Document:

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                                                                    EXHIBIT 10.3

                              DATED 24 January 2002

                                     BETWEEN

                   MONTPELIER MARKETING SERVICES (UK) LIMITED
                                       AND
                                 ANTHONY TAYLOR

                        -----------------------------------

                                SERVICE AGREEMENT

                        -----------------------------------

                         LeBoeuf, Lamb, Greene & MacRae
                               No. 1 Minster Court
                                  Mincing Lane
                                 London EC3R 7AA
                                   Ref: AG/mv

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                                SERVICE AGREEMENT

THIS AGREEMENT is made the 24th day of January, 2002

BETWEEN:

MONTPELIER MARKETING SERVICES (UK) LIMITED, whose registered office is situate
at 6th Floor, 1 Minster Court, Mincing Lane, London EC3R 7YL (the "Company");
and

ANTHONY TAYLOR of 3, Caps Lane, Pitts Bay Road, Pembroke, Bermuda (the
"Executive").

WHEREAS the parties desire to record the terms and conditions upon which the
Executive is employed by the Company.

NOW THEREFORE in consideration of the mutual covenants and promises herein
contained

IT IS HEREBY AGREED as follows:

1.    Interpretation

1.1   In this Agreement unless the context otherwise requires the following
      words and expressions shall have the following meanings:

      this "Agreement" means this service agreement and includes all schedules
      hereto;

      the "Bermudian Service Agreement" means the service agreement dated 12th
      December 2001 entered into between Montpelier Re Holdings Limited,
      Montpelier Reinsurance Limited and the Executive;

      the "Board" means the board of directors of the Company;

      the "Companies Act" means the Companies Act 1985;

      "Group" means Montpelier Re Holdings Limited ("Holdings") and its
      subsidiaries (as defined by the Companies Act) or any company in which
      Holdings owns at least 50% of the issued share capital, and "Group
      Company" shall be construed accordingly;

      the "Parties" means the parties to this Agreement;

1.2   In this Agreement unless the context otherwise requires:

      1.2.1  references to statutory provisions shall be construed as
             references to those provisions as amended or re-enacted or as
             their application is modified by other provisions from time to
             time and shall include references to any provisions of which they
             are re-enactments (whether with or without modification); and

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      1.2.2  references to clauses and schedules are references to clauses
             hereof and schedules hereto; references to sub-clauses or
             paragraphs are, unless otherwise stated, references to sub-clauses
             of the clause or paragraphs of the schedule in which the reference
             appears;

      1.2.3  references to the singular shall include the plural and vice versa
             and references to the masculine shall include the feminine and/or
             neuter and vice versa; and

      1.2.4  references to persons shall include companies, partnerships,
             associations and bodies of persons, whether incorporated or
             unincorporated.

2.    Appointment

2.1   The Company hereby appoints the Executive and the Executive hereby agrees
      to serve the Company as a Director and Chairman subject to the terms and
      conditions hereinafter contained.

3.    Term

3.1   The appointment of the Executive hereunder shall (subject as hereinafter
      provided) be for the period from the 1st day of January, 2002, up to and
      including the 31st day of December, 2004, unless and until terminated in
      accordance with the provisions hereinafter contained unless both parties
      agree in writing to extend the contract for a period to be determined.

4.    Duties and Responsibilities

      During the continuance of his employment hereunder:

4.1   The Executive shall perform such duties and exercise such powers in
      relation to the business of the Company or of any Group Company as may
      from time to time reasonably be assigned to or vested in him by the Board.
      In particular, the Executive will act as Chairman of the Board of
      Directors of the Company, and will involve himself actively in the
      marketing and promotional activities of the Company. The Executive shall
      at no time engage in the following activities on behalf of any Group
      Company:

      (a)   offer insurance to anyone;

      (b)   negotiate any terms of any insurance contracts;

      (c)   exercise discretion as to whether or not to refer risks to any Group
            Company, but rather will refer all risks to the relevant Group
            Company in the absence of explicit instructions to the contrary;

      (d)   accept premiums;

      (e)   bind risks;

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      (f)   negotiate and settle claims;

      (g)   receive notification of claims and instruct loss adjusters;

      (h)   determine underwriting strategy;

      (i)   issue policy documentation to policyholders; and

      (j)   imply, directly or indirectly, to a third party that the Company has
            authority to engage in any of the activities set forth in (a)
            through (i) above.

      The Executive shall give to the Board such information regarding the
      affairs of the Company and any Group Company as it shall require and at
      all times and in all respects conform to and comply with the reasonable
      directions and regulations made by the Board. The Executive shall perform
      such services for any Group Company (without further remuneration except
      as otherwise agreed) and shall accept such offices in any such Group
      Companies as the Board may reasonably require.

4.2   The Executive shall well and faithfully serve the Company and the Group
      Companies and use his best endeavours to promote, develop and extend their
      businesses and interests giving at all times the full benefit of his
      knowledge, expertise, technical skill and ingenuity.

4.3   The Executive shall not without the consent of the Board directly or
      indirectly engage in any other business or be concerned or interested in
      any other business of a similar nature to or which would or might compete
      with the business for the time being carried on by the Company or any
      Group Company save that he may (but without prejudice to clause 4.2) be
      interested as a holder or beneficial owner of not more than 5% of any
      class of stock, shares or debentures in any company (other than the
      Company, in which case, such limit shall not apply) whose stock, shares or
      debentures are listed or dealt in on a recognised stock exchange (as
      defined in the Companies Act).

4.4   The Executive's principal place of employment is at 118 Fenchurch Street,
      London EC3 or such other address as may be established as the Company's
      office.

4.5   The Executive shall carry out his duties under this Agreement in the
      United Kingdom, and the Company reserves the right to require the
      Executive to work at any location in London as the Company may in its
      absolute discretion from time to time decide.

4.6   The Executive may be required to travel in the United Kingdom and overseas
      (including Europe and the United States) in the proper performance of his
      duties, although the Executive will not, without his prior consent, be
      required to work any continuous period abroad in excess of one month.

5.    Remuneration and Reimbursement

5.1   The Company shall pay to the Executive by way of remuneration for his
      services hereunder director's fees at the rate (subject as hereinafter
      provided) of (pound)60,000 per

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      annum. The said fees shall be payable by equal monthly instalments in
      arrears on the day appointed by the Board for the payment of employees'
      salaries or pro rata where the Executive is only employed hereunder
      during part of the month. The Compensation Committee of the Board,
      subject to ratification by the Board, may increase or reduce the
      Executive's fees on 31 December in each year, but not below an amount of
      (pound)60,000 per annum.

5.2   The Executive shall be entitled to participate in:

      (i)   the Group's UK pension scheme; the Company will make a contribution
            equivalent to 10% of the Executive's fees into such scheme;

      (ii)  any other UK specific schemes in which the Executive is entitled to
            participate;

      in addition to any benefits to which he is entitled pursuant to the
      Bermudian Service Agreement.

      The details of these schemes are set out in separate documents, copies of
      which will be provided on request. The schemes may be changed at the
      Company's discretion.

5.3   The Company shall also pay to the Executive all reasonable travelling,
      hotel and other out-of-pocket expenses which are properly incurred by him
      in or about the performance of his duties hereunder and for which vouchers
      (if so required) are provided to the reasonable satisfaction of the Board.

5.4   The Executive agrees that the Company may deduct from his pay any sums
      which the Executive may owe the Company including, without limitation, any
      overpayments or loans made to him by the Company or losses suffered by the
      Company as a result of the Executive's breach of this Agreement.

6.    Normal Hours and Holidays

      The Executive shall conform to such hours of work as may from time to time
      reasonably be required of him and shall not be entitled to receive any
      additional remuneration for work outside his normal hours. The Executive
      agrees that any cap on the average working time imposed by the Working
      Time Regulations 1998 will not apply to him. In addition to the usual
      public holidays the Executive shall be entitled without loss of
      remuneration to 25 days holiday in each year, but such days shall be
      inclusive of, and not in addition to, holidays to which the Executive is
      entitled pursuant to the Bermudian Service Agreement.

7.    Confidentiality

7.1   The Executive shall not either during the continuance of his employment
      hereunder (otherwise than in the proper performance of his duties
      hereunder) or at any time after the determination thereof divulge to any
      person whomsoever and shall use his reasonable endeavours to prevent the
      publication or disclosure of any trade secret or other confidential
      information concerning the business, finances, accounts, dealings,

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      transactions or affairs of the Company or any Group Company or of any of
      their respective clients entrusted to him or arising or coming to his
      knowledge during the course of his employment hereunder or otherwise.

7.2   The Executive shall upon the termination of his employment hereunder
      immediately deliver up to the Company all fee schedules, lists of clients,
      correspondence and other documents, papers and property belonging to the
      Company or any Group Company or related to any of the matters referred to
      in clause 7.1 which may have been prepared by him or have come into his
      possession in the course of his employment hereunder and shall not retain
      any copies thereof.

8.    Change of Status

8.1   If, before the expiration or determination of this Agreement, the
      employment of the Executive hereunder shall be terminated by reason of the
      liquidation of the Company for the purpose of reconstruction or
      amalgamation and he shall be offered employment with any concern or
      undertaking resulting from such reconstruction or amalgamation on terms
      and conditions not less favourable (financially and in personal status)
      than the terms of this Agreement, then he shall have no claim against the
      Company in respect of the termination of his employment hereunder save in
      respect of accrued benefits.

8.2   If for any reason the Executive shall either:

      8.2.1  at the Company's request resign as a director of the Company or
             any Group Company; or

      8.2.2  be removed from office as a director of the Company or any Group
             Company;

      then, notwithstanding his so ceasing to be a director, this Agreement
      shall not automatically terminate and thereupon (and without any claim
      against the Company in respect of such loss of office) the Executive's
      employment hereunder shall continue for the remaining period of this
      Agreement and all the terms and conditions of this Agreement shall with
      the necessary variations apply to the Executive's employment but in any
      event, the Executive's basic annual remuneration will not at any time be
      less than (pound)60,000 per annum.

9.    Termination

9.1   This Agreement shall terminate automatically upon termination of the
      Bermudian Service Agreement.

9.2   This Agreement shall be subject to termination by the Company by summary
      notice in writing without pay in lieu of notice:

9.2.1 if the Executive shall become of unsound mind or be or become a patient
      for the purpose of any statute relating to mental health;

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      9.2.2  if the Executive shall at any time be prevented by illness or
             accident from performing his duties for a period of 6 consecutive
             months or if he shall be absent from his duties by reason of
             illness or accident for more than 180 working days in any
             consecutive twelve months (provided that any such periods may be
             extended at the sole discretion of the Board); and

      9.2.3  if the Executive terminates his employment for any reason prior to
             the expiration of this Agreement or if the Executive shall have
             failed or neglected efficiently and diligently to discharge his
             duties hereunder having received a written warning for the
             misconduct within the previous 6 months or shall have committed
             any serious breach of his obligations hereunder or shall have been
             guilty of conduct tending to bring himself or the Company or any
             Group Company into disrepute or calculated or likely to affect
             prejudicially the interests of the Company or any Group Company or
             shall have committed an act of bankruptcy or compounded with his
             creditors generally.

9.3   The termination by the Company of this Agreement shall be without
      prejudice to any claim which the Company may have for damages arising from
      any breach thereof by the Executive giving rise to such termination.

9.4   This Agreement shall not, save as hereinbefore set out in this Clause, be
      subject to termination by notice or otherwise by the Company or by the
      Executive.

9.5   Until this Agreement is terminated pursuant to clause 9.2, the Executive
      shall remain entitled to receive his remuneration payable hereunder in
      full notwithstanding illness or other incapacity.

9.6   After notice of termination has been given by either party or if the
      Executive seeks to resign without notice then provided the Company
      continues to pay the Executive the contractual benefits in accordance with
      this Agreement, the Company has at its discretion the right for the period
      (the "Garden Leave Period") then outstanding until the termination date of
      this Agreement to:

      9.6.1  exclude the Executive from the Company's premises and require the
             Executive not to attend at the Company's premises; and/or

      9.6.2  require the Executive to carry out no duties; and/or

      9.6.3  require the Executive not to communicate or deal with employees,
             agents, consultants, clients or other representatives of the
             Company;

      Provided always that the maximum permitted Garden Leave Period shall be
      six months.

10.   Consequence of Termination

      Upon the termination of this Agreement howsoever arising, the Executive
      shall at any time or from time to time thereafter upon the request of the
      Company resign, without claim for compensation for loss of office, as a
      director of the Company and such offices

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      held by him in any of the Group Companies as may be so requested and
      should he fail to do so, the Company is hereby irrevocably authorised to
      appoint some person in his name and on his behalf to sign and do any
      documents or things necessary or requisite to give effect thereto.

11.   Non-Competition

11.1  Since the Executive has obtained in the course of his employment prior to
      the date hereof and is likely to obtain in the course of his employment
      hereunder knowledge of the trade secrets and also other confidential
      information in regard to the business of the Company and of any Group
      Company with which he becomes associated, the Executive hereby agrees with
      the Company that in addition to the restrictions contained in clause 4.3
      he will not:

      11.1.1 during the period of 6 months following the termination of his
             employment hereunder (howsoever caused) either on his own account
             or for any other person, firm or company directly or indirectly be
             engaged in or concerned with any business or undertaking which is
             engaged in or carries on in the United Kingdom any insurance
             business which competes or seeks to compete with the marketing
             business carried on by the Company or the reinsurance business
             carried out by any other Group Company for which the Company is
             carrying out marketing and promotional activities at the date of
             termination.

      11.1.2 During the period of 6 months following the termination aforesaid
             either on his own account or for any other person, firm or company
             directly or indirectly solicit, interfere with or endeavour to
             entice away from the Company or any Group Company the custom for
             reinsurance business of any person, firm or company who at the
             date of termination aforesaid or who in the period of 12 months
             immediately prior to such date was a customer or client of the
             Company or any Group Company with whom the Executive was actively
             concerned or who at such date was negotiating with the Executive
             in relation to all or part of the Group's business.

      11.1.3 During the period of 12 months following the termination aforesaid
             either on his own account or for any other person, firm or company
             solicit the services of or endeavour to entice away from the
             Company or any Group Company any director, or executive of the
             Company or any Group Company with whom the Executive was actively
             concerned (whether or not such person would commit any breach of
             his contract of employment or engagement by reason of leaving the
             service of such company) nor shall the Executive knowingly employ
             or aid or assist in or procure the employment by any other person,
             firm or company of any such person.

11.2   While the restrictions aforesaid are considered by the Parties to be
       reasonable in all the circumstances it is agreed that if any of such
       restrictions shall, taken together, be adjudged to go beyond what is
       reasonable in all the circumstances for the protection of the legitimate
       interests of the Company or any Group Company but would be adjudged

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      reasonable if part of the wording thereof were deleted or modified the
      said restrictions shall apply with such words deleted or modified.

11.3  The Executive hereby agrees that he will at the request and cost of the
      Company enter into a direct agreement or undertaking with any Group
      Company whereby he will accept restrictions and provisions corresponding
      to the restrictions and provisions herein contained (or such of them as
      may be appropriate in the circumstances) in relation to such services and
      such area and for such period as such company or companies may reasonably
      require for the protection of its or their legitimate interests provided
      that the terms of such restrictions and provisions will not be more
      onerous than the restrictions and provisions of this agreement.

12.   Untrue Statements

      The Executive shall not knowingly at any time make any untrue statement in
      relation to the Company or any Group Company and in particular shall not
      after the determination of his employment hereunder wrongfully represent
      himself as being employed by or connected with the Company or any Group
      Company.

13.   Intellectual Property

13.1  The Executive may make, discover or create Intellectual Property in the
      course of his duties under this Agreement and agrees that in this respect
      he has a special obligation to further the interests of the Company.

13.2  Subject to the provisions of the Patents Act 1977, the Registered Designs
      Act 1949 and the Copyright Designs and Patents Act 1988 if at any time
      during his employment under this Agreement the Executive makes or
      discovers or participates in the making or discovery of any Intellectual
      Property relating to or capable of being used in the business for the time
      being carried on by the Company or any Group Companies full details of the
      Intellectual Property shall immediately be communicated by him to the
      Company and shall be the absolute property of the Company. At the request
      and expense of the Company the Executive shall give and supply all such
      information data drawings and assistance as may be requisite to enable the
      Company to exploit the Intellectual Property to the best advantage and
      shall execute all documents and do all things which may be necessary or
      desirable for obtaining patent or other protection for the Intellectual
      Property in such parts of the world as may be specified by the Company and
      for vesting the same in the Company or as it may direct.

13.3  The Executive irrevocably appoints the Company to be his agent in his name
      and on his behalf to sign, execute or do any such instrument or thing and
      generally to use his name for the purpose of giving to the Company (or its
      nominee) the full benefit of the provisions of this clause and in favour
      of any third party a certificate in writing signed by any director or the
      secretary of the Company that any instrument or act falls within the
      authority conferred by this clause shall be conclusive evidence that such
      is the case.

13.4  If the Intellectual Property is not the property of the Company, the
      Company shall, subject to the provisions of the Patents Act 1977, have the
      right to acquire for itself or its

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      nominee his rights in the Intellectual Property within 3 months after
      disclosure pursuant to this clause on fair and reasonable terms to be
      agreed or settled by a single arbitrator.

13.5  The Executive waives all of his moral rights (as defined in the Copyright,
      Designs and Patents Act 1988) in respect of any acts of the Company or any
      acts of third parties done with the Company's authority in relation to any
      Intellectual Property which is the property of the Company by virtue of
      this clause.

13.6  Rights and obligations under this clause shall continue in force after
      termination of this Agreement in respect of Intellectual Property made
      during the Executive's employment under this Agreement and shall be
      binding upon his representatives.

14.   Discipline and Grievance Procedures

14.1  If the Executive has a grievance, regarding the employment, he should, in
      the first instance speak to the Group's Chairman. If the grievance is not
      resolved to his satisfaction, he should then refer to the grievance
      procedure, which will be provided to him with his letter of employment.

14.2  The disciplinary procedures applicable to the Executive will be provided
      to him with his letter of employment.

14.3  The disciplinary and grievance procedures do not form part of this
      Agreement.

15.   Delegation

      The Company may at any time and from time to time delegate its power and
      authority under this Agreement to any Group Company and such delegation
      (or the revocation thereof) shall be effective upon the Company's giving
      written notice of the same to the Executive.

16.   Notices

      Notices may be given by either Party by pre-paid first class post or by
      hand delivery addressed to the other Party at (in the case of the Company)
      its registered office for the time being and (in the case of the
      Executive) his last known address. Any such notice given by post shall be
      deemed to have been served on the second week day after dispatch (public
      holidays excepted) and any notice so given by hand shall be deemed to have
      been served when delivered if delivered during normal business hours or,
      if delivered outside such hours, at the next time after delivery when
      normal business hours commence.

17.   Miscellaneous

17.1  The expiration or termination of this Agreement howsoever arising shall
      not operate to affect such of the provisions hereof as are expressed or
      intended to remain in full force and effect notwithstanding such
      termination.

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17.2  If any of the clauses, conditions, covenants or restrictions of this
      Agreement or any deed or document emanating from it shall be found to be
      void but would be valid if some part hereof were deleted or modified, then
      such clause, condition, covenant or restriction shall apply with such
      deletion or modification as may be necessary to make it valid and
      effective.

17.3  This Agreement shall be binding and enure for the benefit of the
      successors of the Parties but shall not be assignable.

17.4  This Agreement (together with any documents referred to herein)
      constitutes the whole agreement between the Parties relating to its
      subject matter.

17.5  The headings in this Agreement are inserted for convenience only and shall
      not affect the construction of this Agreement.

17.6  This Agreement may be executed in counterparts each of which when executed
      and delivered shall constitute an original but all such counterparts
      together shall constitute one and the same instrument.

17.7  No provision in this Agreement may be amended unless such amendment is
      agreed to in writing, signed by the Executive and by a duly authorised
      officer of the Company. No waiver by either Party of any breach by the
      other Party of any condition or provision of this Agreement to be
      performed by such other Party shall be deemed a waiver of a similar or
      dissimilar condition or provision at the same or any prior or subsequent
      tune. Any waiver must be in writing and signed by the Executive or a duly
      authorised officer of the Company, as the case may be.

17.8  This Agreement shall be governed by and construed in accordance with the
      law of England and the Parties hereby irrevocably submit to the
      non-exclusive jurisdiction of the English courts.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.

SIGNED by                                                )
on behalf of Montpelier Marketing Services (UK) Limited  )
in the presence of:                                      )

               /s/
--------------------------------------
Witness

SIGNED by Anthony Taylor                                 )
in the presence of:

               /s/
--------------------------------------
Witness

/s/ Anthony Taylor
--------------------------------------
Anthony Taylor

                                       11<PAGE>
                                                                    EXHIBIT 10.4

                                SERVICE AGREEMENT

THIS AGREEMENT is made as of the 1st day of January, 2002.

BETWEEN:

MONTPELIER REINSURANCE LTD., whose registered office is situate at Clarendon
House, 2 Church Street, Hamilton Bermuda (the "Company"); and

C. RUSSELL FLETCHER, III, c/o 30 Woodbourne Avenue, PO Box 2079, Pembroke HM HX,
Bermuda (the "Executive").

WHEREAS the parties desire to record the terms and conditions upon which the
Executive is employed by the Company.

NOW THEREFORE in consideration of the mutual covenants and promises herein
contained

IT IS HEREBY AGREED as follows:

1.       Interpretation

1.1.     In this Agreement unless the context otherwise requires the following
         words and expressions shall have the following meanings:

         this "Agreement" means this service agreement and includes all
         schedules hereto;

         the "Board" means the board of directors of the Company;

         the "Companies Act" means the Companies Act 1981;

         "Pounds" or "(pound)" means British Pounds Sterling;

         "Group Company" means and includes any company which is from time to
         time a holding company ( as defined by Section 86 of the Companies Act,
         but irrespective of whether it is a Bermuda company or an overseas
         company) of the Company, a subsidiary company (as so defined) of the
         Company, a subsidiary company (as so defined) of a holding company (as
         so defined) of the Company or in which the Company owns at least 50% of
         the issued share capital;

         the "Parties" means the parties to this Agreement;

1.2.     In this Agreement unless the context otherwise requires:

         1.2.1.   references to statutory provisions shall be construed as
                  references to those provisions as amended or re-enacted or as
                  their application is modified by other provisions from time to
                  time and shall include references to any provisions of which
                  they are re-enactments (whether with or without modification);
                  and

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         1.2.2.   references to clauses and schedules are references to clauses
                  hereof and schedules hereto; references to sub-clauses or
                  paragraphs are, unless otherwise stated, references to
                  sub-clauses of the clause or paragraphs of the schedule in
                  which the reference appears;

         1.2.3.   references to the singular shall include the plural and vice
                  versa and references to the masculine shall include the
                  feminine and/or neuter and vice versa; and

         1.2.4.   references to persons shall include companies, partnerships,
                  associations and bodies of persons, whether incorporated or
                  unincorporated.

2.       Appointment

         The Company hereby appoints the Executive and the Executive hereby
         agrees to serve the Company as Executive Vice President - Chief
         Reinsurance Officer subject to the terms and conditions hereinafter
         contained.

3.       Term

         The appointment of the Executive hereunder began on 1 January 2002 and
         shall continue unless and until terminated in accordance with the
         provisions hereinafter contained.

4.       Duties and Responsibilities

         During the continuance of his employment hereunder:

4.1.     The Executive shall perform such duties and exercise such powers in
         relation to the business of the Company or of any Group Company as may
         from time to time reasonably be assigned to or vested in him by the
         Board and shall give to the Board such information regarding the
         affairs of the Company and any Group Company as it shall require and at
         all times and in all respects conform to and comply with the reasonable
         directions and regulations made by the Board. The Executive agrees that
         he shall not conduct any business activity on behalf of the Company in
         the United States of America other than marketing the Company's
         products and save to the extent provided under any contract with any
         other Group Company. The Executive shall perform such services for any
         Group Company (without further remuneration except as otherwise agreed)
         and shall accept such offices in any such Group Companies as the Board
         may reasonably require. Provided, however, neither the Executive's
         material responsibilities as Executive Vice President - Chief
         Reinsurance Officer nor his location in Bermuda shall be changed
         without his consent.

4.2.     The Executive shall well and faithfully serve the Company and the Group
         Companies and use his best endeavours to promote, develop and extend
         their businesses and interests giving at all times the full benefit of
         his knowledge, expertise, technical skill and ingenuity.

4.3.     The Executive shall not without the consent of the Board directly or
         indirectly engage in any other business or be concerned or interested
         in any other business of a similar nature

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         to or which would or might compete with the business for the time being
         carried on by the Company or any Group Company save that he may (but
         without prejudice to clause 4.2) be interested as a holder or
         beneficial owner of not more than 5% of any class of stock, shares or
         debentures in any company (other than the Company, in which case, such
         limit shall not apply) whose stock, shares or debentures are listed or
         dealt in on an appointed stock exchange (as defined in the Companies
         Act).

4.4.     The Company reserves the right to require the Executive not to attend
         work/and or not to undertake all or any of his duties hereunder during
         a period of up to 12 months immediately preceding the termination of
         his employment, provided always that the Company shall continue to pay
         the Executive's salary and contractual benefits for such period. This
         Clause 4.4 shall not affect the general right of the Company to suspend
         the Executive for good cause.

5.       Remuneration and Reimbursement

5.1.     The Company shall pay to the Executive by way of remuneration for his
         services hereunder a base salary at the rate (subject as hereinafter
         provided) of US$400,000 per annum. Such salary shall be inclusive of
         any director's fees payable to the Executive by the Company or any
         Group Company and accordingly either the Executive shall pay over or
         procure to be paid over to the Company all such fees received or
         receivable by him or his remuneration hereunder shall be reduced pro
         tanto. The said salary shall be payable by equal semi-monthly
         instalments in arrears on the day appointed by the Board for the
         payment of employees' salaries or pro rata where the Executive is only
         employed hereunder during part of the month. The Compensation Committee
         of the Company's Board, subject to ratification by the Board, may
         increase or reduce the Executive's salary on each anniversary of the
         date of this Agreement, but not below the amount of the Executive's
         starting salary. In addition, the Executive shall be eligible for an
         annual cash bonus award initially in the range of up to 50% of base
         salary, with the possibility of such award percentage increasing
         thereafter.

5.2.     The Company shall also pay to the Executive all reasonable travelling,
         hotel and other out-of-pocket expenses which are properly incurred by
         him in or about the performance of his duties hereunder and for which
         vouchers (if so required) are provided to the reasonable satisfaction
         of the Board.

5.3.     The Company will reimburse the Executive for up to US$50,000 in
         expenses incurred by the Executive in establishing a residence in
         Bermuda, including, as applicable, cost of furnishings.

5.4.     The Company will reimburse the Executive for all reasonable moving and
         temporary housing expenses, plus a tax gross-up payment to reimburse
         the Executive for any income taxes paid by the Executive on the
         reimbursement (a "gross-up for taxes"), including travel and lodging
         for the Executive's family for house hunting, school search and
         commuting until relocation is completed. Such reimbursement shall also
         include any real estate commissions that the Executive may incur by the
         sale of his primary residence

                                       3
<PAGE>

         in the United States and the cost of moving and/or storage of personal
         property in the United States while the Executive is employed pursuant
         to this Agreement.

5.5.     The Executive shall be entitled to participate in:

         (i)      the Company's medical and Dental Plan

         (ii)     a suitable pension arrangement in accordance with Bermuda law;
                  and

         (iii)    Any other employment benefit plans generally available to
                  executives in the Company of the Executive's stature, to the
                  extent not duplicative of benefits otherwise provided by the
                  Company.

5.6.     During the Executive's appointment under this Agreement, he shall
         receive a housing allowance of US$12,000 per month, grossed-up for
         taxes.

5.7.     The Company shall reimburse the Executive for all reasonable expenses,
         grossed-up for taxes, incurred by the Executive and his dependents in
         connection with their relocation to the city or area of Executive's
         choice in the United States following the expiration or termination of
         this Agreement.

5.8.     The Company shall reimburse the Executive for all reasonable attorney's
         fees and expenses that he incurs in reviewing the terms and conditions
         of the Executive's employment with the Company. In addition, the
         Company will reimburse the Executive for reasonable fees for accounting
         services that he incurs for the preparation and filing of United States
         federal and state income taxes while he is employed by the Company or
         that arise from compensation that he receives from the Company.
         Reimbursement for all such expenses for legal and accounting services
         shall be grossed-up for taxes.

6.       Normal Hours and Holidays

         The Executive shall conform to such hours of work as may from time to
         time reasonably be required of him and shall not be entitled to receive
         any additional remuneration for work outside his normal hours. In
         addition to the usual public holidays the Executive shall, subject as
         mentioned in the Schedule, be entitled without loss of remuneration to
         25 days holiday in each year to be taken at such time or times as may
         be approved by the Chief Executive Officer of the Company. Any
         entitlement to holiday remaining at the end of any year may be carried
         forward to the next succeeding year but no further. The entitlement to
         holiday (and on termination of employment holiday pay in lieu of
         holiday) accrues pro rata throughout each year, provided that fractions
         of days shall be disregarded in calculating entitlement to holiday or
         payment in lieu of holiday. The Executive is also expected to attend
         meetings of approved professional and community organizations, which
         attendance will not be considered holiday leave or result in any loss
         of remuneration. The Company shall reimburse the Executive for the cost
         of coach air-fair for the Executive and his family for two round trips
         per year to a destination in the United States of his choice,
         grossed-up for taxes.

                                       4
<PAGE>

7.       Confidentiality

7.1.     The Executive shall not either during the continuance of his employment
         hereunder (otherwise than in the proper performance of his duties
         hereunder) or at any time after the termination thereof divulge to any
         person whomsoever and shall use his reasonable endeavours to prevent
         the publication or disclosure of any trade secret or other confidential
         information concerning the business, finances, accounts, dealings,
         transactions or affairs of the Company or any Group Company or of any
         of their respective clients entrusted to him or arising or coming to
         his knowledge during the course of his employment hereunder or
         otherwise.

7.2.     The Executive shall upon the termination of his employment hereunder
         immediately deliver up to the Company all fee schedules, lists of
         clients, correspondence and other documents, papers and property
         belonging to the Company or any Group Company or related to any of the
         matters referred to in clause 7.1 which may have been prepared by him
         or have come into his possession in the course of his employment
         hereunder and shall not retain any copies thereof.

8.       Change of Status

8.1.     The liquidation, reconstruction or amalgamation of the Company shall
         not affect the Executive's rights under this Agreement.

8.2.     Unless this Agreement has been terminated under clause 9, if for any
         reason the Executive shall either:

         8.2.1.   at the Company's request resign as a director of the Company
                  or any Group Company; or

         8.2.2.   be removed from office as a director of the Company or any
                  Group Company;

                  then, notwithstanding his so ceasing to be a director, this
                  Agreement shall not automatically terminate and thereupon (and
                  without any claim against the Company in respect of such loss
                  of office) the Executive's employment hereunder shall continue
                  for the remaining period of this Agreement and all the terms
                  and conditions of this Agreement shall with the necessary
                  variations apply to the Executive's employment but in any
                  event, the Executive's basic annual salary will not at any
                  time be less than the Executive's starting salary under this
                  agreement.

9.       Termination

9.1.     This Agreement shall be subject to termination by the Company by
         summary notice in writing:

         9.1.1.   if, after reasonable accommodation, the Executive shall at any
                  time be prevented by illness (mental or physical) or accident
                  from performing his material duties for a period of 6
                  consecutive months or if he shall be absent from his duties by
                  reason of illness or accident for more than 180 working days
                  in any consecutive twelve

                                       5
<PAGE>

                  months (provided that any such periods may be extended at the
                  sole discretion of the Board);

         9.1.2.   if the Executive shall have failed or neglected efficiently
                  and diligently to discharge his material duties hereunder
                  having received a written warning for the misconduct within
                  the previous 6 months or shall have committed any serious
                  breach of his obligations hereunder or shall have been guilty
                  of conduct tending to bring himself or the Company or any
                  Group Company into disrepute or calculated or likely to affect
                  prejudicially the interests of the Company or any Group
                  Company.

9.2.     Subject to 9.1 above, this Agreement shall be subject to termination at
         any time by notice:

         9.2.1.   if by the Company, then upon 12 months' written notice; or

         9.2.2.   if by the Executive, upon 6 months' written notice. The
                  Company reserves the right to terminate the Executive's
                  appointment by payment in lieu of notice.

9.3.     The termination of this Agreement by either party shall be without
         prejudice to any claim which the Company or the Executive may have for
         damages arising from any breach thereof giving rise to such termination
         or otherwise.

9.4.     Until this Agreement is terminated pursuant to clause 9.1 or clause
         9.2, the Executive shall remain entitled to receive his salary payable
         hereunder in full notwithstanding illness or other incapacity.

10.      Consequence of Termination

Upon the termination of this Agreement howsoever arising, the Executive shall at
any time or from time to time thereafter upon the request of the Company resign
as a director of the Company and such offices held by him in any of the Group
Companies as may be so requested and should he fail to do so, the Company is
hereby irrevocably authorised to appoint some person in his name and on his
behalf to sign and do any documents or things necessary or requisite to give
effect thereto. Notwithstanding anything else to the contrary herein, should
this Agreement be terminated pursuant to section 9.1.1, the Executive shall
continue to receive his salary for a period of 12 months following the
termination of this Agreement.

11.      Non-Competition

11.1.    Since the Executive has obtained in the course of his employment prior
         to the date hereof and is likely to obtain in the course of his
         employment hereunder knowledge of the trade secrets and also other
         confidential information in regard to the business of the Company and
         of any Group Company with which he becomes associated, the Executive
         hereby agrees with the Company that in addition to the restrictions
         contained in clause 4.3 he will not in Bermuda, the United States of
         America, the United Kingdom or the European Economic Community

                                       6
<PAGE>

         11.1.1.  during the period of 6 months following the termination of his
                  employment hereunder (howsoever caused) either on his own
                  account or for any other person, firm or company directly or
                  indirectly be engaged in or concerned with any business or
                  undertaking which is engaged in or carries on in Bermuda, the
                  United Kingdom, the European Economic Community any insurance
                  business which competes or seeks to compete with the business
                  carried on by the Company or any other Group Company at the
                  date of termination.

         11.1.2.  During the period of 6 months following the termination
                  aforesaid either on his own account or for any other person,
                  firm or company directly or indirectly solicit, interfere with
                  or endeavour to entice away from the Company or any Group
                  Company the custom of any person, firm or company who at the
                  date of termination aforesaid or who in the period of 12
                  months immediately prior to such date was a customer or client
                  of or in the habit of dealing with the Company or any Group
                  Company or who at such date was to his knowledge negotiating
                  with the Company or any Group Company in relation to all or
                  part of its business.

         11.1.3.  During the period of 6 months following the termination
                  aforesaid either on his own account or for any other person,
                  firm or company solicit the services of or endeavour to entice
                  away from the Company or any Group Company any director,
                  employee or consultant of the Company or any Group Company
                  (whether or not such person would commit any breach of his
                  contract of employment or engagement by reason of leaving the
                  service of such company) nor shall the Executive knowingly
                  employ or aid or assist in or procure the employment by any
                  other person, firm or company of any such person.

         11.1.4.  Provided, however, that Company shall pay to Executive during
                  the said 6 month non-competition period an amount equal to
                  Executive's total compensation (salary, bonus and benefits)
                  over the preceding 12 month period, in 6 equal monthly
                  instalments.

         11.1.5.  The Company shall be relieved of its obligations under clause
                  11.1.4 if, within 2 weeks of termination of this Agreement,
                  the Company provides written notice to the Executive releasing
                  him from the provisions of Section 11 of this Agreement.

11.2.    While the restrictions aforesaid are considered by the Parties to be
         reasonable in all the circumstances it is agreed that if any of such
         restrictions shall, taken together, be adjudged to go beyond what is
         reasonable in all the circumstances for the protection of the
         legitimate interests of the Company or any Group Company but would be
         adjudged reasonable if part of the wording thereof were deleted or
         modified the said restrictions shall apply with such words deleted or
         modified.

11.3.    The Executive hereby agrees that he will at the request and cost of the
         Company enter into a direct agreement or undertaking with any Group
         Company whereby he will accept restrictions and provisions
         corresponding to the restrictions and provisions herein contained (or
         such of them as may be appropriate in the circumstances) in relation to
         such services and such area and for such period as such company or
         companies may

                                       7
<PAGE>

         reasonably require for the protection of its or their legitimate
         interests provided that the terms of such restrictions and provisions
         will not be more onerous than the restrictions and provisions of this
         agreement.

12.      Untrue Statements

         The Executive shall not knowingly at any time make any untrue statement
         in relation to the Company or any Group Company and in particular shall
         not after the termination of his employment hereunder wrongfully
         represent himself as being employed by or connected with the Company or
         any Group Company.

13.      Schedule

         The provisions set out in the schedule hereto shall apply as if
         incorporated in this Agreement.

14.      Delegation

         The Company may at any time and from time to time delegate its power
         and authority under this Agreement to any Group Company and such
         delegation (or the revocation thereof) shall be effective upon the
         Company's giving written notice of the same to the Executive.

15.      Notices

         Notices may be given by either Party by pre-paid first class post or by
         hand delivery addressed to the other Party at (in the case of the
         Company) its registered office for the time being and (in the case of
         the Executive) his last known address. Any such notice given by post
         shall be deemed to have been served on the second week day after
         despatch (public holidays excepted) and any notice so given by hand
         shall be deemed to have been served when delivered if delivered during
         normal business hours or, if delivered outside such hours, at the next
         time after delivery when normal business hours commence.

16.1.    Miscellaneous

         The expiration or termination of this Agreement howsoever arising shall
         not operate to affect such of the provisions hereof as are expressed or
         intended to remain in full force and effect notwithstanding such
         termination.

16.2.    If any of the clauses, conditions, covenants or restrictions of this
         Agreement or any deed or document emanating from it shall be found to
         be void but would be valid if some part thereof were deleted or
         modified, then such clause, condition, covenant or restriction shall
         apply with such deletion or modification as may be necessary to make it
         valid and effective.

16.3.    This Agreement shall be binding and enure for the benefit of the
         successors of the Parties but shall not be assignable.

                                       8
<PAGE>

16.4.    This Agreement (together with any documents referred to herein)
         constitutes the whole agreement between the Parties relating to its
         subject matter.

16.5.    The headings in this Agreement are inserted for convenience only and
         shall not affect the construction of this Agreement.

16.6.    This Agreement may be executed in counterparts each of which when
         executed and delivered shall constitute an original but all such
         counterparts together shall constitute one and the same instrument.

16.7.    No provision in this Agreement may be amended unless such amendment is
         agreed to in writing, signed by the Executive and by a duly authorised
         officer of the Company. No waiver by either Party of any breach by the
         other Party of any condition or provision of this Agreement to be
         performed by such other Party shall be deemed a waiver of a similar or
         dissimilar condition or provision at the same or any prior or
         subsequent time. Any waiver must be in writing and signed by the
         Executive or a duly authorised officer of the Company, as the case may
         be.

16.8.    This Agreement shall be governed by and construed in accordance with
         the laws of Bermuda and the Parties hereby irrevocably submit to the
         non-exclusive jurisdiction of the courts of Bermuda.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.

  SIGNED by                                                             )
  on behalf of the Montpelier Re Holdings Ltd.                          )
  in the presence of                                                    )

/s/
-------------------------------------------------
  Witness

  SIGNED by C. Russell Fletcher, III                                    )
  in the presence of:                                                   )

  /s/ C. Russell Fletcher, III
-------------------------------------------------

/s/
-------------------------------------------------
  Witness

                                       9
<PAGE>

                                  THE SCHEDULE

1.       Hours of Work: The Executive shall conform to such hours of work as may
         reasonably be required of him for the proper performance of his duties
         hereunder and shall not be entitled to receive any additional
         remuneration for work outside his normal hours.

2.       Medical and Other Insurance: The Executive will be entitled to
         participate in the Company medical, dental, disability, life,
         accidental death and travel accident insurance plans and other
         insurance plans on the same terms as the Company's executive employees.

3.       Pension Provisions: The Executive will be entitled to participate in
         the Company's pension plan from time to time subject to the provisions
         of such pension plan in effect at the time.

4.       Incentive Plans: The Executive will be entitled to participate in the
         Montpelier Annual Incentive Plan, the Montpelier Long-Term Incentive
         Plan and any other incentive plan for which the Executive is eligible,
         from time to time subject to the provisions of such plans in effect at
         the time.

5.       Policies: The Executive shall adhere to the Company's policies and
         procedures, a copy of which has been given to the Executive. It
         contains details of Company policies along with descriptions of
         disciplinary and grievance procedures, dress code and other policies
         relevant to the Executive's employment. The Company reserves the right
         to vary the policies from time to time.

                                       10

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