Document:

Exhibit 10.3  

ST. PAUL RE, INC.

195 Broadway

New York, New York 10007  

May
2, 2002 

Michael
D. Price

33 Dorothy Drive

Morris Township, NY 07960 

Dear
Michael: 

        I
am writing this letter (the "Letter Agreement") on behalf of St. Paul Re, Inc. ("SPR" or the "Company"), currently a division of The St. Paul Companies, Inc. ("SPC"), to confirm the
terms and conditions of your employment with SPR or Platinum Underwriters Reinsurance, Inc., a Maryland corporation ("Platinum"), which is expected to acquire certain assets of SPR in connection with
an initial public offering of Platinum Underwriters Holdings, Ltd. ("Holdings"). 

	1.
	Term of Employment.

        Your
employment will commence no later than November 15, 2002 (the "Effective Date") and, subject to termination as provided in Section 7, shall end on the third
anniversary of the Effective Date. Such employment period shall hereinafter be referred to as the "Term." 

        Upon
consummation of the IPO, the Company shall promptly assign all of its rights and obligations hereunder to Platinum and shall, upon such assignment, cease to be a party to this
Letter Agreement (except as otherwise provided herein) and Platinum will be the sole obligor hereunder. Following assignment of this Letter Agreement to Platinum, all references herein to the
"Company" shall be deemed to mean Platinum and all references to the "Board" shall be deemed to mean the Board of Directors of Platinum. 

	2.
	Title and Duties.

        During
the Term, you will serve as Chief Underwriting Officer of the Company and will have such duties and responsibilities and power and authority as those normally associated with such
position in public companies of a similar stature, plus any additional duties, responsibilities and/or power and authority assigned to you by the Chief Executive Officer of the Company. 

	3.
	Base Salary.

        During
the Term, the Company will pay you a minimum base salary (the "Base Salary") as follows: 

	(a)
	at
the annual rate of $400,000 for the period from the Effective Date through the first anniversary of the Effective Date,

	(b)
	at
the annual rate of $420,000 for the period from the first anniversary of the Effective Date through the second anniversary of the Effective Date,

	(c)
	at
the annual rate of $440,000 for the period from the second anniversary of the Effective Date through the third anniversary of the Effective Date. 

        The
base salary shall be payable in accordance with the Company's payroll practices as in effect from time to time. 

	4.
	Bonus.

	(a)
	Annual.    During the Term, you will be entitled to receive a minimum annual bonus (the "Annual Bonus") equal to fifty
percent (50%) of Base Salary (the "Annual Bonus"). 

 

	(b)
	Sign-On Bonus.    On the Effective Date, the Company shall pay you a one-time cash sign-on bonus of $100,000. 

          5.  Moving Expenses.    The Company will reimburse you up to a maximum amount of $30,000.00 for the costs and
expenses reasonably incurred by you to move from New Jersey to New York, including, without limitation, temporary housing expenses until you acquire a permanent residence in New York and real estate
broker fees incurred in connection with the sale of your residence in New Jersey. 

	6.
	Stock Option Grant.

        Upon
consummation of the IPO and provided you are then employed by the Company, you will be entitled to receive a stock option grant to purchase that number of shares of Holdings common
stock (the "IPO Grant") with an aggregate market value equal to $5,000,000.00 at a price not greater than the initial offering price under the IPO and having a term of ten years. Subject to the
specific terms of this Letter Agreement, the terms and conditions of your IPO Grant will provide for vesting in equal annual installments on each of the first two anniversaries of the date of the IPO
Grant and on the third anniversary of the Effective Date, provided you are then employed by SPR. 

        Notwithstanding
the foregoing, if the consummation of the IPO precedes the Effective Date, you will be entitled to receive on the Effective Date, in lieu of the IPO Grant and not in
addition to the IPO Grant, a stock option grant to purchase that number of shares of Holdings common stock (the "Option Grant") with an aggregate market value equal to $5,000,000.00 at a price not
greater than the market price of the stock on the date of grant and having a term of ten years. Subject to the specific terms of this Letter Agreement, the terms and conditions of your Option Grant
will provide for vesting in equal annual installments on each of the first three anniversaries of the Effective Date, provided you are then employed by SPR. 

	7.
	Termination of Employment.

	(a)
	Resignation for Good Reason or Termination Without Cause.    If you terminate your employment for Good Reason or you are
terminated by the Company without Cause, you will receive, immediately upon the effectiveness of any such termination, a lump sum cash payment equal to the sum of (i) any of the bonus payments
set forth in Section 4 hereof which have not been previously paid by the Company, (ii) fifty percent (50%) of the then current annual Base Salary, and (iii) any earned but unpaid
Base Salary or other amounts (including reimbursable expenses and any vested amounts or benefits under the Company's otherwise applicable employee benefit plans or programs) accrued or owing through
the date of termination, provided that you execute a release substantially in the form attached hereto as Exhibit A concurrently with such payment.

	(b)
	Termination Other than for Good Reason or for Cause.    If you terminate your employment other than for Good Reason or if
your employment is terminated by the Company for Cause, you will receive no further payments, compensation or benefits under this Letter Agreement, except you will be eligible to receive, upon the
effectiveness of such termination, amounts (including reimbursable expenses and any vested amounts or benefits under the Company's otherwise applicable employee benefit plans or programs) accrued or
owing prior to the effectiveness of your termination.

	For
	purposes
 of this Letter Agreement, "Cause" means (i) your willful and continued failure to substantially perform your duties hereunder; (ii) your
conviction of, or plea of guilty or nolo contendere to, a felony or other crime involving moral turpitude; or (iii) your engagement in any
malfeasance or fraud or dishonesty of a substantial nature in connection with your position with the Company or other willful act that materially damages the reputation of the Company. 

2

 

	For
	purposes
 of this Letter Agreement, "Good Reason" means (i) the Company reduces your Base Salary or your Annual Bonus without your express written consent;
(ii) the Company reduces the scope of your duties, responsibilities or authority without your express written consent; (iii) the Company requires you to report to anyone other the Chief
Executive Officer; (iv) the Company requires you to be principally based more than 35 miles from the Company's offices in New York; (v) the Company breaches any other material provision
of this Letter Agreement; (vi) the resignation by you for any reason during the 30-day period commencing eighteen months from the Effective Date if an IPO has not occurred; (vii) SPR
fails to assign this Letter Agreement to Platinum prior to or promptly upon the IPO; provided, however, that if you voluntarily consent to any reduction or changes described above in lieu of
exercising your right to resign for Good Reason and deliver such consent to the Company in writing, then such reduction, transfer or change shall not constitute "Good Reason" hereunder, but you shall
have the right to resign for Good Reason under this Agreement as a result of any subsequent reduction described above. 

	8.
	Covenants.

        In
exchange for the remuneration outlined above, in addition to providing service to the Company as set forth in this Letter Agreement, you agree to the following covenants: 

	(a)
	Confidentiality.    During the period of your employment and for a period of three years following any termination of your
employment, you will keep confidential any trade secrets and confidential or proprietary information of SPC, SPR and Platinum which are now known to you or which hereafter may become known to you as a
result of your employment or association with SPC, SPR and Platinum and will not at any time directly or indirectly disclose any such information to any person, firm or corporation, or use the same in
any way other than in connection with the business of SPC, SPR and Platinum during, and at all times after, the termination of your employment. For purposes of this Letter Agreement, "trade secrets
and confidential or proprietary information" means information unique to SPC, SPR and Platinum which has a significant business purpose and is not known or generally available from sources outside
SPC, SPR and Platinum or typical of industry practice, but shall not include any of the foregoing (i) that becomes a matter of public record or is published in a newspaper, magazine or other
periodical available to the general public, other than as a result of any act or omission of you or (ii) that is required to be disclosed by any law, regulation or order of any court or
regulatory commission, department or agency, provided that you give prompt notice of such requirement to SPC, SPR and Platinum, as appropriate, to enable SPC, SPR and Platinum, as appropriate, to seek
an appropriate protective order or confidential treatment.

	(b)
	Non-Solicitation.    You further covenant that during the term of your employment and during the fifteen month period
following termination of your employment for any reason, you will not, directly or indirectly, hire, or cause to be hired by an employer with whom you may ultimately become associated, any senior
executive of SPC, SPR or Platinum at the time of termination of your employment with the Company (defined for such purposes to include executives that report directly to you or that report directly to
such executives that report directly to you). 

        9.    Representations.    By signing this Letter Agreement where indicated below, you represent that you are not
subject to any employment agreement or non-competition agreement that could subject the Company to any future liability or obligation to any third party as a result of the execution of this Letter
Agreement and your appointment to the positions with the Company described above. 

3

 

        10.    Miscellaneous Provisions.    

	(a)
	This
Letter Agreement may not be amended or terminated without the prior written consent of you and the Company.

	(b)
	This
Letter Agreement may be executed in any number of counterparts which together will constitute but one agreement.

	(c)
	This
Letter Agreement will be binding on and inure to the benefit of our respective successors and, in your case, your heirs and other legal representatives. Other than as provided
herein, the rights and obligations described in this Letter Agreement may not be assigned by either party without the prior written consent of the other party.

	(d)
	All
disputes arising under or related to this Letter Agreement will be settled by arbitration under the Commercial Arbitration Rules of the American Arbitration Association then in
effect as the sole and exclusive remedy of either party. Such arbitration shall be held in New York City. Any judgment on the award rendered by such arbitration may be entered in any court having
jurisdiction over such matters. Each party's costs and expenses of such arbitration, including reasonable attorney fees and expenses, shall be borne by such party, unless you are the prevailing party
in the award entered in such arbitration, in which case, all such costs and expenses shall be borne by the Company.

	(e)
	All
notices under this Letter Agreement will be in writing and will be deemed effective when delivered in person, or five (5) days after deposit thereof in the mails, postage prepaid,
for delivery as registered or certified mail, addressed to the respective party at the address set forth below or to such other address as may hereafter be designated by like notice. Unless otherwise
notified as set forth above, notice will be sent to each party as follows: 

You, to:

The
address maintained in the Company's records 

SPC or SPR, to:

The
address of SPC's principal place of business

Attention: General Counsel 

Platinum, to:  

The
address of Platinum's principal place of business

Attention: General Counsel 

        In
lieu of personal notice or notice by deposit in the mail, a party may give notice by confirmed telegram, telex or fax, which will be effective upon receipt. 

	(f)
	This
Letter Agreement will be governed by and construed and enforced in accordance with the laws of the State of New York without reference to rules relating to conflict of laws.

	(g)
	This
Letter Agreement supercedes any inconsistent provisions of any plan or arrangement that would otherwise be applicable to you to the extent such provisions would limit any rights
granted to you hereunder or expand any restrictions imposed on you hereby. 

4

 

        This
Letter Agreement is intended to be a binding obligation upon the Company and yourself. If this Letter Agreement correctly reflects your understanding, please sign and return one
copy to me for the Company's records. 

	 	 	ST PAUL RE, INC.
	

 	
 	

By:	
 	

/s/  JEROME T. FADDEN      

	 	 	Name:	 	Jerome T. Fadden
	 	 	Title:	 	Chief Executive Officer

The above Letter Agreement correctly reflects our understanding, and I hereby confirm my agreement to the same. 

	/s/  MICHAEL D. PRICE      
 Michael D. Price	 	 
	

Dated as of 10 May, 2002	
 	

 

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Exhibit A

FULL AND COMPLETE RELEASE  

        I, Michael D. Price, in consideration for the payment of the severance described in my Letter Agreement dated May 2, 2002, for myself and my heirs,
executors, administrators and assigns, do hereby knowingly and voluntarily release and forever discharge The St. Paul Companies, Inc., Platinum Underwriters Holdings, Ltd., Platinum Underwriters
Reinsurance, Inc. and St. Paul Re, Inc. (the "Companies") and their respective current and former directors, officers and employees from any and all claims, actions and causes of action under those
federal, state and local laws prohibiting employment discrimination based on age, sex, race, color, national origin, religion, disability, veteran or marital status, sexual orientation, or any other
protected trait or characteristic, or retaliation for engaging in any protected activity, including without limitation, the Age Discrimination In Employment Act of 1967, 29 U.S.C. 621 et
seq., as amended by the Older Workers Benefit Protection Act, P.L. 101-433, the Equal Pay Act of 1963, 9 U.S.C. 206, et seq., Title VII of The Civil Rights Act of 1964, as
amended, 42 U.S.C. 2000e et seq., the Civil Rights Act of 1866, 42 U.S.C. 1981, the Civil Rights Act of 1991, 42 U.S.C. 1981a, the Americans with Disabilities
Act, 42 U.S.C. 12101, et seq., the Rehabilitation Act of 1973, 29 U.S.C. 791 et seq., the Family and Medical Leave Act of 1993, 28 U.S.C. 2601 and 2611 et
seq., and equivalent provisions under Bermuda law, whether KNOWN or UNKNOWN, fixed or contingent, which I ever had, now have, or may have, or which I, my heirs, executors, administrators or assigns
hereafter can, shall or may have, from the beginning of time through the date on which I sign this Full and Complete Release (this "Release"), including without limitation those arising out of or
related to my employment or separation from employment with the Companies (collectively the "Released Claims"). 

        I
warrant and represent that I have made no sale, assignment, or other transfer, or attempted sale, assignment, or other transfer, of any of the Released Claims. I fully understand and
agree that: 

	1.
	This
Release is in exchange for severance payments to which I would otherwise not be entitled;

	2.
	No
rights or claims are released or waived that may arise after the date this Release is signed by me;

	3.
	I
am here advised to consult with an attorney before signing this Release;

	4.
	I
have 21 days from my receipt of this Release within which to consider whether or not to sign it;

	5.
	I
have 7 days following my signature of this Release to revoke the Release; and

	6.
	This
Release shall not become effective or enforceable until the revocation period of 7 days has expired. 

        If
I choose to revoke this Release, I must do so by notifying the Companies in writing. This written notice of revocation must be mailed by first class mail or by certified mail within
the 7 day revocation period and addressed as follows: 

The
St. Paul Companies, Inc. or St. Paul Re, Inc.

385 Washington Street

St. Paul, Minnesota 55102

Attention: General Counsel 

Platinum
Underwriters Holdings, Ltd.

Or Platinum Underwriters Reinsurance, Inc.

The address of such company's principal place of business

Attention: General Counsel 

        This
Release is the complete understanding between me and the Companies in respect of the subject matter of this Release and supersedes all prior agreements relating to the same subject 

 

matter. I have not relied upon any representations, promises or agreements of any kind except those set forth herein in signing this Release. 

        In
the event that any provision of this Release should be held to be invalid or unenforceable, each and all of the other provisions of this Release shall remain in full force and effect.
If any provision of this Release is found to be invalid or unenforceable, such provision shall be modified as necessary to permit this Release to be upheld and enforced to the maximum extent permitted
by law. This Release is to be governed by and construed and enforced in accordance with the laws of the State of New York without reference to rules relating to conflict of laws. This Release inures
to the benefit
of the Companies and their successors and assigns. I have carefully read this Release, fully understand each of its terms and conditions, and intend to abide by this Release in every respect. As such,
I knowingly and voluntarily sign this Release. 

	
 Michael D. Price	 	 
	

Dated as of [                  , 20    ]	
 	

 

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Exhibit 10.4  

 
 

THE ST. PAUL COMPANIES, INC.
  385 Washington Street
  St. Paul, Minnesota 55102    
  

March 1,
2002 

Steven
H. Newman

24342 La Masina

Calabasas, CA 91302 

Dear
Steve: 

        This
letter agreement (the "Letter Agreement") confirms, on behalf of The St. Paul Companies, Inc. (the "Company" or "SPC"), the terms and conditions of your consulting agreement
with SPC and USF&G Family Insurance Company ("Operating Company"), which is a wholly-owned subsidiary of SPC. 

        1.    Consulting Period.    

        The
period of your consulting services shall commence on March 1, 2002 (the "Effective Date") and shall end on the third anniversary of the Effective Date; provided that on the
third anniversary of the Effective Date and each anniversary thereafter, the term of your Consulting Agreement shall
automatically be extended by an additional year unless the Company or you give the other party written notice, at least 30 days prior to the applicable anniversary of the Effective Date, that
you or it does not want the term to be so extended. The period during which you are providing consulting services, shall hereafter be referred to as the "Consulting Period". 

        In the event of an initial public offering (the "IPO") of the securities of a newly formed Bermuda company ("Bermuda Newco"), which acquires Operating Company, SPC shall promptly assign
all of its rights and obligations hereunder to Operating Company and shall, upon such assignment, cease to be a party to this Letter Agreement (except as otherwise provided herein) and Operating
Company will be the sole obligor hereunder, provided that substantially concurrently with the IPO, Operating Company is funded with a minimum of $50,000,000. Following assignment of this Letter
Agreement, all references herein to the "Company" shall be deemed to mean Operating Company.

 

        2.    Services.    

        During the Consulting Period, you will be engaged as a consultant to SPC and Operating Company prior to an IPO and to Operating Company on and after an IPO and shall perform services as
are reasonably requested; such services shall include but not be limited to the establishment and development of the reinsurance business of Operating Company.

 

        3.    Consulting Fee.    

        During
the Consulting Period, the Company will pay you a Consulting Fee at the annual rate of $270,000 (the "Consulting Fee"), commencing at the Effective Time and payable on the
fifteenth day of each month in substantially equal monthly installments. 

        4.    Incentive Payments.    

	(a)
	Annual. During the Consulting Period, you will be eligible to receive an annual incentive payment (the "Annual Incentive") with
(i) a target incentive opportunity equal to $440,000 (the "Target") and (ii) a maximum target incentive opportunity equal to one hundred and fifty percent (150%) of the Target, which
shall be increased upon an IPO to two hundred percent (200%) of the Target; provided, however, that you shall receive no later than February 28, 2003 a minimum Annual Incentive for the calendar
year 2002, equal to $366,670. The objectives for your Annual Incentive will be determined by the Company's 

 

Chief
Executive Officer prior to an IPO and by the Compensation Committee of the Board of Directors of Bermuda Newco after an IPO, in both cases in consultation with you. 

	(b)
	One-Time Incentive. On April 15, 2002, the Company shall pay you a one-time cash incentive of $100,000,
provided you are serving as a consultant under this Letter Agreement on such date. 

        5.    Failure to Consummate an IPO.    

        In
the event that an IPO is not consummated by September 1, 2003, the Company shall pay you on September 15, 2003 a one-time cash lump sum payment equal to $350,000. In the
event your consulting services are terminated by the Company without Cause at any time prior to September 1, 2003, the Company shall make such payment to you within 10 days of such termination. 

        6.    Reimbursements.    

        The Company shall reimburse you for all reasonable expenses and disbursements in carrying out your consulting services under this Letter Agreement, including part-time
secretarial support, in accordance with Company policy as in effect from time to time.

        7.    Termination of the Consulting Agreement.    

        The Company may terminate this Letter Agreement for "Cause" (as defined in the paragraph below) at any time and in such event, its only obligation will be to pay you in a lump sum any
accrued but unpaid Consulting Fee due you through the last day you perform services on behalf of the Company.

        For purposes of this Letter Agreement, "Cause" means (i) your willful and continued failure to substantially perform the services hereunder or the services reasonably requested by
the Company, after notice and reasonable opportunity to cure; (ii) your conviction of, or plea of guilty or nolo

contendere to, a felony or other crime involving moral turpitude; or (iii) your engagement in any malfeasance or fraud or dishonesty of a substantial nature in
connection with your relationship as a consultant to the Company or director of St. Paul Re, Inc. ("SPR") or Operating Company or other willful act that materially damages the reputation of the
Company, Operating Company or SPR. For the purposes of this Section, no act or failure to act will be considered "willfull" unless it is done, or omitted to be done, in bad faith and without
reasonable belief that the action was in the best interest of the Company or SPR.

 

        8.    Covenants.    

        In
exchange for the remuneration outlined above, in addition to providing service to the Company as set forth in this Letter Agreement, you agree to the following covenants: 

	(a)
	Confidentiality. During the Consulting Period and for a period of three years following any termination of this Letter Agreement, you
will keep confidential any trade secrets and confidential or proprietary information of SPC, Operating Company and SPR which are now known to you or which hereafter may become known to you as a result
of your consulting services or association with SPC, Operating Company and SPR and will not at any time directly or indirectly disclose any such information to any person, firm or corporation, or use
the same in any way other than in connection with the business of SPC, Operating Company and SPR during, and at all times after, the termination of this Letter Agreement. For purposes of this Letter
Agreement, "trade secrets and confidential or proprietary information" means information unique to SPC, Operating Company and SPR which has a significant business purpose and is not known or generally
available from sources outside SPC, Operating Company and SPR or typical of industry practice, but shall not include any of the foregoing: (i) that becomes a matter of public record or is
published in a newspaper, magazine or other periodical available to the general public, 

2

 

other
than as a result of any act or omission of you or (ii) that is required to be disclosed by any law, regulation or order of any court or regulatory commission, department or agency,
provided that you give prompt notice of such requirement to SPC, Operating Company or SPR, as appropriate, to enable SPC, Operating Company or SCR, as appropriate, to seek an appropriate protective
order or confidential treatment.

 

	(b)
	Non-Competition. You further covenant that during the Consulting Period and for the fifteen month period following your
termination as a consultant for any reason, you will not, for yourself or on behalf of any other person, partnership, company or corporation, directly or indirectly, acquire any financial or
beneficial interest (except as provided in the next sentence), be employed by, or own, manage, operate or control any entity which is primarily engaged in the reinsurance business. Notwithstanding the
preceding sentence, (i) you will not be prohibited from owning less than five (5%) percent of any publicly traded corporation, whether or not such corporation is in competition with SPC,
Operating Company or SPR, and (ii) you may continue to serve as an advisory director (non-voting) of HCC Holdings, Inc., subject to any antitrust, regulatory or other
considerations.

 
	(c)
	Non-Solicitation. You further covenant that during the Consulting Period and during the two year period following your
termination as a consultant for any reason, you will not, directly or indirectly, hire, or cause to be hired by an employer with whom you may ultimately became associated any senior executive of SPC,
Operating Company or SPR at the time of your termination as a consultant. This Section 8(c) shall not apply to any person with respect to whom you had a pre-existing relationship as
of the Effective Date, provided that the Company did not incur an executive search fee in recruiting such person to the Company following the Effective Date. 
	(d)
	Termination without
Cause. Notwithstanding the foregoing, in the event that you are terminated as a consultant to the Company without
cause, you shall not be bound by the provisions of paragraphs (b) and (c) of this Section 8 unless the Company pays you, within 10 days of such termination, an amount equal
to $350,000. 

        9.    Representations.    

        By
signing this Letter Agreement where indicated below, you represent that, except as previously disclosed to the Company, you are not subject to any employment agreement, consulting
agreement or non-competition agreement, that could subject the Company to any future liability or obligation to any third party as a result of the execution of this Letter Agreement and
your engagement by the Company to the positions described above. 

        10.    Miscellaneous Provisions.    

	(a)
	This
Letter Agreement may not be amended or terminated without the prior written consent of you and the Company. 
	(b)
	This
Letter Agreement may be executed in any number of counterparts which together will constitute but one agreement. 
	(c)
	This
Letter Agreement will be binding on and inure to the benefit of our respective successors and, in your case, your heirs and other legal representatives. Other than as provided
herein, the rights and obligations described in this Letter Agreement may not be assigned by either party without the prior written consent of the other party, except that you may assign your rights
and obligations to SHN Enterprises, Inc., a California corporation, so long as it remains controlled by you. 
	(d)
	All
notices under this Letter Agreement will be in writing and will be deemed effective when delivered in person, of five (5) days after deposit thereof in the mails, postage
prepaid, for delivery as registered or certified mail, addressed to the respective party at the address set 

3

 

forth
below or to such other address as may hereafter be designated by like notice. Unless otherwise notified as set forth above, notice will be sent to each party as follows: 

You, to:

24342 La Masina

Calabasas, California 91302 

SPC, to:

The St. Paul Companies, Inc.

385 Washington Street

St. Paul, Minnesota 55102

Attention: General Counsel 

Operating Company, to:

The address of Operating Company's principal

Place of business

Attention: General Counsel 

        In
lieu of personal notice or notice by deposit in the mail, a party may give notice by confirmed telegram, telex or fax, which will be effective upon receipt. 

	(e)
	This
Letter Agreement will be governed by and construed and enforced in accordance with the laws of the State of New York without reference to rules relating to conflict of laws. 

        This
Letter Agreement, consisting of six pages, is intended to be a binding obligation upon the Company and yourself. If this Letter Agreement correctly reflects your understanding,
please sign and return one copy to John MacColl for the Company's records. 

	 	 	THE ST. PAUL COMPANIES, INC.
	

 	
 	
By:	

/s/  JAY S. FISHMAN      
 Jay S. Fishman

Chief Executive Officer
	

 	
 	
USF&G FAMILY INSURANCE COMPANY
	

 	
 	
By:	

/s/  JAY S. FISHMAN      
 Jay S. Fishman

Chief Executive Officer

        The
above Letter Agreement correctly reflects our understanding, and I hereby confirm my agreement to the same. 

Steven
H. Newman

Steven H. Newman 

Dated
as of March 1, 2002 

4

 
 
 

THE ST. PAUL COMPANIES, INC.
  385 Washington Street
  St. Paul, Minnesota 55102    
  

March
1, 2002 

Steven
H. Newman

24342 La Masina

Calabasas, CA 91302 

Dear
Steve: 

        Reference is made to the Letter Agreement of even date herewith among you, The St. Paul Companies, Inc. (the "Company") and USF&G Family Insurance Company (the "Operating Company"),
pursuant to which you will provide certain consulting services to the Company and the Operating Company (the "Consulting Agreement"). This is to acknowledge that it is our mutual expectation that you
would be available as necessary for the establishment and development of the reinsurance business of the Operating Company, but that your services under the Consulting Agreement would not be required
on a full time basis. If this correctly reflects your understanding, please sign below and return a copy of this letter to John MacColl for the Company's records.

 

	 	 	THE ST. PAUL COMPANIES, INC.
	

 	
 	
By:	

/s/  JAY S. FISHMAN      
 Jay S. Fishman

Chief Executive Officer
	

 	
 	
USF&G FAMILY INSURANCE COMPANY
	

 	
 	
By:	

/s/  JAY S. FISHMAN      
 Jay S. Fishman

Chief Executive Officer

        The
above Letter Agreement correctly reflects our understanding, and I hereby confirm my agreement to the same. 

STEVEN H. NEWMAN

Steven H. Newman 

Dated
as of March 1, 2002 

5

 
 
 

ASSIGNMENT    
  

        For value received, Steven H. Newman ("Assignor") hereby assigns to SHN Enterprises, Inc., a California corporation ("Assignee"), all of his right, title
and interest in and to the agreement entered into by and between Assignor and The St. Paul Companies, Inc. ("St. Paul") dated as of March 1, 2002. Said agreement provides for the
Assignor to perform consulting services to St. Paul.

        By
this Assignment, Assignee agrees to provide the services of Steven H. Newman to perform said consulting services and Assignee agrees to assume and perform all duties and obligations
that Assignor has under said agreement. 

        A
copy of said agreement is attached to this assignment. 

	Dated March 18, 2002	/s/  STEVEN H. NEWMAN      
 Steven H. Newman

        The
undersigned here accepts this Assignment. 

	Dated: March 18, 2002	 	SHN ENTERPRISES, INC.
	

 	
 	
By:	

/s/  STEVEN H. NEWMAN      
 Steven H. Newman, President

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THE ST. PAUL COMPANIES, INC. 385 Washington Street St. Paul, Minnesota 55102

THE ST. PAUL COMPANIES, INC. 385 Washington Street St. Paul, Minnesota 55102

ASSIGNMENT

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