Document:

Purchase Agreement with William S. Fisher

 Exhibit 10.4 
 STOCK PURCHASE AGREEMENT 
 STOCK PURCHASE AGREEMENT dated as of August 22, 2007 among The
Gap, Inc., a Delaware corporation (the “Company”), William S. Fisher (“Fisher” and, together with any revocable family trust through which Fisher beneficially owns common stock of the Company,
“Seller”).  
 WITNESSETH: 
 WHEREAS, the Company is authorized to purchase from time to time its Shares (as defined below) pursuant to a share repurchase program authorized by a committee of the Board of Directors of the Company on
August 21, 2007; and 
 WHEREAS, Fisher is the direct beneficial owner of 20,247,933 Shares of the Company (as defined below),
representing approximately 2.51% of the outstanding Shares of the Company as of the date hereof; and 
 WHEREAS in consideration of the above
recitals and of the mutual agreements and covenants contained in this Agreement, the Company and the Sellers intending to be bound legally, each agree as follows: 
 ARTICLE 1 
 Definitions 
 Section 1.1. Definitions. (a) The following terms, as used herein, have the following meanings: 
 “AFR” means, for any Business Day, the monthly short-term applicable federal rate, based on a monthly compounding period, published by the Internal Revenue Service for the Applicable Month in which such Business Day occurs.

 “AFR Carry Amount” means, for any period, an amount determined at the end of each period that is the sum of all Daily AFR
Carry Amounts for such period. 
 “Average Price” means, for any Applicable Month, the weighted average price,
rounded to four decimal points, at which the Company purchased Shares during the Applicable Month pursuant to the Program in open market purchases, calculated as (a) the total purchase price paid by the Company (excluding commissions) for
Shares purchased pursuant to the Program in open market purchases during such Applicable Month divided by (b) the total number of Shares purchased by the Company pursuant to the Program in open market purchases during such Applicable Month;
provided that if the Agreement has been terminated in accordance with Section 7.1, the Average Price for any Closing thereafter shall be calculated only through the day immediately prior to the termination date of the Agreement. For the
avoidance of doubt, Shares acquired in “open market purchases” shall not include the Acquired Shares. 
 “Business
Day” means (a) for purposes of determining the date of a Closing or Closing Notice, a day on which banks are not required or authorized by law to close in New York City and (b) for all other purposes under this Agreement, a day on
which the New York Stock Exchange is open for trading. 

 “Daily AFR Carry Amount” means, for each day, an amount determined at the end of each
period equal to the product of (a) the cumulative month-to-date Implied Daily Settlement Proceeds and (b) AFR divided by 360; provided that if such day is not a Business Day, the Daily AFR Carry Amount for such day shall be equal to the
product of (a) the cumulative month-to-date Implied Daily Settlement Proceeds through the most recent Business Day of such Applicable Month and (b) AFR in effect as of the most recent Business Day divided by 360; and provided, further,
that for any day after the last Business Day of such Applicable Month and prior to the date of Closing with respect to such Applicable Month, the Daily AFR Carry Amount for such day shall be equal to the product of (a) the cumulative
month-to-date Implied Daily Settlement Proceeds as of the most recent Business Day and (b) AFR in effect as of the last Business Day of the Applicable Month divided by 360. 
 “Daily Average Price” means, for any day, the weighted average price at which the Company purchased Shares during the applicable
day pursuant to the Program in open market purchases, calculated as (a) the total purchase price paid by the Company (excluding commissions) for Shares purchased pursuant to the Program in open market purchases during such day divided by
(b) the total number of Shares purchased by the Company pursuant to the Program in open market purchases during such day. 
 “Dividend Adjusted Average Price” means, on any day of an Applicable Month on which all of the following conditions are met: (a) the day is after the public announcement of the dividend, (b) the day precedes an
Ex-Dividend Date that occurs during such Applicable Month, and (c) the record date for the shareholders of record entitled to receive such dividend will occur on or before the Closing for such Applicable Month, then Dividend Adjusted Average
Price of the Acquired Shares for such day shall be calculated as (i) the Daily Average Price for such day minus (ii) the amount of the dividend per Share which has been declared in respect of the Acquired Shares. 
 “Ex-Dividend Date” means the date that is two trading days prior to the record date which has been established in connection with the
declaration of a dividend in respect of the Acquired Shares or such other date as may be established with respect to the Shares as an “ex-dividend” date by the New York Stock Exchange. 
 “Implied Daily Acquired Shares” means, for each Business Day of an Applicable Month, the number of Acquired Shares which were
attributable to such day’s trading as determined by reference to the number of Shares purchased by the Company pursuant to the Program (other than Acquired Shares) on such Business Day as a percent of the Company’s total purchases pursuant
to the Program (other than Acquired Shares) during each Applicable Month determined after the close of trading on the last Business Day of each Applicable Month and prior to the delivery of the Closing Notice relating to the Closing for each
Applicable Month. Implied Daily Acquired Shares may result in fractional shares. 
 “Implied Daily Settlement Proceeds”
means, for each Business Day of an Applicable Month, the product of (a) the number of Implied Daily Acquired Shares which were deemed to have been acquired on the day that was three trading days prior to such Business Day and (b) the Daily
Average Price or Dividend Adjusted Average Price, if applicable, for such prior day. 
  

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 “Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge,
security interest or other encumbrance of any kind in respect of such property or asset. 
 “Person” means an individual,
corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. 
 “Program” means the share repurchase program approved on August 21, 2007 authorizing the Company to purchase from time to time
Shares up to a maximum aggregate amount (including existing authority) of $1.5 billion. 
 “Seller Ownership
Percentage” means 2.51%, which represents a percentage equal to (a) the number of Shares directly owned by such Seller as of August 4, 2007, divided by (b) 807,269,688 shares, which represent the Company’s total
outstanding basic Shares as of August 4, 2007, multiplied by 100. 
 “Shares” means the common stock of the
Company. 
 (b) For purposes of the definitions of “Average Price,” “Daily Average Price” and “Implied Daily
Acquired Shares”, Shares purchased by the Company pursuant to the Program shall be deemed to have been purchased on the trade date with respect to such Shares and not the day on which such trade settles. 
 (c) Each of the following terms is defined in the Section set forth opposite such term: 
  

			
	 Term
	  	Section
	 Acquired Shares
	  	2.1
		
	 Applicable Month
	  	2.1
		
	 Closing
	  	2.3
		
	 Closing Notice
	  	2.3
		
	 Governmental Authority
	  	3.3
		
	 Purchase Price
	  	2.2

 ARTICLE 2 
 Purchase and Sale 
 Section 2.1. Purchase and Sale. Upon the terms and subject to the conditions of
this Agreement, Fisher agrees to sell, transfer, assign and deliver to the Company, and the Company agrees to purchase from Seller, with respect to each calendar month in which the Company purchases Shares pursuant to the Program (the
“Applicable Month”), a number of Shares at each Closing calculated in accordance with Annex A hereto (the Shares acquired from Seller, the “Acquired Shares”). In the event that the Agreement is terminated pursuant
to Section 7.1, the day immediately prior to the termination date will be deemed to be the last day of the Applicable Month. 
  

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 Section 2.2. Purchase Price. The aggregate purchase price for the Acquired Shares at each Closing
(the “Purchase Price”) shall be equal to the product of (i) the aggregate number of Acquired Shares to be purchased at such Closing multiplied by (ii) the Average Price for the Applicable Month. An interest factor
shall be paid along with the Purchase Price for the Acquired Shares equal to the AFR Carry Amount. The Purchase Price shall also include an adjustment to the Average Price of the Acquired Shares, if necessary, to take into account the effect of any
dividends or similar distributions relating to the Acquired Shares to be settled for the Applicable Month in the same manner and under the same conditions as provided for in the definition of “Dividend Adjusted Average Price”. The Purchase
Price and the AFR Carry Amount shall be paid as provided in Section 2.3. 
 Section 2.3. Closing. Within five Business Days after
the end of each Applicable Month, the Company shall deliver to Fisher a notice (each, a “Closing Notice”) setting forth (i) the date of Closing, (ii) the number of Acquired Shares to be purchased by the Company from Seller
pursuant to Section 2.1, (iii) the Purchase Price and the AFR Carry Amount and (iv) the details of the calculation of the Purchase Price and the AFR Carry Amount, sufficient to allow Fisher to reproduce the calculation of the Purchase
Price and the AFR Carry Amount. Subject to the satisfaction or waiver by Fisher and the Company of the conditions set forth in Article 6, each closing of the purchase and sale of the Acquired Shares hereunder shall take place on the date set
forth in the Closing Notice, which in any event shall be no later than the tenth Business Day after the end of each month (each, a “Closing”) at the offices of the Company located at Two Folsom Street, San Francisco, California
94105, at 9:00 A.M., San Francisco time, or as soon as possible thereafter. 
 At each Closing: 
 (a) The Company shall deliver to Seller the Purchase Price by wire transfer of same day or other immediately available funds in accordance with the
payment instructions provided to the Company from time to time by Fisher; and 
 (b) Fisher shall deliver to the Company certificates for the
Acquired Shares duly endorsed or accompanied by stock powers duly endorsed in blank, with any required transfer stamps affixed thereto; provided, if the Acquired Shares are not held by Seller in certificated form, Fisher shall arrange to the
Company’s satisfaction to transfer such shares in electronic form to a brokerage account designated in writing by the Company in the Closing Notice. 
 ARTICLE 3 
 Representations and Warranties of Sellers 
 Fisher represents and warrants to the Company with respect to any Seller, as of the date hereof and as of the date of each Closing that: 
 Section 3.1. Due Authorization. The execution and delivery by Fisher, and the performance by each Seller, of this Agreement and the consummation of
the transactions contemplated hereby are within the powers, corporate or otherwise, of each Seller and have been duly authorized by all necessary action on the part of each Seller. This Agreement constitutes a valid and binding agreement of Fisher
enforceable against Fisher in accordance with its terms. 
  

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 Section 3.2. Governmental Authorization. The execution and delivery by Fisher, and the performance
by each Seller, of this Agreement and the consummation of the transactions contemplated hereby require no prior action by or in respect of, or prior filing with, any governmental organization, whether state or federal (“Governmental
Authority”). 
 Section 3.3. Noncontravention. The execution and delivery by Fisher, and the performance by each Seller, of
this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate the organization documents of each Seller, if applicable, (ii) assuming compliance with the matters referred to in
Section 3.2, violate any applicable law, rule, regulation, judgment, injunction, order or decree (iii) require any consent or other action by any Person under, constitute a default under, or give rise to any right of termination,
cancellation or acceleration of any right or obligation of any Seller under any provision of any agreement or other instrument binding upon any Seller, except with respect to (ii) and (iii), where such violation, consent, action, default or
right of termination, cancellation or acceleration would not adversely affect the ability of any Seller to perform its obligations under this Agreement or to consummate the transactions contemplated hereby. 
 Section 3.4. Ownership of Shares. As of the time of each Closing hereunder, Seller will be the beneficial owner of the Acquired Shares to be sold
at such Closing, and will transfer and deliver to the Company at each Closing valid title to the Acquired Shares to be sold at such Closing free and clear of any Lien and any other limitation or restriction (including any restriction on the right to
sell or otherwise dispose of the Acquired Shares). 
 ARTICLE 4 
 Representations and Warranties of the Company 
 The Company represents and warrants to Fisher as of the date
hereof and as of the date of each Closing that: 
 Section 4.1. Corporate Existence and Power. The Company (i) is a corporation
duly incorporated, validly existing and in good standing under the laws of Delaware and (ii) has all corporate powers and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as
now conducted, except with respect to (ii), where the failure to have such corporate powers, governmental licenses, authorizations, permits, consents or approvals would not adversely affect the ability of the Company to perform its obligations under
this Agreement or to consummate the transactions contemplated hereby. 
 Section 4.2. Corporate Authorization. The execution, delivery
and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby are within the corporate powers of the Company and have been duly authorized by all necessary 

  

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corporate action on the part of the Company. This Agreement constitutes a valid and binding agreement of the Company enforceable against the Company in
accordance with its terms. The Program has been approved by a committee of the Board of Directors of the Company consisting solely of two or more non-employee directors. 
 Section 4.3. Governmental Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby require no prior action by or in
respect of, or prior filing with, any Governmental Authority. 
 Section 4.4. Noncontravention. The execution, delivery and
performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate the certificate of incorporation or bylaws of the Company, (ii) assuming compliance with the matters
referred to in Section 4.3, violate any applicable law, rule, regulation, judgment, injunction, order or decree, (iii) require any consent or other action by any Person under, constitute a default under, or give rise to any right of
termination, cancellation or acceleration of any right or obligation of the Company under any provision of any agreement or other instrument binding upon the Company, except with respect to (ii) and (iii), where such violation, consent, action,
default or right of termination, cancellation or acceleration would not adversely affect the ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated hereby. 
 ARTICLE 5 
 Covenants of the Company and
Fisher 
 The Company and Fisher agree that: 
 Section 5.1. Reasonable Commercial Efforts; Further Assurances. Subject to the terms and conditions of this Agreement, the Company and Fisher will use their reasonable commercial efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable laws and regulations to consummate the transactions contemplated by this Agreement. 
 ARTICLE 6 
 Conditions To Closing 
 Section 6.1. Conditions to Obligations of the Company and Fisher. The obligations of the Company and Fisher to consummate each Closing is subject
to the satisfaction of the following conditions: 
 (a) No provision of any applicable law or regulation and no judgment, injunction, order or
decree shall prohibit the consummation of any Closing; and 
 (b) All actions by or in respect of or filings with any governmental body,
agency, official or authority required to permit the consummation of each Closing shall have been taken, made or obtained. 
  

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 Section 6.2. Conditions to Obligations of the Company. The obligation of the Company to consummate
each Closing is subject to the satisfaction (or waiver by the Company) of the following conditions: 
 (a) Fisher shall have performed in all
material respects all of his respective obligations hereunder required to be performed by him on or prior to such Closing; and 
 (b) The
representations and warranties of Fisher hereunder contained in this Agreement shall be true in all material respects at and as of such Closing as if made at and as of such date. 
 Section 6.3. Conditions to Obligation of Fisher. The obligation of Fisher to consummate each Closing is subject to the satisfaction (or waiver by
Fisher) of the following conditions: 
 (a) The Company shall have performed in all material respects all of its obligations hereunder
required to be performed by it at or prior to such Closing; and 
 (b) The representations and warranties of the Company contained in this
Agreement shall be true in all material respects at and as of such Closing as if made at and as of such date. 
 ARTICLE 7 
 Termination 
 Section 7.1.
Termination. This Agreement shall terminate: 
 (a) pursuant to the joint written agreement of the Company and Fisher; or 

(b) 15 Business Days after notice by Fisher, on the one hand, or the Company, on the other hand; or 
 (c) pursuant to written notice by the Company, if a breach of or failure to perform any representation, warranty, covenant or agreement on the part of
Fisher set forth in this Agreement shall have occurred that would cause any of the conditions set forth in Sections 6.2(a) and 6.2(b) not to be satisfied, and any such condition is incapable of being satisfied by the next Closing; or

 (d) pursuant to written notice by Fisher, if a breach of or failure to perform any representation, warranty, covenant or agreement on the
part of the Company set forth in this Agreement shall have occurred that would cause any of the conditions set forth in Sections 6.3(a) and 6.3(b) not to be satisfied, and any such condition is incapable of being satisfied by the next Closing;
or 
 (e) pursuant to written notice by either Fisher or the Company if there shall be any law or regulation that makes consummation of the
transactions contemplated hereby illegal or otherwise prohibited or if consummation of the transactions contemplated hereby would violate any nonappealable final order, decree or judgment of any court or governmental body having competent
jurisdiction; or 
  

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 (f) at the termination or completion of the Program; 
 provided that with respect to (a) and (b) above, such termination shall not affect the settlement of Acquired Shares in respect of any purchases
pursuant to the Program which have occurred or are deemed to have occurred prior to the effective date of the termination of this Agreement. 
 The party desiring to terminate this Agreement pursuant to clauses (b), (c), (d) or (e) above shall give written notice of such termination to the other party. 
 ARTICLE 8 
 Miscellaneous 
 Section 8.1. Survival. The covenants, agreements, representations and warranties of the parties hereto contained in this Agreement or in any
certificate or other writing delivered pursuant hereto shall not survive the termination of this Agreement other than with respect to a Closing for Acquired Shares which follows a termination of the Agreement pursuant to Sections 7.1(a) or (b);
provided that the covenants, agreements, representations and warranties contained in Articles 3, 4 and 8 shall survive indefinitely; provided, further, that nothing shall relieve any party for liability at any time with respect to any
breach occurring prior to the termination of this Agreement. 
 Section 8.2. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission) and shall be given, 
 if to the Company, to: 
 The Gap, Inc. 
 Two Folsom Street

 San Francisco, CA 94105 
 Fax:
(415) 427-6982 
 Attn: General Counsel 
 with a copy to: 
 Fax: (415) 427-4015 
 Attn: Treasury Department 
 if to Fisher, to:

 One Maritime Plaza 
 Suite 1400

 San Francisco, CA 94111 
 Fax:
(415) 288-0549 
 Attn: William S. Fisher 
  

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 All such notices, requests and other communications shall be deemed received on the date of receipt by
the recipient thereof if received prior to 5:00 P.M. in the place of receipt (as evidenced by confirmation of facsimile or other appropriate transmission receipt) and such day is a business day in San Francisco, California. Otherwise, any such
notice, request or communication shall be deemed not to have been received until the next succeeding business day in San Francisco, California. 
 Section 8.3. Amendments and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by both parties to this Agreement, or
in the case of a waiver, by the party against whom the waiver is to be effective. The failure or delay by any party in exercising any right, power or privilege hereunder shall not operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. 
 Section 8.4. Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such cost or expense. 
 Section 8.5. Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign or delegate any of its rights or obligations under this Agreement without the consent of each other party
hereto. 
 Section 8.6. Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of
California (without regard to principles of conflicts of laws). 
 Section 8.7. Jurisdiction. The parties hereto agree that any suit,
action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in a state or federal court located in San Francisco,
California, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8.2 shall be deemed effective service of process on such party. 
  

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 Section 8.8. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 
 Section 8.9. Counterparts; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. No provision of this Agreement is intended to confer upon any Person other than the Company or Seller
any rights or remedies hereunder. 
 Section 8.10. Entire Agreement. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement. 
 Section 8.11. Captions. The captions herein are included for convenience of reference only and shall be ignored in the construction or
interpretation hereof. 
  

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 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written. 
  

			
	THE GAP, INC.
		
	By:	 	 /s/ Sabrina Simmons

	Name:	 	Sabrina Simmons
	Title:	 	Senior Vice President, Corporate Finance and Treasurer
	
	WILLIAM S. FISHER
	(on behalf of himself and on behalf of Sellers)
		
	By:	 	 /s/ William S. Fisher

	Name:	 	William S. Fisher

  

 SIGNATURE PAGE TO STOCK
PURCHASE AGREEMENT 

 ANNEX A 
 ACQUIRED SHARES CALCULATION 
 The number of Acquired Shares to be purchased from Seller at each
Closing shall be equal to: 
 (a) the quotient of (1) the Seller Ownership Percentage divided by (2) [1 minus the Seller
Ownership Percentage] 
 multiplied by 
 (b) the number of Shares purchased by the Company pursuant to the Program (open market purchases and otherwise) with respect to the Applicable Month (excluding any Acquired Shares) measured from the first Business Day
of the Applicable Month through and including the last Business Day of the Applicable Month; 
 provided that such number of Acquired
Shares for the Applicable Month shall be rounded to the nearest whole Acquired Share. 
 For purposes of the Acquired Shares calculation,
Shares purchased in the open market by the Company pursuant to the Program shall be deemed to have been purchased on the trade date with respect to such Shares and not the day on which such trade settles. Shares purchased after the end of the
Applicable Month that relate to the Applicable Month shall be deemed to have been purchased during the Applicable Month. 
  

 A-1Letter Agreement

 Exhibit 10.1 
 August 17, 2007 
 Barbara Bufkin 
 Sea Change

 3 Dill Lane 
 Devonshire, DV 07 
 Bermuda 
 Dear Barbara, 
 I am pleased to offer you employment with Argo Group International Holdings, Ltd. (“Argo”). The terms and conditions of our offer are set out
below. Our offer of employment is contingent your receipt of a valid work permit from the Bermuda Department of Immigration. Please note that this letter also constitutes your statement of employment as required by Section 6 of The Employment
Act 2000. 
 POSITION OFFERED 
  

	 	1.	We are pleased to offer you the position of Senior Vice President, Business Development of Argo. As Senior Vice President, Business Development you will be responsible for
developing business opportunities for the Company and its subsidiaries, including marketing, business development and related functions. You will also be responsible for oversight of the Company’s ceded and assumed reinsurance program, and
corporate insurance needs. In the interim period between the date hereof and the closing of the Merger, you will also serve as President of Peleus Reinsurance Ltd., our wholly owned subsidiary. In your capacity with our company, you will report
directly to President & Chief Executive Officer of Argo. 

  

	 	2.	Our offices are located at 110 Pitts Bay Road, Pembroke, Bermuda 

 COMMENCEMENT OF EMPLOYMENT 
  

	 	3.	Employment will commence as soon as reasonable possible. 

 HOURS OF
WORK 
  

	 	4.	It is understood that you will work a minimum of 40 hours per week between Monday and Friday. The standard workday begins at 8:00 a.m. and ends at 5:00 p.m. with one hour for lunch.

 COMPENSATION & BENEFITS 
  

	 	5.	As a full time employee, Argo will provide you with a range of compensation and benefits, described in detail below, including: 

  

	 	•	 	 Salary 

	 	•	 	 Health Insurance 

  

	 	•	 	 Long Term Disability Insurance 

  

	 	•	 	 Life Insurance 

  

	 	•	 	 Pension 

  

	 	•	 	 Social Insurance & Payroll Tax 

  

	 	•	 	 Paid Time Off in accordance with Company policy 

  

	 	•	 	 Employee Stock Purchase Plan 

  

	 	6.	You will receive a gross base salary equal to $350,000(effective 6/25/07) per annum. You will be paid salary bi-weekly in arrears. 

  

	 	7.	You will receive a monthly pre-tax housing allowance of $14,000. The receipt of payments will be paid through payroll, bi-weekly over 24 pay periods. 

  

	 	8.	Upon acceptance of this offer, you shall be paid a one-time re-location bonus of $107, 650 (the “Relocation Bonus”). 

  

	 	9.	You will be eligible to participate in the Company’s bonus and equity compensation plans. 

  

	 	10.	In consideration of your re-location to Bermuda, you will be paid a lump sum of $15,000 and we will reimburse you for all re-location expenses incurred in connection with the
movement of your primary residence from Texas to Bermuda, provided that the maximum amount payable for such expenses shall be $50,000 (the “Relocation Expense Allowance”). You will also be eligible to received a one time car allowance of
$20,000 to purchase an automobile for your use in Bermuda. 

  

	 	11.	If you resign from the employ of Argo or its affiliates prior to March 16, 2009, you hereby agree to repay the net after tax amount of the Relocation Bonus, housing allowance
and Relocation Expense Allowance within 5 business days of your resignation. 

  

	 	12.	You will be eligible for a home leave allowance of $10,000 per year. 

  

	 	13.	Argo provides you, your non-working spouse, and your dependents with health insurance coverage that includes major medical, dental (basic) and vision care. Currently this is
provided at no cost to you. Our current provider is Colonial Insurance. Further details can be found in the Employee Handbook. 

  

	 	14.	Argo will provide you with Long Term Disability Insurance. This provides 66 2/3% of salary in the event of a long-term disability. Further details can be found in the Employee
Handbook. 

  

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	 	15.	Argo will provide you with Life Insurance after 30 days of employment. This provides 2 x annual base salary in the event of death. Further details can be found in the Employee
Handbook. 

  

	 	16.	Argo provides a pension plan in accordance with the National Pension Scheme (Occupational Pensions) Act 1988 after 3 months of employment. Ten percent of salary is contributed: 5%
by Argo and 5% is withheld from your salary. This plan is mandatory for all Bermudian employees, and elective for non-Bermudian employees. In addition, Argo may, at the Company’s election, make an additional 3% profit sharing contribution to
your pension plan account in December of each calendar year provided that you are an employee of the company on the date of such contribution. Further details can be found in the Employee Handbook. 

  

	 	17.	Argo currently pays both the employer and the employee portions of contributions for payroll tax and social insurance. Further details can be found in the Employee Handbook.

  

	 	18.	You will be entitled to 32 paid days off per annum which is inclusive of 8 sick days. These may be taken in the event of illness or injury that prevents you from attending work, for
personal days, or for vacation days. Depending upon your start date in 2007, you will receive a pro-rated number of paid days off for calendar 2007. Further details can be found in the Employee Handbook. 

  

	 	19.	Argo maintains an Employee Stock Purchase Plan for all employees working 20 hours or more per week. This plan allows you to purchase up to 20% of your salary, or a maximum of
$25,000, worth of company stock through payroll deductions at a 15% discount from market price. Further details can be found in the Employee Handbook 

  

	 	20.	As a professional employee you will not be paid overtime because your compensation package has been calculated to take into consideration that you will work overtime from time to
time. 

 OTHER MATTERS 
  

	 	21.	It is requirement that an Acknowledgement of Employee Handbook be signed prior to the commencement of employment. 

  

	 	22.	You must adhere to the dress code outlined in the Employee Handbook. 

  

	 	23.	There is no collective agreement which directly affects the terms and conditions of the employment. 

  

	 	24.	You agree to be bound by all the policies and terms and conditions of employment contained in the Employee Handbook. Argo reserves the right to make changes to the Employee Handbook
from time to time. You will be notified directly of any such changes as soon as they have been formalized. 

  

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	 	25.	Please refer to the Employee Handbook for particulars with respect to disciplinary and dispute resolution procedures. 

  

	 	26.	Argo reserves the right to contact previous employers identified during the application process to confirm the details provided. If any information provided proves to be erroneous
or misleading Argo reserves the right to terminate employment. 

  

	 	27.	The terms of this offer will be governed by and construed in accordance with the laws of Bermuda and the parties hereto submit to the non-exclusive jurisdiction of Bermuda courts.

  

	 	28.	This offer is also subject to you receiving a valid work permit from the Bermuda Department of Immigration, Ministry of Labour, Home Affairs and Public Safety allowing you to work
for us in the position as outlined above. 

 Please indicate your agreement with the above terms by signing and returning the original of this
letter to me at our Pembroke offices. A copy is enclosed for your retention. 
 We look forward to you becoming a member of the team at Argo and to
contributing to the future success of the company. 
 Yours sincerely, 
  

	
	 /s/ Mark E. Watson III

	Mark E. Watson III
	 President and Chief Executive Officer

  

	
	I hereby agree to the above terms as of the date hereof.
	  
 /s/ Barbara Bufkin

	Barbara Bufkin

  

 4

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