swayne_letter.htm


    

     

     

    Mark
Byrne

     

    Chairman

     

    Mr. Guy
Swayne

    Chief
Underwriting Officer- International

     

    By
Hand

     

    Tuesday,
July 17, 2007

     

    Dear
Guy,

     

    We are
pleased to offer you a two year secondment to our Swiss subsidiary, Flagstone
Réassurance Suisse SA, as Chief Executive. This letter will outline the terms of
the secondment. The terms of your employment at FSR Suisse are covered in the
attached contract with that company.

     

    
      
        	 	
                1)

              	
                Relocation:

              


      

    

     

    
      	
               
      

            	
              a.

            	
              The
      Company will pay all expenses for your family’s relocation from Bermuda to
      Switzerland, at the beginning of your secondment or later as you
      prefer.

            


    

     

    
      	
               
      

            	
              b.

            	
              The
      Company will provide free temporary housing or a hotel in Martigny area
      for you, until such time is your family is ready to
    relocate.

            


    

     

    
      	
               
      

            	
              c.

            	
              The
      Company will relocate you and your family to Bermuda at the end of your
      secondment.

            


    

     

    
      	
               
      

            	
              d.

            	
              The
      Company will take such steps as are needed and reasonably within its
      power, to ensure that a place will be available for your daughter in
      Bermuda at a school satisfactory to you, at the end of the
      secondment.

            


    

     

    
      
        	 	
                2)

              	
                Transition:  During
      the first four months of employment the Employee is expected to spend
      approximately half time in the offices of the Company, will travel to and
      from Bermuda, according to the travel policies of the Company, as a
      Business expense. The purpose of this transition period is to facilitate
      the handover of previous responsibilities in
  Bermuda.

              


      

    

     

    We will
determine together who will exercise the functions, and hold the title, CUO-
International, during the secondment. Your principal title (business card) will
be CEO of FSRS.

     

    
      
        	 	
                3)

              	
                Benefits:

              


      

    

     

    
      	
               
      

            	
              a.

            	
              As
      described in the contract, the Company will provide a housing allowance of
      CHF 7,000 per calendar month, during all months in which you have a lease
      or own a property in Switzerland, during the term of your secondment. This
      benefit will be taxable to you in
Switzerland.

            


    

     

     

     

     

     

    
      
        	
                FLAGSTONE
      REINSURANCE HOLDINGS LIMITED

                23
      Church Street, Hamilton HM 11, Bermuda

              	
                Tel:
      +1-441-278-4300    Fax: +1-441-296-9879

                info©flagstonere.bm    www.flagstonere.bm

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

     

    Mark Byrne

     

    Chairman

     

    
      	
               
      

            	
              b.

            	
              The
      Company will pay 80% of school expenses for your daughter in Switzerland,
      up to a maximum expense of CHF 20’000 per year paid by the Company.
      Depending on your choice of school this may be taxable or not to you in
      Switzerland.

            


    

     

    
      	
               
      

            	
              c.

            	
              The
      Company will bear the expense of transporting your daughter to and from
      school.

            


    

     

    
      
        	 	
                4)

              	
                Your Bermuda
      contract:

              


      

    

     

    
      	
               
      

            	
              a.

            	
              Your
      salary and Bonus under the Bermuda contract will be suspended during your
      term in Switzerland.

            


    

     

    
      	
               
      

            	
              b.

            	
              Your
      Mortgage Subsidy under the Bermuda contract will continue while you are in
      Switzerland for up to two years.

            


    

     

    
      	
               
      

            	
              c.

            	
              At
      the conclusion of your term in Switzerland, the Company will offer you
      (subject only to your not having resigned or been terminated for Cause),
      the following:

            


    

     

    
      	
               
      

            	
              i.

            	 	
              A
      position in Bermuda equal to or senior to the position you are leaving for
      the secondment.

            


    

     

    
      	
               
      

            	
              ii.

            	 	
              Full
      relocation as described above.

            


    

     

    
      	
               
      

            	
              iii.

            	 	
              Equitable
      adjustment to your Bermuda salary for at least Bermuda inflation during
      your period of absence.

            


    

     

    
      	
               
      

            	
              d.

            	
              Should
      the Company terminate your contract in Switzerland for any reason other
      than Cause, the Company obligations under this section will nonetheless
      still apply.

            


    

     

    
      
        	 	
                5)

              	
                2007 , 2008, and 2009 Bonus
      years:

              


      

    

     

    
      	
               
      

            	
              a.

            	
              We
      will pay your 2007 Bonus for Bermuda work, on August 31,
    2007.

            


    

     

    
      	
               
      

            	
              b.

            	
              We
      will pay a partial year bonus in Switzerland in March 2008, according to
      the terms of that contract.

            


    

     

    
      	
               
      

            	
              c.

            	
              Your
      2008 Bonus will be paid in March 2009 in
  Switzerland.

            


    

     

    
      	
               
      

            	
              d.

            	
              Your
      2009 Bonus will be paid in Switzerland for the salary earned in
      Switzerland, upon your departure from Switzerland in August
      2009.

            


    

     

    
      	
               
      

            	
              e.

            	
              You
      will receive a Bonus for your work in Bermuda in Q4 2009, in March 2010 in
      Bermuda.

            


    

     

    
      	
               
      

            	
              f.

            	
              The
      above assumes your secondment lasts the exact two years expected, failing
      which we will make equitable adjustment to the
  above.

            


    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
       

      

       

    

     

    Mark Byrne

     

    Chairman

     

    I hope
you find these arrangements satisfactory, and we know you will make a fantastic
contribution to the next chapter of Flagstone Réassurance Suisse SA! Please
indicate your acceptance of these terms by countersigning this letter on or
before July 31, 2007.

     

     

     

    
    

     

    
      	 	Yours
      Sincerely 	 	Accepted:
	 	 	 	 
	 	/s/ Mark
    Byrne	 	/s/ Guy
    Swayne
	 	Mark
      Byrne 	 	Guy
  Swayne