non-Competition.
		The Executive agrees that during the Term and the period from the Termination
		Date until the 12 month anniversary of the Termination Date, the Executive
		shall not in any manner, directly or indirectly, through any person, firm or
		corporation, alone or as a member of a partnership or as an officer, director,
		stockholder, investor, broker, advisor, employee of or consultant to any other
		corporation or enterprise or otherwise, engage or be engaged, or assist any
		other person, firm, corporation or enterprise in engaging or being engaged, in
		the Business in any geographic area in which the Company or any of its
		subsidiaries is then conducting the Business. 
	 

	 
		(c) Non-solicitation. The Executive further agrees that during the Term and
		the period from the Termination Date until the 12 month anniversary of the
		Termination Date, the Executive shall not (i) in any manner, directly or
		indirectly, induce or attempt to induce any employee of the Company or any of
		its divisions, subsidiaries or affiliates to terminate or abandon his or her
		employment for any purpose whatsoever or (ii) in connection with the Business,
		call on, service, solicit or otherwise do business with any customer of the
		Company or any of its divisions, subsidiaries or affiliates.
	 

	 
		(d) Exceptions.
		Nothing in this Section 5.2 shall prohibit the Executive from being (i) a
		stockholder in a mutual fund or a diversified investment company or (ii) an
		owner of not more than two percent of the outstanding stock of any class of a
		corporation, any securities of which are publicly traded, so long as the
		Executive has no active participation in the business of such
		corporation.
	 

	 
		5.3 Confidential Information. 
	 

	 
		(a) General. The
		Executive agrees that the Executive will not, at any time during or after the
		Term, make use of or divulge to any other person, firm or corporation any
		Confidential Information which he may have learned in connection with his
		employment hereunder. 
	 

	 
		(b) Exceptions. The
		Executive’s obligation under this Section 5.3 shall not apply to any
		information which (i) is disclosed or used during the Term by the Executive as
		required or appropriate in connection with his duties as Chairman, President
		and Chief Executive Officer of the Company, (ii) is disclosed as required by a
		court of law, by any governmental agency having supervisory authority over the
		business of the Company or any of its divisions, subsidiaries or affiliates or
		by any administrative or legislative body, 
	 

	 
		 
	 

	 
		10
	 

	 
		 
	 



	 
	 

	 

	 
		including a committee thereof) with apparent
		jurisdiction to order the Executive to divulge, disclose or make accessible
		such information, (iii) is disclosed to the Executive’s spouse, attorney
		and/or his personal tax and financial advisors as reasonably necessary or
		appropriate to advance the Executive’s tax, financial and other personal
		planning (iv) is known publicly; (v) is in the public domain or hereafter
		enters the public domain without the fault of the Executive; (vi) is known to
		the Executive prior to his receipt of such information from the Company or any
		of its divisions, subsidiaries or affiliates, as evidenced by written records
		of the Executive or (vii) is hereafter disclosed to the Executive by a third
		party not under an obligation of confidence to the Company or any of its
		divisions, subsidiaries or affiliates. 
	 

	 
		(c) Executive Obligations. The Executive agrees that he shall, immediately after
		he gains knowledge of any required disclosure of Confidential Information
		pursuant to clause (ii) of subsection (b) above, give the Company written
		notice promptly upon obtaining knowledge of the required disclosure of
		Confidential Information and, in any event, prior to such required disclosure
		of Confidential Information, and use commercially reasonable efforts to
		cooperate with the Company (at the Company’s sole expense) in obtaining an
		adequate protective order for such Confidential Information. The Executive
		further agrees to properly advise any recipient of Confidential Information
		pursuant to clause (iii) of subsection (b) above of the obligations of the
		Executive hereunder, to obtain the agreement of such recipient to be bound by
		the terms of this Section 5.3 as if a signatory to this Agreement and to be
		responsible for any breach by any such recipient of the terms of this Section
		5.3. The Executive further agrees not to remove from the premises of the
		Company, or as applicable, the premises of any of its divisions, subsidiaries
		or affiliates, except as an employee of the Company in pursuit of the business
		of the Company, its divisions, subsidiaries or affiliates, or except as
		specifically permitted in writing by the Board, any document or other object
		containing or reflecting any Confidential Information. On or before the
		Termination Date, the Executive shall forthwith deliver to the Company all such
		Confidential Information, including without limitation all lists of customers,
		correspondence, accounts, records and any other documents or property made or
		held by the Executive or under the Executive’s control in relation to the
		business or affairs of the Company or its subsidiaries or affiliates, and no
		copy of any such Confidential Information shall be retained by the
		Executive.
	 

	 
		5.4 Inventions. The
		Executive hereby assigns to the Company the Executive’s entire right,
		title and interest in and to all discoveries and improvements, patentable or
		otherwise, trade secrets and ideas, writings and copyrightable material, which
		may be conceived by the Executive or developed or acquired by the Executive
		during the Term, which may pertain directly or indirectly to the business of
		the Company or any of its divisions, subsidiaries or affiliates. The Executive
		agrees to disclose fully all such developments to the Company upon its request,
		which disclosure shall be made in writing promptly following any such request.
		The Executive shall, upon the Company’s request, execute, acknowledge and
		deliver to the Company all instruments and do all other acts which are
		necessary or desirable to enable the Company or any of its subsidiaries to file
		and prosecute applications for, and to acquire, maintain and enforce, all
		patents, trademarks and copyrights in all countries.
	 

	 
		 
	 

	 
		11
	 

	 
		 
	 



	 
	 

	 

	 
		5.5 Non-Disparagement. Each party hereto acknowledges and agrees that such
		party will not defame or publicly criticize the services, business, integrity,
		veracity or personal or professional reputation of the other party and, in the
		case of the Company, its officers, directors, partners, employees, affiliates
		or agents thereof, in either a professional or personal manner, except that the
		foregoing shall not limit normal competitive activities; provided that, in the
		case of the Executive, such competitive activities are in compliance with the
		Executive’s obligations under Section 5.2.
	 

	 
		5.6 Remedies. The Executive
		acknowledges that the Company’s remedy at law for a breach by him of the
		provisions of this Article V will be inadequate. Accordingly, in the event of a
		breach or threatened breach by the Executive of any provision of this Article
		V, the Company shall be entitled to injunctive relief (without posting a bond
		or other security) in addition to any other remedy it may have. If any of the
		provisions of, or covenants continued in, this Article V are hereafter
		construed to be invalid or unenforceable in any jurisdiction, the same shall
		not affect the remainder of the provisions or the enforceability thereof in any
		jurisdiction, which shall be given full effect, without regard to the
		invalidity or unenforceability in such other jurisdiction. If, at any time of
		enforcement of this Article V, a court or an arbitrator holds that the
		restrictions stated herein are unreasonable and/or unenforceable under
		circumstances then existing, the parties hereto agree that the maximum period,
		scope or geographical area reasonable and/or enforceable under such
		circumstances shall be substituted for the stated period, scope or area and
		that the court or arbitrator shall be allowed to revise the restrictions
		contained herein to cover the maximum period, scope and area permitted by law
		provided, however, that the determination of such court or arbitrator shall not
		affect the enforceability of this Article V in any other jurisdiction.. This
		Agreement shall not authorize a court or arbitrator to increase or broaden any
		of the restrictions in this Article V.
	 

	 
		5.7 Blue Pencil. If, at any time, the
		provisions of this Article V shall be determined to be invalid or unenforceable
		under any applicable law, by reason of being vague or unreasonable as to area,
		duration or scope of activity, this Article V shall be considered divisible and
		shall become and be immediately amended to only such area, duration and scope
		of activity as shall be determined to be reasonable and enforceable by the
		court or other body having jurisdiction over the matter. The Executive and the
		Company agree that this Article V as amended pursuant to the immediately
		preceding sentence, shall be valid and binding as though any invalid or
		unenforceable provision had not been included therein.
	 

	 
		ARTICLE VI.
	 

	 
		Termination
	 

	 
		6.1 Company Termination of Employment
	 

	 
		(a) Termination for Cause. The Company shall have the right to terminate the
		Executive’s employment at any time for Cause by delivery of a Notice of
		Termination. 
	 

	 
		(b) Death. In the
		event the Executive dies during the Term, the Executive’s employment with
		the Company shall automatically terminate, such termination to be effective on
		the date of the Executive’s death.
	 

	 
		 
	 

	 
		12
	 

	 
		 
	 



	 
	 

	 

	 
		(c) Disability. In
		the event that the Executive suffers a Disability, the Company shall have the
		right to terminate the Executive’s employment by delivery of a Notice of
		Termination.
	 

	 
		(d) Termination Without Cause. The Company may at any time terminate the
		Executive’s employment by delivery of a Notice of Termination for any
		reason other than Cause or the Executive’s death or disability.
	 

	 
		6.2 Executive Termination of Employment. 
	 

	 
		(a) Termination without Good Reason. The Executive may terminate his employment at any time
		without Good Reason by delivery of a Notice of Termination to the
		Company.
	 

	 
		(b) Termination with Good Reason. The Executive may terminate his employment for Good
		Reason only by delivery of Notice of Termination to the Company within 30
		calendar days of the Executive first becoming aware of the circumstances giving
		rise to the Executive’s right to terminate his employment for Good
		Reason.
	 

	 
		6.3 Notice of Termination. Any purported termination of the Executive’s
		employment (other than termination pursuant to Section 6.1(b) hereof) shall be
		communicated by written Notice of Termination to the other party hereto
		delivered in accordance with Section 7.3 hereof. 
	 

	 
		6.4 Effect of Termination. 
	 

	 
		(a) Termination by Company for Cause or by Executive without
		Good Reason. In the event of any
		termination of the Executive’s employment during the Term (x) by the
		Company for Cause or (y) by the Executive without Good Reason, the Company
		shall pay to or provide the Executive with the following compensation and
		benefits:
	 

	 
		(i) Any earned but unpaid Base Salary up to
		and including the Date of Termination, payable in accordance with the
		Company’s customary payroll procedures;
	 

	 
		(ii) Any unreimbursed business expenses
		incurred by the Executive in the performance of his duties for the Company
		prior to the Date of Termination, upon receipt by the Company of documentation
		in such form as customarily required by the Company to report business
		expenses, payable in accordance with the Company’s customary business
		expense reimbursement procedures;
	 

	 
		(iii) The Executive’s Base Salary for
		any vacation days accrued and unused (determined in accordance with Company
		policy) by the Executive from the immediately preceding January 1st
		until the Date of Termination, payable in accordance with the Company’s
		customary payroll procedures; 
	 

	 
		(iv) Any housing expense reimbursement
		payable in accordance with Section 4.1(d) until the earlier of (A) the end of
		the lease for the Executive’s residence in Bermuda or (B) the three month
		anniversary of the Date of 
	 

	 
		 
	 

	 
		13
	 

	 
		 
	 



	 
	 

	 

	 
		Termination, payable in accordance with the
		Company’s customary business housing allowance reimbursement procedures;
		and
	 

	 
		(v) Any other benefits available to
		employees of the Company generally, through and including the Date of
		Termination, payable or deliverable in accordance with the terms and conditions
		applicable to such benefits.
	 

	 
		(b) Termination as a Result of Death or
		Disability. In the event of any
		termination of the Executive’s employment during the Term as a result of
		the Executive’s death or Disability, the Company shall pay to or provide
		the Executive (or the Executive’s heirs) with the following compensation
		and benefits:
	 

	 
		(i) Any earned but unpaid Base Salary up to
		and including the Date of Termination, payable in accordance with the
		Company’s customary payroll procedures;
	 

	 
		(ii) Any earned but unpaid Annual Incentive
		Compensation for the last completed calendar year during the Term, which Annual
		Incentive Compensation shall be determined (A) in accordance with the
		Company’s annual incentive plan, (B) utilizing the Threshold Annual
		Incentive Compensation Percentage, Maximum Annual Incentive Compensation
		Percentage, Target Annual Incentive Compensation Percentage and performance
		criteria previously established by the Board for such completed calendar year
		in accordance with Section 4.1(b) and (C) by the Board (1) without the exercise
		by the Board of any discretionary adjustment to such Annual Incentive
		Compensation and (2) with the Board ascribing to any individual evaluation of
		the Executive the same result as occurs based upon the Company’s
		performance under its annual incentive plan, and which Annual Incentive
		Compensation shall be payable within 15 business days of the six month
		anniversary of the Date of Termination;
	 

	 
		(iii) A cash sum equal to the Target Annual
		Incentive Compensation Percentage of the Executive’s Base Salary as of the
		Date of Termination multiplied by a fraction (x) the numerator of which is the
		number of calendar days elapsed in the calendar year up to and including the
		Date of Termination and (y) the denominator of which is 365, payable within 15
		business days of the six month anniversary of the Date of Termination;
	 

	 
		(iv) Any unreimbursed business expenses
		incurred by the Executive in the performance of his duties for the Company
		prior to the Date of Termination, upon receipt by the Company of documentation
		in such form as customarily required by the Company to report business
		expenses, payable in accordance with the Company’s customary business
		expense reimbursement procedures;
	 

	 
		(v) The Executive’s Base Salary for any
		vacation days accrued and unused (determined in accordance with Company policy)
		by the Executive from the immediately preceding January 1st until
		the Date of Termination, payable in accordance with the Company’s
		customary payroll procedures; 
	 

	 
		 
	 

	 
		14
	 

	 
		 
	 



	 
	 

	 

	 
		(vi) Any housing expense reimbursement
		payable in accordance with Section 4.1(d) until the earlier of (A) the end of
		the lease for the Executive’s residence in Bermuda or (B) the three month
		anniversary of the Date of Termination, payable in accordance with the
		Company’s customary business housing allowance reimbursement procedures;
		
	 

	 
		(vii) Reimbursement for the reasonable cost
		of the preparation of the Executive’s home country federal and state
		income tax returns by KPMG, or an alternate tax preparation service provider
		elected by the Executive and approved by the Company, for the calendar year
		during which the Date of Termination occurred; provided that the maximum amount
		of tax preparation expense reimbursable by the Company pursuant hereto shall be
		$2,500 and the Company shall have received from the Executive satisfactory
		written substantiation for such tax expenses, which reimbursement shall be
		payable on the later to occur of the six month anniversary of the Date of
		Termination or 15 business days after the submission to the Company of
		satisfactory written substantiation for such tax expenses;
	 

	 
		(viii) Any proper and reasonable expense
		reimbursement relating to the relocation of the Executive’s residence from
		Bermuda, in the event the Executive and the Executive’s family relocate
		their permanent residence from Bermuda during the 12 months immediately
		following the Date of Termination, which relocation expense reimbursement shall
		be made in a manner agreeable to the Company and the Executive and subject to
		receipt by the Company of satisfactory written substantiation for such
		relocation expenses, which reimbursement shall be payable on the later to occur
		of the six month anniversary of the Date of Termination or15 business days
		after the submission to the Company of satisfactory written substantiation for
		such relocation expenses; and
	 

	 
		(ix) Any other benefits available to
		employees of the Company generally, through and including the Date of
		Termination, payable or deliverable in accordance with the terms and conditions
		applicable to such benefits.
	 

	 
		(c) Termination by the Company without Cause or by the
		Executive with Good Reason other than During a Change in Control
		Period. In the event of any termination
		of the Executive’s employment during the Term (x) by the Company without
		Cause or (y) by the Executive with Good Reason, in either case other than
		during a Change in Control Period, the Company shall pay to or provide the
		Executive with the following compensation and benefits:
	 

	 
		(i) Any earned but unpaid Base Salary up to
		and including the Date of Termination, payable in accordance with the
		Company’s customary payroll procedures;
	 

	 
		(ii) Any earned but unpaid Annual Incentive
		Compensation for the last completed calendar year during the Term, which Annual
		Incentive Compensation shall be determined (A) in accordance with the
		Company’s annual incentive plan, (B) utilizing the Threshold Annual
		Incentive Compensation Percentage, 
	 

	 
		 
	 

	 
		15
	 

	 
		 
	 



	 
	 

	 

	 
		Maximum Annual Incentive Compensation
		Percentage, Target Annual Incentive Compensation Percentage and performance
		criteria previously established by the Board for such completed calendar year
		in accordance with Section 4.1(b) and (C) by the Board (1) without the exercise
		by the Board of any discretionary adjustment to such Annual Incentive
		Compensation and (2) with the Board ascribing to any individual evaluation of
		the Executive the same result as occurs based upon the Company’s
		performance under its annual incentive plan, and which Annual Incentive
		Compensation shall be payable within 15 business days of the six month
		anniversary of the Date of Termination;
	 

	 
		(iii) A cash sum equal to the Target Annual
		Incentive Compensation Percentage of the Executive’s Base Salary as of the
		Date of Termination multiplied by a fraction (x) the numerator of which is the
		number of calendar days elapsed from the January 1st immediately
		preceding the Date of Termination to the Date of Termination and (y) the
		denominator of which is 365, payable within 15 business days of the six month
		anniversary of the Date of Termination;
	 

	 
		(iv) A cash sum equal to the average Annual
		Incentive Compensation paid by the Company to the Executive in respect of the
		three most recent completed calendar years, payable within 15 business days of
		the six month anniversary of the Date of Termination;
	 

	 
		(v) A cash sum equal to six months of the
		Executive’s Base Salary, payable on the six month anniversary of the Date
		of Termination and, thereafter, the continuation of the Executive’s Base
		Salary, paid in accordance with the Company’s payroll policy, from the six
		month anniversary of the Date of Termination to the twelve month anniversary of
		the Date of Termination, if any;
	 

	 
		(vi) A cash sum equal to the product of the
		following:
	 

	 
		(A) the greater of (I) the unvested Equity
		Incentive Awards lapsing immediately following the Date of Termination which,
		absent such Date of Termination, would otherwise vest during the 12 month
		period immediately following the Date of Termination and (II) 50% of the Equity
		Incentive Awards lapsing immediately following the Date of Termination,
		multiplied by 
	 

	 
		(B) either (x) the per share closing price
		on the New York Stock Exchange for Endurance Specialty Holdings Ltd. ordinary
		shares on the Date of Termination for Equity Incentive Awards with no exercise
		price or (y) the difference between (1) the per share closing price on the New
		York Stock Exchange for Endurance Specialty Holdings Ltd. ordinary shares on
		the Date of Termination and (2) the applicable per share exercise price for
		Equity Incentive Awards with an exercise price, payable within 15 business days
		of the six month anniversary of the Date of Termination. 
	 

	 
		 
	 

	 
		16
	 

	 
		 
	 



	 
	 

	 

	 
		(vii) The continuation during the 12 months
		immediately following the date of Termination of the eligibility of the
		Executive, his spouse and his dependent children to participate in the
		Company’s medical, dental, vision and life insurance plans in which the
		Executive, his spouse and his dependent children participated immediately
		preceding the Date of Termination; provided,
		however, that participation in such medical, dental, vision and
		life insurance plans shall be subject to the Executive’s payment of the
		applicable employee portion of the monthly premium cost, if any.
	 

	 
		(viii) Any unreimbursed business expenses
		incurred by the Executive in the performance of his duties for the Company
		prior to the Date of Termination, upon receipt by the Company of documentation
		in such form as customarily required by the Company to report business
		expenses, payable in accordance with the Company’s customary business
		expense reimbursement procedures;
	 

	 
		(ix) The Executive’s Base Salary for
		any vacation days accrued and unused (determined in accordance with Company
		policy) by the Executive from the immediately preceding January 1st
		until the Date of Termination, payable in accordance with the Company’s
		customary payroll procedures; 
	 

	 
		(x) Any housing expense reimbursement
		payable in accordance with Section 4.1(d) until the earlier of (A) the end of
		the lease for the Executive’s residence in Bermuda or (B) the three month
		anniversary of the Date of Termination, payable in accordance with the
		Company’s customary business housing allowance reimbursement
		procedures;
	 

	 
		(xi) Reimbursement for the reasonable cost
		of the preparation of the Executive’s home country federal and state
		income tax returns by KPMG, or an alternate tax preparation service provider
		elected by the Executive and approved by the Company, for the calendar year
		during which the Date of Termination occurred; provided that the maximum amount
		of tax preparation expense reimbursable by the Company pursuant hereto shall be
		$2,500 and the Company shall have received from the Executive satisfactory
		written substantiation for such tax expenses, which reimbursement shall be
		payable on the later to occur of the six month anniversary of the Date of
		Termination or 15 business days after the submission to the Company of
		satisfactory written substantiation for such tax expenses;
	 

	 
		(xii) Any proper and reasonable expense
		reimbursement relating to the relocation of the Executive’s residence from
		Bermuda, in the event the Executive and the Executive’s family relocate
		their permanent residence from Bermuda during the 12 months immediately
		following the Date of Termination, which relocation expense reimbursement shall
		be made in a manner agreeable to the Company and the Executive and subject to
		receipt by the Company of satisfactory written substantiation for such
		relocation expenses, which reimbursement shall be payable on the later to occur
		of the six month anniversary of the Date of Termination or 15 business days
		after the submission to the Company of satisfactory written substantiation for
		such relocation expenses; and
	 

	 
		 
	 

	 
		17
	 

	 
		 
	 



	 
	 

	 

	 
		(xiii) Any other benefits available to
		employees of the Company generally, through and including the Date of
		Termination, payable or deliverable in accordance with the terms and conditions
		applicable to such benefits.
	 

	 
		(d) Termination by the Company without Cause or by the
		Executive with Good Reason During a Change in Control Period. In the event of any termination of the
		Executive’s employment during the Term (x) by the Company without Cause or
		(y) by the Executive with Good Reason, in each case during a Change in Control
		Period, the Company shall pay to or provide the Executive with the following
		compensation and benefits:
	 

	 
		(i) Any earned but unpaid Base Salary up to
		and including the Date of Termination, payable in accordance with the
		Company’s customary payroll procedures;
	 

	 
		(ii) Any earned but unpaid Annual Incentive
		Compensation for the last completed calendar year during the Term, which Annual
		Incentive Compensation shall be determined (A) in accordance with the
		Company’s annual incentive plan, (B) utilizing the Threshold Annual
		Incentive Compensation Percentage, Maximum Annual Incentive Compensation
		Percentage, Target Annual Incentive Compensation Percentage and performance
		criteria previously established by the Board for such completed calendar year
		in accordance with Section 4.1(b) and (C) by the Board (1) without the exercise
		by the Board of any discretionary adjustment to such Annual Incentive
		Compensation and (2) with the Board ascribing to any individual evaluation of
		the Executive the same result as occurs based upon the Company’s
		performance under its annual incentive plan, and which Annual Incentive
		Compensation shall be payable within 15 business days of the six month
		anniversary of the Date of Termination;
	 

	 
		(iii) A cash sum equal to the Target Annual
		Incentive Compensation Percentage of the Executive’s Base Salary as of the
		Date of Termination multiplied by a fraction (x) the numerator of which is the
		number of calendar days elapsed in the calendar year up to and including the
		Date of Termination and (y) the denominator of which is 365, payable within 15
		business days of the six month anniversary of the Date of Termination;
	 

	 
		(iv) A cash sum equal to (A) two times the
		Executive’s annual Base Salary as of the Date of Termination plus (B) two
		times the average Annual Incentive Compensation paid by the Company to the
		Executive in respect of the three most recent completed calendar years, payable
		within 15 business days of the six month anniversary of the Date of
		Termination;
	 

	 
		(v) A cash sum equal to (A) the product of
		the unvested Equity Incentive Awards lapsing immediately following the Date of
		Termination multiplied by (B) either (x) the per share closing price on the New
		York Stock Exchange for Endurance Specialty Holdings Ltd. ordinary shares on
		the Date of Termination for Equity Incentive Awards with no exercise price or
		(y) the difference between 
	 

	 
		 
	 

	 
		18
	 

	 
		 
	 



	 
	 

	 

	 
		(1) the per share closing price on the New
		York Stock Exchange for Endurance Specialty Holdings Ltd. ordinary shares on
		the Date of Termination and (2) the applicable per share exercise price for
		Equity Incentive Awards with an exercise price, payable within 15 business days
		of the six month anniversary of the Date of Termination;
	 

	 
		(vi) The continuation during the period from
		the Date of Termination until the 24 month anniversary of the Date of
		Termination, of the eligibility of the Executive, his spouse and his dependent
		children to participate in the Company’s medical, dental, vision and life
		insurance plans in which the Executive, his spouse and his dependent children
		participated immediately preceding the Date of Termination; provided,
		however, that participation in such medical, dental, vision and
		life insurance plans shall be subject to the Executive’s payment of the
		applicable employee portion of the monthly premium cost, if any;
	 

	 
		(vii) Any unreimbursed business expenses
		incurred by the Executive in the performance of his duties for the Company
		prior to the Date of Termination, upon receipt by the Company of documentation
		in such form as customarily required by the Company to report business
		expenses, payable in accordance with the Company’s customary business
		expense reimbursement procedures;
	 

	 
		(viii) The Executive’s Base Salary for
		any vacation days accrued and unused (determined in accordance with Company
		policy) by the Executive from the immediately preceding January 1st
		until the Date of Termination, payable in accordance with the Company’s
		customary payroll procedures; 
	 

	 
		(ix) Any housing expense reimbursement
		payable in accordance with Section 4.1(d) until the earlier of (A) the end of
		the lease for the Executive’s residence in Bermuda or (B) the three month
		anniversary of the Date of Termination, payable in accordance with the
		Company’s customary business housing allowance reimbursement procedures;
		
	 

	 
		(x) Reimbursement for the reasonable cost of
		the preparation of the Executive’s home country federal and state income
		tax returns by KPMG, or an alternate tax preparation service provider elected
		by the Executive and approved by the Company, for the calendar year during
		which the Date of Termination occurred; provided that the maximum amount of tax
		preparation expense reimbursable by the Company pursuant hereto shall be $2,500
		per annum and the Company shall have received from the Executive satisfactory
		written substantiation for such tax expenses, which reimbursement shall be
		payable on the later to occur of the six month anniversary of the Date of
		Termination or 15 business days after the submission to the Company of
		satisfactory written substantiation for such tax expenses;
	 

	 
		(xi) Any proper and reasonable expense
		reimbursement relating to the relocation of the Executive’s residence from
		Bermuda, in the event the Executive and the Executive’s family relocate
		their permanent residence from Bermuda during the 12 months immediately
		following the Date of Termination, which 
	 

	 
		 
	 

	 
		19
	 

	 
		 
	 



	 
	 

	 

	 
		relocation expense reimbursement shall be
		made in a manner agreeable to the Company and the Executive and subject to
		receipt by the Company of satisfactory written substantiation for such
		relocation expenses, which reimbursement shall be payable on the later to occur
		of the six month anniversary of the Date of Termination or15 business days
		after the submission to the Company of satisfactory written substantiation for
		such relocation expenses; and
	 

	 
		(xii) Any other benefits available to
		employees of the Company generally, through and including the Date of
		Termination, payable or deliverable in accordance with the terms and conditions
		applicable to such benefits.
	 

	 
		6.5 Section 280G Gross Up. 
	 

	 
		(a) Gross-Up Obligation. In the event that any payment, award, benefit or
		distribution (or any acceleration of any payment, award, benefit or
		distribution) by the Company or any entity which effectuates a change in
		ownership or effective control of the Company or a change in the ownership of a
		substantial portion of the assets of the Company, in either case, within the
		meaning of Section 280G(b)(2)(A)(i) of the Code and the regulations promulgated
		thereunder (a “Change in Ownership”), to or for the benefit of the
		Executive (the “Payments”) is subject to the excise tax imposed by
		Section 4999 of the Code, or any interest or penalties are incurred by the
		Executive with respect to such excise tax (such excise tax, together with any
		such interest and penalties, are hereinafter collectively referred to as the
		“Excise Tax”), then, subject to the limitation in Section 6.5(b), the
		Company shall pay to the Executive an additional payment (a “Gross-Up
		Payment”) in an amount such that after payment by the Executive of all
		taxes (including any Excise Tax, but excluding any taxes or penalties under
		Section 409A of the Code) imposed upon the Gross-Up Payment, Executive retains
		an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax
		imposed upon the Payments and (y) the product of any deductions disallowed
		because of the inclusion of the Gross-Up Payment in the Executive’s
		adjusted gross income and the highest applicable marginal rate of taxation for
		the calendar year in which the Gross-Up Payment is to be made. For purposes of
		determining the amount of the Gross-Up Payment, Executive shall be deemed to
		(A) pay federal income taxes at the highest marginal rate of taxation for the
		calendar year in which the Gross-Up Payment is to be made, (B) pay applicable
		state and local income taxes at the highest marginal rate of taxation for the
		calendar year in which the Gross-Up Payment is to be made, net of the maximum
		reduction in federal income taxes which could be obtained from deduction of
		such state and local taxes and (C) have otherwise allowable deductions for
		federal income tax purposes at least equal to those which could be disallowed
		because of the inclusion of the Gross-Up Payment in Executive’s adjusted
		gross income.
	 

	 
		(b) Limitation on Gross-Up Obligation. In the event the Executive is entitled to a Gross-Up
		Payment, but that the Payments would not be subject to the Excise Tax if the
		Payments were reduced by an amount that is less than 10% of the portion of the
		Payments that would be treated as “parachute payments” under Section
		280G of the Code, then the amounts payable to the Executive under this
		Agreement shall be reduced (but not below zero) to the maximum amount that
		could be paid to the Executive without giving rise to the Excise Tax (the
		“Safe Harbor Cap”), and no Gross-Up Payment shall be 
	 

	 
		 
	 

	 
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		made to the Executive. The reduction of the
		amounts payable hereunder, if applicable, shall be made by reducing first the
		payments under Section 6.4(d)(iv), unless an alternative method of reduction is
		elected by the Executive. For purposes of reducing the Payments to the Safe
		Harbor Cap, only amounts payable under this Agreement (and no other Payments)
		shall be reduced. If the reduction of the amounts payable hereunder would not
		result in a reduction of the Payments to the Safe Harbor Cap, no amounts
		payable under this Agreement shall be reduced pursuant to this
		provision.
	 

	 
		(c) Method of Determining Gross-Up. All determinations required to be made under this
		Section 6.5, including whether and when a Gross-Up Payment is required, the
		amount of such Gross-Up Payment and the assumptions to be utilized in arriving
		at such determinations, shall be made by KPMG, or such other public accounting
		firm as shall be mutually agreed by the Company and the Executive (the
		“Accounting Firm”), which shall provide detailed supporting
		calculations both to the Company and the Executive within 15 business days of
		receipt of notice from the Company or Executive that there has been a Payment,
		or such earlier time as is requested by the Company. All fees and expenses of
		the Accounting Firm shall be borne solely by the Company in connection with the
		performance of the services hereunder. The Executive shall cooperate with the
		Company and the Accounting Firm in connection with the determination of the
		Gross-Up Payment. The Gross-Up Payment under this Section 6.5 with respect to
		any Payments made to the Executive shall be made no later than the earlier of
		(i) 30 calendar days following the final determination of the amount of the
		Gross-Up Payment by the Accounting Firm or (ii) the end of the taxable year
		following the taxable year during which the Excise Tax is paid by the
		Executive. The final determination of the amount of the Gross-Up Payment by the
		Accounting Firm shall be binding upon the Company and the Executive. The
		parties hereto agree to cooperate with each other and the Accounting Firm in
		connection with any contest or disputes with the Internal Revenue Service in
		connection with the Excise Tax.
	 

	 
		(d) Underpayment or Overpayment of Gross-Up. In the event that the calculations prepared by the
		Accounting Firm result in the Gross-Up Payment made by the Company on behalf of
		the Executive being in excess of the amount (“Overpayment”) or
		insufficient to fulfill the Company’s obligations under Section 6.5(a),
		subject to the limitation set forth in Section 6.5(b)
		(“Underpayment”), the Accounting Firm, upon receipt of written notice
		from either the Executive or the Company, with a copy to the other party to
		this Agreement, shall determine the amount of the Underpayment or Overpayment,
		if any. In the event the Accounting Firm determines there is an Underpayment,
		the Company shall promptly pay to the Executive the amount of such
		Underpayment, which payment shall be made by the Company no later than the end
		of the taxable year following the taxable year during which the Excise Tax is
		paid by the Executive. In the event there is an Overpayment, the Executive
		shall promptly pay to the Company the amount of the Overpayment; provided, that
		in the event the Executive has previously paid the applicable Excise Tax to the
		Internal Revenue Service, the Executive shall not be obligated to pay to the
		Company the amount of the Overpayment until the Executive has received the
		applicable refund from the Internal Revenue Service. All fees and expenses of
		the Accounting Firm in calculating the Underpayment or Overpayment shall be
		borne solely by the Company. The Executive shall cooperate with the Company
		
	 

	 
		 
	 

	 
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		and the Accounting Firm in connection with
		the determination of the Underpayment or Overpayment.
	 

	 
		6.6 Executive Release. The execution by the Executive of the Executive
		Release attached hereto as Exhibit D shall be a condition precedent to the
		delivery to the Executive by the Company of any payment or benefit under
		Section 6.4(c) or Section 6.4(d). In addition, the Executive Agrees that, to
		the extent applicable, a portion of the payments made by the Company to the
		Executive under Section 6.4(c) or Section 6.4(d) shall be deemed severance pay
		in lieu of notice under the Bermuda Employment Act 2000 and that the Company
		shall have no other liability to the Executive thereunder.
	 

	 
		6.7 Resignations.
		The resignation by the Executive from all director and officer positions held
		by the Executive with the Company and any subsidiary or affiliate of the
		Company shall be a condition precedent to the delivery to the Executive by the
		Company of any payment or benefit under Section 6.4 (other than in connection
		with a termination of the Executive’s employment wit the Company as a
		result of the Executive’s death).
	 

	 
		6.8 Compliance with Restrictive Covenants. The Executive’s continued compliance with the
		restrictive covenants set forth in Sections 5.2, 5.3, 5.4 and 5.5 shall be a
		condition precedent to the receipt by the Executive of the payments and
		benefits set forth in Sections 6.4(b)(iii), 6.4(b)(vii), 6.4(b)(viii),
		6.4(c)(iii), 6.4(c)(iv), 6.4(c)(v), 6.4(c)(vi), 6.4(c)(vii), 6.4(c)(xi),
		6.4(c)(xii), 6.4(d)(iii), 6.4(d)(iv), 6.4(d)(v), 6.4(d)(vi), 6.4(d)(x) and
		6.4(d)(xi) on or after the Date of Termination and, in the event the Executive
		breaches one or more of the covenants set forth in Sections 5.2, 5.3, 5.4 or
		5.5, the Company shall be entitled to recover from the Executive the value of
		any payment or benefit made or provided by the Company to the Executive
		pursuant to the above-referenced Sections of this Agreement on and after the
		first date of such breach.
	 

	 
		6.9 Equity Incentive Awards. The Executive’s rights with respect to his Equity
		Incentive Awards upon any termination of his employment with the Company shall
		be governed exclusively by the terms and conditions of the Plans and any award
		agreements executed by the Executive in connection with such Equity Incentive
		Awards. For the avoidance of doubt, under no circumstances shall the Executive
		be entitled to any cash payment under Section 6.4(c)(vi) or Section 6.4(d)(v)
		with respect to any Equity Incentive Award which is either exercisable or
		convertible in accordance with its terms at any time after the Date of
		Termination.
	 

	 
		6.10 Other Compensation and Benefits. Except as specified in Section 6.4, the Executive
		shall not be entitled to any compensation, benefits or other payments or
		distributions, and references in the Executive Release to the release of claims
		against the Company shall be deemed to also include reference to the release of
		claims against all compensation and benefit plans and arrangements established
		or maintained by the Company and its subsidiaries and affiliates.
	 

	 
		6.11 Obligations of the Executive. The Executive shall have no obligations to the Company
		under this Agreement after the Date of Termination, other than as provided in
		Sections 6.5 and 6.12, and except and to the extent Sections 5.2, 5.3, 5.4 or
		5.5 shall apply.
	 

	 
		6.12 Post-Termination Cooperation. Following any termination of the Executive’s
		employment for any reason, the Executive shall reasonably cooperate with the
		Company to assist 
	 

	 
		 
	 

	 
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		with existing or future investigations,
		proceedings, litigations or examinations involving the Company or any of its
		divisions, subsidiaries or affiliates. For each business day, or part thereof,
		that the Executive provides assistance as contemplated under this Section 6.12,
		the Company shall pay the Executive an amount equal to (i) the Executive’s
		annual Base Salary as in effect on the date of the Executive’s termination
		of employment, divided by (ii) 200. In addition, upon presentment of
		satisfactory written documentation, the Company will reimburse the Executive
		for reasonable out-of-pocket travel, lodging and other incidental expenses he
		incurs in providing such assistance. If requested by the Company, the Executive
		shall make reasonable good faith efforts to travel to such locations as the
		Company may reasonably request.
	 

	 
		ARTICLE VII.
	 

	 
		Miscellaneous
	 

	 
		7.1 Life Insurance.
		The Executive agrees that the Company or any of its divisions, subsidiaries or
		affiliates may apply for and secure and own insurance on the Executive’s
		life (in amounts determined by the Company) for the benefit of the Company. The
		Executive agrees to cooperate fully in the application for and securing of such
		insurance, including the submission by the Executive to such physical and other
		examinations, and the answering of such questions and furnishing of such
		information by the Executive, as may be required by the carrier(s) of such
		insurance. Notwithstanding anything to the contrary contained herein, neither
		the Company nor any of its divisions, subsidiaries or affiliates shall be
		required to obtain any insurance for or on behalf of the Executive.
	 

	 
		7.2 Benefit of Agreement; Assignment;
		Beneficiary. This Agreement shall inure
		to the benefit of and be binding upon the Company and its successors and
		assigns, including, without limitation, any corporation or person which may
		acquire all or substantially all of the Company’s assets or business, or
		with or into which the Company may be consolidated or merged. This Agreement
		shall also inure to the benefit of, and be enforceable by, the Executive and
		his personal or legal representatives, executors, administrators, successors,
		heirs, distributes, devisees and legatees. The Company shall require any
		successor (whether direct or indirect, by operation of law, purchase, merger,
		consolidation or otherwise) to all or substantially all of the business and/or
		assets of the Company to expressly assume and agree to perform this Agreement
		in the same manner and to the same extent that the Company would be required to
		perform it if no such succession had taken place.
	 

	 
		7.3 Notices. All
		notices and other communications required or permitted hereunder shall be in
		writing and shall be deemed given when (a) delivered personally or by overnight
		courier to the following address of the other party hereto (or such other
		address for such party as shall be specified by notice given pursuant to this
		Section 7.3) or (b) sent by facsimile to the following facsimile number of the
		other party hereto (or such other facsimile number for such party as shall be
		specified by notice given pursuant to this Section 7.3), with the confirmatory
		copy delivered by overnight courier to the address of such party pursuant to
		this Section 7.3:
	 

	 
		If to the Company, to:
	 

	 
		Endurance Specialty Holdings Ltd.
	 

	 
		Wellesley House
	 

	 
		90 Pitts Bay Road
	 

	 
		Pembroke HM 08, Bermuda
	 

	 
		Attention: General Counsel
	 

	 
		Facsimile: (441) 278-0401
	 

	 
		 
	 

	 
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		If to the Executive, to the residence
		address or residence facsimile number of the Executive set forth in the records
		of the Company.
	 

	 
		7.4 Entire Agreement: This Agreement contains the entire agreement of the
		parties hereto with respect to the terms and conditions of the Executive’s
		employment and supersedes any and all prior agreements and understandings,
		whether written or oral, between the parties hereto with respect to
		compensation due for services rendered hereunder. 
	 

	 
		7.5 Amendment and Waiver. This Agreement may not be changed or modified except
		by an instrument in writing signed by both of the parties hereto. The waiver by
		either party of a breach of any provision of this Agreement shall not operate
		or be construed as a continuing waiver or as a consent to or waiver of any
		subsequent breach hereof.
	 

	 
		7.6 Headings. The
		Article and Section headings herein are for convenience of reference only, do
		not constitute a part of this Agreement and shall not be deemed to limit or
		affect any of the provisions hereof.
	 

	 
		7.7 Arbitration.
		Except as otherwise set forth in Section 5.6 hereof, any dispute or controversy
		between the Company and the Executive, whether arising out of or relating to
		this Agreement, the breach of this Agreement, or otherwise, shall be settled by
		arbitration in Hamilton, Bermuda administered in accordance with the
		Arbitration Act 1986, and judgment on the award rendered by the arbitrator may
		be entered in any court having jurisdiction thereof. The arbitrator shall have
		the authority to award any remedy or relief that a court of competent
		jurisdiction could order or grant, including, without limitation, the issuance
		of an injunction. However, either party may, without inconsistency with this
		arbitration provision, apply to any court having jurisdiction over such dispute
		or controversy and seek interim provisional, injunctive or other equitable
		relief until the arbitration award is rendered or the controversy is otherwise
		resolved. Except as necessary in court proceedings to enforce this arbitration
		provision or an award rendered hereunder, or to obtain interim relief, neither
		a party nor an arbitrator may disclose the existence, content or results of any
		arbitration hereunder without the prior written consent of the Company and the
		Executive. The Executive shall have no right to enforce any of his rights
		hereunder by seeking or obtaining injunctive or other equitable relief and
		acknowledges that damages are an adequate remedy for any breach by the Company
		of this Agreement.
	 

	 
		7.8 Governing Law.
		This Agreement shall be governed by, and construed and interpreted in
		accordance with, the internal laws of Bermuda, without regard to principles of
		conflict of laws.
	 

	 
		7.9 No Mitigation; No Offset. The Executive shall not be required to mitigate
		damages or the amount of any payment provided for under this Agreement by
		seeking (and, without limiting the generality of this sentence, no payment
		otherwise required under this Agreement shall be reduced on account of) other
		employment or otherwise, and payments under this 
	 

	 
		 
	 

	 
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		Agreement shall not be subject to offset in
		respect of any claims which the Company may have against the Executive.
	 

	 
		7.10 Attorneys’ Fees. Each party to this Agreement will bear its own
		expenses in connection with any dispute or legal proceeding between the parties
		arising out of the subject matter of this Agreement, including any proceeding
		to enforce any right or provision under this Agreement; provided, that in the
		event the Executive prevails on any material claim raised in such dispute or
		legal proceeding, the Company shall reimburse the Executive for his reasonable
		out-of-pocket legal fees and expenses incurred in connection with such dispute
		or legal proceeding.
	 

	 
		7.11 Compliance with Section 409A. This Agreement is intended to comply with Section 409A
		of the Code and shall be construed and interpreted in accordance with such
		intent. To the extent that the delivery of any cash or benefits to the
		Executive under this Agreement, or the payment, settlement or deferral thereof,
		is subject to Section 409A of the Code, such cash or benefits shall be paid,
		settled or deferred in a manner that will comply with Section 409A of the Code,
		including regulations or other guidance issued with respect thereto, except as
		otherwise agreed by the Company and the Executive. In the event that the
		Executive becomes subject to any additional tax under Section 409A(a)(1)(B) of
		the Code as a direct result of unilateral action taken by the Company without
		the prior approval of the Executive, the Company shall indemnify and hold the
		Executive harmless against any such additional tax.
	 

	 
		7.12 Termination; Survivorship. This Agreement shall terminate upon termination of the
		Executive’s employment, except that the respective rights and obligations
		of the parties under this Agreement as set forth herein shall survive any
		termination of this Agreement to the extent necessary to the intended
		preservation of such rights and obligations.
	 

	 
		7.13 Severability.
		Whenever possible, each provision of this Agreement shall be interpreted in
		such manner as to be effective and valid under applicable law, but if any
		provision of this Agreement is held to be invalid, illegal or unenforceable in
		any respect under applicable law or rule in any jurisdiction, such invalidity,
		illegality or unenforceability shall not affect the validity, legality or
		enforceability of any other provision of this Agreement or the validity,
		legality or enforceability of such provision in any other jurisdiction, but
		this Agreement shall be reformed, construed and enforced in such jurisdiction
		as if such invalid, illegal or unenforceable provision had never been contained
		herein.
	 

	 
		7.14 Other Agreements. The Executive represents and warrants to the Company
		that to the best of his knowledge, neither the execution and delivery of this
		Agreement nor the performance of his duties hereunder violates or will violate
		the provisions of any other agreement to which he is a party or by which he is
		bound.
	 

	 
		7.15 Subsidiaries, etc. 
	 

	 
		(a) Company Obligations. The obligations of the Company under this Agreement
		may be satisfied by any subsidiary or affiliate of the Company for which the
		Executive serves as an employee under this Agreement, to the extent such
		obligations relate to the Executive’s employment by such subsidiary or
		affiliate.
	 

	 
		 
	 

	 
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		(b) Company Rights
		The rights of the Company under this Agreement may be enforced by any
		Subsidiary or affiliate of the Company for which the Executive serves as an
		employee under this Agreement, to the extent such rights relate to the
		Executive’s employment by such subsidiary or affiliate.
	 

	 
		7.16 Counterparts.
		This Agreement may be executed in one or more counterparts, each of which shall
		be deemed to be an original but all of which together will constitute one and
		the same instrument.
	 

	 
		IN WITNESS WHEREOF, the parties hereto have
		executed this Agreement as of the date first written above.
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  ENDURANCE SPECIALTY HOLDINGS
				  LTD.
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  By: 
				

			 	
				
				  
 /s/ John V. Del Col
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name: 
				

			 	
				
				       John
				  V. Del Col
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				  Title:
				

			 	
				
				       General Counsel &
				  Secretary
				

			 
	 	 	 	 
	 	 	 	 /s/ Kenneth J. LeStrange
	 	 	 	      Kenneth J.
				LeStrange

 

	 
		 
	 

	 
		 
	 

	 
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