Document:

Exhibit 4.2

2008 ARCELORMITTAL EMPLOYEE SHARE PURCHASE PLAN

ARTICLE 1. Purpose

The 2008 ArcelorMittal Employee Share Purchase Plan (the “ESPP 2008”) is intended to enable Employees of the Companies to acquire an equity interest in ArcelorMittal through the acquisition of Shares (as defined hereinafter) on favourable terms and thereby for ArcelorMittal to align the interest of those employees and of ArcelorMittal’s shareholders.

ARTICLE 2. Definitions

For the purposes of the ESPP 2008, the following terms shall have the meaning set forth below:

	
             
 	
            “Allocation Date”
 	
            means 13 October 2008 for Tranche 1 and 10 December 2008 for Tranche 2.
 

	
             
 	
            “ArcelorMittal”
 	
            means ArcelorMittal, a Luxembourg public limited liability company (société anonyme) with its registered office at 19, Avenue de la Liberté, L-2930 Luxembourg, Grand Duchy of Luxembourg.  ArcelorMittal is registered with the Luxembourg Registry of Trade and Companies under number B 82.454.
 

	
             
 	
            “Board”
 	
            means the Board of Directors of ArcelorMittal.
 

	
             
 	
            “Committee” 
 	
            means the Appointments, Remuneration and Corporate Governance Committee of the Board or such other committee appointed by the Board to administer the ESPP 2008.
 

	
             
 	
            “Company”
 	
            means:
 

	
             
 	
            •
 	
            with respect to Tranche 1, any of (i) ArcelorMittal or (ii) the entities exclusively controlled, directly or indirectly, by ArcelorMittal (which, for the avoidance of doubt, includes Paul Wurth entities) and having their registered office in the Tranche 1 Jurisdictions, and 
 

	
             
 	
            •
 	
            with respect to Tranche 2, any of (i) the entities exclusively controlled, directly or indirectly, by ArcelorMittal (which for the avoidance of doubt includes Paul Wurth entities) and having their registered office in the Tranche 2 Jurisdictions or (ii) the U.S. joint venture entity I/N Tek or I/N Kote.  
 
	 	For the purposes hereof, an entity shall be deemed “exclusively controlled” by ArcelorMittal if it is fully consolidated in ArcelorMittal’s financial statements. 

 

 

 

	
             
 	
             
 	
             
 

 

 

 

 

	
             
 	
            “Custodian” 
 	
            means either of the European Custodian and the U.S. Custodian.
 

 

	
             
 	
            “Early Exit Event”
 	
            means, for any Participant, (i) the termination of the Participant’s employment with any Company for any reason, whether voluntarily or involuntarily, including death, unless the Participant is still an employee of an entity which is exclusively or jointly controlled, directly or indirectly, by ArcelorMittal or (ii) the permanent disability of the Participant, as determined in its sole discretion by the human resources department of the relevant Company.
 

	
             
 	
            “Early Exit Notice”
 	
            has the meaning set forth in Section 8.1. 
 

	
             
 	
            “Employee”
 	
            means a person who is an employee of any of the Companies (whether for a definite or indefinite period of time) at the end of the Subscription Period, excluding any such employee who has given or received notice of termination of employment or who will have been employed for less than 3 (three) months as of the end of the Subscription Period.
 

	
             
 	
            “ESPP 2008”
 	
            means the 2008 ArcelorMittal Employee Share Purchase Plan. 
 

	
             
 	
            “European Custodian” 
 	
            means, with respect to Shares purchased by Employees of Companies having their registered office in jurisdictions other than the United States of America or Canada, BNP Paribas Securities Services, a French public limited liability company (société anonyme) with its registered office at 3, rue d’Antin, 75002 Paris, France, registered with the Paris Registry of Trade and Companies under number 552 108 011 RCS.
 

 

	
             
 	
            “European Securities Account” 
 	
            has the meaning set forth in Section 4. 4.
 

 

	
             
 	
            “Expiration Date”
 	
            means 24 November 2011 for Tranche 1 and 21 January 2012 for Tranche 2, or if any such day is not a Stock Exchange Day, the next following day which is a Stock Exchange Day.
 

	
             
 	
            “European Stock Exchange”
 	
            means any of European regulated markets where the ArcelorMittal shares are officially admitted to trading.
 

	
             
 	
            “First Cap”
 	
            has the meaning set forth in Section 3.2.
 

	
             
 	
            “Initial FX Rate”
 	
            means, with respect to any Local Currency other than the U.S. dollar, the foreign exchange rate of the U.S. dollar into the Local Currency (or, depending on the context, of 
 

 

 

	
             
 	
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the Local Currency into the U.S. dollar) fixed by ArcelorMittal: 

	
             
 	
            •
 	
            for Local Currencies for which there is a U.S. Federal Reserve official exchange rate of the US. dollar into the Local Currency, based on the closing foreign exchange rate of the U.S. dollar into the Local Currency published by the U.S. Federal Reserve at 11:00 New York time on Reuters (page USDFIX=) on the Stock Exchange Day immediately preceding the date of the determination of the Reference Price;
 
	
         
	
        •
	
        for Local Currencies for which there is no U.S. Federal Reserve official exchange rate of the U.S. dollar into the Local Currency but for which there is a European Central Bank official exchange rate of the euro into the Local Currency, based on the foreign exchange rate of the euro into the Local Currency published by the European Central Bank at 14:15 (ECB time page 37) on the Stock Exchange Day immediately preceding the date of the determination of the Reference Price, as converted from euro to U.S. dollar based on the foreign exchange rate of the euro into the U.S. dollar published by the European Central Bank at the same time and on the same page;

	
         
	
        •
	
        for other Local Currencies, based on the foreign exchange rate of the U.S. dollar into the Local Currency published by the local central bank of the relevant jurisdiction on the Stock Exchange Day immediately preceding the date of the determination of the Reference Price.

	
             
 	
            “Insider Dealing Regulations”
 	
            means the insider dealing regulations adopted by the Board (as amended from time to time), in order to ensure appropriate treatment of inside information and thus avoid insider dealing and market manipulation. Such regulations, which are available on the ArcelorMittal website (www.arcelormittal.com), form an integral part of the ESPP 2008.
 
	
         
	
        “Interest Period”
	
        for any dividend payment on the Shares, the duration of the first Interest Period shall be from and including the date on which the Custodian receives the dividend on the Shares held in the relevant Securities Account to and including the last day of the same month and the duration of each subsequent Interest Period shall be from but excluding the last day of the previous Interest Period to and including the last day of the subsequent month.

 

 

	
             
 	
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            “Interest Rate”
 	
            means, for each Interest Period, the percentage rate per annum equal (i) to the U.S. Federal Funds rate relevant for that Interest Period (as determined by the U.S. Custodian) less 10 basis points, with respect to dividends paid on the Shares held in a U.S. Securities Account and (ii) to the Euribor-one month rate (as determined by the European Custodian) less 10 basis points with respect to dividends paid on the Shares held in a European Securities Account.

             

            Any interest accruing under the ESPP 2008 shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the relevant interbank market differs, in accordance with that market practice.

	
         
	
        “Local Currency”
	
        means, with respect to any jurisdiction, the official currency of that jurisdiction. 

	
         
	
        “Local Supplement”
	
        means, with respect to any jurisdiction, the supplement to the ESPP 2008 providing a summary of certain specific terms and conditions of the ESPP 2008 applicable in that jurisdiction. The Local Supplement (except the tax and social charges withholding summary included therein) constitutes an integral and essential part of the ESPP 2008 applicable in the relevant jurisdiction. In case of inconsistencies between the ESPP 2008 and the Local Supplement, the provisions of the Local Supplement shall prevail. 

	
         
	
        “Maximum Number of Shares”
	
        means (i) 1,375,000 (one million three hundred seventy five thousand) Shares for Tranche 1 and, (ii) for Tranche 2, the difference between 2,500,000 (two million five hundred thousand) Shares and the number of Shares effectively purchased by Employees under Tranche 1, after application of the reduction rules set forth in Section 4.1, as the case may be.

	
         
	
        “NYSE”
	
        means the New York Stock Exchange.

	
         
	
        “Open Market”
	
        means the NYSE where the Custodian is the U.S. Custodian and any of the European Stock Exchanges, at the sole discretion of Custodian, where the Custodian is the European Custodian.

	
         
	
        “Participant”
	
        means an Employee (i) who was validly enrolled in the ESPP 2008 in accordance with Article 3, and (ii) whose participation in the ESPP 2008 has not terminated.

	
         
	
        “Purchased Shares”
	
        has the meaning set forth in Section 4.2.

 

 

 

	
             
 	
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            “Purchase Price”
 	
            means the purchase price per Share as determined in  accordance with Section 3.2.
 

	
             
 	
            “Reference Price”
 	
            means, for each Tranche of the ESPP 2008, the average of the opening and closing market prices of the Share on the NYSE on the Stock Exchange Day before the opening date of the relevant Subscription Period.
 

	
             
 	
            “Second Cap”
 	
            has the meaning set forth in Section 3.2.
 

	
             
 	
            “Securities Account”
 	
            means any of the U.S. Securities Accounts and the European Securities Accounts. 
 

	
             
 	
            “Settlement Date”
 	
            means 24 November 2008 for Tranche 1 and 21 January 2009 for Tranche 2.
 

	
             
 	
            “Share”
 	
            means an ordinary, whole existing share of ArcelorMittal.
 

	
             
 	
            “Stock Exchange Day”
 	
            means a day on which all of the NYSE and the European Stock Exchanges are open.
 

	
             
 	
            “Subscription Amount”
 	
            means the aggregate amount to be paid by the Employee to purchase Shares by such Employee under the ESPP 2008, based on the Purchase Price.
 

	
             
 	
            “Subscription Form”
 	
            means the subscription form provided by ArcelorMittal and in Italy by the financial intermediary appointed by ArcelorMittal, to be executed by an Employee pursuant to Section 3.1 in connection with his/her participation in the ESPP 2008.
 

	
             
 	
            “Subscription Period”
 	
            means, for Tranche 1, the ten-calendar day period beginning on 19 September 2008 at 00:01 New York time and ending on 28 September 2008 at 23:59 New York time and, for Tranche 2, the ten-calendar day period beginning on 14 November 2008 at 00:01 New York time and ending on 23 November 2008 at 23:59 New York time.
 

	
             
 	
            “Termination Notice ”
 	
            has the meaning set forth in Section 7.1.
 

	
             
 	
            “Tranche”
 	
            means any of Tranche 1 or Tranche 2.
 

	
             
 	
            “Tranche 1”
 	
            means the first tranche of the ESPP 2008, open to Employees in the Tranche 1 Jurisdictions.
 

	
             
 	
            “Tranche 1 Jurisdictions”
 	
            means Belgium, Bosnia & Herzegovina, Brazil, Canada, the Czech Republic, Germany, Hungary, Italy, Luxembourg, Mexico, the Netherlands, Poland, Spain and the United Kingdom.
 

 

 

	
             
 	
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            “Tranche 2”
 	
            means the second tranche of the ESPP 2008, open to Employees in the Tranche 2 Jurisdictions.
 

	
             
 	
            “Tranche 2 Jurisdictions”
 	
            means the jurisdictions that ArcelorMittal will decide to include in Tranche 2 prior to the opening of the Subscription Period of Tranche 2 ; such jurisdictions will be set forth in an Exhibit hereto when this decision is made, which for the avoidance of doubt shall not require a specific decision of the Board.
 

	
             
 	
            “U.S. Custodian” 
 	
            means, with respect to Shares purchased by Employees of Companies having their registered office in the United States of America or Canada, Bank of New York Mellon, a corporation incorporated under the laws of the State of New York, with its registered office at One Wall Street, New York, NY 10286.
 

 

	
             
 	
            “U.S. Securities Account” 
 	
            has the meaning set forth in Section 4.4.
 

 

ARTICLE 3.  Subscription

	
            3.1
 	
            Pursuant to the ESPP 2008, an Employee may apply to purchase a number of whole Shares not exceeding that number of whole Shares equal to the lower of (i) 200 (two hundred) Shares and (ii) the whole number of Shares that may be purchased for US$ 15,000 (fifteen thousand U.S. dollars) pursuant to Section 3.2 (rounded down to eliminate fractional Shares), by submitting a duly completed and signed Subscription Form during the Subscription Period or, where applicable, by subscribing online during the relevant Subscription Period, in each case as set out in the Local Supplement for his/her jurisdiction and, as the case may be, accompanied by any means of payment or document permitted and required to be delivered in accordance with the terms and conditions of the Subscription Form and the Local Supplement.  Unless the Local Supplement
provides for a cancellation right, the submission of the Subscription Form or the subscription online, as the case may be, will be an irrevocable and definitive subscription order and cannot be cancelled or rescinded by the Employee once submitted.
 

 

	
            3.2
 	
            The Purchase Price will be equal to the Reference Price, less a discount equal to:
 

	
             
 	
            (a)
 	
            15% (fifteen percent) of the Reference Price for a purchase order not exceeding the lower of (x) 100 (one hundred) Shares, and (y) the immediately lower whole number of Shares corresponding to an investment of US$ 7,500 (seven thousand five hundred U.S. dollars) (the “First Cap”); and thereafter; 
 

	
             
 	
            (b)
 	
            10% (ten percent) of the Reference Price for any additional acquisition of Shares up to a number of Shares (including those in the First Cap) not exceeding the lower of (x) 200 (two hundred) Shares, and (y) the immediately lower whole number of Shares corresponding to an investment of US$ 15,000 (fifteen thousand U.S. dollars) (the “Second Cap”).
 

	
            3.3
 	
      The Subscription Amount (converted into the Employee’s Local Currency at the Initial FX Rate where the applicable Local Currency is not the U.S. dollar) shall be payable in Local Currency in accordance with the terms and conditions set out in the relevant Local Supplement.  In the event that an Employee fails in whole or in part to make such payment in accordance with the terms and conditions set out in the Local Supplement, his/her subscription shall be null, void and without effect. If the payment default is identified after the relevant Settlement Date, the Custodian will deliver the corresponding Shares back to ArcelorMittal as soon as practicable. In case of a partial payment by an Employee, any such payment shall be refunded to the Employee as soon as practicable through means such as his or her payroll, separate wire transfer to his or her bank account or cheque, at ArcelorMittal's option. No interest will accrue or be paid in respect of such sums.  
 

 

 

	
             
 	
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 ARTICLE 4. Reduction, Allocation and Settlement

 

	
            4.1
 	
            Under any of Tranche 1 or Tranche 2, in the event that on the Allocation Date, the total amount of the Subscription Amounts of all the Participants for whom no partial or total payment default has been identified as of 17:00 Luxembourg time on the immediately preceding day, as converted into U.S. dollars at the Initial FX Rate where the applicable Local Currency is not the U.S. dollar, corresponds to a number of Shares exceeding the applicable Maximum Number of Shares, each Participant’s purchase order shall be reduced such that the number of Shares effectively purchased by him/her shall be equal to the sum of (i) one Share and (ii) the whole number of Shares (rounded down to eliminate fractional Shares) corresponding to the product of (x) the ratio of (I) the excess of such Participant’s demand over one Share over
(II) the aggregate demand of all the Participants in the relevant Tranche in excess of one Share per Participant and (y) the difference between the Maximum Number of Shares and the number of Participants under such Tranche (for the avoidance of doubt, excluding any Participants for whom a partial or total payment default has been identified). The Subscription Amount of each Participant shall be reduced accordingly, based on the reduced number of Shares allocated to him or her, the Purchase Price and, where the applicable Local Currency is not the U.S. dollar, the Initial FX Rate. 
 

	
            4.2
 	
            As soon as practicable after the relevant Settlement Date of a given Tranche, each Participant in that Tranche will receive an individual allocation statement, setting forth the final number of Shares allocated to such Employee under the ESPP 2008, as reduced in accordance with the provisions of Section 4.1, as the case may be (the “Purchased Shares”).
 

	
            4.3
 	
            Any excess payment made by the Participant resulting from the reduction contemplated by Section 4.1 shall be refunded to him/her as soon as practicable through means such as his or her payroll, separate wire transfer to his or her bank account or cheque, at ArcelorMittal's option. No interest will accrue or be paid in respect of such sums.
 

	
            4.4
 	
            On the relevant Settlement Date, in consideration of the Participants’ payment of the Subscription Amount, as reduced in accordance with Section 4.1, as the case may be, ArcelorMittal shall cause (i) a number of Shares equal to the aggregate number of Purchased Shares of the Employees of the Companies having their registered office in the United States of America or in Canada to be delivered to and deposited in a securities account maintained by the U.S. Custodian for the ESPP 2008 (a “U.S. Securities Account”) and (ii) a number of Shares equal to the aggregate number of Purchased Shares of the Employees of the Companies having their registered office in jurisdictions other than the United States of America or Canada to be delivered to and deposited in a securities account maintained by the European Custodian for
the ESPP 2008 (a “European Securities Account”).   
 

 

 

	
             
 	
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 ARTICLE 5.  Custody – Dividends

 

	
            5.1
 	
            ArcelorMittal shall cause the relevant Custodian to credit in its records in the name of each Participant the number of Purchased Shares purchased by such Participant.
 

	
            5.2
 	
            From the Settlement Date, subject to the transfer restrictions set out in Article 6 and the specific terms relating to the payment of dividends set out in Section 5.3, any Participant shall have, with respect to his/her Purchased Shares, all of the rights of a shareholder of such Shares, including the right to vote the Shares.  In order to attend a general meeting of shareholders in person or by proxy, Participants must contact their Custodian or download all the relevant documents from the ArcelorMittal website (www.arcelormittal.com) and follow the instructions set forth therein.
 

	
            5.3
 	
            Any cash dividend paid by ArcelorMittal on the Shares held in a U.S. Securities Account shall be paid to and deposited with the U.S. Custodian, net of applicable withholding tax, in a separate global U.S. dollar account opened and maintained for such purposes.  
 

	
            5.4
 	
            Any cash dividend paid by ArcelorMittal on the Shares held in an European Securities Account shall be paid and deposited with the European Custodian, net of applicable withholding tax, in a separate global euro account opened and maintained for such purposes. 
 

	
            5.5
 	
            Any cash dividend paid by ArcelorMittal on the Shares will not be paid to the Participant until the delivery of the Shares to such Participant’s securities account or the sale of his/her Shares on the Open Market, in each case as set out in Article 7 and 8. The net amount of such dividends will accrue interest at the Interest Rate between the date of their receipt by the Custodian and the last day of the month preceding that during which dividends are effectively paid to the Participant.  The Custodian will provide the Participant with annual statements indicating the amount of the dividend earned by the Participant on his/her Shares, net of any applicable withholding tax levied at the time of the payment of the dividends to the Custodian, together with the interest rate applied for the relevant period.  Payment of the
dividends (and interest accrued thereon) to the Participants will be made net of any applicable withholding tax and in Local Currency, based on the then applicable foreign exchange rate where the Local Currency differs from the functional currency of the cash account to which the dividends were credited.  
 

	
            5.6
 	
            ArcelorMittal will bear any bookkeeping costs incurred in connection with the custody of the Purchased Shares until the Expiration Date or their early sale or delivery in accordance with Article 8, as the case may be.  ArcelorMittal will bear any brokerage and related fees and stock exchange duties incurred in connection with the sale of the Purchased Shares in accordance with Article 7.  Any other costs (including any brokerage and related fees and stock exchange duties) incurred in connection with the sale of the Purchased Shares in accordance with Article 8 shall be borne by the Participants (or their beneficiaries, as applicable). 
 

ARTICLE 6. Transfer restrictions

Subject to the provisions of Article 8, no Purchased Shares and no interest thereon may be assigned, transferred, sold, exchanged, pledged or otherwise encumbered or disposed of by a Participant or any beneficiary of any Participant until the Expiration Date.  Any attempted assignment, transfer, sale, exchange, pledge or other encumbrance or disposition shall be null and void. 

 

 

	
             
 	
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 ARTICLE 7. Termination

 

	
            7.1
 	
            Approximately 90 (ninety) days prior to the Expiration Date, the Custodian shall distribute to the Participants a notice (the “Termination Notice”) pursuant to which the Participant may request, subject to compliance with the Insider Dealing Regulations, either the delivery to such Participant of all of his/her Purchased Shares, or the sale of all of his/her Purchased Shares by the relevant Custodian on the Open Market on his/her behalf.  The Termination Notice shall set forth a deadline for Participants to return a duly completed Termination Notice to the Custodian.
 

	
            7.2
 	
            As soon as possible after the Expiration Date and in accordance with the Termination Notice, the Custodian shall, in accordance with the Participant’s choice, cause all of his/her Purchased Shares to be delivered to him/her or cause such Shares to be sold on the Open Market on his/her behalf in accordance with Section 7.4.  A combination of these alternatives will not be permitted. 
 

	
            7.3
 	
            Any Participant’s Purchased Shares for which the Custodian has not received a duly completed Termination Notice in due time will be sold on the Open Market as soon as possible after the Expiration Date on behalf of such Participant together with the Shares for which the Custodian has received a selling instruction. The provisions of Section 7.4 shall apply to such sale. 
 

	
            7.4
 	
            The relevant Custodian will cause the Purchased Shares as to which it has received a selling instruction or no instruction to be sold in accordance with the provisions of this Article 7 on the Open Market for the accounts of the relevant Participants at dates it shall determine in its sole discretion but not later than 15 (fifteen) Stock Exchange Days following the Expiration Date, provided, however, that this period may be extended by the Custodian in case of market disruption or in order to comply with the Insider Dealing Regulations or any other regulations that would restrict the ability of the Custodian to sell the Shares on the Open Market.  The proceeds realised from such sale will be paid to each of the Participants entitled thereto in proportion to each Participant’s interest in the aggregate number of Shares
sold.  No interest will accrue or be paid in respect of the cash proceeds resulting from the sale.  Payment to the Participants will be made net of any applicable withholding tax and in Local Currency, based on the then applicable foreign exchange rate where the Local Currency differs from the currency of the Open Market.  If a Participant cannot be reached at the address provided by him or her, such funds will continue to be held on his/her behalf until the expiration of the applicable statute of limitations. When this period has elapsed, the Custodian shall dispose of the corresponding sums in accordance with applicable laws. No interest will accrue or be paid in respect of such sums.  
 

ARTICLE 8. Early Exit

	
            8.1
 	
            Subject to compliance with the Insider Dealing Regulations, upon the occurrence of an Early Exit Event, a Participant (or in case of death his/her beneficiaries) shall be permitted but not required to deliver to the human resources department of his Company (or former Company) a notice (an “Early Exit Notice”) within 3 (three) months following the occurrence of an Early Exit Event requesting the delivery to such Participant of all of his/her Purchased Shares, or the sale of all of his/her Purchased Shares by the Custodian on the Open Market on his/her behalf, provided, however, that the Companies will not accept any Early Exit Notice received on or after the fifteenth day before the Expiration Date.  A combination of these alternatives will not be permitted.  The Company will be responsible for confirming the
occurrence of an Early Exit Event and for transmitting the Early Exit Notice to the relevant Custodian. In the event that for a given Participant the Custodian receives an Early Exit Notice after having received a Termination Notice, the Early Exit Notice shall prevail.  
 

 

 

	
             
 	
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            8.2
 	
            As soon as practicable following the receipt of a properly completed Early Exit Notice, the Custodian shall, in accordance with the Participant’s choice, cause all of his/her Purchased Shares to be delivered to him/her, or cause such Shares to be sold on the Open Market on his/her behalf.  In the latter case, the cash proceeds of the sale (net of applicable fees) shall be paid to the relevant Participant(s) as soon as practicable thereafter in Local Currency, based on the then applicable foreign exchange rate where the Local Currency differs from the currency of the Open Market.  
 

	
            8.3
 	
            Upon the occurrence of an Early Exit Event, in the event that a Participant does not submit a properly completed Early Exit Notice on a timely basis, then his/her Shares shall be maintained in the relevant Securities Account and remain subject to the terms and conditions of the ESPP 2008, including the transfer restrictions, until the Expiration Date or the occurrence of a subsequent Early Exit Event.  
 

ARTICLE 9. Administration

The ESPP 2008 shall be administered by the Committee.  The Committee may, from time to time, adopt rules and regulations for carrying out the provisions and purposes of the ESPP 2008.  The Committee, in its absolute discretion, shall have the power to interpret and construe the ESPP 2008, provided, however, that the Committee or the Board may designate persons other than members of the Committee to carry out such responsibilities of the Committee under the ESPP 2008 as it may deem appropriate.  Any interpretation or construction of any provision of this ESPP 2008 by the Committee shall be final and conclusive upon all parties.  No member of the Committee or the Board shall be liable for any action or determination made hereunder in good faith.

ARTICLE 10. Miscellaneous

	
            10.1
 	
            No Additional Rights.  Nothing in the ESPP 2008 shall interfere with or limit in any way the right of any of the Companies to terminate any Participant’s employment at any time, or confer upon any Participant any right to continue employment with any of the Companies. None of the benefits arising under the ESPP 2008 shall constitute part of a Participant’s employment contract with any of the Companies or other affiliates of ArcelorMittal, nor be taken into account for the computation of any labour-related benefits, including any severance payments.
 

	
            10.2
 	
            Binding Effect.  Any decision made or action taken by ArcelorMittal, the Board, or the Committee arising out of or in connection with the construction, administration, interpretation, and effect of the ESPP 2008 shall be conclusive and binding upon all persons having any interest in the ESPP 2008, including ArcelorMittal, its employees, Participants, and their beneficiaries.
 

	
            10.3
 	
            Withholding.  The Companies and the Custodian shall, to the fullest extent permitted by applicable laws and regulations, have the power and the right to deduct or withhold from any payment due to a Participant, or require a Participant to remit to the Companies or the Custodian, an amount sufficient to satisfy all taxes and social security contributions or similar social charges required by law or regulation to be withheld or accounted for in connection with this ESPP 2008.
 

	
            10.4
 	
      Changes in Capital Structure.  In the event of any changes in the common stock or the capital structure of ArcelorMittal through a corporate transaction, including, without limitation, pursuant to a merger, demerger (including a spin-off), reorganization, partial or complete liquidation, recapitalization, stock dividend, stock split or reverse stock split, any such transaction shall be binding on the Participant as on any other ArcelorMittal shareholder and the Committee shall make any appropriate adjustments and changes, to the extent necessary, to reflect such changes in the ESPP 2008.
 

 

 

	
             
 	
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            10.5
 	
            Amendments.  The Board may at any time alter, amend, suspend, or terminate the ESPP 2008 in whole or in part; provided, however, that no amendment, suspension or termination of the ESPP 2008 shall be permitted that would impair or diminish, in any material respect, any outstanding right of a Participant without the Participant’s written consent.
 

	
            10.6
 	
            Delivery of Title.  ArcelorMittal shall have no obligation to deliver Shares under the ESPP 2008 prior to (i) obtaining any approvals from governmental agencies that ArcelorMittal determines are necessary or advisable, and (ii) completion of any registration or other qualification of the Shares under any applicable national or foreign law or regulation that ArcelorMittal determines to be necessary or advisable.
 

	
            10.7
 	
            Registration - Listing.  ArcelorMittal may use reasonable endeavours to register all or part of the Shares offered pursuant to the ESPP 2008 with the United States Securities and Exchange Commission or to effect compliance with the registration, qualification, and listing requirements of any national or foreign securities laws, stock exchange, or automated quotation system.
 

	
            10.8
 	
            Governing Law - Jurisdiction.  The ESPP 2008 and all actions taken hereunder shall be governed by and construed in accordance with the laws of the Grand Duchy of Luxembourg. The courts of the judicial district of Luxembourg shall have exclusive jurisdiction to resolve any disputes arising in relation to the ESPP 2008 (including in connection with its interpretation or its performance).
 

	
            10.9
 	
            Effective Date.  The ESPP 2008 shall be effective on the opening date of the Subscription Period of Tranche 1.
 

 

 

 

 

	
             
 	
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EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”) is made and entered into as of April 1, 2008 (the
Effective Date”) between ODYSSEY RE HOLDINGS CORP. (“Employer”), a holding company, incorporated in
the State of Delaware, that owns all of the shares of the entities comprising the group of
reinsurance and insurance companies constituted by Odyssey America Reinsurance Corporation and its
subsidiaries, and Michael G. Wacek (“Executive”), an
individual residing at [address].

     WHEREAS, the Board of Directors of Employer (such Board of Directors, and/or any duly
authorized Committee thereof acting on its behalf, being referred to herein as the “Board”)
believes it is in the best interests of Employer (i) to ensure that the reasonable employment,
compensation and benefits expectations of Executive are satisfied; (ii) to induce and encourage
Executive to continue his employment with Employer as a senior executive; and (iii) to reward
Executive’s commitment to provide continued service, full attention and dedication to Employer, by
providing Executive with the compensation and benefits arrangements described below during the term
provided for in this Agreement; and

     WHEREAS, to accomplish these objectives, the Board has authorized and directed Employer to
enter into this Agreement with Executive.

     NOW THEREFORE, IT IS AGREED AS FOLLOWS:

 

 

ARTICLE I

EMPLOYMENT AND DUTIES; COMPENSATION

Section 1:   Duties.

     During the term of this Agreement, Executive shall be employed by and shall serve Employer in
the capacity of Executive Vice President, and shall be employed by and/or shall serve Employer and
such subsidiaries of Employer in such capacities as Employer shall from time to time designate and
as are consistent with Executive’s position as Executive Vice President of Employer, including,
without limitation, his present duties as President of the Company’s principal operating
subsidiary, Odyssey America Reinsurance Corporation; as Chief Executive Officer, Americas Division;
and as Employer’s Chief Risk Officer (until such time as a replacement is identified). Executive
shall devote substantially all of his business time to the business and affairs of Employer and
shall use his best efforts, skills, and energy to promote Employer’s interests, provided that it
shall not be a violation of the foregoing for Executive to act or serve as a director, trustee or
committee member of any civic or charitable organization, as long as such activities are disclosed
to Employer, and Employer, in the exercise of its reasonable judgment, agrees that such activities
do not present any conflict of interest with Employer.

Section 2:   Term of Employment.

     The term of employment of Executive by Employer shall commence as of April 1, 2008 (the
“Commencement Date”) and shall continue until April 1, 2011 (the “Term”),

 

 

provided, however, that the Term shall automatically be extended without
further action of either party for additional twelve (12)-month periods unless either party gives
written notice to the other party at least sixty (60) days prior to the expiration of the
then-effective term. At any time prior to the expiration of the Term, Employer and Executive may,
by mutual written agreement, extend Executive’s employment under the terms of this Agreement for
such additional periods as they may agree.

Section 3:   Salary, Benefits and Additional Compensation.

     As compensation and consideration for the performance by Executive of his duties and
responsibilities pursuant to this Agreement, Employer agrees to pay, and/or to cause one or more of
its subsidiaries to pay Executive, and Executive agrees to accept the following amounts and
benefits (all Dollar amounts referred to herein are in United States Dollars):

     (a)     Base Salary:

     During the Term, Executive shall receive an annual base salary (“Base Salary”) of Six Hundred
Thousand Dollars ($600,000), as it may be increased from time to time at the discretion of the
Board, pro rated for any calendar year within the Term for which employment does not extend for the
entire calendar year. The Base Salary shall be paid to Executive in equal bi-weekly installments.

     (b)     Bonus Pool:

     Executive shall participate in the bonus pool (the “Bonus Pool”) created by the Board with
respect to each calendar year, and the Board shall establish performance criteria upon which
Executive’s bonus shall be determined. During Executive’s employment under this Agreement,
Executive shall be eligible to receive a

 

 

target bonus of 100% of Base Salary, although it is agreed that actual bonus awards may
exceed, match or be less than the target bonus, as Executive’s performance or Employer’s
performance warrant. The form of payment and other terms and conditions of such bonus shall be
determined by Employer. Notwithstanding the foregoing, to the extent Executive is a “covered
employee” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”), the annual bonus may be implemented and administered in a manner intended to insure
the treatment of such bonus as “performance-based compensation” within the meaning of Section
162(m) of the Code (including, without limitation, by having the relevant performance goals
established by the Board and having the Board certify the achievement of such goals before the
annual bonus is paid).

     Bonuses will be paid on or about March 15 of the year following the related calendar year (and
in no event later than April 15 of the year following the related calendar year).

     (c)     Restricted Stock Grants:

     (i)   Executive shall receive, as of the date hereof, an award consisting of that number of
restricted shares of OdysseyRe’s common stock, par value $.01 per share (“Restricted Shares”),
which, when multiplied by the simple average of the closing prices of OdysseyRe’s common stock on
the New York Stock Exchange on the twenty (20) business days next preceding the date of execution
hereof, yields the aggregate sum of One Million Dollars ($1,000,000), subject to subparagraph (ii)
below, the foregoing grant (the “Incentive Stock Bonus”) shall be subject to the terms of the
Odyssey Re Holdings Corp. Restricted Share Plan (the “Restricted Share Plan”). Executive shall
become

 

 

vested in the shares granted pursuant to the foregoing sentence, and all restrictions shall
lapse, on April 1, 2009 with respect to twenty percent (20%) of the Restricted Shares and on each
anniversary thereafter with respect to an additional twenty percent (20%) of the Restricted Shares
such that on April 1, 2013 all restrictions on the Restricted Shares constituting the Incentive
Stock Bonus shall lapse.

     (ii)   A copy of the award document relating to the Incentive Stock Bonus (an “Award
Document”) is attached hereto as Exhibit A. The Award Document provide that (a) upon Executive’s
Termination of Employment as a result of death, disability, reaching retirement age; Change in
Control (as defined in Article II, Section 6 below); termination by Executive as a result of a
Constructive Termination (as defined in Article II, Section 4 below); or termination by Employer
for reasons other than For Cause (as defined in Article II, Section 3 below) the restricted period
applicable to any Restricted Shares granted to Executive thereunder (an “Award”) shall terminate
and Executive shall become fully vested in such Award; and (b) if the stock of Employer at any time
during the restricted period ceases to be publicly traded, then Executive shall have the option to
receive a cash payment, payable by Employer within ten (10) days following written notice from
Executive no later than thirty (30) days following the delisting of Employer stock from the
exchange, equal to the number of shares of Restricted Stock of Employer granted under the Award
Document and held by Executive as of the delisting of the stock times the greater of (i) the share
price of Employer stock as of the close of business forty-five (45) trading days prior to its
delisting and (ii) the average share price of Employer stock (based on end of business day values)
over the forty-five (45) trading day period prior to delisting. To the extent the cash payment
exceeds the fair market value of the

 

 

stock at the time of payment and Executive is a “specified employee” as defined in Section 409A of
the Code, the excess amount shall be paid the earlier of (A) 6 months following termination of
employment, or (B) death. The foregoing subparagraph (b) shall not apply if the stock of Employer
ceases to be publicly traded as a result of Employer having made a general assignment for the
benefit of creditors, been adjudicated as bankrupt or insolvent, or having filed a voluntary
petition in bankruptcy, a petition or answer seeking an arrangement with creditors or to take
advantage of any insolvency law or having filed an answer admitting the material allegations of a
petition filed against Employer in bankruptcy.

     (iii)   Employer will take whatever action necessary, including, without limitation, amendment
of the Restricted Share Plan, to ensure that the issuance of Restricted Shares to Executive
pursuant to the Award Document does not exceed the maximum number of shares available for such
purpose.

     (d)     Additional Benefits:   During the term of this Agreement, Executive shall be
entitled to the following fringe benefits:

     (i)   Executive Benefits: Executive shall be eligible to participate in such benefits and
perquisites as are now generally available or later made generally available to executive officers
of Employer.

     (ii)   Vacation: Executive shall be entitled to vacation time consistent with his position as
Executive Vice President and his duties hereunder.

     (iii)   Life Insurance: Executive shall be eligible to participate in any life insurance
program available to executive officers of Employer on terms at least as favorable as those
generally made available to such executive officers.

 

 

     (iv)   Disability Insurance: Executive shall be eligible to participate in any disability
insurance program available to executive officers of Employer on terms at least as favorable as
those generally made available to such executive officers.

     (v)   Reimbursement for Expenses: Employer shall reimburse Executive for reasonable and
properly documented out-of-pocket business and/or entertainment expenses incurred by Executive in
connection with the performance of his duties under this Agreement.

     (vi)   Retirement Plans and Related Arrangements: Executive shall continue to participate in
all retirement plans and related arrangements made available by Employer to its executives.

     (vii)   Reimbursement of Attorney’s Fees: Employer shall pay all reasonable attorney’s fees and
disbursements incurred by Executive in negotiating this Agreement; payment shall be made either to
Executive upon submission of paid invoices for such legal work or directly to the attorney chosen
by Executive.

Section 4:   Reimbursement of Certain Taxes, Penalties and Interest.

     To the best of Employer’s knowledge, Employer hereby represents to Executive that, as of the
date hereof, Executive’s execution of this Agreement shall not result in the attribution of any
current taxable income to him. Notwithstanding anything in this Agreement to the contrary, in the
event that the execution of this Agreement or the payment of any bonus hereunder is subject to tax
under Section 409A of the Internal Revenue Code of 1986, as amended (the “409A Tax”), Employer will
reimburse Executive for such 409A Tax (together with any interest and penalties and the amount of
any federal income tax attributable to your receipt of such reimbursement from the

 

 

Employer). Such reimbursement payment will be made at the time the 409A Tax is due and payable.
In addition, Employer agrees to advance to Executive an amount equal to any base taxes that he
would be obligated to pay in any year during which he does not receive a bonus payment or bonus
payments if 409A liability is alleged and payment is actually made. Any and all such advances
shall be treated by the Company as a credit against bonus payments to be made to Executive under
this Agreement. If Executive is terminated without Cause or terminates his employment in the event
of Constructive Termination and such advance is not offset against a bonus payment, Employer shall
forgive all amounts owed to it by Executive in respect of such advance. In the event Executive is
terminated with Cause or terminates his employment for any reason other than Constructive
Termination and such advance is not offset against a bonus payment, Executive hereby agrees to pay
Company an amount equal to amounts outstanding in respect of such advance together with interest at
an annual rate of six percent (6%) payable in two (2) equal annual payments over the two (2) year
period immediately following Executive’s termination with Cause or termination for any reason other
than Constructive Termination.

ARTICLE II

TERMINATION OF EMPLOYMENT

     Subject to Section 7 of this Article II, Employer shall provide Executive with the following
payments and benefits upon termination of employment:

 

 

Section 1:   Termination Due to Death.

     The employment of Executive under this Agreement shall terminate upon Executive’s death. In
the event of Executive’s death during Executive’s employment hereunder, the estate or other legal
representative of Executive shall be entitled to receive the following:

     (a)     Base Salary:   Employer shall pay to Executive’s estate or other legal
representative of Executive, Executive’s Base Salary for the period ending one year following the
month in which Executive dies. Such an amount and all other amounts payable under this Section 1
of Article II shall be paid by Employer in a lump sum within thirty (30) days of the date of death,
provided, however, that the amounts due with respect to the Bonus Pool shall be
paid when such amounts would ordinarily be paid.

     (b)     Payment from Bonus Pool:   Employer shall pay to the estate or other legal
representative of Executive, (i) all amounts accrued in the Bonus Pool by Executive with respect to
years preceding the year in which the death of Executive occurs and (ii) the pro-rated bonus
payable with respect to the year in which the death of Executive occurs.

     (c)     Restricted Stock:   Upon the death of Executive, the restricted period with respect
to all Restricted Stock previously awarded to Executive including, without limitation, Restricted
Stock awarded pursuant to this Agreement, shall terminate and Executive’s estate or other legal
representative shall become fully vested in all Restricted Stock previously awarded to Executive.
In addition, upon the death of Executive, all other equity awards shall vest (and, with respect to
stock options and stock appreciation rights, if any, shall become fully exercisable).

 

 

Section 2:   Termination by Reason of Disability.

     If, during the term of this Agreement, Executive, in the reasonable judgment of the Board, has failed to perform his duties under this Agreement on
account of illness or physical or mental incapacity, and such illness or incapacity continues for a
period of more than (i) six (6) consecutive months or (ii) one hundred eighty three (183) days in
any consecutive three hundred sixty-five (365) day period, Employer shall have the right to
commence process to terminate Executive’s employment under this Agreement on account of disability.
Employer shall send written notice to Executive of (x) its intention to commence such process, (y)
a medical doctor chosen by Employer to make the determination referred to in the next sentence, and
(z) Executive’s right within ten (10) days of receipt of the notice to choose a second medical
doctor to make such determination. Termination for disability shall be based on a reasonable
determination that Executive is either unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that can be expected to result
in death or last for a continuous period of not less than 12 months; or by reason of any
medically determinable physical or mental impairment that can be reasonably expected to result in
death or last for a continuous period of not less than 12 months, is receiving income replacement
benefits for a period of not less than three months under an accident and health plan covering
employees of the service provider’s employer. Executive shall fully cooperate in this process,
including by making himself available for and consenting to all examinations and tests reasonably
required by any doctor making the aforesaid determination. The aforesaid determination shall be
made by the medical doctor chosen by Executive, if he exercises his foregoing right to choose a
doctor, and the medical

 

 

doctor chosen by Employer. If the determination is being made by two medical doctors and they
cannot agree within fifteen (15) days of their both being chosen, they shall as soon as reasonably
possible select a third medical doctor to make the determination, who shall make the determination
within fifteen (15) days of being chosen. The determination made by the foregoing process shall be
conclusive. In the event Executive’s employment is terminated on account of disability, Executive’s
rights to compensation and benefits shall be as follows:

     (a)     Base Salary:   Executive shall be paid his pro rated Base Salary, as determined in
accordance with the terms of Section 3(a) of Article I for a period of no less than one year, less
any benefits paid to him under disability insurance policies maintained by Employer, following his
termination on account of disability.

     (b)     Payment from Bonus Pool:   Employer shall pay to Executive, when the same would
ordinarily be paid, (i) all amounts accrued in the Bonus Pool by Executive with respect to years
preceding the year in which termination due to disability of Executive occurs and (ii) the
pro-rated bonus payable with respect to the year in which termination due to the disability of
Executive occurs.

     (c)     Restricted Stock:   The restricted period with respect to all Restricted Stock
previously awarded to Executive shall terminate and Executive shall become fully vested in all
Restricted Stock previously awarded to Executive, including, without limitation, Restricted Stock
awarded pursuant to this Agreement. In addition, all other equity awards shall vest (and, with
respect to stock options and stock appreciation rights, if any, shall become fully exercisable).

 

 

Section 3:   Termination for Cause.

     “Termination for Cause” shall mean termination by Employer of Executive’s employment by
Employer by reason of:

     (i)   a willful failure by Executive in bad faith to substantially perform his duties with
Employer resulting in material harm to Employer; or

     (ii)   Executive’s conviction of a felony involving moral turpitude. Executive must be given
written notice that Employer intends to terminate his employment for Cause. Such written notice
shall specify the particular act or failure to act constituting the basis of the intention to so
terminate employment.

     In the case of a Termination for Cause under clause (i) above, Executive shall be given the
opportunity, within twenty (20) days of the receipt of such notice, to meet with the Board to
refute or explain such act or failure to act. If such act or failure to act is reasonably
determined by the Board to be in violation of clause (i) of this Section, Executive shall be given
ten (10) days after such meeting to correct such act or failure to act, and upon failure of
Executive within such ten (10) day period to correct such act or failure to act to the reasonable
satisfaction of the Board, Executive’s employment by Employer shall be terminated. In the case of
Termination for Cause under Clause (ii) above, Executive’s employment shall be terminated as of the
date such notice is given.

     In the event the Board shall terminate Executive’s employment for Cause, Executive shall be
entitled only to the following:

     (a)     Base Salary:   Within thirty (30) days of the date of Executive’s Termination for
Cause, Executive shall be paid his pro rated Base Salary, as determined in accordance with the
terms of Section 3(a) of Article I.

 

 

     (b)     Payment from Bonus Pool:   Executive shall forfeit all rights to payments from the
Bonus Pool.

Section 4:   Termination without Cause; Constructive Termination.

     Notwithstanding anything in this Agreement to the contrary, Executive’s employment hereunder
may be terminated by Employer without Cause, and Executive may terminate his employment hereunder
in the case of Constructive Termination, as defined in this Section 4, provided,
however, that in the event that Executive’s employment is terminated in accordance with the
terms of this Section 4, Executive shall be entitled to receive:

     (a)     Base Salary:   Within thirty (30) days of Executive’s termination of employment,
Employer shall pay to Executive a lump sum payment equal to Executive’s Base Salary, as determined
in accordance with the terms of Section 3(a) of Article I, for the month in which termination
occurs, and for the period incepting the first day of the month immediately following the month in
which termination occurs to the end of the Term, or any extension thereto, inclusive (but in no
event for less than one (1) year).

     (b)     Payment from Bonus Pool:   Employer shall pay to Executive, within thirty (30) days
following termination of employment, (i) if performance has been met under the Bonus Pool, all
amounts accrued in the Bonus Pool by Executive with respect to years preceding the year in which
termination of employment of Executive occurs and (ii) if performance has been met under the
Bonus Pool, the pro-rated bonus determined under the Bonus Pool with respect to the year in which
termination of employment of Executive occurs.

 

 

     (c)     Restricted Stock:

     (i)   The restricted period applicable to all Restricted Stock previously awarded to Executive
shall terminate and Executive shall become fully vested in all Restricted Stock previously awarded
to Executive, including, without limitation, Restricted Stock awarded pursuant to this Agreement.
Executive shall, upon such termination, have the option to take cash in lieu of Restricted Stock
with respect to all, or any portion, of the shares of Restricted Stock that vest as a result of
this subparagraph, based on a share price for such Restricted Stock that is the greater of (a) the
share price of Employer’s stock as of the close of business on the business day next preceding the
date of termination of employment and (b) the share price of Employer’s stock ten (10) business
days prior to the date determined under paragraph (a) above (or the closing price of the next
preceding business day, if such date does not fall on a business day). To the extent the cash
payment exceeds the fair market value of the stock at the time of payment and Executive is a
“specified employee” as defined in Section 409A of the Code; the excess amount shall be paid the
earlier of (A) 6 months following termination of employment or (B) death. In addition, all other
equity awards shall vest (and, with respect to stock options and stock appreciation rights, if any,
shall become fully exercisable).

     (ii)   Executive shall give Employer written notice within ten (10) business days following
termination of employment under this Section 4, specifying the number of shares of Restricted Stock
with respect to which Executive has elected to take cash in lieu of shares of Restricted Stock.
Employer shall, within thirty (30) days of receipt of such notice, deliver to Executive a check in
payment of the value of the shares of Restricted Stock as determined in accordance with the
immediately preceding subsection, and share

 

 

certificates evidencing the remaining shares of Restricted Stock that have vested as a result of
termination of employment under this Section 4 and with respect to which Executive has not
exercised his election to take cash in lieu of shares.

     (d)     Health Coverage:   Executive’s medical and dental coverage shall cease upon the
termination of Executive’s employment. In the event of such termination in accordance with the
terms of this Section 4, Employer shall provide Executive with notice and enrollment materials
confirming Executive’s right to continue medical and dental insurance coverage to the extent
permitted under COBRA; provided, however, that Executive shall only be required to
pay the premiums charged to similarly-situated active employees during the entire COBRA
continuation period, and Employer shall pay the remaining cost of coverage.

     For purposes of this Agreement, “Constructive Termination” shall mean the termination of
employment by Executive following written notice to Employer for any of the following reasons:

     (i)   without Executive’s express written consent, the loss of Executive’s position described in
Article I, Section 1 or a material alteration in Executive’s position or responsibility as so
described;

     (ii)   without Executive’s express written consent, a breach by Employer of any of its material
obligations set forth in this Agreement;

     (iii)   any failure by a successor to Employer to assume Employer’s obligations under this
Agreement, either expressly or by operation of law, or, if Employer sells all or substantially all
of its assets, or as a result of a sale by Employer’s majority stockholder, Fairfax Financial
Holdings Limited (“Fairfax”) of all of Employer or a controlling

 

 

interest in Employer and in either case, as a result thereof, any failure by the purchaser to
assume Employer’s obligations under this Agreement; or

     (iv)   without Executive’s express written consent, relocation of Executive’s work situs to a
location that is not within a radius of thirty (30) miles by major thoroughfare from the
Executive’s work situs in Stamford, Connecticut at the inception of this Agreement.

     Executive must give written notice to Employer within ninety (90) days following the initial
existence of one or more of the reasons listed above if Executive intends to terminate Executive’s
employment because of the occurrence of one of the circumstances constituting Constructive
Termination under this Section 4. Such written notice shall specify the particular act or failure
to act constituting the basis of Executive’s claim that Constructive Termination has occurred.
Employer shall be given the opportunity, within thirty (30) days of the receipt of such notice, to
fully cure any such act or failure to act.

     Notwithstanding any provision of this Agreement to the contrary, if, at the time of
Executive’s termination of employment with the Employer, Executive is a “specified employee” as
defined in Section 409A of the Code, and one or more of the payments or benefits received or to be
received by Executive pursuant to this Agreement would constitute deferred compensation subject to
Section 409A, no such payment or benefit will be provided under this Agreement until the earliest
of (A) the date which is six (6) months after his “separation from service” for any reason, or (B)
death. If any payment is delayed pursuant to the above sentence, the first payment after such
delay expires shall include all amounts not previously paid as a result of such delay. The
determination of whether Section 409A of the Code requires any such delay shall be made by
Employer,

 

 

after consultation with Executive’s tax counsel. The provisions of this paragraph shall only
apply to the extent required to avoid Executive’s incurrence of any penalty tax or interest under
Section 409A of the Code or any regulations or Treasury guidance promulgated thereunder. In
addition, if any provision of this Agreement would cause Executive to incur any penalty tax or
interest under Section 409A of the Code or any regulations or Treasury guidance promulgated
thereunder, the Employer shall reform such provision to maintain to the maximum extent practicable
the original intent of the applicable provision without violating the provisions of Section 409A of
the Code.

Section 5:   Termination by Executive Other than in the Event of Constructive Termination.

     Executive may terminate his employment hereunder upon sixty (60) days written notice to
Employer. In the event Executive terminates his employment under this Section 5, Executive shall
be entitled only to payment of his Base Salary through his termination date and reimbursement of
all business expenses incurred by Executive in accordance with Employer’s expense policies through
his termination date; provided, however, that the terms of this Section 5 shall not
apply to any termination that is subject to the terms of either Article II, Section 7 or
Constructive Termination under Article II, Section 4.

Section 6:   Non-Extension of Employment.

     Employer shall provide Executive written notice (“Notice”) of its intention not to extend
Executive’s employment under the terms of this Agreement (“Non-Extension of Employment”) at least
ninety (90) days prior to the end of the Term, and in such event, Executive’s employment with
Employer shall terminate upon the completion of the final

 

 

day of the Term. In the event of Non-Extension of Employment in accordance with the terms of this
Section 6, Executive shall be entitled to receive:

     (a)     Base Salary; Health Coverage:   Employer shall continue to pay Executive the Base
Salary (at the rate in effect at the end of the Term) for twelve (12) months following Executive’s
termination of employment at such intervals as the same would have been paid to Executive had
Executive remained in the active service of Employer. Executive’s medical and dental coverage
shall cease upon the termination of Executive’s employment. In the event of such termination in
accordance with the terms of this Section 6, Employer shall provide Executive with notice and
enrollment materials confirming Executive’s right to continue medical and dental insurance coverage
to the extent permitted under COBRA; provided, however, that Executive shall only
be required to pay the premiums charged to similarly-situated active employees during the entire
COBRA continuation period, and Employer shall pay the remainder of the cost of coverage.

     (b)     Payment from Bonus Pool:   Employer shall pay to Executive, thirty (30) days
following the end of the Term, (i) ) if performance has been met under the Bonus Pool, all amounts
accrued in the Bonus Pool by Executive with respect to years preceding the year in which
Non-Extension of Employment occurs and (ii) ) if performance has been met under the Bonus Pool, the
pro-rated bonus determined under the Bonus Pool with respect to the year in which Non-Extension of
Employment occurs.

     (c)     Restricted Stock:

     (i)   The restricted period applicable to all Restricted Stock previously awarded to Executive
shall terminate and Executive shall become fully vested in all Restricted

 

 

Stock previously awarded to Executive, including, without limitation, Restricted Stock awarded
pursuant to this Agreement. Executive shall, upon such termination, have the option to take cash
in lieu of Restricted Stock with respect to all, or any portion, of the shares of Restricted Stock
that vest as a result of this subparagraph, based on a share price for such stock which is the
greater of (a) the share price of Employer’s stock as of the close of business on the business day
next preceding the date of termination of employment and (b) the share price ten (10) business days
prior to the date determined under clause (a) above (or the closing price of the next preceding
business day, if such date does not fall on a business day). To the extent the cash payment
exceeds the fair market value of the stock at the time of payment and Executive is a “specified
employee” as defined in Section 409A of the Code; the excess amount shall be paid the earlier of
(A) 6 months following termination of employment, or (B) death. In addition, all other equity
awards shall vest (and, with respect to stock options and stock appreciation rights, if any, shall
become fully exercisable).

     (ii)   Executive shall give Employer written notice within ten (10) business days following
termination of employment under this Section 6, specifying the number of shares of Restricted Stock
with respect to which Executive has elected to take cash in lieu of shares of Restricted Stock.
Employer shall, within thirty (30) days of receipt of such notice, deliver to Executive a check in
payment of the value of the shares of Restricted Stock as determined in accordance with the
immediately preceding subsection, and share certificates evidencing the remaining shares of
Restricted Stock that have vested as a result of termination of employment under this Section 6 and
with respect to which Executive has not exercised his election to take cash in lieu of shares.

 

 

     Notwithstanding any provision of this Agreement to the contrary, if, at the time of
Executive’s termination of employment with Employer, Executive is a “specified employee” as defined
in Section 409A of the Code, and one or more of the payments or benefits received or to be received
by Executive pursuant to this Agreement would constitute deferred compensation subject to Section
409A, no such payment or benefit will be provided under this Agreement until the earliest of (A)
the date which is six (6) months after Employee’s “separation from service” for any reason or (B)
death. If any payment is delayed pursuant to the above sentence, the first payment after such
delay expires shall include all amounts not previously paid as a result of such delay. The
determination of whether Section 409A of the Code requires any such delay shall be made by
Employer, after consultation with Executive’s tax counsel. The provisions of this paragraph shall
only apply to the extent required to avoid Executive’s incurrence of any penalty tax or interest
under Section 409A of the Code or any regulations or Treasury guidance promulgated thereunder. In
addition, if any provision of this Agreement would cause Executive to incur any penalty tax or
interest under Section 409A of the Code or any regulations or Treasury guidance promulgated
thereunder, Employer shall reform such provision to maintain to the maximum extent practicable the
original intent of the applicable provision without violating the provisions of Section 409A of the
Code.

     For the avoidance of doubt, this Section 6 shall not apply to the extent Section 4, above, is
applicable.

Section 7:   Termination Upon a Change of Control.

     “Termination/Terminated Upon a Change in Control” shall mean the termination of Executive’s
employment by Employer or the successor company (otherwise than for

 

 

Cause as provided in Section 3 of this Article II) or by Executive, in either case within one
year following a Change in Control. In the event that Executive’s employment is Terminated Upon a
Change in Control, Executive’s rights to compensation, Restricted Stock and benefits shall be
identical to those to which he would be entitled had he been terminated by Employer other than for
Cause pursuant to Section 4, provided, however, that the minimum severance benefit
described in Section 4(a)(i) (relating to Base Salary) shall be no less than two (2) years.

     “Change in Control” shall mean (i) the time that Employer or its ultimate parent, Fairfax,
first determines that any person and all other persons who constitute a group (within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934 (“Exchange Act”)) have, at a time when
no other person or group directly or indirectly beneficially owns securities carrying more than
forty-five percent (45%) of the votes attached to all outstanding securities of Employer or
Fairfax, acquired direct or indirect beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of outstanding securities of Employer or Fairfax carrying more than twenty
percent (20%) of the votes attached to all outstanding securities of Employer or Fairfax, unless a
majority of the “Continuing Directors” approves the acquisition not later than ten (10) business
days after Employer or Fairfax makes that determination, or (ii) the first day on which a majority
of the members of Employer’s or Fairfax’s Board of Directors are not “Continuing Directors”, or
(iii) the time that the Controlling Shareholder of either Employer or Fairfax no longer is the
controlling shareholder, or (iv) the arm’s length sale of a majority interest in Employer by
Fairfax, or (v) a sale of substantially all of the assets of Employer or Fairfax. For purposes of
(iii) in the preceding sentence, the “Controlling

 

 

Shareholder” of Fairfax is one or more of V. Prem Watsa, his family, corporations controlled
by, or trusts whose beneficiaries are, V. Prem Watsa or his family, the estate of V. Prem Watsa
(including the executors and administrators), and any persons to whom shares are distributed or
sold upon the death or by the estate of V. Preen Watsa or his family.

     “Continuing Directors” shall mean, as of any date of determination, any member of the Board of
Directors of Employer or Fairfax who (i) was a member of that Board of Directors on the date of
this Agreement, (ii) has been a member of that Board of Directors for the two years immediately
preceding such date of determination, or (iii) was nominated for election or elected to the Board
of Directors by the Controlling Shareholder or with the affirmative vote of all, or one less than
all, of the Continuing Directors who were members of the Board at the time of such nomination or
election.

     Notwithstanding any provision of this Agreement to the contrary, if, at the time of
Executive’s termination of employment with Employer, Executive is a “specified employee” as defined
in Section 409A of the Code, and one or more of the payments or benefits received or to be received
by Executive pursuant to this Agreement would constitute deferred compensation subject to Section
409A, no such payment or benefit will be provided under this Agreement until the earliest of (A)
the date which is six (6) months after Executive’s “separation from service” for any reason or (B)
death. If any payment is delayed pursuant to the above sentence, the first payment after such
delay expires shall include all amounts not previously paid as a result of such delay. The
determination of whether Section 409A of the Code requires any such delay shall be made by
Employer, after consultation with Executive’s tax counsel. The provisions of

 

 

this paragraph shall only apply to the extent required to avoid Executive’s incurrence of any
penalty tax or interest under Section 409A of the Code or any regulations or Treasury guidance
promulgated thereunder. In addition, if any provision of this Agreement would cause Executive to
incur any penalty tax or interest under Section 409A of the Code or any regulations or Treasury
guidance promulgated thereunder, Employer shall reform such provision to maintain to the maximum
extent practicable the original intent of the applicable provision without violating the provisions
of Section 409A of the Code.

Section 8:   Release

     In consideration of the payments and benefits to be provided to Executive under Sections 2, 4,
6, and 7 of Article II of this Agreement, Executive shall execute and deliver Employer’s standard
waiver and release.

ARTICLE III

MISCELLANEOUS PROVISIONS

Section 1:   Payment Obligations.

     The obligation of Employer to pay Executive the compensation and to make the arrangements
provided herein shall be unconditional, and except as provided herein, Executive shall have no
obligation whatsoever to mitigate damages hereunder. If litigation after a Change in Control
(otherwise than in connection with a Termination for Cause that is ultimately upheld in litigation)
shall be brought to enforce or interpret any provision contained herein, Employer, to the extent
permitted by applicable law, hereby indemnifies Executive for Executive’s reasonable attorney’s fees and disbursements incurred in such
litigation.

 

 

Section 2:   Confidentiality.

     Executive agrees that all confidential and proprietary information relating to the business of
Employer shall be kept and treated as confidential both during and after the term of this
Agreement, except as may be permitted in writing by Employer or as such information is within the
public domain or comes within the public domain without any breach of this Agreement.

Section 3:   Arbitration.

     Any dispute or controversy arising under or in connection with this Agreement that cannot be
mutually resolved by the parties hereto shall be settled exclusively by arbitration in Stamford,
Connecticut under the employment arbitration rules of the American Arbitration Association before a
single arbitrator, who shall be selected jointly by Employer and Executive, or, if Employer and
Executive cannot agree on the selection of the arbitrator, shall be selected by the American
Arbitration Association. Judgment may be entered on the arbitrator’s award in any court having
jurisdiction. The parties hereby agree that the arbitrator shall be empowered to enter an
equitable decree mandating specific enforcement of the terms of this Agreement. The party that
prevails in any arbitration hereunder shall be reimbursed by the other party hereto for any
reasonable legal fees and out of pocket expenses directly attributable to such arbitration, and
such other party shall bear all expenses of the arbitrator.

 

 

Section 4:   Withholdings.

     Unless otherwise provided herein, all compensation and benefits to Executive hereunder shall
be reduced by all federal, state, local and other withholdings and similar taxes and payments
required by applicable law.

Section 5:   Parachute Payments.

     (a)     Subject to Article III, Section 5(b) below, notwithstanding anything in this Agreement to
the contrary, the amount of any payment or benefit to be received by Executive pursuant to this
Agreement or otherwise which would be subject to the excise tax imposed by Section 4999 of the Code
shall be reduced (but not below zero) by the amount, if any, necessary to prevent any part of any
such payment or benefit received or to be received by Executive (such foregoing payments or
benefits referred to collectively as the “Total Payments”), from being subject to such excise tax,
but only if and to the extent such reduction will also result in, after taking into account all
applicable state and Federal taxes (computed at the highest applicable marginal rate), including
any taxes payable pursuant to Section 4999 of the Code, a greater after-tax benefit to Executive
than the after-tax benefit to Executive of the Total Payments computed without regard to any such
reduction. For purposes of the foregoing, (a) no portion of the Total Payments shall be taken into
account which in the opinion of the public accounting firm (“Accounting Firm”) selected by Employer
does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code; (b)
any reduction in payments or benefits pursuant to this Agreement shall be computed by taking into
account, in accordance with Section 280G(b)(4) of the Code, that portion of the Total Payments
which is reasonable compensation, within the meaning of Section 280G(b)(4) of the

 

 

Code, in the opinion of Accounting Firm; (c) the value of any non-cash benefits or of any
deferred or accelerated payments or benefits included in the Total Payments shall be determined by
Accounting Firm; and (d) in the event of any uncertainty as to whether a reduction in Total
Payments to Executive is required pursuant hereto, Employer shall initially make all payments
otherwise required to be paid to Executive hereunder, and any amounts so paid which are ultimately
determined not to have been payable hereunder (other than as a loan to Executive), either (x) upon
mutual agreement of Executive and Employer, or (y) upon Accounting Firm furnishing Executive with
its written opinion setting forth the amount of such payments not to have been so payable (other
than as a loan to Executive under this Section 5(a)), or (z) in the event a portion of the Total
Payments shall be determined by a court or an Internal Revenue Service proceeding to have otherwise
been an “excess parachute payment,” to the extent permitted by law, the amount so determined in
(x), (y) or (z) shall constitute a loan by Employer to Executive under this Section 5(a), and
Executive shall repay to Employer, within ten (10) business days after the time of such mutual
agreement, such opinion of Accounting Firm is so furnished to Executive, or of such determination,
as applicable, the amount of such loan plus interest thereon at the rate provided in Section
1274(b)(2)(B) of the Code for the period from the date of the initial payments to Executive to the
date of such repayment by Executive. All fees and expenses of any Accounting Firm selected under
this Section 5(a) shall be borne solely by Employer.

     (b)     Notwithstanding Article III, Section 5(a) above, and notwithstanding anything else in this
Agreement to the contrary, in the event the Total Payments exceed 110% of 2.99 multiplied by
Executive’s “base amount” (as defined in Section

 

 

280G(b)(3)(A) of the Code), then, in addition to any other benefits provided under or pursuant to
this Agreement or otherwise, Employer shall pay to Executive at the time any such payments are made
under or pursuant to this Agreement or any other agreements, an amount equal to the amount of any
excise tax imposed or to be imposed on Executive pursuant to Section 4999 of the Code (the amount
of any such payment, the “Parachute Tax Reimbursement”). In addition, Employer shall “gross up”
such Parachute Tax Reimbursement by paying to Executive at the same time an additional amount equal
to the aggregate amount of any additional taxes (whether income taxes, excise taxes, special taxes,
employment taxes or otherwise) that are or will be payable by Executive as a result of the
Parachute Tax Reimbursement being paid or payable to Executive and/or as a result of the additional
amounts paid or payable to Executive pursuant to this sentence, such that after payment of such
additional taxes, Executive shall have been paid on a net after-tax basis an amount equal to the
Parachute Tax Reimbursement. The amount of any Parachute Tax Reimbursement and of any such
gross-up amounts shall be determined by a public accounting firm, selected by Executive, whose
determination, absent manifest error, shall be treated as conclusive and binding absent a binding
determination by a governmental taxing authority that a greater amount of taxes is payable by
Executive. All fees and expenses of any accounting firm selected under this Section 5(b) shall be
borne solely by Employer.

     (c)     If a Taxing Authority makes a claim against Executive which, if successful, would require
Employer to make a payment under this Section 5, Executive agrees to contest the claim on request
of Employer, subject to the following conditions:

 

 

     (i)   Executive shall notify Employer of any such claim within ten days of becoming aware
thereof. In the event that Employer desires the claim to be contested, Employer shall promptly
(but in no event more than 30 days after the notice from Executive, or such shorter time as the
Taxing Authority may specify for responding to such claim) request Executive to contest the claim.
Executive shall not make any payment of any tax which is the subject of the claim before Executive
has given the notice or during the 30 day period thereafter unless Executive has received written
instructions from Employer to make such payment together with an advance of funds sufficient to
make the requested payment plus any amounts payable under this Section 4 determined as if such
advance were an Excise Tax subject to the Parachute Tax Reimbursement and related gross-up under
Section 5(b), in which event, Executive will act promptly in accordance with such instructions; and

     (ii)   If Employer so requests, Executive will contest the claim by either paying the tax
claimed and suing for a refund in the appropriate court or contesting the claim in the United
States Tax Court or other appropriate court, as directed by Employer; provided,
however, that any request by Employer for Executive to pay the tax shall be accompanied by
an advance from Employer to Executive of funds sufficient to make the requested payment plus any
amounts under this Section 4 determined as if such advance were an Excise Tax subject to the
Parachute Tax Reimbursement and related gross-up under Section 5(b). If directed by Employer in
writing, Executive will take all action necessary to compromise or settle the claim, but in no
event will Executive compromise or settle the claim or cease to contest the claim without the
written consent of Employer; provided, however, that Executive may take any such
action if Executive waives in

 

 

writing Executive’s right to a payment under this Section 5 for any amounts payable in
connection with such claim. Executive agrees to cooperate in good faith with Employer in
contesting the claim and to comply with any reasonable request from Employer concerning the contest
of the claim, including the pursuit of administrative remedies, the appropriate forum for any
judicial proceedings, and the legal basis for contesting the claim. Upon request of Employer,
Executive shall take appropriate appeals of any judgment or decision that would require Employer to
make a payment under this Section 5. Provided that Executive is in reasonable compliance with the
provisions of this subparagraph, Employer shall be liable for and indemnify Executive against any
loss in connection with, and all costs and expenses, including attorneys’ and accountants’ fees,
which may be incurred as a result of, contesting the claim, and shall provide to Executive within
30 days after each written request therefore by Executive, cash advances or reimbursement for all
such costs and expenses actually incurred or reasonably expected to be incurred by Executive as a
result of contesting the claim.

Section 6:   Indemnification.

     In addition to any rights to indemnification to which Executive is entitled under Employer’s
Articles of Incorporation and Bylaws, Employer shall indemnify Executive at all times during and
after the term of this Agreement to the maximum extent permitted under the Delaware General
Corporation Law and any successor provision thereof and any other applicable corporate law, and
shall pay Executive’s expenses in defending any civil or criminal action, suit or proceeding in
advance of the final disposition of such action, suit or proceeding and any appeal thereof, to the
maximum extent permitted under such applicable laws. Employer shall use reasonable efforts to
maintain at all times

 

 

Directors and Officers Coverage comparable to its existing Directors and Officers Coverage, if
the same can be obtained at a reasonable cost in comparison to the cost of the then existing
coverage, to cover all or a portion of the foregoing liability.

Section 7:   Notices.

     Any notices permitted or required under this Agreement shall be deemed given upon the date of
personal delivery, addressed to Employer at:

	 	 	 	Odyssey Re Holdings Corp.

     Attn: General Counsel

300 First Stamford Place

Stamford, Connecticut 06902

and addressed to Executive at:

	 	 	 	Mr. Michael G. Wacek

[address]

or at any other address as either party may, from time to time, designate by notice given in
compliance with this Section.

Section 8:   Governing Law.

     This Agreement shall be governed by and construed in accordance with the substantive laws of
the State of Connecticut, without giving effect to the conflicts of laws principles thereof.

Section 9:   Titles and Captions.

     All section’s titles or captions contained in this Agreement are for convenience
only and shall not be deemed part of the context nor affect the interpretation of this
Agreement.

 

 

Section 10:   Entire Agreement.

     This Agreement contains the entire understanding between the parties, and supersedes any prior
understandings and agreements between Executive and Employer and/or any affiliate of Employer
respecting the subject matter of this Agreement, including, without limitation, any representations
contained within public notices, press releases or regulatory filings previously issued or made by
Employer or Fairfax. No provision in this Agreement may be amended unless such amendment is set
forth in a writing that expressly refers to the provision of this Agreement that is being amended
and that is signed by Executive and by a representative of Employer.

Section 11:   Agreement Binding.

     The Agreement shall be binding upon the heirs, executors, administrators, successors and
assigns of the parties hereto.

Section 12:   Computation of Time.

     In computing any period of time pursuant to this Agreement, the day of the act, event or
default from which the designated period of time begins to run shall be included, unless it is a
Saturday, Sunday or a legal holiday, in which event the period shall begin to run on the next day
which is not a Saturday, Sunday or legal holiday, and if the period ends on a Saturday, Sunday or
legal holiday, the period shall run until the end of the next day thereafter which is not a
Saturday, Sunday or legal holiday.

 

 

Section 13:   Pronouns and Plurals.

     All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine,
neuter, singular or plural as the identity of the person or persons may require.

Section 14:   Presumption.

     This Agreement or any section thereof shall not be construed against any party due to the fact
that said Agreement or any section thereof was drafted by said party.

Section 15:   Further Action.

     The parties hereto shall execute and deliver all documents, provide all information and take
or forbear from all such action as may be necessary or appropriate to achieve the purposes of this
Agreement.

Section 16:   Parties in Interest.

     Nothing herein shall be construed to be to the benefit of any third party, nor is it intended
that any provision shall be for the benefit of any third party.

Section 17:   Savings Clause.

     If any provision of this Agreement, or the application of such provision to any person or
circumstance, shall be held invalid, the remainder of this Agreement, or the application of such
provisions to persons or circumstances other than those as to which it is held invalid, shall not
be affected thereby.

Section 18:   Failure to Enforce and Waiver.

     The failure to insist upon strict compliance with any of the terms, covenants or conditions of
this Agreement shall not be deemed a waiver of such terms, covenants or

 

 

conditions, and the waiver or relinquishment or any right or power under this Agreement at any
one or more times shall not be deemed a waiver or relinquishment of such right or power at any
other time or times.

Section 19:   Counterparts; Facsimile Signatures.

     This Agreement may be executed in one or more counterparts, each of which will be deemed to be
an original copy of this Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement. This Agreement may be executed by facsimile signatures.

Section 20:   Headings.

     The headings of the Sections and sub-sections contained in this Agreement are for convenience
only and shall not be deemed to control or affect the meaning or construction of any provision of
this Agreement.

Date:  September 15, 2008

	 	 	 	 	 
	 	ODYSSEY RE HOLDINGS CORP.

 

 	 
	 	By:  	/s/  Andrew A. Barnard
 	 
	 	 	Chief Executive Officer 	 
	 	 	 	 
	 
	 	 	 
	 	  	           /s/  Michael G. Wacek
 	 
	 	 	MICHAEL G. WACEK 	 
	 	 	 	 
	 

 

 

AWARD DOCUMENT PURSUANT TO THE

ODYSSEY RE HOLDINGS CORP. RESTRICTED SHARE PLAN

Exhibit A

PERSONAL & CONFIDENTIAL

Mr. Michael Wacek

[address]

Dear Mike:

     We are pleased to advise you that Odyssey Re Holdings Corp., a Delaware corporation (the
“Company”), has elected to grant you, effective September 15, 2008 (the “Date of
Grant”), an award of 26,220 shares of restricted Common Stock, par value $.01 per share, of
Odyssey Re Holdings Corp. (referred to as the “Award” or the “Restricted Shares”).
The Restricted Shares remain subject to forfeiture, transfer and certain other restrictions in
accordance with the terms and provisions of the Odyssey Re Holdings Corp. Restricted Share Plan
(the “Plan”) and this Award Document. In the event of any conflict or inconsistency
between the terms of this Award Document and the terms of the Plan, the latter shall govern. A
copy of the Plan is attached hereto.

     This Award Document and the Plan are referred to collectively as the “Grant
Documents”. Capitalized terms not explicitly defined in this Award Document but defined in the
Plan shall have the same definitions as in the Plan.

     1.     Power
and Authority of the Committee.   All determinations and interpretations, as
provided in Section 3(a) of the Plan, made by the Committee in carrying out and administering the
Plan and construing and interpreting the Plan shall be final, binding and conclusive on all
parties. Furthermore, every action, including an exercise of discretion by the Committee, is
wholly without precedent value for any purpose.

     2.     Restricted
Period.   Subject to the terms and provisions contained herein and in the
Plan, you shall become vested in the Award and all restrictions shall lapse, on April 1, 2009 with
respect to 5,244 Restricted Shares, on April 1, 2010 with respect to 5,244 Restricted Shares, on
April 1, 2011 with respect to 5,244 Restricted Shares, on April 10, 2012 with respect to 5,244
Restricted Shares, and on April 1, 2013 with respect to the remaining 5,244 Restricted Shares.
Such period of time the Restricted Shares are subject to restrictions is referred to as the
“Restricted Period”. Subject to Section 7(e) of

 

 

the Plan, vesting is contingent upon your continuous employment with the Company or one of its
subsidiaries or affiliates from the Date of Grant until the respective vesting dates. In addition,
Restricted Shares may be subject to forfeiture upon a Termination of Employment. Please carefully
review the definition of “Termination of Employment” and Section 7 of the Plan.

     3.     Escrow
Agreement and Stock Powers.   You must, as provided in Section 7(a)(ii) of
the Plan, sign the attached escrow agreement and appropriate stock powers, in accordance with the
instructions thereon, and return them to the Company to the attention of the General Counsel of the
Company; otherwise the Award shall be null and void.

     4.     Shareholder
Rights.   Subject to restrictions set forth in the Plan, you shall
generally have the rights and privileges of a stockholder as to the Restricted Shares, including
the right to vote the Restricted Shares and to receive dividends in accordance with Section
7(a)(ii) of the Plan.

     5.     Delivery
of Restricted Shares.   Pursuant to Section 7(f) of the Plan, upon the
expiration of the Restricted Period applicable to any Restricted Shares and all other restrictions
set forth in the Plan and this Award Document, the Company shall deliver to you, without charge, a
share certificate evidencing the Restricted Shares (to the nearest full share) which have not been
forfeited and any cash dividends or share dividends credited to your account with respect to such
Restricted Share and the interest thereon, if any.

     6.     Non-Transferability
of Award.   Pursuant to Section 8(a) of the Plan, no Award or
amount payable under, or interest in, the Plan shall be transferable by you except by will or the
laws of descent and distribution or may otherwise be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge. The Committee may, in its
sole discretion, however, permit the transfer of an Award for no consideration to a family member
or to one or more trusts or partnerships established in whole or in part for the benefit of one or
more of your family members.

     7.     Termination
of Employment.   Upon your Termination of Employment as a result of
death, disability, reaching retirement age, Change in Control (as defined in Article II, Section 7
of your Employment Agreement), termination by the Company for reasons other than For Cause (as
defined in Article II, Section 3 of your Employment Agreement) or Constructive Termination (as
defined in Article II, Section 4 of your Employment Agreement), the Restricted Period applicable to
any Restricted Shares granted to you shall terminate and you shall become fully vested in the
Award.

     8.     Cessation
of Public Trading.   If the stock of the Company at any time during the
Restricted Period ceases to be publicly traded (other than as the result of the Company having made
a general assignment for the benefit of creditors, been adjudicated as bankrupt or insolvent, or
having filed a voluntary petition in bankruptcy, a petition or answer seeking an arrangement with
creditors or to take advantage of any insolvency law or having filed an answer admitting the
material allegations of a petition filed against the Company in bankruptcy), then you shall have
the option to receive a cash payment,

 

 

payable by OdysseyRe within ten (10) days following written notice from you no later than
thirty (30) days following the delisting of OdysseyRe’s stock from the exchange, equal to the
number of Restricted Shares held by you as of the delisting of the stock times the greater of (a)
the share price of Odyssey Re’s stock as of the close of business forty-five (45) trading days
prior to its delisting and (b) the average share price of Odyssey Re’s stock (based on end of
business day values) over the forty-five (45) trading day period prior to delisting.

     9.     No Right to Continued Employment.   Pursuant to Section 8(b) of the Plan, nothing in
the Grant Documents shall interfere in any way with the right of the Company or one of its
subsidiaries or affiliates to terminate your employment or directorship at any time, with or
without cause, consistent with the provisions of your Employment Agreement.

     10.     Wage and Tax Withholding.   Pursuant to Section 8(d) of the Plan, the Company and
its subsidiaries or affiliates is authorized to withhold from any Award or any compensation or
other payment to you amounts of withholding and other taxes with respect to the payment of any
foreign, federal, state or local taxes of any kind required by law to be withheld in connection
with any Award, and to take such other action as the Committee may deem necessary or advisable to
enable the Company and you to satisfy obligations for the payment of the minimum required
withholding obligations relating to any Award.

     11.     Compliance with Securities Laws.   An Award, as provided in Section 8(e) of the
Plan, may not be exercised, and no shares of Common Stock may be issued in connection with an
Award, unless (i) the issuance of such shares have been registered under the Securities Act of
1933, as amended, and qualified under applicable state “blue sky” laws, or the Company has
determined that an exemption from registration and from qualification under such state “blue sky”
laws is available and (ii) the issuance of such shares complies with any other applicable
securities laws.

     12.     Resale Limitations.   An Award may be subject to limitations on resale pursuant to
Rule 144 of the Securities Act of 1933, as amended. Individual resales may be subject to, without
limitation, any of the following limitations: (i) holding period (e.g., the holder may be
prohibited from reselling Restricted Shares until such shares have been beneficially owned for a
prescribed period of time); (ii) location of sales (e.g., resales may be confined to residents of a
particular geographical area); (iii) manner of sale (e.g., a would-be-seller may be required to
resell in brokers’ transactions or other arrangements); or (iv) volume (e.g., holders may be
subject to quantitive limits that restrict the amount of securities that are eligible for resale
within a fixed period of time).

     13.     Recapitalization or Reorganization.   The Company and the stockholders of the
Company, as provided in Section 9 of the Plan, have the right and power to make or authorize any
adjustment, recapitalization, reorganization and other changes to the Company’s capital structure
or its business, including changes which affect shares of Common Stock.

 

 

     14.     Entire Agreement; Counterparts.   The Grant Documents set forth the entire
agreement and understanding between the parties hereto and supersede all prior agreements and
understandings relating to the subject matter hereof. This Award Document may be executed in one
or more counterparts, each of which shall be deemed to be an original, but all such counterparts
shall together constitute one and the convenience of reference and shall not affect the meaning of
any of the provisions of this Award Document.

     15.     Governing Law.   This Award Document shall be subject to, and construed in
accordance with, the laws of the State of Delaware.

     To confirm your acceptance of the Award, please sign where indicated below on the enclosed
copy of this Award Document and return the signed copy to the Company (together with the signed
escrow agreement and stock powers) to the attention of the General Counsel of the Company. By
signing and delivering that copy, you are acknowledging receipt of a copy of the Plan,
acknowledging that you are bound by all of the terms of the Grant Documents, and indicating your
acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the
Board or the Committee. In addition, we recommend that you retain a copy of the Grant Documents
for your files.

	 	 	 	 	 
	 	
Yours truly,

ODYSSEY RE HOLDINGS CORP.

 
 	 
	 	By:  	 	 
	 	 	Name:  	Donald L. Smith 	 
	 	 	Title:  	Senior Vice President, General

Counsel and Corporate Secretary 	 
	 

I have read, understand, and agree to be bound by the Grant Documents.

 

	 	 	 	 	 
	Signature:

	 	 	 	 
	 
	Address:

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