Document:

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                                                                     Exhibit 4.2

                                                                  Execution Copy

                                MASTER AGREEMENT

                                     BETWEEN

                              ALLEGHANY CORPORATION

                                       AND

                     DARWIN PROFESSIONAL UNDERWRITERS, INC.

                            Dated as of May 18, 2006

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                                TABLE OF CONTENTS

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ARTICLE I  DEFINITIONS...................................................     1

   1.1   Certain Definitions.............................................     1

ARTICLE II  FINANCIAL AND OTHER INFORMATION..............................     4

   2.1   Financial Information and Public Documents......................     4
   2.2   Internal Control / Audit........................................     8
   2.3   Board Meetings..................................................     9
   2.4   Corporate Compliance Program....................................     9

ARTICLE III  CERTAIN MATTERS.............................................    10

   3.1   Amended and Restated Certificate of Incorporation and Amended
         and Restated Bylaws.............................................    10
   3.2   The Initial Public Offering.....................................    10
   3.3   Covenant Not to Take Certain Actions Affecting Alleghany........    10
   3.4   Adoption of Stockholder Rights Plan.............................    10
   3.5   Dilutive Issuances..............................................    10
   3.6   Repurchase of Common Stock......................................    11

ARTICLE IV  OTHER AGREEMENTS.............................................    11

   4.1   Further Assurances..............................................    11
   4.2   Insurance Matters...............................................    11
   4.3   Indemnification.................................................    12
   4.4   Investment Management...........................................    12
   4.5   Allocation of Costs and Expenses................................    12
   4.6   Charter Provision...............................................    13
   4.7   Alleghany Policies..............................................    13

ARTICLE V  MISCELLANEOUS.................................................    13

   5.1   Governing Law; Consent to Jurisdiction; Waiver of Jury Trial....    13
   5.2   Survival of Covenants...........................................    14
   5.3   Notices.........................................................    14
   5.4   Severability....................................................    14
   5.5   Entire Agreement................................................    15
   5.6   Amendment.......................................................    15
   5.7   Rules of Construction...........................................    15
   5.8   Counterparts....................................................    15
   5.9   Specific Performance............................................    16
   5.10  Further Assurances..............................................    16
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                                MASTER AGREEMENT

          MASTER AGREEMENT, dated as of May 18, 2006 (this "Agreement"), by and
between Alleghany Corporation, a Delaware corporation ("Alleghany") and Darwin
Profession Underwriters, Inc., a Delaware corporation ("DPUI"). Certain terms
used in this Agreement are defined in Section 1.1.

                                   WITNESSETH:

          WHEREAS, as of the date hereof, Alleghany, through its wholly-owned
subsidiary Alleghany Insurance Holdings LLC, owns approximately 90% of the
issued and outstanding voting securities of DPUI; and

          WHEREAS, DPUI has previously filed the IPO Registration Statement (as
herein defined) with the Securities and Exchange Commission but it has not yet
become effective; and

          WHEREAS, immediately following the consummation of the Initial Public
Offering (as herein defined), Alleghany will continue to own more than 50% of
the outstanding voting securities of DPUI; and

          WHEREAS, Alleghany may in the future further reduce its equity
ownership of DPUI; and

          WHEREAS, it is appropriate and desirable to set forth the agreements
that will, following the consummation of the Initial Public Offering, govern
certain matters relating to the Initial Public Offering and the relationship of
Alleghany, DPUI and their respective Subsidiaries (as herein defined).

          NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

          1.1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings specified in this Section 1.1:

          "Affiliate" (and, with a correlative meaning, "affiliated") means,
with respect to any Person, any direct or indirect subsidiary of such Person,
and any other Person that directly, or through one or more intermediaries,
controls or is controlled by or is under common control with such first Person;
provided, however, that from and after the Closing Date, no member of the DPUI
Group shall be deemed an Affiliate of any member of the Alleghany Group for
purposes of this Agreement and no member of the Alleghany Group shall be deemed
an Affiliate of any member of the DPUI Group for

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purposes of this Agreement. As used in this definition, "control" (including
with correlative meanings, "controlled by" and "under common control with")
means possession, directly or indirectly, of power to direct or cause the
direction of management or policies or the power to appoint and remove a
majority of directors (whether through ownership of securities or partnership or
other ownership interests, by contract or otherwise).

          "Alleghany Audit Committee" means the Audit Committee of the Alleghany
Board.

          "Alleghany Auditors" means the independent certified public
accountants of Alleghany.

          "Alleghany Board" means the Board of Directors of Alleghany.

          "Alleghany Designated Officer" means either of the Senior Vice
President - Finance and Investments or the Vice President - Finance of
Alleghany.

          "Alleghany Group" means Alleghany and each Person (other than any
member of the DPUI Group) that, at any time of determination, is a Subsidiary of
Alleghany.

          "Alleghany Representatives" means the officers and directors of
Alleghany and Persons designated by them (including without limitation legal
counsel and other professional advisors) to act on behalf of Alleghany.

          "Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by Law to
close. Any event the scheduled occurrence of which would fall on a day that is
not a Business Day shall be deferred until the next succeeding Business Day.

          "Capitol Companies" means, collectively, Capitol Insurance
Corporation, Capitol Specialty Insurance Corporation, and Platte River Insurance
Company.

          "CEO" means, with respect to either Alleghany or DPUI, its chief
executive officer.

          "CFO" means, with respect to either Alleghany or DPUI, its chief
financial officer.

          "Closing Date" means the closing of the Initial Public Offering.

          "Common Stock" means the common stock, $0.01 par value per share, of
DPUI.

          "DPUI Audit Committee" means the Audit Committee of the DPUI Board.

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          "DPUI Auditors" means the independent certified public accountants of
DPUI.

          "DPUI Board" means the Board of Directors of DPUI.

          "DPUI Group" means, at any time of determination, DPUI and each
Subsidiary of DPUI.

          "Effective Time" means the time that the IPO Registration Statement is
declared effective by the SEC.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder, all as the same
shall be in effect at the time that reference is made thereto.

          "GAAP" means United States generally accepted accounting principles.

          "Governmental Authority" means any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including any governmental authority, agency, department, board,
commission or instrumentality whether federal, state, local or foreign (or any
political subdivision thereof), and any tribunal, court or arbitrator(s) of
competent jurisdiction.

          "Initial Public Offering" means the initial public offering of the
Common Stock.

          "IPO Registration Statement" means the registration statement on Form
S-1 filed under the Securities Act (No. 333-132355) pursuant to which the Common
Stock to be sold in the Initial Public Offering will be registered, including
the Prospectus related thereto, amendments and supplements to the Registration
Statement, including post-effective amendments, all exhibits and all materials
incorporated by reference in the Registration Statement and Prospectus.

          "Law" means any federal, state, local or foreign law (including common
law), statute, code, ordinance, rule, regulation or other requirement enacted,
promulgated, issued or entered by a Governmental Authority.

          "NYSE Arca" means NYSE Arca Exchange or, if the Common Stock at any
time shall not be traded on the NYSE Acra Exchange, then such securities
exchange (including for this purpose the NASDAQ National Market) on which the
Common Stock is then traded.

          "Person" means any individual, corporation, partnership, firm, joint
venture, association, joint-stock company, trust, unincorporated organization,
Governmental Authority or other entity.

          "Prospectus" means the prospectus or prospectuses included in the
Registration Statement, as amended or supplemented by any prospectus supplement
and

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by all other amendments and supplements to any such prospectus, including
post-effective amendments and all material incorporated by reference in such
prospectus or prospectuses.

          "Purchase Agreement" means the Purchase Agreement to be entered into
by and among DPUI and the Underwriters in connection with the offering of Common
Stock by DPUI in the Initial Public Offering.

          "Registration Rights Agreement" means the Registration Rights
Agreement to be entered into by and between Alleghany Insurance Holdings LLC and
DPUI, substantially in the form filed or to be filed as an exhibit to the IPO
Registration Statement.

          "SEC" means the Securities and Exchange Commission.

          "Securities Act" means the Securities Act of 1933, as amended.

          "Subsidiary" or "subsidiary" means, with respect to any Person, any
corporation, limited liability company, joint venture or partnership of which
such Person (a) beneficially owns, either directly or indirectly, more than
fifty percent (50%) of (i) the total combined voting power of all classes of
voting securities of such entity, (ii) the total combined equity interests, or
(iii) the capital or profit interests, in the case of a partnership; or (b)
otherwise has the power to vote, either directly or indirectly, sufficient
securities to elect a majority of the board of directors or similar governing
body.

          "Tax Sharing Agreement" means the Tax Sharing Agreement, dated as of
January 1, 2005, entered into by and between Alleghany Insurance Holdings LLC
and DPUI.

          "Underwriters" means the managing underwriters for the Initial Public
Offering.

                                   ARTICLE II

                         FINANCIAL AND OTHER INFORMATION

          2.1 Financial Information and Public Documents. DPUI agrees that if
Alleghany is required during or for any fiscal year, in accordance with GAAP, to
account for its investment in DPUI on a consolidated basis or under the equity
method of accounting, then in respect of such fiscal year:

          (a) Fiscal Year. DPUI shall, and shall cause each of its consolidated
subsidiaries to, maintain a fiscal year which commences on January 1 and ends on
December 31 of each calendar year.

          (b) Monthly Financial Information. DPUI shall furnish to Alleghany a
Monthly President's Report, containing monthly financial and other information,
in such form and detail, and within the time periods, as are specified by the
Alleghany

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Designated Officer consistent with the requirements then applicable to other
Subsidiaries of Alleghany regarding such reports.

          (c) Monthly, Quarterly and Annual Financial Information. DPUI shall
furnish to Alleghany a Subsidiary Reporting Package containing monthly,
quarterly or annual financial and other information and data with respect to
DPUI and its Subsidiaries and their businesses, properties, financial position,
results of operations and prospects, in such form and detail, and within the
time periods, as are specified by the Alleghany Designated Officer consistent
with the requirements then applicable to other Subsidiaries of Alleghany
regarding such reporting packages.

          (d) Alleghany Public Filings. DPUI shall cooperate fully, and shall
use reasonable efforts to cause the DPUI Auditors to cooperate fully, with
Alleghany to the extent requested by Alleghany in the preparation of Alleghany's
press releases, public earnings releases, Quarterly Reports on Form 10-Q, Annual
Reports to Stockholders, Annual Reports on Form 10-K (the Annual Reports to
Stockholders and the Annual Reports on Form 10-K, collectively "the Alleghany
Annual Statements"), any Current Reports on Form 8-K and any amendments to any
of the foregoing and any other proxy, information and registration statements,
reports, notices, prospectuses and any other filings made by Alleghany with the
SEC, any national securities exchange or otherwise made publicly available
(collectively, "Alleghany Public Filings"). In connection with the Alleghany
Public Filings, DPUI agrees:

          (i) to provide to Alleghany all information that Alleghany requests in
     connection with any such Alleghany Public Filings or that, in the judgment
     of Alleghany's legal department, is required to be disclosed therein under
     any Law. Without limiting the generality of the foregoing, DPUI will
     provide all required financial information with respect to it and its
     consolidated Subsidiaries to the Alleghany Auditors and management in
     sufficient and reasonable time and in sufficient detail to permit the
     Alleghany Auditors to take all steps and perform all review necessary, and
     to provide sufficient assistance to the Alleghany Auditors, with respect to
     information to be included or contained in the Alleghany Public Filings;

          (ii) to use its best efforts to provide such information in a timely
     manner to enable Alleghany to prepare, print and release such Alleghany
     Public Filings on such date as Alleghany shall determine; in this regard,
     DPUI shall diligently and promptly review all drafts of such Alleghany
     Public Filings as are requested by Alleghany and shall prepare in a
     diligent and timely fashion any portion of such Alleghany Public Filing
     pertaining to DPUI or its Subsidiaries requested by Alleghany;

          (iii) to provide to Alleghany in connection with each quarterly and
     annual report filed by Alleghany with the SEC, reasonably in advance of the
     Alleghany Audit Committee related to such filing, the certifications from
     each of the CEO and the CFO of DPUI pursuant to Section 302 of the
     Sarbanes-Oxley Act (the "DPUI Certifications"); provided, however, that if
     the DPUI

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Certifications are not available reasonably in advance of such Alleghany Audit
Committee meeting, the CEO and CFO shall sign certifications which support the
certifications made by the CEO and the CFO of Alleghany in connection with such
filing pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, and such
certification by the CEO and the CFO of DPUI shall be in such form as Alleghany
then requires from its other Subsidiaries;

          (iv) to provide to Alleghany, reasonably in advance of the Alleghany
     Audit Committee meeting relating to the Annual Report on Form 10-K filed by
     Alleghany with the SEC, a DPUI management report, including an annual
     assessment by DPUI management of DPUI's internal control over financial
     reporting; provided, however, that if such DPUI management report is not
     available reasonably in advance of such Alleghany Audit Committee meeting,
     DPUI shall prepare and execute a management report in such form as
     Alleghany then requires from its other Subsidiaries;

          (v) that, without prior notice to Alleghany, DPUI shall not publicly
     release any financial or other information which conflicts with the
     information with respect to DPUI, any Affiliate of DPUI or the DPUI Group
     that is provided by DPUI for any Alleghany Public Filing;

          (vi) to use its best efforts to enable the DPUI Auditors to complete
     their audit such that they will date their opinion on DPUI's audited annual
     financial statements on the same date (or prior to the date) that the
     Alleghany Auditors date their opinion on the Alleghany Annual Statements,
     and to enable Alleghany to meet its timetable for the printing, filing and
     public dissemination of the Alleghany Annual Statements; and

          (vii) to provide such other information, certifications, reports or
     cooperation as the other Subsidiaries of Alleghany are from time to time
     required to provide to Alleghany.

          (e) DPUI Public Information and SEC Reports. DPUI shall file its
Quarterly Reports on Form 10-Q and its Annual Reports on Form 10-K with the SEC
as soon as possible (and in no event later than one Business Day) following
Alleghany's filing of its quarterly and annual reports with the SEC for the
corresponding period. In no event shall DPUI file any Quarterly Report on Form
10-Q or Annual Report on Form 10-K with the SEC prior to the time that Alleghany
files its corresponding report on Form 10-Q or Form 10-K with the SEC; provided,
however that such restriction shall not apply to the extent that compliance with
such restriction would cause DPUI not to be in compliance with its SEC filing.
DPUI shall deliver to Alleghany (to the attention of its General Counsel), no
later than the date the same are printed for distribution to its stockholders,
sent to its stockholders or filed with the SEC, whichever is earliest, final
copies of all DPUI reports, notices and proxy and information statements to be
sent or made available by DPUI or such Subsidiaries to their security holders,
all regular, periodic and other reports filed under Sections 13, 14 and 15 of
the Exchange Act by DPUI or such Subsidiaries and all registration statements
and prospectuses to be filed by

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     DPUI or such Subsidiaries with the SEC or any securities exchange pursuant
     to the listed company manual (or similar requirements) of such exchange
     (collectively, "DPUI Public Documents"). Alleghany shall have the right to
     review, reasonably in advance of public release or filing or release to
     financial analysts or investors (i) all press releases and other statements
     to be made available by DPUI or any of its Subsidiaries to the public which
     contain DPUI financial information, results of operation, earnings guidance
     or information with respect to transactions or matters outside the ordinary
     course of DPUI's business, (ii) all reports and other information prepared
     by DPUI or any of its Subsidiaries for release to financial analysts or
     investors which contain DPUI financial information, results of operation,
     earnings guidance with respect to transactions or information matters
     outside the ordinary course of DPUI's business, and (iii) all DPUI Public
     Documents.

          (f) Earnings Releases. DPUI agrees that unless Alleghany shall have
consented thereto, no member of the DPUI Group will publicly release any
quarterly, annual or other financial information of DPUI or any of its
Subsidiaries ("DPUI Information") prior to the time that Alleghany publicly
releases financial information of Alleghany for the relevant period. DPUI shall
publicly release its financial results for each annual and quarterly period
immediately (and in no event later than one Business Day) following Alleghany's
release of its financial results for the corresponding period.

          (g) Other Financial Information. DPUI shall provide to Alleghany upon
request such other financial information and analyses of DPUI and its
Subsidiaries that may from time to time be requested by Alleghany, including
without limitation such information as may be required to enable Alleghany to
comply with applicable financial reporting requirements or its customary
financial reporting practices.

          (h) Annual Reports Furnished to State Insurance Regulatory
Authorities. Promptly following the filing by DPUI or any Subsidiary of DPUI of
annual reports with any state insurance regulatory authority in each
jurisdiction in which such reports are required to be filed, DPUI shall deliver
the final forms of such reports to Alleghany.

          (i) Meetings with Financial Analysts. DPUI shall notify Alleghany
reasonably in advance of the date of all scheduled meetings and conference calls
to be held between DPUI and members of the investment community (including any
financial analysts), and of any conferences to be attended by management of DPUI
with members of the investment community, and shall consult with Alleghany as to
the appropriate timing for all such scheduled meetings, calls and conferences.
With respect to any such meeting, call or conference, DPUI shall not schedule
such meeting or call or attend such conference on any date to which Alleghany
objects.

          (j) Communications with Regulators. DPUI shall notify Alleghany
promptly of any communications that DPUI or any member of the DPUI Group may
have or receive from time to time with or from any regulators, including the
SEC, any self-regulatory organization with appropriate jurisdiction, NYSE Arca
and any state insurance regulators, in connection with any compliance,
regulatory or accounting matters;

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provided that DPUI shall not be required to provide notification of routine
communications with or from state insurance regulators in the ordinary course of
business. Without limitation of the foregoing, DPUI shall promptly provide
Alleghany with copies of any written correspondence with regulators, provided
that DPUI shall not be required to provide copies of routine correspondence with
state insurance regulators in the ordinary course of business.

          2.2 Internal Control / Audit. DPUI agrees that if Alleghany is
required during or for any fiscal year, in accordance with GAAP, to account for
its investment in DPUI on a consolidated basis or under the equity method of
accounting, then, unless stated otherwise herein, in respect of such fiscal
year:

          (a) Maintenance of Books and Records. DPUI shall, and shall cause each
of its consolidated Subsidiaries to, (i) make and keep books, records and
accounts, which, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of DPUI and such Subsidiaries and
(ii) devise and maintain a system of internal accounting controls sufficient to
provide reasonable assurances that: (A) transactions are executed in accordance
with management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

          (b) Access to Company Records and Personnel. DPUI shall provide the
Alleghany Representatives and the Alleghany Auditors with full access to DPUI's
books and records and to the internal accounting controls and operations of
DPUI. DPUI shall also provide the Alleghany Representatives and the Alleghany
Auditors with full access to the officers, directors and employees of DPUI and
the other members of the DPUI Group and to the DPUI Auditors so that the
Alleghany Representatives and the Alleghany Auditors may discuss with them the
affairs, finances, accounts and prospects relating to DPUI and the other members
of the DPUI Group.

          (c) Access to Personnel and Working Papers. DPUI will request the DPUI
Auditors to make available to the Alleghany Auditors both the personnel who
performed or are performing the annual audit of DPUI and, consistent with
customary professional practice and courtesy of such auditors with respect to
the furnishing of work papers, work papers related to the annual audit of DPUI,
in all cases on a time frame that will enable the Alleghany Auditors to perform
the procedures they consider necessary to take responsibility for the work of
the DPUI Auditors as it relates to the Alleghany Auditors' report on the
Alleghany Annual Statements, all within sufficient time to enable Alleghany to
meet its timetable for the printing, filing and public dissemination of the
Alleghany Annual Statements.

          (d) Accounting Estimates and Principles. DPUI will give Alleghany
notice of any proposed material change in accounting estimates or material
change in

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accounting principle (including without limitation changes in reserving
practices) from those currently in effect at DPUI and its Subsidiaries. DPUI
will consult with Alleghany with respect to any such proposed change and, if
requested by Alleghany, DPUI will, and will cause the DPUI Auditors to, consult
with the Alleghany Auditors with respect thereto. Without limitation of the
foregoing, if Alleghany so requests, DPUI will be required to obtain the
concurrence of the DPUI Auditors as to such material change prior to its
implementation. For so long as Alleghany is required during or for any fiscal
year, in accordance with GAAP, to account for its investment in DPUI on a
consolidated basis, DPUI agrees that it will not implement any such proposed
material change in accounting estimates or accounting principle without
Alleghany's prior written consent (excluding changes that, in the opinion of the
DPUI Auditors, are mandated or required by the SEC, the Financial Accounting
Standards Board or the Public Company Accounting Oversight Board).

          (e) Reports of Accountants and External Actuaries. Promptly, but in no
event later than five Business Days following the receipt thereof, DPUI shall
deliver to Alleghany copies of (i) all reports submitted to DPUI or any of its
Subsidiaries by the DPUI Auditors, including, without limitation, each report
submitted to DPUI or any of its Subsidiaries concerning its accounting practices
and systems and any comment letter submitted to management in connection with
the annual audit conducted by the DPUI Auditors and all responses by management
to such reports and letters and (ii) all reports and opinions submitted to DPUI
or any of its Subsidiaries by their external actuaries.

          (f) Alleghany Audit Committee Approval. To the extent required by
statute, SEC rules and regulations, any self-regulatory organization with
appropriate jurisdiction (including, without limitation, the NYSE exchange or
any other stock exchange on which the shares of Alleghany common Stock are
listed), or any state insurance regulators law, all engagements of the DPUI
Auditors, whether for audit services or for non-audit services, must be approved
by the Alleghany Audit Committee.

          2.3 Board Meetings. DPUI agrees that, for so long as Alleghany is
required during or for any fiscal year, in accordance with GAAP, to account for
its investment in DPUI on a consolidated basis or under the equity method of
accounting, then in respect of such fiscal year, at the request of Alleghany,
the executive officers of DPUI shall make themselves available to attend
meetings of the Alleghany Board and shall provide such reports to the Alleghany
Board as Alleghany shall request.

          2.4 Corporate Compliance Program. DPUI agrees, for so long as
Alleghany is required during or for any fiscal year, in accordance with GAAP, to
account for its investment in DPUI on a consolidated basis or under the equity
method of accounting, (i) to maintain a corporate compliance program which
meets, in all material respects, the elements of an "effective" corporate
compliance program as defined by the U.S. Sentencing Guidelines for
Organizations, (ii) at all times to have a Chief Compliance Officer who shall
provide regular reports to the DPUI Audit Committee and to the Alleghany Chief
Compliance Officer (the "Alleghany CCO"), (iii) at the request of the Alleghany
CCO, to furnish compliance information related to DPUI and to the members of the
DPUI Group, in such form and detail as may be requested by the

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Alleghany CCO, (iv) to provide the Alleghany CCO with advance notice of any
proposed change in DPUI's Code of Conduct or of any other material change
proposed to other elements of its compliance program and (v) to provide notice
to the Alleghany CCO of any material violation by a director, officer or
employee of DPUI or other member of the DPUI Group of its Code of Conduct or
other provisions of DPUI's compliance program.

                                  ARTICLE III

                                CERTAIN MATTERS

          3.1 Amended and Restated Certificate of Incorporation and Amended and
Restated Bylaws. Prior to the Effective Time, each of DPUI and Alleghany shall
take all necessary action that may be required to provide for the adoption by
DPUI of the Amended and Restated Certificate of Incorporation of DPUI in the
form attached hereto as Exhibit A (the "Charter"), and the Amended and Restated
Bylaws of DPUI in the form attached hereto as Exhibit B (the "Bylaws"), in each
case, with such changes thereto as may be approved by Alleghany.

          3.2 The Initial Public Offering. At the direction of Alleghany, DPUI
shall execute and deliver the Purchase Agreement in such form and substance as
is reasonably satisfactory to Alleghany, and DPUI shall promptly take any and
all actions as may be directed by Alleghany in connection with the consummation
of the Initial Public Offering as contemplated by the IPO Registration Statement
and the Purchase Agreement.

          3.3 Covenant Not to Take Certain Actions Affecting Alleghany. DPUI
hereby covenants and agrees that it shall not, without the prior written consent
of Alleghany (which Alleghany may withhold in its sole and absolute discretion)
take, or cause to be taken, directly or indirectly, any action which has the
effect, directly or indirectly, of restricting or limiting the ability of
Alleghany or any member of the Alleghany Group to freely sell, transfer, assign,
pledge or otherwise dispose of shares of Common Stock. Without limiting the
generality of the foregoing, DPUI shall not, without the prior written consent
of Alleghany (which Allegany may withhold in its sole and absolute discretion),
take any action, or recommend to its stockholders any action, which would limit
the legal rights of, or deny any benefit to, Alleghany or any member of the
Alleghany Group as a stockholder of DPUI in a manner not applicable to
stockholders of DPUI generally.

          3.4 Adoption of Stockholder Rights Plan. DPUI agrees that for so long
as members of the Alleghany Group beneficially own, in the aggregate, ten
percent (10%) or more of the then outstanding shares of Common Stock, DPUI shall
not adopt or implement any stockholder rights plan or similar takeover defense
measure without Alleghany's prior written consent.

          3.5 Dilutive Issuances. DPUI agrees that for so long as members of the
Alleghany Group beneficially own, in the aggregate, more than fifty percent
(50%) of the then outstanding shares of Common Stock, DPUI shall not issue any
shares of

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Common Stock or any securities convertible into or exercisable or exchangeable
for shares of Common Stock (including, without limitation, options and warrants)
or any other rights to acquire shares of Common Stock or any such securities, or
take any other action, the effect of which would be to reduce Alleghany's
beneficial ownership of Common Stock to less than fifty percent (50%) of the
then outstanding shares of Common Stock.

          3.6 Repurchase of Common Stock. DPUI agrees that for so long as
members of the Alleghany Group beneficially own, in the aggregate, more than
fifty percent (50%) of the then outstanding shares of Common Stock, DPUI shall
not, and shall cause the other members of the DPUI Group not to, purchase,
redeem or otherwise acquire or retire for value any shares of Common Stock or
any warrants, options or other rights to acquire Common Stock other than (i) the
repurchase of Common Stock deemed to occur upon exercise of stock options to the
extent that shares of Common Stock represent a portion of the exercise price of
the stock options or are withheld by DPUI to pay applicable withholding taxes
and (ii) the repurchase of Common Stock deemed to occur to the extent shares of
Common Stock are withheld by DPUI to pay applicable withholding taxes in
connection with any grant or vesting of restricted stock.

                                   ARTICLE IV

                                OTHER AGREEMENTS

          4.1 Further Assurances. In addition to the actions specifically
provided for elsewhere in this Agreement, each of the parties hereto will
cooperate with each other and use (and will cause their respective Subsidiaries
and Affiliates to use) commercially reasonable efforts, prior to, on and after
the Closing Date, to take, or to cause to be taken, all actions, and to do, or
to cause to be done, all things reasonably necessary on its part under
applicable Law or contractual obligations to consummate and make effective the
transactions contemplated by this Agreement.

          4.2 Insurance Matters.

          (a) Alleghany and DPUI acknowledge that, immediately following
completion of the Initial Public Offering, members of the DPUI Group will
continue to be covered under the umbrella insurance policies and the director
and officer liability insurance policies maintained by Alleghany for the benefit
of Alleghany and its Subsidiaries (the "Alleghany Policies"). DPUI agrees that
for so long as coverage under the Alleghany Policies is continued, members of
the DPUI Group will pay to Alleghany amounts representing their allocable
portions of the premiums for such Alleghany Policies as determined by Alleghany.
DPUI agrees that Alleghany may terminate the coverage of the members of the DPUI
Group under any of the Alleghany Policies at any time upon at least 60 days'
written notice to DPUI and that, upon receipt of such notice, it will be the
responsibility of DPUI to obtain, at its own expense, replacement umbrella
insurance and/or directors and officers liability insurance coverage.

                                       11

<PAGE>

          (b) DPUI may terminate coverage of members of the DPUI Group under the
Alleghany Policies at any time; provided that the termination by DPUI of
coverage of the members of the DPUI Group under any Alleghany Policy shall not
relieve the members of the DPUI Group to pay to Alleghany, through the current
expiration date of such Alleghany Policy as of the time of termination of
coverage of members of the DPUI Group thereunder by DPUI, amounts representing
their allocable portions of the premiums under such Alleghany Policy as
determined by Alleghany.

          (c) In no event shall Alleghany or any other member of the Alleghany
Group have any liability or obligation whatsoever to any member of the DPUI
Group, or to any director or officer of any member of the DPUI Group, if any of
the Alleghany Policies shall be terminated or otherwise cease to be in effect or
for any reason shall be unavailable or inadequate to cover any liability of any
member of the DPUI Group or of any director or officer of any member of the DPUI
Group.

          (d) DPUI agrees, on behalf of itself and each Subsidiary of DPUI, that
any claim asserted by DPUI or any Subsidiary of DPUI under any of the Alleghany
Policies may be asserted only through Alleghany.

          4.3 Indemnification. DPUI and Alleghany agree that it shall be the
responsibility of DPUI, and not the responsibility of Alleghany, to indemnify
any director or officer of a member of the DPUI Group who asserts a claim for
indemnification arising from his or her service as a director or officer of a
member of the DPUI Group, regardless of whether such claim arises from an event
occurring prior or subsequent to the completion of the Initial Public Offering.
DPUI further agrees that it shall indemnify Alleghany and hold Alleghany
harmless against any loss, liability or expense arising from the assertion of
any such claim against Alleghany.

          4.4 Investment Management. DPUI and Alleghany agree that, subsequent
to the completion of the Initial Public Offering, Alleghany will have no
obligation to provide investment management services or investment advice to
members of the DPUI Group. DPUI acknowledges and agrees that Alleghany has no
obligation to provide to members of the DPUI Group investment ideas or
opportunities to share in investments made by Alleghany or made available by
Alleghany to other members of the Alleghany Group.

          4.5 Allocation of Costs and Expenses.

DPUI agrees, for so long as Alleghany is required during or for any fiscal year,
in accordance with GAAP, to account for its investment in DPUI on a consolidated
basis or under the equity method of accounting, Alleghany may, with reasonable
notice to and the consent of DPUI ( such consent not to be unreasonably
withheld), retain third parties for the benefit of DPUI or any other member of
the DPUI Group. DPUI shall pay the fees and expenses of the third party (or to
the extent paid for by Alleghany, will promptly reimburse Alleghany for any and
all amounts so paid), including without limitation the fees and expenses of KPMG
LLP. To the extent that such fees are charged by a third party on a basis that
relates to members of the Alleghany Group and members of the

                                       12

<PAGE>

DPUI Group, then DPUI shall be responsible for payment (or reimbursement) of the
portion of such fees and expenses charged by such third party as are reasonably
allocable to members of the DPUI Group.

          4.6 Charter Provision. DPUI shall, and shall cause each of its
Subsidiaries to, take any and all actions necessary to ensure continued
compliance by DPUI and its Subsidiaries with the provisions of its certificate
or articles of incorporation and by-laws. DPUI shall notify Alleghany in writing
promptly after becoming aware of any act or activity taken or proposed to be
taken by DPUI or any of its Subsidiaries which resulted or would result in
non-compliance with any such charter provisions. DPUI and its Subsidiaries shall
take or refrain from taking all actions necessary or desirable to prevent or
remedy any non-compliance with the provisions of its certificate or articles of
incorporation and by-laws.

          4.7 Alleghany Policies. Except as otherwise agreed by Alleghany or
unless superseded by any comparable policies adopted by the Darwin Board, the
policies of Alleghany that apply to Subsidiaries of Alleghany shall apply to
DPUI and its Subsidiaries for so long as members of the Alleghany Group
beneficially own, in the aggregate, more than fifty percent (50%) of the then
outstanding shares of Common Stock. The key policies of Alleghany applicable to
DPUI and its Subsidiaries as of the Closing Date are listed on Schedule 4.7.

                                   ARTICLE V

                                 MISCELLANEOUS

          5.1 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof. Each of the parties hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the state and federal courts located in the State of Delaware
for the purposes of enforcing this Agreement. The parties shall take such
actions as are within their control to cause any matter contemplated hereby to
be assigned to the Chancery Court of the State of Delaware. In any action, suit
or other proceeding, each of the parties hereto irrevocably and unconditionally
waives and agrees not to assert by way of motion, as a defense or otherwise any
claim that it is not subject to the jurisdiction of the above courts, that such
action or suit is brought in an inconvenient forum or that the venue of such
action, suit or other proceeding is improper. Each of the parties hereto also
agrees that any final and unappealable judgment against a party hereto in
connection with any action, suit or other proceeding shall be conclusive and
binding on such party and that such award or judgment may be enforced in any
court of competent jurisdiction, either within or outside of the United States.
A certified or exemplified copy of such award or judgment shall be conclusive
evidence of the fact and amount of such award or judgment. Each of the parties
hereto hereby irrevocably waives any and all right to trial by jury in any legal

                                       13

<PAGE>

proceeding arising out of or related to this Agreement or the transactions
contemplated hereby.

          5.2 Survival of Covenants. The covenants and other agreements
contained in this Agreement, and liability for the breach of any obligations
contained herein, shall survive the Initial Public Offering and shall remain in
full force and effect.

          5.3 Notices. All notices, requests and other communications pursuant
to this Agreement shall be in writing and shall be deemed to have been duly
given, if delivered in person or by courier, or sent by express, registered or
certified mail, postage prepaid, to the Alleghany Group or to the DPUI Group at
the address set forth below:

          If to the Alleghany Group, to:

               Alleghany Insurance Holdings LLC
               c/o Alleghany Corporation
               7 Times Square Tower
               17th Floor
               New York, NY 10036
               Attention: Chairman

               with a copy to:

               Alleghany Corporation
               7 Times Square Tower
               17th Floor
               New York, NY 10036
               Attention: General Counsel

          If to the DPUI Group, to:

               Darwin Professional Underwriters, Inc.
               9 Farm Springs Road
               Farmington, Connecticut 06032
               Attention: Chairman

               with a copy to:

               Darwin Professional Underwriters, Inc.
               9 Farm Springs Road
               Farmington, Connecticut 06032
               Attention: General Counsel

          5.4 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced under any Law or as a matter of
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties to this Agreement shall negotiate in

                                       14

<PAGE>

good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated by this Agreement be consummated as originally
contemplated to the greatest extent possible.

          5.5 Entire Agreement. Except as otherwise expressly provided in this
Agreement, this Agreement (including the Schedules and Exhibits hereto)
constitutes the entire agreement of the parties hereto with respect to the
subject matter of this Agreement and supersedes all prior agreements and
undertakings, both written and oral, between or on behalf of the parties hereto
with respect to the subject matter of this Agreement. For the avoidance of
doubt, nothing in this Agreement shall be deemed to supersede or to amend in any
respect any of the Registration Rights Agreement, the Tax Sharing Agreement, or
any other agreement currently in effect between any member of the Alleghany
Group, on the one hand, and any member of the DPUI Group, on the other hand,
including without limitation the agreements between members of the DPUI Group
and the Capitol Companies, which have been filed as exhibits to the IPO
Registration Statement (collectively, the "Intercompany Agreements"), and each
of the Intercompany Agreements shall remain in full force and effect in
accordance with its respective terms as such terms may be modified from time to
time as permitted under the terms of such Intercompany Agreement.

          5.6 Amendment. No provision of this Agreement may be amended or
modified except by a written instrument signed by all the parties hereto. No
waiver by any party of any provision hereof shall be effective unless explicitly
set forth in writing and executed by the party so waiving. The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any other subsequent breach.

          5.7 Rules of Construction. Interpretation of this Agreement shall be
governed by the following rules of construction: (a) words in the singular shall
be held to include the plural and vice versa, and words of one gender shall be
held to include the other gender, in each case as the context requires, (b)
references to the terms Article, Section, paragraph, Schedule and Exhibit are
references to the Articles, Sections, paragraphs, Schedules and Exhibits to this
Agreement unless otherwise specified, (c) the word "including" and words of
similar import shall mean "including, without limitation," (d) provisions shall
apply, when appropriate, to successive events and transactions, (e) the table of
contents and headings contained herein are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement and (f)
this Agreement shall be construed without regard to any presumption or rule
requiring construction or interpretation against the party drafting or causing
any instrument to be drafted.

          5.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

                                       15

<PAGE>

          5.9 Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to any
other remedy to which it may be entitled at law or in equity, shall be entitled
to injunctive relief, including specific performance, to enforce such
obligations without the posting of any bond, and, if any action should be
brought in equity to enforce any of the provisions of this Agreement, none of
the parties hereto shall raise the defense that there is an adequate remedy at
law.

          5.10 Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments, and
documents as any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.

            [The remainder of this page is intentionally left blank]

                                       16

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the date first written above by their respective duly authorized
officers.

                                         ALLEGHANY INSURANCE HOLDINGS LLC

                                         By: /s/ WESTON M. HICKS
                                             -----------------------------------
                                         NAME: Weston M. Hicks
                                         Title: President and CEO

                                         DARWIN PROFESSIONAL UNDERWRITERS, INC.

                                         By: /s/ STEPHEN SILLS
                                             -----------------------------------
                                         Name: Stephen Sills
                                         Title: President and CEO<PAGE>
                                                                    EXHIBIT 10.1

                     DARWIN PROFESSIONAL UNDERWRITERS, INC.

                            2006 STOCK INCENTIVE PLAN

      1. PURPOSES OF THE PLAN. The purposes of the Darwin Professional
Underwriters, Inc. 2006 Stock Incentive Plan (the "Plan") are to further the
long-term growth of Darwin Professional Underwriters, Inc. (the "Corporation"),
to the benefit of its stockholders, by providing incentives to the officers and
other key employees of the Corporation and its subsidiaries who will be largely
responsible for such growth, and to assist the Corporation in attracting and
retaining executives of experience and ability on a basis competitive with
industry practices. The Plan permits the Corporation to provide incentive
compensation in the form of, or based upon the value of, the Corporation's
common stock, $.01 par value ("Common Stock"), of the types commonly known as
restricted stock, stock options, stock appreciation rights and performance
shares, as well as other types of equity-based incentive compensation
(collectively, the "Awards").

      2. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Compensation Committee of the Board of Directors or such other committee of two
or more directors as the Board of Directors of the Corporation may from time to
time designate (the "Committee"). Subject to the provisions of the Plan, the
Committee shall have exclusive power to select the officers or other key
employees to participate in the Plan, to determine the type, size and terms and
conditions of Awards (including, but not limited to, restrictions as to
transferability or forfeiture, exercisability or settlement of an Award and
waivers or accelerations thereof, based in each case on such considerations as
the Committee shall determine) and all other matters to be determined in
connection with any Award to be made to each Participant selected, and to
determine the time or times when Awards will be granted; provided, however, that
if the Committee is not the Compensation Committee of the Board of Directors,
then an Award granted hereunder by the Committee to any Participant will be
revoked if such Award is not thereafter ratified by the Compensation Committee
of the Board of Directors. The Committee's interpretation of the Plan or of any
Awards granted thereunder shall be final and binding on all parties concerned,
including the Corporation and any Participant. The Committee shall have the
authority, subject to the provisions of the Plan, to correct any defect or
supply any omission or reconcile any inconsistency in the Plan, and to adopt,
revise and rescind such rules, regulations, guidelines, forms of agreements and
instruments relating to the Plan as it may deem necessary or advisable for the
administration of the Plan.

      3. PARTICIPATION. The Committee shall select from the officers and other
key employees of the Corporation and its subsidiaries (the "Participants") the
persons who will receive Awards pursuant to the Plan. The term "subsidiary"
shall mean any corporation a majority of the total combined voting power of
whose stock is beneficially owned, directly or indirectly, by the Corporation.
Participants may receive multiple Awards under the Plan.

      4. SHARES OF STOCK SUBJECT TO THE PLAN. Subject to adjustment as provided
in Section 6(a) hereof, 850,000 shares of Common Stock may be issued pursuant to
Awards under the Plan, provided that no more than 850,000 shares of Common Stock
may be issued pursuant to Options intended to qualify as incentive stock
options. Shares to be issued under the Plan may be either authorized but
unissued shares of Common Stock or shares of

<PAGE>

Common Stock held by the Corporation as treasury shares, including shares
acquired by purchase.

      No Award may be granted if the number of shares of Common Stock to which
such Award relates, when added to the number of shares of Common Stock
previously issued under the Plan and the number of shares of Common Stock which
may then be acquired pursuant to other outstanding, unexercised Awards, exceeds
the number of shares of Common Stock available for issuance pursuant to the
Plan. If any shares of Common Stock subject to an Award are forfeited or such
Award is settled in cash or otherwise terminates or is settled for any reason
whatsoever without an actual issuance of shares of Common Stock to the
Participant, any shares of Common Stock counted against the number of shares of
Common Stock available for issuance pursuant to the Plan with respect to such
Award shall, to the extent of any such forfeiture, settlement, or termination,
again be available for Awards under the Plan; provided, however, that the
Committee may adopt procedures for the counting of shares of Common Stock
relating to any Award to ensure appropriate counting, avoid double counting, and
provide for adjustments in any case in which the number of shares of Common
Stock actually distributed differs from the number of shares of Common Stock
previously counted in connection with such Award. Notwithstanding anything to
the contrary herein, the following shares of Common Stock shall not again be
available for issuance as Awards under the Plan: (i) shares of Common Stock
tendered (either actually, by attestation or otherwise) to pay all or any part
of the exercise price on any Option, (ii) any shares of Common Stock retained by
the Corporation in satisfaction of the Participant's obligation for withholding
taxes, and (iii) shares of Common Stock not issued as a result of a net exercise
of an Option.

      5.    AWARDS.

            (a) General. Awards under the Plan may include, but need not be
      limited to, shares of Common Stock that may be subject to certain
      restrictions and to a risk of forfeiture ("Restricted Stock"), options to
      purchase a specified number of shares of Common Stock at a fixed exercise
      price ("Options"), rights to receive the appreciation of Common Stock from
      the date of grant to the date of exercise ("SARs") and a book-entry unit
      with an initial value equal to Common Stock on the date of grant
      ("Performance Shares"). The Committee may also make any other type of
      Award payable in, or valued in whole or in part by reference to, shares of
      Common Stock ("Stock-Based Awards") deemed by the Committee to be
      consistent with the purposes of the Plan. Awards may be granted on the
      terms and conditions set forth in this Section 5.

            (b) Vesting, Other Performance Requirements and Forfeiture. In
      making Awards under the Plan, the Committee may, on the date of grant or
      thereafter, (i) specify that the right to exercise, receive, retain and/or
      transfer such Award shall be conditional upon the fulfillment of specified
      conditions, including, without limitation, completion of specified periods
      of service in the employ of the Corporation or its subsidiaries, and/or
      the achievement of specified business and/or personal performance goals,
      and (ii) provide for the forfeiture of all or any portion of any such
      Awards in specified circumstances. The Committee may also specify by whom
      and/or in what manner the accomplishment of any such performance goals
      shall be determined. Notwithstanding the foregoing, the

                                      -2-
<PAGE>

      Committee shall retain full power to accelerate or waive any such
      condition as it may have previously imposed. All Awards shall be evidenced
      by an Award agreement.

            (c) Term of Awards. The term of each Award shall, except as
      otherwise provided herein, be for such period as may be determined by the
      Committee; provided, however, that in no event shall the term of any Award
      exceed a period of ten years from the date of grant.

            (d) Restricted Stock. The Committee may grant Restricted Stock to
      Participants on the following terms and conditions:

                  (i) Restricted Stock shall be subject to such restrictions on
      transferability and other restrictions, if any, as the Committee may
      impose at the date of grant or thereafter, which restrictions, if any, may
      lapse separately or in combination at such times, under such circumstances
      (including, without limitation, upon achievement of performance criteria
      if deemed appropriate by the Committee), in such installments, or
      otherwise, as the Committee may determine. Except to the extent restricted
      under the Award agreement relating to the Restricted Stock, a Participant
      granted Restricted Stock shall have all of the rights of a shareholder
      including, without limitation, the right to vote Restricted Stock and the
      right to receive dividends (whether in cash or in shares of Common Stock)
      thereon.

                  (ii) Except as otherwise determined by the Committee, at the
      date of grant or thereafter, upon termination of employment prior to
      specific vesting dates, shares of Restricted Stock and any accrued but
      unpaid dividends that are at that time subject to restrictions shall be
      forfeited.

                  (iii) Restricted Stock granted under the Plan may be evidenced
      in such manner as the Committee shall determine. If certificates
      representing Restricted Stock are registered in the name of the
      Participant, such certificates shall bear an appropriate legend referring
      to the terms, conditions, and restrictions applicable to such Restricted
      Stock, and, if the Committee so determines, the Corporation shall retain
      physical possession of the certificate representing such Restricted Stock
      (whether or not vested).

            (e) Options. The Committee may grant Options to Participants on the
      following terms and conditions:

                  (i) An Option shall confer on the Participant the right to
                  purchase a specified number of shares of Common Stock at a
                  fixed exercise price (the "Exercise Price"). Options granted
                  may include Options intended to qualify as incentive stock
                  options within the meaning of Section 422 of the Internal
                  Revenue Code of 1986, as amended ("Code"), and Options not
                  intended to so qualify.

                  (ii) The term of any Option shall be determined by the
                  Committee, but in no event shall any Option be exercisable
                  more than ten years after the date on which it was granted.

                                      -3-
<PAGE>

                  (iii) The Exercise Price at which shares of Common Stock may
                  be purchased pursuant to any Option shall be determined by the
                  Committee at the time the Option is granted, but in no event
                  shall the Exercise Price be less than 100 percent of the Fair
                  Market Value of such shares on the date the Option is granted.
                  For purposes of the Plan, Fair Market Value is the mean of the
                  high and low sales prices of the Common Stock on the relevant
                  date as reported on the stock exchange or market on which the
                  Common Stock is primarily traded, or, if no sale is made on
                  such date, then Fair Market Value is the weighted average of
                  the mean of the high and low sales prices of the Common Stock
                  on the next preceding day and the next succeeding day on which
                  such sales were made as reported on the stock exchange or
                  market on which the Common Stock is primarily traded.

                  (iv) Upon exercise of an Option, the Exercise Price shall be
                  payable to the Corporation in cash, or, at the discretion of
                  the Committee, in shares of Common Stock valued at the Fair
                  Market Value thereof on the date of payment, or in a
                  combination of cash and shares of Common Stock.

                  (v) The Corporation may, if the Committee so determines,
                  accept the surrender by a Participant, or the personal
                  representative of a Participant, of an Option, in
                  consideration of a payment by the Corporation equal to the
                  difference obtained by subtracting the aggregate Exercise
                  Price from the aggregate Fair Market Value of the Common Stock
                  covered by the Option on the date of such surrender, such
                  payment to be in cash, or, if the Committee so provides, in
                  shares of Common Stock valued at Fair Market Value on the date
                  of such surrender, or partly in shares of Common Stock and
                  partly in cash.

            (f) Stock Appreciation Rights. The Committee is authorized to grant
      SARs to Participants on the following terms and conditions:

                  (i) A SAR shall confer on the Participant to whom it is
                  granted a right to receive, upon exercise thereof, the excess
                  of (A) the Fair Market Value of one share of Common Stock on
                  the date of exercise over (B) the Fair Market Value of one
                  share of Common Stock on the date of grant of the SAR (the
                  "Grant Value").

                  (ii) The Committee shall determine the time or times at which
                  a SAR may be exercised in whole or in part, the method of
                  exercise, method of settlement, form of consideration payable
                  in settlement, the method by which shares of Common Stock will
                  be delivered or deemed to be delivered to Participants, and
                  any other terms and conditions of any SAR.

            (g) Performance Shares. The Committee is authorized to grant Awards
      of Performance Shares to Participants with a value equal to the Fair
      Market Value of one share of Common Stock on the date of grant. An Award
      of Performance Shares shall

                                      -4-
<PAGE>

      vest and become payable to a Participant after a specified period of
      continued employment with the Corporation or a subsidiary or upon the
      achievement of specified performance goals, as determined by the
      Committee. Settlement of Performance Shares shall be made in cash or
      shares of Common Stock or any combination thereof, as determined by the
      Committee.

            (h) Other Stock-Based Awards. The Committee is authorized, subject
      to limitations under applicable law, to grant to Participants Stock-Based
      Awards, in addition to those provided in Sections 5(d), (e), (f) and (g)
      hereof, as deemed by the Committee to be consistent with the purposes of
      the Plan, including Stock-Based Awards granted in substitution for any
      other right of a Participant to receive payment of compensation from the
      Corporation or a subsidiary. The Committee shall determine the terms and
      conditions of such Awards.

            (i) Cash Payments. The Committee is authorized, subject to
      limitations under applicable law, to grant to Participants cash payments,
      including cash payments of dividend equivalents with respect to a
      specified number of shares of Common Stock, whether awarded separately or
      as a supplement to any other Award. The Committee shall determine the
      terms and conditions of such cash payment Awards.

            (j) Certain Qualifying Awards. The Committee, in its sole
      discretion, may grant an Award to any Participant with the intent that
      such award qualifies as "performance-based compensation" under Section
      162(m) of the Code (a "Qualifying Award"). The right to receive or retain
      any award granted as a Qualifying Award (other than an Option or SAR)
      shall be conditional upon the achievement of specified performance goals
      during a calendar year or such other period (a "Performance Period") as
      may be established by the Committee. Performance goals shall be
      established in writing by the Committee prior to the beginning of each
      Performance Period, or at such other time no later than such time as is
      permitted by the applicable provisions of the Code. Such performance
      goals, which may vary from Participant to Participant and Award to Award,
      shall be based upon the attainment of specific amounts of, or increases
      in, one or more of the following: the Fair Market Value of Common Stock,
      revenues, operating income, cash flow, earnings before income taxes, net
      income, earnings per share, stockholders' equity, return on equity,
      underwriting profits, compound growth in net loss and loss adjustment
      expense reserves, loss ratio or combined ratio of the Corporation's
      insurance businesses, operating efficiency or strategic business
      objectives consisting of one or more objectives based on meeting specified
      cost targets, business expansion goals and goals relating to acquisitions
      or divestitures, all whether applicable to the Corporation or any relevant
      subsidiary or business unit or entity in which the Corporation has a
      significant investment, or any combination thereof as the Committee may
      deem appropriate. Each performance goal may be expressed on an absolute
      and/or relative basis, may be based on, or otherwise employ, comparisons
      based on internal targets, the past performance of the Corporation and/or
      the past or current performance of other companies, may provide for the
      inclusion, exclusion or averaging of specified items in whole or in part,
      such as catastrophe losses, realized gains or losses on strategic
      investments, discontinued operations, extraordinary items, accounting
      changes, and unusual or nonrecurring items, and, in the case of
      earnings-based measures, may use or

                                      -5-
<PAGE>

      employ comparisons relating to capital, shareholders' equity and/or shares
      outstanding, assets or net assets. Prior to the payment of any Award
      granted as a Qualifying Award, the Committee shall certify in writing that
      the performance goals were satisfied. The maximum number of shares of
      Common Stock with respect to which Qualifying Awards may be granted to any
      Participant in any calendar year shall be 127,500 shares of Common Stock,
      subject to adjustment as provided in Section 6(a) hereof.

            (k) Form of Payment. Subject to the terms of the Plan and any
      applicable Award agreement, payments or transfers to be made under the
      Plan upon the grant or exercise of an Award may be made in such forms as
      the Committee shall determine, including, without limitation, cash, shares
      of Common Stock, other Awards, or other property, and may be made in a
      single payment or transfer, or on a deferred basis. The Committee may,
      whether at the time of grant or at any time thereafter prior to payment or
      settlement, permit (subject to the requirements of applicable law and any
      conditions as the Committee may from time to time establish) a Participant
      to elect to defer receipt of all or any portion of any payment of cash or
      shares of Common Stock that would otherwise be due to such Participant in
      payment or settlement of an Award under the Plan. (Such payments may
      include, without limitation, provisions for the payment or crediting of
      reasonable interest in respect of deferred payments credited in cash, and
      the payment or crediting of dividends in respect of deferred amounts
      credited in Common Stock equivalents.)

            (l) Exchange and Buy Out Provisions; Limitation on Repricing. The
      Committee may at any time offer to exchange or buy out any previously
      granted Award for a payment in cash, shares of Common Stock, other Awards,
      or other property based on such terms and conditions as the Committee
      shall determine and communicate to a Participant at the time that such
      offer is made. Notwithstanding the foregoing, unless such action is
      approved by the Corporation's stockholders, the Exercise Price of any
      outstanding Option or the Grant Value of an SAR may not be reduced (except
      pursuant to Section 6), nor may an Option or an SAR be cancelled and a new
      Option or SAR granted in consideration therefore (whether for the same or
      a different number of shares) having a lower Exercise Price or issued at a
      Grant Value less than the Exercise Price of the Option or the Grant Value
      of the SAR cancelled, as the case may be.

      6.    DILUTION AND OTHER ADJUSTMENTS.

            (a) Changes in Capital Structure. In the event of any corporate
      transaction involving the Corporation (including, without limitation, any
      subdivision or combination or exchange of the outstanding shares of Common
      Stock, stock dividend, stock split, spin-off, split-off, recapitalization,
      capital reorganization, liquidation, reclassification of shares of Common
      Stock, merger, consolidation, extraordinary cash distribution, or sale,
      lease or transfer of substantially all of the assets of the Corporation),
      the Board of Directors of the Corporation shall make such equitable
      adjustments as it may deem appropriate in the Plan and the Awards
      thereunder, including, without limitation, an adjustment in (i) the total
      number of shares of Common Stock which may thereafter be issued pursuant
      to Awards under the Plan and the maximum number of shares of Common Stock
      that may be issued pursuant to Options intended to qualify as incentive

                                      -6-
<PAGE>

      stock options pursuant to Section 4 hereof, (ii) the number of shares of
      Common Stock with respect to which Qualifying Awards may be granted to any
      Participant in any calendar year under Section 5(j) hereof, and (iii) the
      Exercise Price, Grant Price or other price or value at the time of grant
      relating to any Award. Moreover, in the event of any such transaction, the
      Board of Directors of the Corporation may provide in substitution for any
      or all outstanding Awards under the Plan such alternative consideration as
      it may in good faith determine to be equitable under the circumstances and
      may require in connection therewith the surrender of all Awards so
      replaced. Agreements evidencing Awards may include such provisions as the
      Committee may deem appropriate with respect to the adjustments to be made
      to the terms of such Awards upon the occurrence of any of the foregoing
      events.

            (b) Tender Offers and Exchange Offers. In the event of any tender
      offer or exchange offer, by any person other than the Corporation, for
      shares of Common Stock, the Committee may (i) make such adjustments in
      outstanding Awards and authorize such further action as it may deem
      appropriate to enable the recipients of outstanding Awards to avail
      themselves of the benefits of such offer, including, without limitation,
      acceleration of the exercise date of outstanding Options so that they
      become immediately exercisable in whole or in part, or offering to acquire
      all or any portion of specified categories of Options for a price
      determined pursuant to Section 5(e)(v) hereof, or acceleration of the
      payment of outstanding Awards payable, in whole or in part, in shares of
      Common Stock and/or (ii) cancel any outstanding Award and cause the holder
      thereof to be paid, in cash or shares of Common Stock, or any combination
      thereof, the value of such Award based upon the price per share of Common
      Stock received or to be received by other shareholders of the Corporation
      in the tender offer or exchange offer.

            (c) Limits on Discretion to Make Adjustments. Notwithstanding any
      provision of this Section 6 to the contrary, no adjustment shall be made
      in any outstanding Qualifying Awards to the extent that such adjustment
      would adversely affect the status of that Qualifying Award as
      "performance-based compensation" under Section 162(m) of the Code.

      7.    MISCELLANEOUS PROVISIONS.

            (a) Right to Awards. No employee or other person shall have any
      claim or right to be granted any Award under the Plan.

            (b) Rights as Stockholders. A Participant shall have no rights as a
      holder of Common Stock by reason of Awards under the Plan, unless and
      until certificates for shares of Common Stock are issued to the
      Participant.

            (c) No Assurance of Employment. Neither the Plan nor any action
      taken thereunder shall be construed as giving any employee any right to be
      retained in the employ of the Corporation or any subsidiary.

            (d) Costs and Expenses. All costs and expenses incurred in
      administering the Plan shall be borne by the Corporation.

                                      -7-
<PAGE>

            (e) Unfunded Plan. The Plan shall be unfunded. The Corporation shall
      not be required to establish any special or separate fund nor to make any
      other segregation of assets to assure the payment of any Award under the
      Plan.

            (f) Withholding Taxes. The Corporation is authorized to withhold
      from any Award granted and any payment relating to an Award under the
      Plan, including from a distribution of Common Stock or any payroll or
      other payment to a Participant amounts of withholding and other taxes due
      in connection with any transaction involving an Award, and to take such
      other action as the Committee may deem advisable to enable the Corporation
      and Participants to satisfy obligations for the payment of withholding
      taxes and other tax obligations relating to any Award. This authority
      shall include authority to withhold or receive shares of Common Stock or
      other property, to make payment of an Award net of a Participant's
      withholding taxes and other tax obligations and to make cash payments in
      respect thereof in satisfaction of a Participant's tax obligations.
      Withholding of taxes in the form of shares of Common Stock issued pursuant
      to an Award (including any net payments) shall not occur at a rate that
      exceeds the minimum required statutory federal and state withholding
      rates.

            (g) Limits on Transferability. No Awards under the Plan nor any
      rights or interests therein shall be pledged, encumbered, or hypothecated
      to, or in favor of, or subject to any lien, obligation, or liability of a
      Participant to, any party, other than the Corporation or any subsidiary,
      nor shall such Awards or any rights or interests therein be assignable or
      transferable by the recipient thereof except, in the event of the
      recipient's death, to his designated beneficiary as hereinafter provided,
      or by will or the laws of descent and distribution. During the lifetime of
      the recipient, Awards under the Plan requiring exercise shall be
      exercisable only by such recipient or by the guardian or legal
      representative of such recipient. Notwithstanding the foregoing, the
      Committee may, in its discretion, provide that Awards granted pursuant to
      the Plan (other than an Option granted as an incentive stock option) be
      transferable, without consideration, to a Participant's immediate family
      members (i.e., children, grandchildren or spouse), to trusts for the
      benefit of such immediate family members and to partnerships in which such
      family members are the only partners. The Committee may impose such terms
      and conditions on such transferability as it may deem appropriate.

            (h) Beneficiary. Any payments on account of Awards under the Plan to
      a deceased Participant shall be paid to such beneficiary as has been
      designated by the Participant in writing to the Secretary of the
      Corporation or, in the absence of such designation, according to the
      Participant's will or the laws of descent and distribution.

            (i) Nature of Benefits. Awards under the Plan, and payments made
      pursuant thereto, are not a part of salary or base compensation.

            (j) No Fractional Shares. No fractional shares of Common Stock shall
      be issued or delivered pursuant to the Plan or any Award. In the case of
      Awards to Participants, the Committee shall determine whether cash or
      other property shall be issued or paid in lieu of such fractional shares,
      or whether such fractional shares or any rights thereto shall be forfeited
      or otherwise eliminated.

                                      -8-
<PAGE>

            (k)   Compliance with Legal Requirements.

                  (i) The obligation of the Corporation to issue shares of
                  Common Stock hereunder shall be subject to the satisfaction of
                  all applicable legal and securities exchange requirements,
                  including, without limitation, the provisions of the
                  Securities Act of 1933, as amended and the Securities Exchange
                  Act of 1934, as amended. The Corporation shall endeavor to
                  satisfy all such requirements in such a manner to permit the
                  issuance and delivery of shares of Common Stock under the
                  Plan.

                  (ii) The Committee may require, as a condition to the right to
                  receive shares of Common Stock pursuant to any Award, that the
                  Corporation receive from the Participant, at the time any such
                  Award is exercised, vests or any applicable restrictions
                  lapse, representations, warranties and agreements to the
                  effect that the shares are being purchased or acquired by the
                  Participant for investment only and without any present
                  intention to sell or otherwise distribute such shares and that
                  the Participant will not dispose of such shares in
                  transactions which, in the opinion of counsel to the
                  Corporation, would violate the registration provisions of the
                  Securities Act of 1933, as then amended, and the rules and
                  regulations thereunder. The certificates issued to evidence
                  such shares shall bear appropriate legends summarizing such
                  restrictions on the disposition thereof.

      (l) Discretion. In exercising, or declining to exercise, any grant of
authority or discretion hereunder, the Committee may consider or ignore such
factors or circumstances and may accord such weight to such factors and
circumstances as the Committee alone and in its sole judgment deems appropriate
and without regard to the effect such exercise, or declining to exercise such
grant of authority or discretion, would have upon the affected Participant, any
other Participant, any employee, the Company, any Subsidiary, any stockholder or
any other person.

      8. AMENDMENT OR TERMINATION OF THE PLAN. The Board of Directors of the
Corporation, without the consent of any Participant, may at any time terminate
or from time to time amend the Plan in whole or in part; provided, however,
that, subject to Section 6 hereof, no such action shall materially and adversely
affect any rights or obligations with respect to any Awards theretofore made
under the Plan; and provided, further, that no amendment, without approval of
the holders of Common Stock by an affirmative vote of a majority of the shares
of Common Stock voted thereon in person or by proxy, shall (i) increase the
aggregate number of shares subject to the Plan (other than increases pursuant to
Section 6 hereof), (ii) extend the maximum term of Awards under the Plan or the
Plan itself, (iii) decrease the price at which Options and SARs may be granted
under the Plan (other than decreases pursuant to Section 6 hereof) to less than
Fair Market Value at the time of grant, or (iv) make any other change that would
require stockholder approval pursuant to the terms of the Plan or under any
regulatory requirement applicable to the Plan (including as necessary to comply
with any applicable stock exchange listing requirement). Subject to Section 6
hereof, with the consent of the Participants affected, the Committee may amend
outstanding agreements evidencing Awards under the Plan in any manner not
inconsistent with the terms of the Plan.

                                      -9-
<PAGE>

      9. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective when
adopted by the Board of Directors, provided that the Plan is approved by the
stockholders of the Corporation at the annual meeting of stockholders next
following the adoption of the Plan by the Board of Directors, and no Award shall
become exercisable, realizable or vested prior to such annual meeting. If the
Plan is not so approved by the stockholders at the next annual meeting, all
Awards theretofore granted shall be null and void. The Plan shall terminate at
the close of business on the tenth anniversary of the date the Plan was adopted
by the Board of Directors, unless sooner terminated by action of the Board of
Directors of the Corporation. No Award may be granted hereunder after
termination of the Plan, but such termination shall not affect the validity of
any Award then outstanding.

      10. LAW GOVERNING. The validity and construction of the Plan and any
agreements entered into thereunder shall be governed by the laws of the State of
Delaware without giving effect to principles of conflict of laws.

                                      -10-

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