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EXHIBIT 10.15  

 
  Investment Advisory Agreement    
  

        INVESTMENT ADVISORY AGREEMENT dated as of July 1,2000, by and between ACCENT INSURANCE COMPANY LIMITED, an Irish company (the "Client"), and HEAD ASSET
MANAGEMENT L.L.C., a limited liability company formed under the laws of the State of Delaware (the "Adviser"). 

        1.    Engagement.    Commencing on July 1, 2000, the Client engages and retains the Adviser to provide the
investment advisory and related services described below. The Adviser hereby accepts such engagement and shall provide or make satisfactory arrangements for the provision of such services and assumes
the obligations herein set forth for the compensation provided herein. 

        2.    Services and Authority of the Adviser.    The Adviser will perform the services and have the authority set forth
in this Agreement with respect to all cash, securities and other investment assets of the Client which are from time to time deposited by the Client with the Adviser for investment pursuant to the
provisions hereof, and all proceeds thereof and additions thereto (the "Account"). The Adviser will supervise and direct the investment of the Account in accordance with, and subject to, the
investment objectives, guidelines and restrictions specified in written statements and notices given by the Client as provided in Section 15 hereof. 

        The
Adviser, as agent and attorney-in-fact with respect to the Account, may, when it deems appropriate, without prior consultation with the Client and at the risk
of the Client (i) buy, sell, exchange, convert, tender and otherwise trade in, retain, or reinvest in bonds, securities and any other investments, including money market instruments, and
(ii) place orders for the execution of such investment transactions with or through such brokers, dealers, issuers, or other persons as the Adviser may select, or tender or exchange such
securities in a tender or exchange offer or similar transaction initiated by the issuer or any other person or entity. Subject to the last sentence of Section 15, the Adviser shall comply with
all legal requirements and rules of securities exchanges applicable to its duties in connection with the execution of transactions. The Advisor shall not effect any borrowing of money on behalf of the
Client without Client's written consent thereto. 

        3.    Transaction Procedures.    The Client has provided the Adviser with a statement of the existing Account
portfolio that it desires the Adviser to manage. In connection with each investment transaction in the
Account, the Adviser shall instruct the brokers and dealers to provide to the Client such written advice of trades, including expenses and other incidents of the transaction, as is normally provided. 

        Instructions
of the Adviser to the custodian of the securities and other investments in the Account selected by the Client (the "Custodian") shall be made, at the option of the Adviser,
either (i) in writing sent by first class mail or by facsimile transmission, or (ii) orally and confirmed in writing by first class mail or facsimile transmission as soon as practical
thereafter. The Adviser shall instruct all brokers and dealers executing orders on behalf of the Account to forward to the Client copies of all confirmations promptly after execution of transactions.
The Adviser shall not be responsible for any loss incurred by reason of any act or omission of any broker or dealer; provided, however, that the Adviser exercises due care in the selection of brokers
and dealers and makes reasonable efforts to see that brokers and dealers selected by the Adviser perform their obligations with respect to the Account. 

        4.    Reports and Records of the Adviser.    The Adviser will provide or cause to be provided to the Client such
periodic reports concerning the status of the Account as the Client may reasonably request. The Adviser shall provide to the Client within 10 business days of the end of each calendar month, a report
of Account transactions effected by the Adviser since the date of the most recent such report, and within 20 business days of the end of each calendar month, a valuation report of all investments and
cash in the Account. The Client and the Adviser will arrange for the Custodian to provide the Adviser daily cash account statements and monthly asset position statements. The Adviser will compare
these statements with its own records and inform the Custodian of any differences. In the event that differences between the custodian's statements and the Adviser's records cannot be resolved between
the Adviser and the custodian, the Adviser will inform the Client in writing. 

        The
Adviser shall preserve its records relating to the Account for no less than six years and shall, upon the request of the Client, make such records available for inspection, at
reasonable times at its main business office during normal business hours, by the Client, its auditors or any regulatory authority. Prior to discarding or destroying any such records, the Adviser
shall give the Client reasonable opportunity, at the Client's expense, to review them and to take all or such portion of them as the Client wishes to retain. The Adviser, in the maintenance of its
records, does not assume responsibility for the accuracy of information furnished by or on behalf of the Client or any third party not an officer or employee of the Adviser. 

        5.    Confidential Relationship.    All information and advice furnished by either party to the other hereunder,
including their respective agents and employees, shall be treated as confidential and shall not be disclosed to third parties except as provided in Section 4 or as required by law. 

        6.    Service to Other Clients.    The Adviser may perform investment advisory and other services for various clients,
including insurance companies, investment companies and accounts held by the Adviser in a fiduciary capacity. The Adviser may give advice and take action with respect to any of its other clients
which may differ from advice given or the timing or nature of action taken with respect to the Account, so long as it is the Adviser's policy, to the extent practical, to allocate investment
opportunities to the Account over a period of time on a fair and equitable basis relative to other clients. The Adviser shall not have any obligation to purchase or sell, or to recommend for purchase
or sale, for the Account any security or other investment which the Adviser, its officers, affiliates or employees may purchase or sell for its or their own accounts or for the account of any other
client, if in the opinion of the Adviser such transaction or investment appears unsuitable, impractical or undesirable for the Account. 

        7.    Allocation of Brokerage.    Where the Adviser places orders for the execution of portfolio transactions for the
Account, the Adviser may allocate such transactions to such brokers and dealers for execution on such markets, at such prices and at such commission rates (including commission rates that may exceed
those that another broker or dealer would have charged for effecting such transactions) as the Adviser determines to be appropriate; provided, however, that if such commission rate exceeds that which
another broker or dealer might have charged for the same transaction, the Adviser has determined in good faith that the amount of such commission is reasonable in relation to the value of brokerage
and research services provided by such broker or dealer, viewed in terms of the particular transaction or the Adviser's overall responsibilities with respect to some or all of the accounts over which
the Adviser exercises investment discretion; provided, further, that the Adviser shall make reasonable efforts to minimize brokerage costs where similar services of adequate standards and reliability
are available from more than one broker or dealer. 

        The
Adviser may take into consideration in the selection of such brokers and dealers not only the available prices and rate of brokerage commissions, but all other relevant factors
(including without limitation, execution and processing capabilities, and general brokerage services, such as economic, fixed income, and equity research, account evaluation, analysis and/or
performance and database and/or market information services, all of which are provided by such brokers and dealers and which are expected to enhance the overall investment management capabilities of
the Adviser) without the Adviser's having to demonstrate that such Factors are a direct benefit to the Account. 

        8.    Inside Information.    The Adviser shall have no obligation to seek to obtain any material
non-public information about any issuer of securities, the use of which, in any event, may be prohibited by the securities laws of certain jurisdictions. 

        9.    Proxies.    The Adviser will not be required to take any action with respect to the voting of proxies solicited
by, or with respect to, the issuers of securities in which assets of the Account may be invested from time to time, but the Adviser shall, whenever the Client so requests, provide advice to the Client
with respect to the voting of such proxies. 

        10.    Independent Contractor.    The Adviser shall for all purposes herein be deemed to be an independent contractor
and shall, except as otherwise expressly provided or authorized by or under this 

Agreement, have no authority to act for or represent the Client in any way or otherwise be deemed an agent of the Client. 

        11.    Reimbursement of Travel and Related Expenses.    The Client shall promptly pay or reimburse the Adviser for its
payment of all travel and other expenses reasonably incurred by the Adviser with respect to any visit to the Client where such travel is requested by the Client. 

        12.    Investment Advisory Fees.  

        (a)    Description of Fee.    In consideration of the services provided to the Client under
this Agreement, the Client shall pay the Adviser a fee to be calculated on the market value of all assets in the Account, and paid quarterly as set forth in paragraph (b) of this
Section 12 (the "Investment Advisory Fee") to be determined at the following annual rates for the corresponding market values of the Account: 

        (x)  $2.00
per $1,000 (20 basis points) for a market value of $150 million or less; and 

        (y)  $1.50
per $1,000 (15 basis points) for the balance. 

        (b)    Payment of the Investment Advisory Fee.    The Investment Advisory Fee shall be payable in quarterly
installments in arrears. Each Investment Advisory Fee shall be paid by the Client promptly upon the receipt of a statement from the Adviser showing the amount of the fee and the manner in which the
fee was calculated. 

        (c)    Effect of Termination.    If the quarterly Investment Advisory Fee has not been paid as of the effective date
of termination, the Adviser shall earn a pro rata share of the quarterly fee. Payments shall be made as soon as possible after such date of termination. 

        13.    Limitation of Liability and Indemnification.    Neither the Adviser nor any shareholder, director, officer or
employee of the Adviser performing services for the Client at the direction or request of the Adviser in connection with the discharge of the Adviser's obligations hereunder shall be liable for any
error of judgment or mistake of law or for any loss which the Client or any subsidiary of the Client may incur in connection with the investment of assets in the Account. 

        To
the fullest extent permitted by law, the Client shall indemnify, hold harmless, protect and defend the Adviser, its shareholders, directors, officers and employees (the "Indemnitees")
against any losses, claims, damages or liabilities, including without limitation, legal or other expenses incurred in
investigating or defending against any such loss, claim, damages or liability, and any amounts expended in settlement of any claim (collectively "Liabilities"), to which any Indemnitee may become
subject by reason of any act or omission performed or omitted to be performed by or on behalf of the Client in connection with the investment of assets in the Account. The provisions of this
Section 13 shall continue to afford protection to each Indemnitee regardless of whether such Indemnitee remains in the position or capacity pursuant to which such Indemnitee became entitled to
indemnification under this Section 13. 

        However,
nothing contained in this Section 13 shall be construed to protect any Indemnitee against Liability to the Client or any subsidiary or parent corporation of the Client to
which such Indemnitee would otherwise be subject, or require the Client to indemnify any Indemnitee against Liability to the Client to which such Indemnitee would otherwise be subject, or require the
Client to indemnify any Indemnitee against any Liability, by reason of actions or omissions constituting willful misfeasance, bad faith or gross negligence in the performance of the Adviser's duties
or reckless disregard of the Adviser's obligations and duties under this Agreement. 

        14.    Valuation.    The market value of the investments in the Account shall be determined from reports published by
any nationally recognized pricing service, or, if such reports are not readily available with respect to a particular security, the Adviser shall determine the value of any such security either by
securing a quotation from a broker or dealer it selects or in some other manner which the Adviser determines in good faith reflects the fair market value of such security. 

        15.    Investment Objectives, Guidelines, Procedures and Restrictions.    It will be the Client's responsibility to
provide the Adviser from time to time with written Investment Guidelines for the Account, approved by the Board of Directors of the Client and signed by its Chief Financial Officer (or a Vice
President if no person has the title of Chief Financial Officer), as well as any changes or modifications therein, and any further restrictions under applicable Bermuda laws or regulations. In
addition, the client shall give the Adviser prompt written notice if the Client deems any investments recommended or made for the Account to be in violation of any of the Investment Guidelines. Unless
the Investment Guidelines contain specific restrictions, the investments recommended for, or made on behalf of, the Account shall be deemed not to be restricted under the current or future regulations
stipulated by any Bermuda regulatory body applicable to the Client, or by virtue of the terms of any other contract or instrument purporting to bind the Client or the Adviser. 

        16.    Termination.    This Agreement may be terminated at any time (i) by the Client by giving not less than
5 days' written notice to Adviser, and (ii) by the Adviser by giving not less than 90 days' written notice to the Client; provided, however, that the parties may terminate on
shorter notice upon mutual agreement in writing. Such termination shall be without penalty to either party but shall not prejudice any rights which have accrued before the date of termination. The
Client shall remain liable for settlement of any transactions outstanding at the date of termination. In addition, the Client may order immediate cessation of securities transactions at any time,
provided, however, that the request is confirmed in writing immediately thereafter via facsimile transmission to the Adviser. After the Clients termination of the Adviser's authority as provided in
Section 17 hereof, the Adviser shall not act further for the
Client. The Adviser shall reasonably cooperate with the Client to ensure that there is an orderly transfer to an alternative investment adviser. 

        17.    The Client's Termination of Authority.    The Client shall compensate the Adviser for any fees due in
accordance with this Agreement and for any loss the Adviser may suffer as a result of any action taken by the Adviser within the terms of the Agreement, either before or after the Client's bankruptcy,
dissolution, or other termination of authority under this Agreement, but before receipt by the Adviser of notice thereof. The Client further agrees that, to the extent permitted by law, any such
action taken by the Adviser shall be binding upon the Client and any successor of the Client, who shall hold the Adviser harmless from all Liability arising from any such action. 

        18.    Notices.    Unless otherwise specified herein, all notices, instructions, directions, advice and other
communication with respect to security transactions or any other matter contemplated by this Agreement from the Adviser to the Client and from the Client to the Adviser shall be given either
(i) in writing sent by first class mail, courier service, or facsimile transmission or (ii) orally and confirmed in writing by first class mail, courier service, or facsimile
transmission as soon as practical thereafter. Any such communication shall be deemed to have been made upon its receipt. Communications by mail or courier service shall be effective if to the Adviser,
only if addressed to it at 1330 Avenue of the Americas, 12th floor, New York, New York, 10019, or if to the Client, only if addressed to it at 12/13 Exchange Place, IFSC, Dublin I,
Ireland, provided that either party may specify another address or addresses for itself for this purpose in a notice similarly given. 

        The
adviser may rely upon any communication (written or oral) from any person if the Adviser reasonably believes it to be genuine and from an authorized person. A person shall be deemed
to be an authorized person for purposes hereof if his name, specimen signature and authority have been certified to the Adviser by a Director of the Client and such person shall continue to be deemed
an authorized person until the Adviser receives written notice to the contrary from a Director of the Client. 

        19.    Representation by the Client.    The Client represents and confirms that the employment of the Adviser is
authorized by the governing documents relating to the Account and that the terms hereof do not violate any obligation by which the Client or any subsidiary of the Client is bound, or any obligation
known to the Client by which the Adviser, as investment manager of the Account, is intended to be bound, whether arising by contract, operation of law, or otherwise. 

        The
Adviser represents and confirms that it has all requisite power and authority to act as Adviser hereunder. 

        20.    Amendment.    This Agreement may be amended only by an instrument in writing executed by both parties. 

        21.    Assignment.    Neither party may assign any of its rights or obligations under this Agreement without the prior
written consent of the other party to this Agreement. 

        22.    Governing Law.    This Agreement shall be construed and enforced in accordance with, and governed by, the
internal laws of the State of New York applicable to agreements made and to be performed in that State. 

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

	 	 	ACCENT INSURANCE COMPANY LIMITED
	

 	
 	

By:	
 	

/s/  MARK E. OLEKSIK      
	 	 	Name:	 	Mark E. Oleksik
	 	 	Title:	 	Senior Financial Officer
	

 	
 	

HEAD ASSET MANAGEMENT L.L.C.
	

 	
 	

By:	
 	

/s/  HENRY B. SPENCER      
	 	 	Name:	 	Henry B. Spencer
	 	 	Title:	 	Chief Investment Officer

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EXHIBIT 10.18  

 
 

ESG Re Limited Non-Management
  Directors' Compensation and Option Plan    
  

        1.    Purpose:    ESG Re Limited, a Bermuda corporation (the "Company"), hereby adopts this Non-Management
Directors' Compensation and Option Plan (the "Plan") to provide for the granting of options to purchase ordinary stock of the Company, par value $1.00 per share ("Common Shares") and for the payment
of fees for services as a member of the Board of Directors ("Fees") in order to promote the long-term growth and financial success of the Company by attracting and retaining
non-management directors of outstanding ability and assisting the Company in promoting a greater identity of interest between the Company's non-management directors and its
stockholders. 

        2.    Administration.    

        (a)  The
Plan shall be administered by the Board of Directors of the Company (the "Board"). 

        (b)  The
Board shall have the authority (i) to exercise all of the powers granted to it under the Plan, (ii) to construe, interpret and implement the Plan and
all documents executed pursuant to the Plan (including all election forms), (iii) to prescribe, amend and rescind rules relating to the Plan, (iv) to make any determination necessary or
advisable in administering the Plan and (v) to correct any defect, supply any omission and reconcile any inconsistency in the Plan. 

        (c)  The
determination of the Board on all matters relating to the Plan or any document executed pursuant to the Plan shall be conclusive. 

        (d)  No
member of the Board shall be liable for any action or determination made in good faith with respect to the Plan. 

        3.    Eligibility.    Only directors of the Company who are not full-time employees of the Company or any
of its subsidiaries ("Eligible Directors") shall be eligible to participate in the Plan. 

        4.    Shares Subject to the Plan.    

        (a)  Subject
to the adjustment provisions of Section 7 below, a maximum of 1,000,000 Common Shares shall be issuable under the Plan. If, and to the extent that,
options granted under the Plan shall terminate, expire or be canceled for any reason without having been exercised, new awards may be granted in respect of the Common Shares covered by such
terminated, expired or canceled options. In addition, in the event that Common Shares are delivered in payment of the exercise price of an option (or withholding obligation) such Common Shares shall
become available for subsequent grants, including Reload Options (as defined in section 6(a)(4) below). The granting and terms of such new awards shall comply in all respects with the
provisions of the Plan. 

        Common
Shares sold upon the exercise of any option granted under the Plan pursuant to Section 6 or Common Shares paid as Fees pursuant to Section 5 may be authorized and
unissued Common Shares, issued Common Shares held in the Company's treasury or shares purchased by, or on behalf of the Company in open-market or private transactions or both. There shall
be reserved at all times for awards under the Plan a number of Common Shares, of either authorized and unissued Common Shares or Common Shares held in the Company's treasury, or both, equal to the
maximum number of Common Shares that may be issued under the Plan. 

        5.    Directors Fees.    

        (a)    In General.    Each Eligible Director shall be entitled to fees for services as a member of the Board and its
committees in amounts determined by the Board ("Fees"). 

        (b)    Deferral and Payment of Fees.    

        (1)  In General. Subject to the timing requirements set forth in subsection (2) below, commencing on the Effective Date
of the Plan, each Eligible Director may elect either (i) to receive all or a portion of the Fees payable to such Eligible Director as soon as practicable after the date such amounts become
payable, subject to the following paragraph, or (ii) to defer all or a portion of such Fees in accordance with the provisions of subsection (2) below (a "Deferred Payment"). 

        With
respect to any payment that an Eligible Director has elected to receive pursuant to subsection (i) above or for which there is no Deferred Payment Election Form in effect in
accordance with the provisions of subsection (2) below (a "Current Payment"), the Eligible Director may elect at least 30 days prior to the date such amounts become payable to either
(i) have such Fees paid in a combination of Common Shares and cash, as determined by the Board (a "Cash and Shares Payout") or (ii) to receive options for Common Shares with a value, as
determined by the Board, equal to two times the amount of the Fees that would otherwise be payable (an "Option Payment"), which options shall be subject to Section 6 of the Plan. 

        (2)  Elective Deferrals.

	(i)
	An
Eligible Director may elect to defer the payment of the Fees by submitting an election form, in the form attached hereto as Exhibit A (a
"Deferred Payment Election Form") to the Board, indicating: (I) the percentage of the Fees that are to be deferred; and (II) the date on which the commencement of payments of deferred
amounts (the "Distribution Date") should begin, as contemplated by Subsection (4)(i) below. A Deferred Payment Election Form shall become effective with respect to the amounts becoming payable
with respect to services performed in the calendar year following the calendar year in which such Deferred Payment Election Form is submitted to the Board; provided,
however, that with respect to Initial Fees, or with respect to any Eligible Director, in the calendar year such Eligible Director first becomes eligible to participate in the
Plan, an election may be made to defer Fees within 30 days after either the Effective Date of the Plan or the date on which such Eligible Director first becomes eligible to participate in the
Plan, whichever is applicable.

	(ii)
	An
election under this section shall continue in effect until revoked by written notice to the Board or superseded by a new effective Deferred Payment
Election Form; provided, however, that no revocation of a Deferred Payment Election Form or supersession of such form by submission of a new Deferred
Payment Election Form shall be effective to make any change with respect to Fees to be paid to the Eligible Director in respect of services in the calendar year in which such revocation or
supersession occurs or for any amounts which, pursuant to a previous election of the Participant, are payable within one year of the date of the change of election.

	(iii)
	An
Eligible Director may designate, in an election form, one or more beneficiaries to receive any distributions under the Plan upon the death of the
Eligible Director, and such designation may be changed at any time by submitting a new designation to the Board, which shall become effective immediately upon receipt by the Board. 

        (3)  Share Units. Any portion of the Fees that an Eligible Director elects to defer (the "Deferred Amount") shall be credited
to an account (a "Share Unit Account") in units that are equivalent in value to Common Shares ("Share Units"). The Deferred Amount allocated to the Share Unit Account shall be credited to the Share
Unit Account as of the first business day following the date on which the Eligible Director becomes entitled to payment of the 

Fees, as the case may be, and the number of Share Units credited to such Share Unit Account shall be an amount equal to the results obtained by dividing (I) the Deferred Amount of Fees
allocated to the Share Unit Account by (II) the Fair Market Value of a Share on the first business day following the date on which the Eligible Director becomes entitled to payment of the Fees,
as the case may be. If Share Units exist in an Eligible Director's Share Unit Account on a dividend record date for the Company's Common Shares, the Share Unit Account shall be credited, on the
dividend payment date, with an additional number of Share Units equal to (i) the cash dividend paid on one Share, times (ii) the number of Share Units in the Share Unit Account on the
dividend record date, divided by (iii) the Fair Market Value of a Share on the dividend payment date. 

        (4)  Distributions.

	(i)
	Distribution Date. Each Eligible Director shall designate on a Deferred Payment Election Form a
distribution date with respect to the Deferred Amount credited to the Eligible Director's Share Unit Account thereafter which is not earlier than one year from the date the Fees become payable (the
"Elected Distribution Date"). The amounts in an Eligible Director's Share Unit Account shall be paid as soon as practicable following the Elected Distribution Date.

	(ii)
	Distribution Method. Distributions shall be made from the Eligible Director's Share Unit Account in
cash in an amount equal to the greater of (i) the value of the Common Shares in the Eligible Directors Share Unit Account valued at their Fair Market Value on the Elected Distribution Date and
(ii) the amount that would have been credited to the Eligible Directors Share Unit Account on the Elected Distribution had the Fees earned interest at the one-year United States
treasury bill rate. 

        (c)  Fair Market Value. For purposes of the Plan, "Fair Market Value" of a Common Share shall mean as of any date: 

        (1)  the
average of the closing bid prices for the past ten consecutive trading days of the Common Shares on the Nasdaq National Market if Common Shares are approved for
quotation on such system, or, if not so approved, the mean between the closing sales prices for the past ten consecutive trading days of the Common Shares on such other national exchange or
over-the-counter market on which the Common Shares are principally trading on such dates, or if, there were no sales on such dates; or 

        (2)  in
the event there shall be no public market for the Common Shares, the fair market value of the Common Shares as determined in good faith by the Board of Directors
based upon the valuation of an independent appraiser. 

        6.    Options.    

        (a)  Grant of Options

        (1)  Initial Awards. Each person who is an Eligible Director as of the Effective Date or becomes an Eligible Director within
one year of the Effective Date shall receive an option to purchase 10,000 Common Shares on the Effective Date or on the date on which such Eligible Director first becomes an Eligible Director
("Initial Options"). 

        (2)  Subsequent Awards. Each year during the term of the Plan, each person who is an Eligible Director on the date of the
Company's annual shareholders meeting and, except with respect to the first annual meeting following the Effective Date, who has been an Eligible Director for the entire year preceding such annual
meeting will automatically receive an option to purchase 5,000 Common Shares (or such other amount as the Board determines) for service as a director of the Company. Each Eligible Director who is an
Eligible Director on the date of the Company's annual shareholders meeting but has not been an Eligible Director for the entire year preceding such annual meeting shall receive an option to purchase a 

portion of such 5,000 Common Shares (or such other amount) equal to the results obtained by multiplying 5,000 (or such other amount) by a fraction, the numerator of which shall be the number of full
months such Eligible Director has served as an Eligible Director and the denominator of which shall be 12 ("Annual Options") provided however, that
Eligible Directors who are Eligible Directors on the first annual meeting following the Effective Date shall receive an option to purchase 5,000 Common Shares (or such other amount) without regard to
the number of months such Eligible Director has served as an Eligible Director. A director receiving an option pursuant to the Plan may hereinafter be referred to as an "Optionee". 

        (3)  Discretionary Options. The Board shall also have discretionary authority to award additional options to the Chairman of
the Board, the Deputy Chairman of the Board, the Committee Chairmen and members of the Board of Directors or the Supervisory Board of any of the Company's subsidiaries, subject to the terms and
conditions set forth below. 

        (4)  Reload Options. Options may, in the discretion of the Board, be granted under the Plan to permit an Optionee to reacquire
any Common Shares such Optionee delivered to the Company as payment of the exercise price in connection with the exercise of an option hereunder or to reacquire any Common Shares retained by the
Company to satisfy the Optionee's withholding obligation in connection with the exercise of an Option hereunder (a "Reload Option"). The terms of such Option shall be identical in all material
respects to the terms of the Option for which such Reload Option was granted and the term of the Reload Option shall expire at the same time that the term of the Option for which such Reload Option
was granted was scheduled to expire; provided, however, that the option price for each Common Share granted under the Reload Option shall be the Fair Market Value of a Common Share at the time such
Reload Option is granted. 

        (5)  Options for Fees. Pursuant to Section  5(b)(1), Options shall be granted to an Eligible Director who elects to receive an
Option Payment,
subject to the terms and conditions set forth below. 

        (b)  Price.

	(i)
	The
option price of each share of Common Shares purchasable under any option granted pursuant to the Plan shall be the Fair Market Value thereof at the
time the option is granted. 

        (c)  Vesting and Exercisability.

	(i)
	Vesting.

        All
options granted hereunder shall be fully (100%) vested and exercisable upon grant. 

	(ii)
	Notwithstanding
any provision of the Plan to the contrary, the unexercised portion of any option granted under the Plan shall automatically and without
notice terminate and become null and void at the expiration of 10 years from the date on which such option was granted. 

        (d)  Exercise of Options.

	(i)
	An
option granted under the Plan shall be deemed exercised when the person entitled to exercise the option: 

        (1)  delivers
written notice to the Company at its principal business office, directed to the attention of Chairman of the Board, of the decision to exercise; and 

        (2)  concurrently
tenders to the Company full payment for the Common Shares to be purchased pursuant to such exercise in U.S. dollars. 

	(ii)
	Payment
for Common Shares with respect to which an option is exercised may be made in any combination of the following: (i) by certified or
official bank check payable to the Company (or the equivalent thereof acceptable to the Board of 

Directors);
(ii) with the consent of the Board of Directors in its sole discretion, by personal check (subject to collection) and which may in the Board of Directors' discretion be deemed
conditional; and (iii) by delivery of previously-acquired Common Shares owned by the grantee for at least six months (or such longer or shorter period as the Board of Directors may prescribe)
having a Fair Market Value (determined as of the option exercise date) equal to the portion of the option exercise price being paid thereby. In addition, subject to such rules as may be established by
the Board of Directors, if there is a public market for the Common Shares, payment in accordance with clause (a) of this Section 8 may be deemed to be satisfied by delivery to the
Company of an assignment of a sufficient amount of the proceeds from the sale of Common Shares acquired upon exercise to pay for all of the Common Shares acquired upon exercise and an authorization to
the broker or selling agent to pay that amount to the Company, which sale shall be made at the Optionee's direction at the time of exercise. 

        (e)  Transferability of Options.

        (1)  Subject
to subsection 2 below, each Option shall be exercisable only by the Optionee during the Optionee's lifetime, or, if permissible under applicable law, by the
Optionee's legal guardian or representative. No Option may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by an Optionee otherwise than by will or by the laws
of descent and distribution or, if inapplicable, transmission on death in accordance with the Bye-Laws of the Company and any such purported assignment, alienation, pledge, attachment,
sale, transfer or encumbrance shall be void and unenforceable against the Company; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment,
sale, transfer or encumbrance. 

        (2)  Notwithstanding
the foregoing, the Board may in the applicable Award Agreement evidencing an Option granted under the Plan or at any time thereafter in an amendment to
an Award Agreement provide that Options granted hereunder may be transferred by the Optionee without consideration, subject to such rules as the Board may adopt to preserve the purposes of the Plan,
to: 

        (A)  the
Optionee's spouse, children or grandchildren (including adopted and stepchildren and grandchildren) (collectively, the "Immediate Family"); 

        (B)  a
trust solely for the benefit of the Optionee and his or her Immediate Family; or 

        (C)  a
partnership corporation or limited liability company whose only partners, shareholders or members are the Optionee and his or her Immediate Family members; 

(each
transferee described in clauses (A), (B) and (C) above is hereinafter referred to as a "Permitted Transferee"); provided that the
Optionee gives the Board advance written notice describing the terms and conditions of the proposed transfer and the Board notifies the grantee in writing that such a transfer would comply with the
requirements of the Plan and any applicable Award Agreement evidencing the option. 

The
terms of any option transferred in accordance with the immediately preceding sentence shall apply to the Permitted Transferee and any reference in the Plan or in an Award Agreement to an Optionee
or Participant shall be deemed to refer to the Permitted Transferee, except that (a) Permitted Transferees shall not be entitled to transfer any Options, other than by will or the laws of
descent and distribution; (b) Permitted Transferees shall not be entitled to exercise any transferred Options unless there shall be in effect a registration statement on an appropriate form
covering the Common Shares to be acquired pursuant to the exercise of such Option if the Board determines that such a registration statement is necessary or appropriate, (c) the Board or the
Company shall not be required to provide any notice to a Permitted Transferee, 

whether or not such notice is or would otherwise have been required to be given to the Optionee under the Plan or otherwise and (d) the consequences of termination of the Optionee's employment
by, or services to, the Company under the terms of the Plan and the applicable Award Agreement shall continue to be applied with respect to the Optionee, following which the Options shall be
exercisable by the Permitted Transferee only to the extent, and for the periods, specified in the Plan and the applicable Award Agreement. 

        (f)    Rights of Optionee. Neither the Optionee nor the Optionee's executor or administrator shall have any of the rights of a
stockholder of the Company with respect to the Common Shares subject to an option until certificates for such Common Shares shall actually have been issued upon the due exercise of such option. Unless
the Board of Directors otherwise determines in accordance with Section 7 below, no adjustment shall be made for any regular cash dividend for which the record date is prior to the date of such
due exercise and full payment for such Common Shares has been made therefor. 

        (g)  Form of Agreements with Optionees. Each option granted pursuant to the Plan shall be evidenced by an individual agreement
("Award Agreement") in writing and shall have such form, terms and provisions, not inconsistent with the provisions of the Plan, as the Board of Directors shall provide for such option. In the event
that any provisions of an Agreement differ from the terms of the Plan, the Plan provisions shall govern. 

        (h)  Purchase for Investment. Whether or not the options and Common Shares covered by the Plan have been registered under the
United States Securities Act of 1933, as amended, each person exercising an option under the Plan may be required by the Company to give a representation in writing that such person is acquiring such
Common Shares for investment and not with a view to, or in connection with, the sale, transfer or distribution of any part thereof. The Company will endorse any necessary legend
referring to the foregoing restriction upon the certificate or certificates representing any Common Shares issued or transferred to the Optionee upon the exercise of any option granted under the Plan. 

        7.    Adjustment Upon Changes in Capitalization. Etc.    In the event that the Board of Directors determines that any
dividend or other distribution (whether in the form of cash, Common Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of Common Shares or other securities of the Company, issuance of warrants or other rights to purchase
Common Shares or other securities of the Company, or other similar corporate transaction or event affects the Common Shares such that an adjustment is determined by the Board of Directors in its
discretion to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Board of Directors shall, in such
manner as it may deem equitable, adjust any or all of (i) the number of Common Shares or other securities of the Company (or number and kind of other securities or property) available for
issuance under the Plan with respect to which options may be granted and the number of Share Units credited to a Participant's Share Unit Account, (ii) the number of Common Shares or other
securities of the Company (or number and kind of other securities or property) subject to outstanding options, and (iii) the grant or exercise price with respect to any option or, if deemed
appropriate, make provision for a cash payment to the holder of an outstanding option in consideration for the cancellation of such option. 

        8.    Withholding and Other Obligations.    

        (a)  A
Participant may be required to pay to the Company and the Company shall have the right and is hereby authorized to withhold from any Option, from any payment due or
transfer made under any Option or under the Plan or from any compensation or other amount owing to a Participant the amount (in cash, Common Shares, other securities, other Option or other property)
of any applicable withholding taxes in respect of an Option, its exercise, or any payment or transfer under an Option or under the Plan and to take such other action as may be necessary in the opinion
of the Company to satisfy all obligations for the payment of such taxes. 

        (b)  Without
limiting the generality of clause (a) above, a Participant may satisfy, in whole or in part, the foregoing withholding liability by delivery of Common
Shares owned by the Participant (which are not subject to any pledge or other security interest and which have been owned by the Participant for at least 6 months) with a Fair Market Value
equal to such withholding liability or by having the Company withhold from the number of Common Shares otherwise issuable pursuant to the exercise of the option a number of Common Shares with a Fair
Market Value equal to such withholding liability. 

        (c)  Notwithstanding
any provision of this Plan to the contrary, in connection with the transfer of an Option to a Permitted Transferee pursuant to Section 6(e) of the
Plan, the Optionee shall remain liable
for any withholding taxes required to be withheld upon the exercise of such Option by the Permitted Transferee. 

        9.    Plan Amendments and Termination.    The Board may suspend or terminate the Plan at any time and may amend it at
any time and from time to time, in whole or in part; provided, however, that no amendment or termination may adversely affect any rights of any Eligible
Director with respect, to amounts that have been deferred or options that have been granted prior to the date of such amendment or termination without the affected Eligible Director's consent and;  provided
further, that any amendment for which stockholder approval is necessary to comply with any tax or regulatory requirement shall not be effective
until such approval has been obtained. 

        10.    Listing, Registration and Legal Compliance.    If the Board shall at any time determine that any Consent (as
hereinafter defined) is necessary or desirable as a condition of, or in connection with, the issuance of Common Shares or other rights hereunder or the taking of any other action hereunder (each such
action being hereinafter referred to as a "Plan Action"), then such Plan Action shall not be taken, in whole or in part, unless and until such Consent shall have been effected or obtained. The term
"Consent" as used herein with respect to any Plan Action means (i) the listing, registration or qualification of any Common Shares issued under the Plan on any securities exchange or under any
foreign, federal, state or local law, rule or regulation, (ii) any and all consents, clearances and approvals in respect of a Plan Action by any governmental or other regulatory bodies or
(iii) any and all written agreements and representations by an Eligible Director with respect to the disposition of Common Shares or with respect to any other matter that the Board shall deem
necessary or desirable in order to comply with the terms of any such listing, registration or qualification or to obtain an exemption from the requirement that any such listing, qualification or
registration be made. 

        11.    Right of Discharge Reserved.    Nothing in the Plan shall confer upon any Eligible Director the right to
continue in the service of the Company or affect any right that the Company may have to terminate the service of such Eligible Director. 

        12.    Other Payments or Awards.    By participation in the Plan, each Eligible Director so participating shall be
deemed to have agreed that any payments made under the Plan are special incentive compensation that will not be taken into account, in any manner, as salary, compensation or bonus in determining the
amount of any payment under any pension, retirement or other employee benefit plan of the Company or any of its affiliates. In addition, such participation will not affect the amount of any life
insurance coverage, if any, provided by the Company on the life of any such Eligible Director. 

        13.    Rights Not Transferable or Subject to Alienation.    Except as set forth in Section 6(e) no options
granted to an Eligible Director under this Plan may be sold, assigned or otherwise transferred by the Eligible Director other than by will or the laws of descent or distribution; all options granted
to an Eligible Director under this Plan may be exercised during the Eligible Director's lifetime only by such Eligible Director. An Eligible Director's rights to payments under the Plan are not
subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by his creditors or his beneficiaries. 

        14.    Restrictions on Transferability.    All Common Shares delivered under the Plan shall be
non-transferable for six months after receipt if the Board determines that such restriction is necessary 

to comply with Section 16b of the United States Securities Exchange Act or otherwise and shall be subject to such stop-transfer orders and other restrictions as the Company may
deem advisable or legally necessary under any laws, rules, regulations and other legal requirements, including, without limitation, those of any stock exchange upon which the Common Shares are then
listed and any applicable federal, state or foreign securities laws. 

        15.    Rights as a Stockholder.    An Eligible Director shall have no rights as a stockholder of the Company with
respect to any Common Shares issuable under the Plan until such Common Shares have been delivered to the Eligible Director. 

        16.    Unfunded Plan.    The Plan shall be unfunded for U.S. Federal income tax purposes and shall not create (or be
construed to create) a trust or separate fund. The Plan shall not establish any fiduciary relationship between the Company and any Eligible Director or other person and shall constitute a mere promise
by the Company to make payments in the future. The Company may, in its sole discretion, establish a separate trust to hold assets set aside to provide benefits under the Plan, provided that no
Eligible Director shall have an interest in the assets of any such trust and the assets of such trust shall be available to pay claims of the Company's general creditors on such terms and conditions
as the trust may provide. To the extent any person holds any rights by virtue of a pending deferral under the Plan, such rights shall be no greater than the rights of an unsecured general creditor of
the Company. 

        17.    Non-Exclusivity of the Plan.    Neither the adoption of the Plan by the Board of Directors nor the
submission of the Plan to the stockholders of the Company for approval shall be construed as creating any limitation on the power of the Board of Directors to adopt such other incentive arrangements
as it may deem desirable, including, without limitation, the granting of stock options and the awarding of stock and cash otherwise than under the Plan, and such arrangements may be either generally
applicable or applicable only in specific cases. 

        18.    Governing Law.    The Plan shall be governed by, and construed in accordance with, the laws of the State of
Bermuda. 

        19.    Severability.    If any portion of the Plan is declared by any court or governmental authority to be invalid,
such invalidity shall not affect any portion not declared to be invalid. Any portion so declared to be invalid shall, if possible, be construed in a manner that will give effect to the terms of such
portion to the fullest extent possible while remaining valid. 

        20.    Notices.    All notices and other communications hereunder shall be given in writing and shall be personally
delivered against or sent by registered or certified mail, return receipt requested or by reputable overnight delivery service. Any notice shall be deemed given on the date of delivery or mailing, and
if mailed, shall be addressed (a) to the Company, and (b) to an Eligible Director, at the Eligible Director's principal residential address last furnished to the Company. Either party
may, by notice, change the address to which notice to such party is to be given. 

        21.    Section Headings.    The Section headings contained herein are for convenience only and are not intended to
define or limit the contents of said Sections. 

        22.    Effective Date.    This Plan shall become effective upon approval by the shareholders of the Company. 

QuickLinks

ESG Re Limited Non-Management Directors' Compensation and Option Plan

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