Document:

-- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

EXHIBIT 10.3.1

EXECUTION COPY

Syncora Holdings Ltd. 

1221 Avenue of the Americas

New York, NY 10020 

As of October 30, 2008

PERSONAL & CONFIDENTIAL

BY HAND DELIVERY 

Edward B. Hubbard 

c/o Syncora Holdings Ltd. 

1221 Avenue of the Americas 

New York, NY 10020 

Dear Ed:

     This letter agreement (the “Agreement”) is intended to memorialize our mutual agreements and understandings with respect to your continued employment with Syncora Holdings Ltd (the
“Company”), effective as of October 31, 2008 (the “Effective Date”). 

     1. Termination of Employment Agreement. On the Effective Date, the Amended and Restated Employment Agreement,
dated as of August 27, 2008, between you and the Company (the “Employment Agreement”) will terminate in its entirety without further right, liability or obligation on the part of you or the Company or any of its affiliates, except as
expressly provided herein. 

     2. Change in Status. On the Effective Date, your title and position with the Company shall change from
President and Chief Operating Officer of Syncora Guarantee Inc. (“SGI”) to Chief Remediation Strategist of the Company. During the period of your employment hereunder, you will report directly to the Acting Chief Executive Officer and you
will have such duties and responsibilities related to your position, including but not limited to the remediation of SGI’s portfolio, and such other related activities as reasonably requested by the Board of Directors of the Company.

     3. Term. The term of your employment pursuant to this Agreement shall commence on the Effective Date and
continue until December 31, 2008 or, if the Company provides you written notice prior to December 15, 2008, such term shall continue until January 31, 2009 (whichever date is applicable, the “Expiration Date”), unless earlier terminated as
provided in Section 5 hereof. (the “Term”). Upon termination of your employment for any reason, the Term shall expire.

     4. Compensation and Benefits. It is recognized that under the terms of your Employment Agreement, the change
in your title and status described in paragraph 2 above constitutes a material breach of the Employment Agreement entitling you to terminate your employment pursuant to Section 8(d)(iv) thereof and to receive the severance pay and benefits set forth
in Section 8(d)(ii) thereof (the “Termination Right”).

(a) In consideration of your agreement not to exercise the Termination Right and to continue to perform services for the Company during the
current restructuring period, the Company will pay you, within ten days following the Effective Date, a cash lump sum payment of $853,125. You agree that upon receipt of such payment you irrevocably waive and forfeit any further right or
entitlement to any deferred cash and retention awards previously granted to you. 

(b) During the Term, you will continue to receive your base salary at an annual rate of $375,000, payable in accordance with the
Company’s regular pay practices. 

(c) During the Term, you will continue to be eligible to participate in all employee retirement, pension, welfare, travel and entertainments
expense reimbursement and executive fringe benefit plans, programs and arrangements, of the Company as are in effect from time to time and in which similarly situated senior executives are eligible to participate on the same terms as such other
similarly situated senior executives. 

     5. Termination of Services. In the event of your termination of employment other than other than (i) by the
Company for Cause (as defined in the Employment Agreement) or (ii) by you (such voluntary termination not to include your death or disability), you will be entitled to be paid a lump sum cash payment of $853,125 (the “Payment”), with
such payment to be made 10 days after your termination date (the “Payment Date”), so long as, prior to the Payment Date, you have executed the attached Release and it has become irrevocable. If you remain employed with the Company through
the Expiration Date, your employment will end on the Expiration Date and the Payment will be paid to you within 10 days after the Expiration Date, so long as you execute the Release within seven (7) days after the Expiration Date and it has become
irrevocable. In addition, upon your termination of employment other than (i) by the Company for Cause (as defined in the Employment Agreement) or (ii) if prior to the Expiration Date, by you (such voluntary termination not to include your death or
disability), for a period of 24 months (six months in the case of your termination due to death or disability) following the expiration of the Term (or, if earlier, until the date you become eligible to receive medical benefits from a new employer),
you and your 

immediate family members will be entitled to coverage under the Company’s medical benefit plan on a fully insured basis, at the Company-subsidized premium rate in effect at such time. Further, upon your termination of
employment for any reason, you will be entitled to the following payments and/or benefits: 

(a) Your vested accrued benefits under the employee benefit programs of the Company, in accordance with the applicable terms and provisions of
such programs and subject to the rules of Internal Revenue Code Section 409A; and 

(b) Payment of any earned but unpaid base salary as of the expiration of the Term, and, reimbursement of any unreimbursed business expenses
properly incurred in connection with the Company’s expense reimbursement policy and any accrued but unused vacation. Such amounts will be paid within 60 days following the expiration of the Term.

     6. Survival of Certain Provisions in Employment Agreement. Notwithstanding the termination of the Employment
Agreement, the parties acknowledge the following provisions of the Employment Agreement shall survive and be applicable during and/or following the Term in accordance with their current terms, conditions and limitations: Section 9 (Excise Tax
Payments), Section 11 (Noncompetition and Nonsolicitation), Section 12 (Confidentiality), Section 14 (Subsidiary Services and Guarantee), Section 17 (Indemnification), Section 18 (Settlement of Disputes) and Section 26 (Section 409A). For avoidance
of doubt, Section 11 of the Employment Agreement shall continue in effect until the first anniversary following your termination of employment, whenever occurring.

     7. Execution of General Release. On expiration of the Term, you agree to execute the General Release and
Covenant Not to Sue attached hereto as Exhibit A (the “Release”). For avoidance of doubt, the parties acknowledge and agree that the Release does not waive or release (a) any rights under this Agreement, (b) any right to claim benefits
under employee benefit plans (including welfare benefit, qualified and nonqualified retirement and equity-related plans, (c) any right of indemnification as to advancement of legal fees (including without limitation indemnification, legal defense
and related rights under the Company’s and any other Released Parties’ (as defined in the Release) certificate of incorporation, by-laws any other such organic documents, any other plan or agreement or at law, or (d) any rights under
directors and officers’ liability insurance policies.

     8. Cooperation. Following your termination of employment, you agree, at the Company’s request, to provide
information to the Company and its counsel in connection with any lawsuit or regulatory investigation pending at the time of your termination or which may later arise and which relates to your employment with the Company, or to events or information
about which you are aware as a result of such employment. The 

Company shall pay all reasonable out-of-pocket expenses incurred by you and pre-approved by the Company in connection therewith and, unless agreed otherwise, compensate you at a rate of $50.00 per hour for time expended, with
a minimum of one hour for any time expended on a single day. Such compensation shall not apply if you are giving testimony under oath. 

     9. Withholding. Any payment to be made to you hereunder shall be subject to withholding for all federal, state
and local taxes required to be withheld there from. 

     10. Successors; Binding Agreement. The Company will require any successor to all or substantially all of the
business and/or assets of the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise), by an assumption agreement in form and substance reasonably satisfactory to you, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be required to perform it if no succession had taken place. This Agreement and all your rights hereunder shall inure to the benefit of and be enforceable by your personal or
legal representatives, heirs, distributees and permitted assigns. 

     11. No Assignments. This Agreement is personal to each of the parties hereto and no party hereto may assign or
delegate any of its rights or obligations hereunder without first obtaining the written consent of the other party. 

     12. Notices. All notices, requests, and other communications hereunder shall be in writing and shall be deemed
to have been duly given if (i) delivered by hand, (ii) mailed, certified or registered mail, return receipt requested, with postage prepaid, (iii) sent by next-day or overnight mail or delivery, or (iv) sent by fax, as follows: 

	 	
A.    	
If to the Company, to:        
	     
	 	    	
Syncora Holdings Ltd. 
	 	    	
1221 Avenue of the Americas   
	 	    	
New York, NY 10020    
	 	    	
Attn: Corporate Secretary     
	 	    	
Phone:        	
(212)
478 3400      
	 	    	
Fax:  	
(212) 478 3587        
	     
	 	
B.    	
If to you, to the home address most recently contained in     the
Company’s records. 

and to such other or additional person or persons as each party shall have designated to the other party in writing by like notice. 

     13. Entire Agreement. Effective as of the Effective Date, this Agreement constitutes the entire agreement
among the parties hereto with respect to the subject 

matter hereof, and supersedes all undertakings and agreements, whether oral or in writing, previously entered into by the parties with respect thereto. Except as expressly provided herein, all prior correspondence and proposals,
including, without limitation, the Employment Agreement, and all offers, promises, representations, understandings, arrangements and agreements relating to such subject matter (including but not limited to those made to or with Consultant by any
other person) are superseded hereby except to the extent provided herein.

     14. Amendments. No amendments or additions to this Agreement shall be binding unless in writing and signed by
each party, except as herein otherwise provided. 

     15. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. 

     16. Payment from Trust. You acknowledge and agree that the Company may satisfy one or more of its obligations
to make payments to you hereunder by causing such payments to be made from the Syncora Guarantee Services Inc. Employee Trust (the “Trust”). You agree that any such payment made by the Trust shall fully satisfy and discharge the
Company’s obligation to make such payment to you hereunder (but only to the extent of such payment). 

     17. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws
of the State of New York. 

[signature page follows]

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

	 	 	 SYNCORA HOLDINGS LTD.      
	 	 	 	   
	 	By:	/s/
              Susan Comparato

	 	 	Name: Susan
        Comparato
	 	 	Title: Acting CEO & President   
	 	 	 	   
	 	 	EDWARD B. HUBBARD   
	 	 	 	   
	 	 	 	   
	 	 	By:	/s/ Edward B. Hubbard
	 	 	 	   
	 	 	GUARANTORS: 
	 	 	 
	 	 	SYNCORA HOLDINGS US INC     
	 	 	 
	 	 	By: 	/s/
        Susan Comparato
	 	 	Name:       Susan
            Comparato
	 	 	Title: Secretary     
	 	 	 	   
	 	 	SYNCORA GUARANTEE SERVICES  
	 	 	INC.        
	 	 	 
	 	 	By: 	/s/
        Susan Comparato
	 	 	Name: Susan
              Comparato
	 	 	Title: Secretary     

General Release and Covenant Not to Sue

     1. General Release of Claims. In consideration for the payments and benefits paid to you under that certain Agreement, signed by you
and Syncora Holdings Ltd. (the “Company”), dated October 30, 2008 (the “Agreement”), you hereby
release and forever discharge the Company and any and all of its affiliates, predecessors, successors, assigns, and their respective officers, directors, administrators and employees (the “Released
Parties”) of and from all actions, claims, liabilities, demands and causes of action, known or unknown, fixed or contingent, in law or equity, included but not limited to those arising under the Civil Rights
Act of 1964, the Reconstruction Era Civil Rights Act, the Age Discrimination in Employment Act of 1967 (“ADEA”), the Consultant Retirement Income Security Act of 1974, The Americans with Disabilities Act, The Family and Medical Leave Act
of 1993, The New York State Human Rights Law Section 196 ET SEQ., the New York City Administrative Code, as amended, and any and all other federal, state, and local laws, rules and regulations prohibiting, without limitation, discrimination in
employment, tortuous or wrongful discharge, breach of an express or implied contract, breach of a covenant of good faith and fair dealing, negligent or intentional infliction of emotional distress, defamation, misrepresentation or fraud, which you
ever had, now have or hereafter can, shall or may have for, upon or by reason of any matter, cause or thing, up to and including the day on which you sign this Agreement (the “Claims”); provided, however, that you are not waiving (a) any rights under the Agreement, (b) any right to claim benefits under employee benefit plans (including welfare benefit, retirement and (except as set forth in the Agreement)
equity-related plans), (c) any right of indemnification (including indemnification, legal defense and related rights under the Company’s certificate of incorporation, by-laws or other such organic documents), or (d) any rights under directors
and officers’ liability insurance policies. 

     2. Effect of General Release; Limitations on General Release. You understand that by signing this General Release you are prevented
from filing, commencing or maintaining any action, complaint, or proceeding with regard to any of the claims released hereby. However, nothing in the General Release of Claims above precludes you from filing a charge with an administrative agency or
from participating in an agency investigation. You are, however, waiving your right to recover money in connection with any such charge or investigation. You are also waiving your right to recover money in connection with a charge filed by any other
individual or by the Equal Employment Opportunity Commission or any other federal or state agency.

     3. Covenant Not to Sue. In addition to waiving and releasing the claims and rights covered by the General Release of Claims, you
promise not to sue the Company or any other Released Party in any forum on any claim which is covered by (i.e., released under) the General Release of Claims. This covenant by you not to sue is different from the General Release of Claims, which
will provide the Company a defense in the event 

you violate the General Release. If you violate this Covenant Not to Sue by suing a Released Party, you may be liable to that party for monetary damages. More specifically, if you sue a Released Party in violation of this Covenant
Not to Sue, you will be required to either: (1) pay that Released Party’s attorneys’ fees and other costs incurred as a result of having to defend against your suit; or (2) alternatively, at the Released Party’s option, return to the
Company all of the severance pay provided to you under Section 8 of the Employment Agreement and under the Agreement, except for one-hundred dollars ($100.00) . In the event of such violation, the Company will also be excused from providing you
any remaining severance payments under Section 8 of the Employment Agreement and under the Agreement. However, nothing in this Covenant Not to Sue or in any other part of this Agreement prevents you from challenging the validity of this Agreement
under the ADEA.

     4. Knowing and Voluntary Decision to Sign. You further agree that no statements, representations, promises, threats or suggestions
have been made by the Company or its representatives, officers, or employees to influence you to sign this General Release except such statements as are expressly set forth herein. You have signed this General Release upon reaching the considered
conclusion that it is best for you, and of your own free will, relying entirely upon your own judgment, and the judgment of such lawyers and other personal advisors who you have chosen to consult. You further acknowledge that you are under no
disability or impairment, which affects your decision to sign this General Release.

     5. Time to Consider the Agreement. You have actually read this General Release, and have had adequate time of at least 21 days to
consider its terms and effect, and to ask any questions that you may have of the legal or other personal advisors of your own choosing. You may revoke this General Release during the seven day period following its execution by providing written
notice of such revocation to the Company. 

     6. Subsequent Facts. No fact, evidence, event or transaction currently unknown to you but which may hereafter become known to you
shall affect in any way or manner the final and unconditional nature of this General Release.

[signature page follows]

8

	
READ, ACCEPTED & AGREED   
	 
	/s/
      Edward B. Hubbard 
	
Edward B. Hubbard     
	 
	1/30/09 
	
Dated:        

9Exhibit 10.7

EMPLOYMENT AGREEMENT

          AGREEMENT,
made and entered into as of this 29th day of May, 2008, by and between,
Security Capital Assurance Ltd, a Bermuda corporation (the “Company”),
and David P. Shea (the “Executive”) to amend and restate an agreement
between the parties dated as of January, 23, 2007 (the “Prior Agreement”).

          WHEREAS,
the Executive had been employed by XL Capital Ltd as an Executive Vice
President, Chief Financial Officer of the Financial Products & Services
operations, which has included the business of the Company;

          WHEREAS,
the Executive and the Company desired that the Executive cease to be an
employee of XL Capital Ltd and become the Chief Financial Officer of the
Company on the terms and subject to the conditions set forth herein, effective
upon the consummation of the initial public offering of the common stock of the
Company (the “IPO”);

          WHEREAS,
the Executive and the Company now wish to amend the Prior Agreement to bring it
into compliance with the requirements of Section 409A of the Internal Revenue
Code and the treasury regulations and other official guidance promulgated
thereunder;

          NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the Company, and the
Executive (the “Parties”) agree as follows:

          1.
EMPLOYMENT.

          The
Company hereby employs the Executive, and the Executive hereby accepts
employment with the Company, for the term of this Agreement as set forth in
Section 2, below, in the position and with duties and responsibilities set
forth in Section 3, below, and upon such other terms and conditions as are
hereinafter stated.

          2.
TERM OF EMPLOYMENT.

          The
stated term of employment under this Agreement commenced on August 2, 2006 (the
“Date of the Agreement”) and shall continue through the close of
business on the third anniversary of the Date of the Agreement, subject to
earlier termination as provided in Section 8, below, and extension as provided
in the next succeeding sentence. On the third anniversary of the Date of the
Agreement and on each anniversary thereafter, the stated term of employment
shall be automatically extended for an additional one year unless the Company
gives notice in writing to the Executive or the Executive gives notice 

1

in writing to
the Company at least three months prior to such anniversary that the term is
not to be so extended.

          3.
POSITIONS, DUTIES AND RESPONSIBILITIES.

          (a)
General. The Executive shall be employed as Chief Financial Officer of
the Company. In such position, the Executive shall have the duties,
responsibilities and authority normally associated with the office, position
and titles of such an officer of a financial guaranty company, or holding
company, whose shares are publicly traded in the United States. In carrying out
his duties and responsibilities, the Executive shall report to the Chief
Executive Officer of the Company. During the term of this Agreement, the
Executive shall devote his full business time to the business and affairs of
the Company and its subsidiaries, and shall use his best efforts, skills and
abilities to promote the interests of the Company and its subsidiaries.

          (b)
Performance of Services. The Executive’s services under this Agreement,
which are global in nature, shall be performed either in the greater New York
City metropolitan area, as reasonably requested by the Company, in accordance
with the guidelines established by the Company from time to time for the
location of the performance of services on behalf of the Company and its
subsidiaries. The Executive acknowledges that the Company may require the
Executive to travel to the extent such travel is reasonably necessary to
perform the services hereunder and that such travel may be extensive. To the
extent reasonably requested by the Company, the Executive shall allocate
greater business time to a location other than his principal business location,
if necessary.

          4.
BASE SALARY.

          The
Executive shall be paid a Base Salary by the Company not less than
US$385,000.00, payable in accordance with the Company’s regular pay practices.
Such Base Salary shall be subject to annual review in accordance with the
Company’s practices for executives as in effect from time to time and may be
increased at the discretion of the Compensation Committee of the Board of
Directors of the Company (the “Compensation Committee”).

          5.
BONUSES.

          In
addition to the Base Salary provided for in Section 4, above, the Executive
shall be eligible for an annual cash bonus under the Company’s Annual Incentive
Compensation Plan as in effect from time to time, with an annual target bonus
equal to 150% of the Executive’s Base Salary. The Executive may be awarded such
annual bonuses thereunder as may be approved by the Compensation Committee
based on corporate, individual and business unit performance measures, as
appropriate, established or approved from time to time, by the Compensation
Committee. Any annual bonus shall 

2

be paid in
cash in a lump sum no later than March 15 following the year for which the
annual bonus is paid, unless deferred at the Executive’s option in accordance
with the provisions of any applicable deferred compensation plan of the Company
or it subsidiaries in effect from time to time. Nothing in this Section 5 shall
confer upon the Executive any right to a minimum annual bonus.

          6.
EMPLOYEE BENEFIT PROGRAMS.

          During
the term of the Executive’s employment under this Agreement, the Executive
shall be entitled to participate in all employee retirement, pension, welfare
and benefit programs of the Company as are in effect from time to time and in
which similarly situated senior executives of the Company are eligible to
participate.

          7.
BUSINESS EXPENSE REIMBURSEMENT AND FRINGE BENEFITS.

          During
the term of the Executive’s employment under this Agreement, the Executive
shall be entitled to participate in the Company’s travel and entertainment
expense reimbursement programs and its executive fringe benefit plans and
arrangements, all in accordance with the terms and conditions of such programs,
plans and arrangements as in effect from time to time as applied to the Company’s
similarly situated executives.

          8.
TERMINATION OF EMPLOYMENT.

          (a)
Termination due to Death. In the event the Executive dies during the
term of employment hereunder, the Executive’s spouse, if the spouse survives
the Executive, (or, if the Executive’s spouse does not survive him, the estate
or other legal representative of the Executive) shall be entitled to receive
the Base Salary as provided in Section 4, above, at the rate in effect at the
time of Executive’s death, to be paid in accordance with the Company’s regular
payroll practices (as in effect at the time of death), through the end of the
sixth month after the month in which the Executive dies. In addition to the
above, the estate or other legal representative of the Executive shall be
entitled to:

	
 

	
 

	
 

	
          (i)
 any annual bonus awarded in accordance with the Company’s bonus program but
 not yet paid under Section 5, above, to be paid at the time such bonus would
 otherwise be due under Section 5 above, and reimbursement of business
 expenses incurred prior to death in accordance with Section 7 above,

	
 

	
 

	
 

	
          (ii)
 within 45 days after the date of death, a pro rata bonus for the year of
 death in an amount determined by the Compensation Committee, but in no event
 less than a pro rata portion of the Executive’s average annual bonus for the
 immediately preceding three years (or the period of the Executive’s
 employment with the Company, if less),

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          (iii)
 the rights under any options to purchase equity securities of the Company or
 other rights with respect to equity securities of the Company, including any
 restricted stock or other securities, held by the Executive determined in
 accordance with the terms thereof,

	
 

	
 

	
 

	
          (iv)
 for a period of six months following the Executive’s death, continued medical
 benefit plan coverage (including dental and vision benefits if provided under
 the applicable plans) for the Executive’s dependents, if any, under the
 Company’s medical benefit plans upon substantially the same terms and
 conditions (including cost of coverage to the dependents) as is then in
 existence for other executives during the coverage period; provided,
 that, if the Executive’s dependents cannot continue to participate in the
 Company plans providing such benefits, the Company shall otherwise provide
 such benefits on substantially the same after-tax basis as if continued
 participation had been permitted, and

	
 

	
 

	
 

	
          (v)
 the vested accrued benefits, if any, under the employee benefit programs of
 the Company, as provided in Section 6, above, determined in accordance with
 the applicable terms and provisions of such programs.

          (b)
Termination due to Disability. In the event the Executive’s employment
hereunder is terminated due to his disability, as determined under the
Company’s long-term disability plan and within the meaning of Code Section
409A, the Executive shall be entitled to the following amounts:

	
 

	
 

	
 

	
          (i)
 a cash lump sum payment made, within sixty (60) days after the date of termination
 in an amount equal to the Base Salary as provided in Section 4, above, that
 would have been paid to the Executive had he remained employed through the
 end of the sixth month after the month in which the Executive’s employment
 terminates due to disability,

	
 

	
 

	
 

	
          (ii)
 any annual bonus awarded in accordance with the Company’s bonus program but
 not yet paid under Section 5 above, to be paid at the time such bonus would
 otherwise be due under Section 5 above and reimbursement of business expenses
 incurred prior to termination of employment in accordance with Section 7
 above,

	
 

	
 

	
 

	
          (iii)
 within 60 days after the date of termination, a pro rata bonus for the year
 of termination in an amount determined by the Compensation Committee, but in
 no event less than a pro rata portion of the Executive’s average annual bonus
 for the immediately preceding three years (or the period of the Executive’s
 employment with the Company, if less),

	
 

	
 

	
 

	
          (iv)
 the rights under any options to purchase equity securities of the Company or
 other rights with respect to equity securities of the Company, 

4

	
 

	
 

	
 

	
including
 any restricted stock or other securities, held by the Executive, determined
 in accordance with the terms thereof,

	
 

	
 

	
 

	
          (v)
 for a period of six months following the termination of the Executive’s
 employment, continued medical benefit plan coverage (including dental and
 vision benefits if provided under the applicable plans) for the Executive
 (and the Executive’s dependents, if any) under the Company’s medical benefit
 plans upon substantially the same terms and conditions (including cost of
 coverage to the Executive) as is then in existence for other executives
 during the coverage period; provided, that, if the Executive cannot
 continue to participate in the Company plans providing such benefits, the
 Company shall otherwise provide such benefits on substantially the same
 after-tax basis as if continued participation had been permitted; provided
 further, however, that, in the event the Executive becomes
 re-employed with another employer and becomes eligible to receive medical
 benefits from such employer, the medical benefits described herein shall
 immediately cease, and

	
 

	
 

	
 

	
          (vi)
 the vested accrued benefits, if any, under the employee benefit programs of
 the Company, as provided in Section 6 above, determined in accordance with
 the applicable terms and provisions of such programs.

          (c)
TERMINATION FOR CAUSE.

	
 

	
 

	
 

	
          (i)
 The employment of the Executive under this Agreement may be terminated by the
 Company for Cause, such termination to be effective upon the Company giving
 the Executive written notice of termination in accordance with the provisions
 of this Agreement. For this purpose, “Cause” shall mean:

	
 

	
 

	
 

	
          (A)
 conviction of the Executive of a felony involving moral turpitude, dishonesty
 or laws to which the Company or its Affiliates are subject in connection with
 the conduct of its or their business;

	
 

	
 

	
 

	
          (B)
 the Executive, in carrying out his duties for the Company under this
 Agreement, has been guilty of (1) willful misconduct or (2) substantial
 and continual refusal by the Executive to perform the duties assigned to the
 Executive pursuant to the terms hereof; provided, however, that
 any act or failure to act by the Executive shall not constitute Cause for
 purposes of this Section 8(c)(i)(B) if such act or failure to act was
 committed, or omitted, by the Executive in good faith and in a manner he
 reasonably believed to be in the overall best interests of the Company, as
 the case may be. The determination of whether the Executive acted in good
 faith and that he reasonably believed his action to be in the Company’s
 overall best interest, as the case may be, will be in the 

	
 

	
 

5

	
 

	
 

	
 

	
 

	
 

	
reasonable
 and good faith judgment of the Compensation Committee and/or the Audit
 Committee; or

	
 

	
 

	
 

	
 

	
 

	
          (C)
 the Executive’s continued willful refusal to obey any lawful policy or
 requirement duly adopted by the Company’s Board of Directors and the continuance
 of such refusal after receipt of written notice.

	
 

	
 

	
 

	
 

	
          (ii)
 In the event of a termination for Cause under Section 8(c)(i), above, the
 Executive shall be entitled only to:

	
 

	
 

	
 

	
 

	
 

	
          (A)
 Base Salary as provided in Section 4, above, at the rate in effect at the
 time of his termination of employment for Cause, through the date on which
 termination for Cause occurs, to be paid in accordance with the Company’s
 regular payroll practices,

	
 

	
 

	
 

	
 

	
 

	
          (B)
 the rights under any options to purchase equity securities of the Company or
 other rights with respect to equity securities of the Company, including any
 restricted stock or other securities, held by the Executive, determined in
 accordance with the terms thereof, and

	
 

	
 

	
 

	
 

	
 

	
          (C)
 the vested accrued benefits, if any, under employee benefit programs of the
 Company, as provided in Section 6, above, and re-imbursement of properly
 incurred unreimbursed business expenses under the business expense
 reimbursement program as described in Section 7, above, determined in
 accordance with the applicable terms and provisions of such employee benefit
 and expense reimbursement programs; provided that the Executive shall
 not be entitled to any such benefits unless the terms and provisions of such
 programs expressly state that the Executive shall be entitled thereto in the
 event his employment is terminated for Cause (as defined in this Agreement or
 otherwise).

          (d)
TERMINATION WITHOUT CAUSE.

	
 

	
 

	
 

	
 

	
          (i)
 Anything in this Agreement to the contrary notwithstanding, the Executive’s
 employment may be terminated by the Company without Cause as provided in this
 Section 8(d). A termination due to death or disability, as described in
 Section 8(a) or (b), above, or a termination for Cause, as described in
 Section 8(c), above, shall not be deemed a termination without Cause under
 this Section 8(d). For the avoidance of doubt, if a notice of non-renewal of
 this Agreement pursuant to Section 2 is issued by the Company and, within
 three (3) months thereafter, a written notice is issued (x) by
 the Company to the Executive of its intention to terminate the employment
 relationship with Executive at the end of the Term or (y) by the
 Executive to the Company of Executive’s intention to terminate the employment
 relationship with the Company 

6

	
 

	
 

	
 

	
 

	
at the end
 of the Term, the termination of the Executive’s employment at the end of the
 Term shall be considered a termination by the Company without Cause
 hereunder.

	
 

	
 

	
 

	
 

	
          (ii)
 In the event the Executive’s employment is terminated by the Company without
 Cause (x) prior to a Change in Control or (y) following
 the Post-Change Period (as hereinafter defined), the Executive shall be
 entitled to:

	
 

	
 

	
 

	
 

	
 

	
          (A)
 Base Salary as provided in Section 4, above, at the rate in effect at the
 time of his termination of employment without Cause, through the date on
 which termination without Cause occurs, to be paid in accordance with the
 Company’s regular payroll practices,

	
 

	
 

	
 

	
 

	
 

	
          (B)
 provided the Executive executes on or before the date that is the later of
 (x) 90 days following the date of his termination of employment or (y) the
 last day of the Executive’s taxable year in which the termination of
 employment occurs, a general release of employment liability claims against
 the Company and its affiliates in substantially the form of Exhibit C
 attached hereto, and does not revoke such release prior to the end of the
 seven day statutory revocation period, a cash lump sum payment made within 60
 days after such statutory revocation period equal to (x) two
 times the Executive’s annual Base Salary, at the annual rate in effect in
 accordance with Section 4, above, immediately prior to such termination and (y) one
 times the higher of the targeted annual bonus for the year of such
 termination, if any, or the average of the Executive’s annual bonus payable
 by the Company or its subsidiaries for the three years immediately preceding
 the year of termination (or such shorter period during which the Executive
 has been employed by any of such entities),

	
 

	
 

	
 

	
 

	
 

	
          (C)
 any annual bonus awarded in accordance with the Company’s bonus program but
 not yet paid under Section 5 above, to be paid at the time such bonus would
 otherwise be due under Section 5 above and reimbursement of business expenses
 incurred prior to termination of employment in accordance with Section 7
 above,

	
 

	
 

	
 

	
 

	
 

	
          (D)
 the rights under any options to purchase equity securities of the Company or
 other rights with respect to equity securities of the Company, including any
 restricted stock or other securities or other long-term cash incentives, held
 by the Executive, determined in accordance with the terms thereof,

	
 

	
 

	
 

	
 

	
 

	
          (E)
 for a period of twenty-four months following the termination of the
 Executive’s employment, continued medical benefit 

7

	
 

	
 

	
 

	
 

	
 

	
plan
 coverage (including dental and vision benefits if provided under the
 applicable plans) for the Executive (and the Executive’s dependents, if any)
 under the Company’s medical benefit plans upon substantially the same terms
 and conditions (including cost of coverage to the Executive) as is then in
 existence for other executives during the coverage period; provided,
 that, if the Executive cannot continue to participate in the Company plans
 providing such benefits, the Company shall otherwise provide such benefits on
 substantially the same after-tax basis as if continued participation had been
 permitted; provided, however, that, in the event the Executive
 becomes reemployed with another employer and becomes eligible to receive
 medical benefits from such employer, the medical benefits described herein
 shall immediately cease, and

	
 

	
 

	
 

	
 

	
 

	
          (F)
 the vested accrued benefits, if any, under the employee benefit programs of
 the Company, as provided in Section 6 above, determined in accordance with
 the applicable terms and provisions of such programs.

	
 

	
 

	
 

	
 

	
          (iii)
 In the event the Executive’s employment is terminated by (x) the
 Company without Cause within the twenty-four month period following a Change
 in Control (as defined in Exhibit A hereto) (the “Post-Change
 Period”) or (y) the Executive terminates his employment for “Good
 Reason” (as defined in Exhibit B hereto) during the Post-Change
 Period, the Executive shall be entitled to the following, paid in the case of
 amounts set forth in (A), (B), (C), (D) and where applicable, (G) below
 within 60 days after termination of employment:

	
 

	
 

	
 

	
 

	
 

	
          (A)
 Base Salary as provided in Section 4, above, at the rate in effect at the
 time of his termination of employment, through the date on which termination
 occurs,

	
 

	
 

	
 

	
 

	
 

	
          (B)
 a cash lump sum payment equal to two times the Executive’s annual Base
 Salary, at the rate in effect in accordance with Section 4, above, or
 immediately prior to such termination or Change in Control, whichever is
 greater,

	
 

	
 

	
 

	
 

	
 

	
          (C)
 a cash lump sum payment equal to two times the higher of (i) the
 average annual bonus awarded to the Executive by the Company or its
 subsidiaries in the three years prior to the year in which the Change in
 Control occurs (or shorter period during which the Executive had been
 employed by any of such entities), or (ii) the Executive’s target
 annual bonus, if any, for the year of such termination,

	
 

	
 

	
 

	
 

	
 

	
          (D)
 a cash lump sum equal to (i) the higher of (x) the
 bonus actually awarded to the Executive by the Company for the year 

8

	
 

	
 

	
 

	
 

	
 

	
immediately
 preceding the year in which the Change in Control occurs or (y) the
 targeted amount of bonus, if any, that would have been awarded to the
 Executive in respect of the year in which the termination of employment
 occurs, multiplied by (ii) a fraction, the numerator of which is
 the number of months or fraction thereof in which the Executive was employed
 by the Company in the year of termination of employment, and the denominator
 of which is 12,

	
 

	
 

	
 

	
 

	
 

	
          (E)
 options to purchase equity securities of the Company or other rights with
 respect to equity securities of the Company held by the Executive shall
 immediately vest in full and shall continue to be exercisable for three years
 from the date of termination of employment, notwithstanding the Executive’s
 termination of employment, or the original full term of the option or other
 right, if shorter,

	
 

	
 

	
 

	
 

	
 

	
          (F)
 for a period of twenty-four months following the termination of the
 Executive’s employment, continued medical benefit plan coverage (including
 dental and vision benefits if provided under the applicable plans) for the
 Executive (and the Executive’s dependents, if any) under the Company’s
 medical benefit plans upon substantially the same terms and conditions
 (including cost of coverage to the Executive) as is then in existence for
 other executives during the coverage period; provided, that, if the
 Executive cannot continue to participate in the Company plans providing such
 benefits, the Company shall otherwise provide such benefits on substantially
 the same after-tax basis as if continued participation had been permitted; provided,
 however, that, in the event the Executive becomes reemployed with
 another employer and becomes eligible to receive medical benefits from such
 employer, the medical benefits described herein shall immediately cease, and

	
 

	
 

	
 

	
 

	
 

	
          (G)
 full and immediate vesting as of the date of termination under the Company’s
 retirement plans that are not qualified under Code Section 401(a), and, with
 regard to those retirement plans that are qualified under Code Section 401(a)
 (other than those where any unvested benefit is paid through a plan that is
 not subject to Code Section 401(a), an economically equivalent benefit as if
 the unvested benefit under any plan qualified under Code Section 401(a) fully
 and immediately vested shall be paid in a cash lump sum to the Executive
 within 60 days after termination of employment.

          Anything
in this Agreement to the contrary notwithstanding, the Executive shall be
entitled to the benefits described in (A)-(G) above, subject to the proviso
below, if the Executive’s employment with the Company is terminated by the
Company (other than for Cause) within one year prior to the date on which a
Change in Control occurs, and it is 

9

reasonably
demonstrated that such termination (i) was at the request of a
third party who has taken steps reasonably calculated or intended to effect the
Change in Control or (ii) otherwise arose in connection with or
anticipation of the Change in Control; provided, however, that in
such event, (x) the Executive shall be entitled to the benefits and
payments provided under Section 8(d)(ii) in the form and at the times provided
there under, and (y) the Executive shall also be entitled to the
benefits and payments provided under Section 8(d)(iii) in the form and at the
times provided under Section 8(d)(iii) payable on a Change in Control, but
solely to the extent that the benefits and payments under Section 8(d)(iii)
exceed the benefits and payments under Section 8(d)(ii).

	
 

	
 

	
 

	
          (iv)
 If, in situations where Section 8(d)(iii) does not apply, at any time during
 the term of the Executive’s employment hereunder, (x) duties are
 assigned to the Executive that constitute a material diminution in his duties
 as described under Section 3 hereof, or (y) the Company does not
 cure any other material breach by it of any provision of Sections 3 through
 7, 14 and 17 of this Agreement within 30 calendar days following written
 notice of same by the Executive (which written notice must be given within 30
 calendar days after such breach), the Executive shall have the right to
 terminate his employment within 30 calendar days of the Company’s failure to
 rescind such assignment or of such failure to cure a breach, as the case may
 be, in both cases in accordance with the proviso below and such termination
 shall be deemed a termination by the Company without Cause under Section
 8(d)(ii), above, provided, in the event of (x) or (y)
 above, the Executive shall have given the Company written notice of his
 decision within 30 calendar days of such occurrence and shall not, within 30
 calendar days thereafter, have had the assignment of such duties rescinded or
 the material breach cured.

          (e)
VOLUNTARY TERMINATION BY THE EXECUTIVE. The Executive may voluntarily
terminate his employment prior to the expiration of the term of this Agreement
upon at least 30 days prior written notice to the Company (or if the Board
deems a longer period necessary to effect an orderly transition, the Board may,
by prompt written notice to the Executive, extend the termination date up to an
additional 60 days, but in no event beyond the date falling 90 days after the
date on which the Executive gave his notice of termination) ,provided such
termination shall constitute a voluntary termination and, except as provided in
Section 8(d)(iii) or Section 8(d)(iv), above, in such event the Executive shall
be limited to the same rights and benefits as applicable to a termination by
the Company for Cause as provided in Section 8(c), above. A voluntary
termination in accordance with this Section 8(e) shall not be deemed a breach
of this Agreement. A termination of the Executive’s employment due to
disability or death as described in Section 8(b) or 8(a), above, a termination
by the Executive which the Executive is entitled to treat as a termination by
the Company pursuant to Section 8(d), above, or a termination by the Executive
under Section 8(d)(iv), above, shall not be deemed a voluntary termination
within the meaning of this Section 8(e). For the 

10

avoidance of
doubt, a notice of non-renewal of the Agreement pursuant to Section 2 above
issued by the Executive shall not be considered a voluntary termination within
the meaning of this Section 8(e).

          9.
EXCISE TAX PAYMENTS.

          (a)
Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that (i) any payment or distribution made, or
benefit provided (including, without limitation, the acceleration of any
payment, distribution or benefit or accelerated vesting or exercisability of
any award) by the Company to or for the benefit of the Executive (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional
payments required under this Section 9) (a “Payment”) would be subject
to the excise tax imposed by Section 4999 of the Code (or any successor
provision or similar excise tax), or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as
the “Excise Tax”), (ii) the aggregate amount of the
Executive’s Parachute Payments (as defined in Section 280G(b)(2)(A) of the
Code) is less than 3.25 times the Executive’s Base Amount (as defined in
Section 280G(b)(3)(A) of the Code), and (iii) no such Payment would
be subject to the Excise Tax if the payments set forth in Section 8(d)(iii)(B)
and (C) hereof were each reduced by up to 20 percent, then the payments
set forth in Section 8(d)(iii)(B) and (C) will each be reduced to the
smallest extent possible (and in no event by more than 20 percent in the
aggregate) such that no Payment is subject to the Excise Tax.

          (b)
Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that (i) the aggregate amount of the
Executive’s Parachute Payments equals or exceeds 3.25 times the Executive’s
Base Amount, (ii) the aggregate amount of the Executive’s Parachute
Payments is less than 3.25 times the Base Amount but one or more Payments would
be subject to the Excise Tax even if the payments set forth in Section
8(d)(iii)(B) and (C) hereof were each reduced by 20 percent, or (iii) notwithstanding
a reduction in payments pursuant to Section 9(a) above, an Excise Tax is
payable by the Executive on one or more Payments, then, in any such case,
Payments shall not be reduced and the Executive shall be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount such that after
payment by the Executive of all taxes (including any income or Excise Tax)
imposed upon the Gross-Up Payment and any interest or penalties imposed with
respect to such taxes, the Executive retains from the Gross-Up Payment an
amount equal to the Excise Tax imposed upon the Payments.

          (c)
Subject to the provisions of Section 9(d), all determinations required to be
made under this Section 9, including determination of whether a Gross-Up
Payment is required and of the amount of any such Gross-Up Payment, shall be
made by a nationally recognized public accounting firm selected by the Company
(the “Accounting Firm”) 

11

which shall
provide detailed supporting calculations both to the Company and the Executive
within 15 business days of the date of termination of the Executive’s
employment, if applicable, or such earlier time as is reasonably requested. The
initial Gross-Up Payment, if any, as determined pursuant to this Section 9(c),
shall be paid to the Executive within five business days of the receipt of the
Accounting Firm’s determination. If the Accounting Firm determines that no
Excise Tax is payable by the Executive, it shall furnish the Executive with a
written opinion that he has substantial authority not to report any Excise Tax
on his Federal income tax return. Any determination by the Accounting Firm
meeting the requirements of this Section 9(c) shall be binding upon the Company
and the Executive, subject only to payments pursuant to the following sentence
based on a determination that additional Gross-Up Payments should have been
made, consistent with the calculations required to be made hereunder (the
amount of such additional payments are referred to herein as the “Gross-Up
Underpayment”). In the event that the Company exhausts its remedies
pursuant to Section 9(d) and the Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine the amount of
the Gross-Up Underpayment that has occurred and any such Gross-Up Underpayment
shall be promptly paid by the Company to or for the benefit of the Executive.
The fees and disbursements of the Accounting Firm shall be paid by the Company.

          (d)
The Executive shall notify the Company in writing of any claim by the United
States Internal Revenue Service that, if successful, would require the payment
by the Executive of any Excise Tax and, therefore, the payment by the Company
of a Gross-Up Payment. Such notification shall be given as soon as practicable
but not later than 30 business days after the Executive receives written notice
of such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day period following the date on
which he gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such
period that it desires, in good faith, to contest such claim (which notice
shall set forth the bases for such contest) and that it will bear the costs and
provide the indemnification as required by this sentence, the Executive shall,
in good faith:

	
 

	
 

	
 

	
          (i)
 give the Company any information reasonably requested by the Company relating
 to such claim,

	
 

	
 

	
 

	
          (ii)
 take such action in connection with contesting such claim as the Company
 shall, in good faith, reasonably request in writing from time to time,
 including, without limitation, accepting legal representation with respect to
 such claim by an attorney selected by the Company and reasonably acceptable
 to the Executive,

12

	
 

	
 

	
 

	
          (iii)
 cooperate with the Company in good faith in order effectively to contest such
 claim, and

	
 

	
 

	
 

	
          (iv)
 permit the Company to participate, in good faith, in any proceedings relating
 to such claim;

provided, however, that the Company
shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis to the
Executive, for any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of such representation and payment of
all costs and expenses.

          Without
limitation on the foregoing provisions of this Section 9(d), the Company shall,
exercising good faith, control all proceedings taken in connection with such
contest and, at its sole option (but in good faith), may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option (but in
good faith), either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that
if the Company directs the Executive to pay such claim and sue for a refund,
the Company shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax
basis to the Executive, from any Excise Tax or income tax, including interest
or penalties with respect thereto, imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to the payment of
taxes for the taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority. If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 9(d), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the
Company’s complying with the requirements of Section 9(d)) promptly pay to the
Company, as the case may be, the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by the Executive of an amount advanced by the Company pursuant to
Section 9(d), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to
the expiration of 30 days after such determination, then any obligation of 

13

the Executive
to repay such advance shall be forgiven and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment required to be
paid.

          Notwithstanding
any provision herein to the contrary, the Executive’s failure to strictly
comply with the notice provisions set forth in this Section 9, so long as such
failure does not prevent the Company from contesting an excise tax claim, shall
not adversely affect the Executive’s rights under this Section 9.

          Subject
to any earlier time limits set forth in Section 9, all payments and
reimbursements to which the Executive is entitled under this Section 9 shall be
paid to or on behalf of the Executive not later than the end of the taxable
year of the Executive next following the taxable year of the Executive in which
the Executive (or the Company, on the Executive’s behalf) remits the related
taxes (or, in the event of an audit or litigation with respect to such tax
liability under Section 9(d), not later than the end of the taxable year of the
Executive next following the taxable year of the Executive in which there is a
final resolution of such audit or litigation (whether by reason of completion
of the audit, entry of a final and non-appealable judgment, final settlement,
or otherwise)).

          10.
NO MITIGATION; NO OFFSET.

          In
the event of any termination of employment under Section 8, above, the
Executive shall be under no obligation to mitigate damages or seek other
employment, and, except as expressly set forth herein, there shall be no offset
against amounts due the Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that he may obtain.

          11.
NONCOMPETITION AND NONSOLICITATION.

          The
Executive represents and warrants that, to the best of his knowledge, he is not
using the confidential or proprietary information of any other person in
violation of any agreement or rights of others known to him. The Executive
agrees that the products of the Company and its Affiliates shall constitute the
exclusive property of the Company and its Affiliates.

          For
the avoidance of doubt, all trademarks, policy language or forms, products or
services (including products and services under development), trade names,
trade secrets, service marks, designs, computer programs and software, utility
models, copyrights, know-how and confidential information, applications for
registration of any of the foregoing and the right to apply for them in any
part of the world (whether any of the foregoing shall be registered or
unregistered) created or discovered or participated in by the Executive during
the course of his employment (whether or not pursuant to the terms of this
Agreement) or under the instructions of the Company or its Affiliates are and
shall be the absolute property of the Company and its Affiliates, as
appropriate. Without limiting the foregoing, the Executive hereby assigns to
the Company any and all of the 

14

Executive’s
right, title and interest, if any, pertaining to the financial products
insurance and reinsurance (including, without limitation, finite insurance and
reinsurance), risk assumption, risk management, brokerage, financial and other
products or services developed or improved upon by the Executive (including,
without limitation, any related “know-how”) while employed by the Company or
its Affiliates, including any patent, trademark, trade name, copyright,
ownership or other right that may pertain thereto.

          Since
Executive has obtained and is likely to obtain in the course of Executive’s
employment with the Company and its Affiliates knowledge of trade names, trade
secrets, know-how, products and services (including products and services under
development), techniques, methods, lists, computer programs and software and
other confidential information relating to the Company and its Affiliates, and
their employees, clients, business or business opportunities, Executive hereby
undertakes that:

	
 

	
 

	
 

	
          (i)
 Executive will not (either alone or jointly with or on behalf of others and
 whether directly or indirectly) encourage, entice, solicit or endeavor to
 encourage, entice or solicit away from employment with the Company or its
 Affiliates, or hire or cause to be hired, any officer or employee of the
 Company or its Affiliates (or any individual who was within the prior twelve
 months an officer or employee of the Company or its Affiliates), or
 encourage, entice, solicit or endeavor to encourage, entice or solicit any
 individual to violate the terms of any employment agreement or arrangement
 between such individual and the Company or any of its Affiliates; and

	
 

	
 

	
 

	
          (ii)
 Executive will not (either alone or jointly with or on behalf of others and
 whether directly or indirectly) interfere with or disrupt or seek to
 interfere with or disrupt (A) the relationships between the
 Company and its Affiliates, on the one hand, and any customer or client of
 the Company and its Affiliates, on the other hand, (including any reinsured
 party) who during the period of twenty-four months immediately preceding such
 termination shall have been such a customer or client, or (B) the
 supply to the Company and its Affiliates of any services by any supplier or
 agent or broker who during the period of twenty-four months immediately
 preceding such termination shall have supplied services to any such person,
 nor will Executive interfere or seek to interfere with the terms on which
 such supply or agency or brokering services during such period as aforesaid
 have been made or provided.

          The
provisions of the immediately preceding sentence shall continue as long as the
Executive is employed by the Company or its Affiliates and such provisions
shall continue in effect after such employment is terminated for any reason
under Section 8 until the first anniversary of such termination, provided that
if such employment is terminated by the Company under Section 8(d)(iii) or by
the Executive under Section 8(d)(iii), the provisions of clause (ii) shall
automatically terminate upon such termination of employment, unless the Company
elects, in writing, upon such termination to continue

15

the provisions
of clause (ii) in effect through the six-month anniversary of such
termination of employment, in which case the Company shall be obligated to pay
the Executive, in addition to any of the Executive’s rights under Section
8(d)(iii), a lump sum payment equal to the sum of (x) six months of
his Base Salary and (y) one half of the Executive’s average annual
bonus payable by the Company or its subsidiaries for the three years (or
shorter period of employment by any of such entities) immediately preceding the
year of termination, and such lump sum payment shall be made within 60 days
following termination of employment.

          For
purposes of this Agreement, an “Affiliate” of the Company means any
person, directly or indirectly, through one or more intermediaries, controlled by
the Company, and such term shall specifically include, without limitation, the
Company’s majority-owned subsidiaries.

          The
limitations on the Executive set forth in this Section shall also apply to any
agent or other representative acting on behalf of Executive.

          While
the restrictions aforesaid are stated to be reasonable in all the circumstances
it is also recognized that restrictions of the nature in question may fail for
reasons unforeseen and accordingly it is hereby declared and agreed that if any
of such restrictions or the geographic or other scope thereof shall be adjudged
to be void as going beyond what is reasonable in the circumstances for the
protection of the interests of the Company and its Affiliates but would be
valid if part of the wording thereof were deleted and/or the periods (if any)
thereof reduced and/or geographic or other area dealt with thereby reduced in
scope then said restrictions shall apply with such modifications as may be
necessary to make them valid and effective.

          Nothing
contained in this Section 11 shall limit in any manner any additional
obligations to which Executive may be bound pursuant to any other agreement or
any applicable law, rule or regulation and Section 11 shall apply, subject to its
terms, after employment has terminated for any reason.

          12.
CONFIDENTIAL INFORMATION.

          The
Executive covenants that he shall not, without the prior written consent of the
Company, use for the Executive’s own benefit or the benefit of any other person
or entity other than the Company and its Affiliates or disclose to any person,
other than an employee of the Company or other person to whom disclosure is
necessary to the performance by the Executive of his duties in the employ of
the Company, any confidential, proprietary, secret, or privileged information
about the Company or its Affiliates or their business or operations, including,
but not limited to, information concerning trade secrets, know-how, software,
data processing systems, policy language and forms, inventions, designs,
processes, formulae, notations, improvements, financial information, business
plans, prospects, referral sources, lists of suppliers and customers, 

16

legal advice
and other information with respect to the affairs, business, clients,
customers, agents or other business relationships of the Company or its
Affiliates. Executive shall hold in a fiduciary capacity for the benefit of the
Company all secret, confidential proprietary or privileged information or data
relating to the Company or any of its Affiliates or predecessor companies, and
their respective businesses, which shall have been obtained by Executive during
his employment, unless and until such information has become known to the
public generally (other than as a result of unauthorized disclosure by the
Executive) or unless he is required to disclose such information by a court or
by a governmental body with apparent authority to require such disclosure. The
foregoing covenant by the Executive shall be without limitation as to time and
geographic application and this Section 12 shall apply in accordance with its
terms after employment has terminated for any reason. The Executive
acknowledges and agrees that he shall have no authority to waive any attorney-client
or other privilege without the express prior written consent of the
Compensation Committee as evidenced by the signature of the Company’s General
Counsel.

          13.
WITHHOLDING.

          Anything
in this Agreement to the contrary notwithstanding, all payments required to be
made by the Company hereunder to the Executive shall be subject to withholding
of such amounts relating to taxes as the Company may reasonably determine
should be withheld pursuant to any applicable law or regulation. In lieu of
withholding such amounts, in whole or in part, the Company may, in its sole
discretion, accept other provision for payment of taxes as required by law,
provided it is satisfied that all requirements of law affecting its
responsibilities to withhold such taxes have been satisfied.

          14.
SUBSIDIARY SERVICES AND GUARANTEE.

          (a)
Each of SCA Holdings US Inc and XL Financial Assurance Ltd (together, the “Guarantors”)
hereby agrees to be jointly and severally liable, together with the Company,
for the performance of all obligations and duties, and the payment of all
amounts, due to the Executive under this Agreement.

          (b)
All of the terms and provisions of this Agreement relating to the Executive’s
employment by the Company shall likewise apply mutatis mutandis to the
Executive’s employment by any of its subsidiaries, it being understood that if
the Executive’s employment with the Company is terminated, his employment with
its subsidiaries shall also be terminated and the Executive shall be required
to resign immediately from all directorships and other positions held by the
Executive in the Company and its subsidiaries or in any other entities in
respect of which the Executive was acting as a representative or designee of
the Company or its subsidiaries in connection with his employment.

17

          15.
ENTIRE AGREEMENT.

          This
Agreement, together with the Exhibits, contains the entire agreement between
the Parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings, whether
written or oral, between the Company and the Executive with respect thereto
including, without limitation, the Prior Agreement.

          16.
ASSIGNABILITY; BINDING NATURE.

          This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors, heirs and assigns. No rights or obligations of the
Executive under this Agreement may be assigned or transferred by the Executive
other than his right to compensation and benefits hereunder, which may be
transferred by will or operation of law subject to the limitations of this
Agreement. No rights or obligations of the Company under this Agreement may be
assigned or transferred by the Company except that such rights or obligations
may be assigned or transferred pursuant to a merger or consolidation or
amalgamation or scheme of arrangement in which the Company is not the
continuing entity, or the sale or liquidation of all or substantially all of
the assets of the Company, provided that the assignee or transferee is the
successor to all or substantially all of the assets of the Company and such
assignee or transferee assumes by operation of law or in writing duly executed
by the assignee or transferee all of the liabilities, obligations and duties of
the Company, as contained in this Agreement, either contractually or as a
matter of law.

          17.
INDEMNIFICATION.

          The
Executive shall be provided indemnification by the Company to the maximum
extent permitted by applicable law and its charter documents. In addition, he
shall be covered by a directors’ and officers’ liability policy with coverage
for all directors and officers of the Company in an amount equal to at least
US$25,000,000. Such directors’ and officers’ liability insurance shall be
maintained in effect for a period of six years following termination of the
Executive’s employment for any reason other than pursuant to Section 8(c) or
Section 8(e) hereof.

          18.
SETTLEMENT OF DISPUTES.

          (a)
Any dispute between the Parties arising from or relating to the terms of this
Agreement or the Executive’s employment with the Company or its Affiliates
shall, except as provided in Section 18(b) or Section 18(c), be resolved by
binding arbitration held in New York City in accordance with the rules of the
American Arbitration Association.

18

          (b)
Executive acknowledges that the Company and its Affiliates will suffer
irreparable injury, not readily susceptible of valuation in monetary damages,
if Executive breaches his obligations under Section 11 or 12. Accordingly,
Executive agrees that the Company and its Affiliates will be entitled, in
addition to any other available remedies, to obtain injunctive relief against
any breach or prospective breach by Executive of his obligations under Section
11 or 12 in any Federal or state court sitting in the City and State of New
York or court sitting in Bermuda or the United Kingdom, or, at the Company’s or
any Affiliate’s election, in any other jurisdiction in which Executive
maintains his residence or his principal place of business. Executive hereby
submits to the non-exclusive jurisdiction of all those courts for the purposes
of any actions or proceedings instituted by the Company or its Affiliates to
obtain such injunctive relief, and Executive agrees that process in any or all
of those actions or proceedings may be served by registered mail or delivery,
addressed to the last address of Executive known to the Company or its
Affiliates, or in any other manner authorized by law. Executive further agrees
that, in addition to any other remedies available to the Company or its
Affiliates by operation of law or otherwise, because of any breach by Executive
of his obligations under Section 11 or 12 he will forfeit any and all bonus and
rights to any payments to which he might otherwise then be entitled by virtue
hereof and such payments may be suspended so long as any good faith dispute
with respect thereto is continuing; provided, however, that
payments, benefits and other rights and privileges of the Executive under this
Agreement following termination of the Executive’s employment during a Post
Change Period shall not be forfeited, suspended, offset, diminished or
otherwise altered in any way on account of any breach or prospective breach of
Section 11, Section 12 or any other provision of this Agreement alleged by the
Company.

          (c)
Notwithstanding any other provision of this Agreement, the Executive may elect
to resolve any dispute involving a breach or alleged breach of this Agreement
following termination of the Executive’s employment during a Post-Change Period
in any Federal or State court sitting in the City and State of New York or
court sitting in Bermuda or the United Kingdom. The Company hereby submits to
the non-exclusive jurisdiction of all those courts for the purposes of any such
actions or proceedings instituted by the Executive, and the Company agrees that
process in any or all of such actions or proceedings may be served by
registered mail or delivery, addressed to the Company as set forth in Section
20, or in any other manner authorized by law. The Company shall pay all costs
associated with any court proceeding under this Section 18(c) without regard to
the outcome of such proceeding, including all legal fees and expenses of the
Executive, who shall be reimbursed for all such costs within 30 days following
written demand therefor by the Executive (which written demand shall be made no
later than six (6) months following the end of the calendar year in which such
costs were incurred).

19

          (d)
Each Party shall bear its own costs incurred in connection with any proceeding
under Sections 18(a) or 18(b) hereof, including all legal fees and expenses; provided,
however, that the Company shall bear all such costs of the Executive (to
the extent such costs are reasonable) if the Executive substantially prevails
in the proceeding. Following the final determination of the dispute in which
the Executive has substantially prevailed, the Company shall reimburse all such
reasonable costs within 30 days following written demand therefore (supported
by documentation of such costs) by the Executive, and the Executive shall make
such written demand within 60 days following the final determination of the
dispute: provided, however, that such payment shall be made no later than on or
prior to the end of the calendar year following the calendar year in which the
cost is incurred. Notwithstanding the foregoing, in the event a final
determination of the dispute has not been made by December 1 of the year
following the calendar year in which the cost is incurred, the Company shall,
within 30 days after such December 1, reimburse such reasonable costs
(supported by documentation of such costs) incurred in the prior taxable year;
provided, however, that the Executive shall return such amounts to the Company
within ten (10) business days following the final determination if the
Executive did not substantially prevail in the dispute.

          19.
AMENDMENT OR WAIVER.

          No
provision in this Agreement may be amended unless such amendment is agreed to
in writing, signed by the Executive and by a duly authorized officer of the
Company. No waiver by any 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. Except as set forth in Exhibit B, any
waiver must be in writing and signed by the Executive or a duly authorized
officer of the Company, as the case may be.

          20.
NOTICES.

          Any
notice required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been given when delivered personally or
sent by courier, or by certified or registered mail, postage prepaid, return
receipt requested, duly addressed to the Party concerned at the address
indicated below or to such changed address as such Party may subsequently by
similar process give notice of:

          If
to the Company:

          Security
Capital Assurance Ltd

          A.S. Cooper
Building

          26 Reid Street, 4th
floor

          Hamilton HM11,
Bermuda

          Att’n: Chief
Executive Officer

20

          If
to the Executive:

          To
the last address delivered to

          the Company by the
Executive in

          the manner set
forth herein.

          21.
[INTENTIONALLY OMITTED]

          22.
SEVERABILITY.

          In
the event that any provision or portion of this Agreement shall be determined
to be invalid or unenforceable for any reason, in whole or in part, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.

          23.
SURVIVORSHIP.

          The
respective rights and obligations of the Parties shall survive any termination
of this Agreement to the extent necessary to the intended preservation of such
rights and obligations.

          24.
REFERENCE.

          In
the event of the Executive’s death or a judicial determination of his
incompetence, reference in this Agreement to the Executive shall be deemed,
where appropriate, to refer to his estate or other legal representative.

          25.
GOVERNING LAW.

          This
Agreement shall be governed by and construed and interpreted in accordance with
the laws of the State of New York without reference to the principles of
conflict of laws.

          26.
SECTION 409A.

          (a)
The intent of the Parties is that payments and benefits under this Agreement
comply with Internal Revenue Code Section 409A and the regulations and guidance
promulgated there under (collectively “Code Section 409A”) and,
accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be in compliance therewith. If the Executive notifies the
Company (with specificity as to the reason therefor) that the Executive
believes that any provision of this Agreement (or of any award of compensation,
including equity compensation or benefits) would cause the Executive to incur
any additional tax or interest under Code Section 409A and the Company concurs
with such belief or the Company (without any obligation whatsoever to do so)
independently makes such determination, the Company shall, after consulting 

21

with the
Executive, reform such provision to attempt to comply with Code Section 409A
through good
faith modifications to the minimum extent reasonably appropriate to conform
with Code Section 409A. To the extent that any provision hereof is
modified in order to comply with Code Section 409A, such modification shall be
made in good faith and shall, to the maximum extent reasonably possible,
maintain the original intent and economic benefit/burden to the Executive and
the Company of the applicable provision without violating the provisions of
Code Section 409A.

          (b)
A termination of employment shall not be deemed to have occurred for purposes
of any provision of this Agreement providing for the payment of any amounts or
benefits upon or following a termination of employment unless such termination
is also a “separation from service” within the meaning of Code Section 409A
and, for purposes of any such provision of this Agreement, references to a
“termination,” “termination of employment” or like terms shall mean “separation
from service.” If the Executive is deemed on the date of termination to be a
“specified employee” within the meaning of that term under Code Section
409A(a)(2)(B), then with regard to any payment that is considered deferred
compensation under Code Section 409A payable on account of a “separation from
service,” such payment or benefit shall be made or provided at the date which
is the earlier of (i) the expiration of the six (6)-month period measured from
the date of such “separation from service” of the Executive, and (ii) the date
of the Executive’s death (the “Delay Period”). Upon the expiration of
the Delay Period, all payments and benefits delayed pursuant to this Section
26(b) (whether they would have otherwise been payable in a single sum or in
installments in the absence of such delay) shall be paid or reimbursed to the
Executive in a lump sum with interest at the prime rate as published in The
Wall Street Journal on the first business day of the Delay Period, and any
remaining payments and benefits due under this Agreement shall be paid or
provided in accordance with the normal payment dates specified for them herein.

          (c)
With regard to any provision herein that provides for reimbursement of costs
and expenses or in-kind benefits, except as permitted by Code Section 409A, (i)
the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit, (ii) the amount of expenses
eligible for reimbursement, or in-kind benefits, provided during any taxable
year shall not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other taxable year, provided that the foregoing
clause (ii) shall not be violated without regard to expenses reimbursed under
any arrangement covered by Code Section 105(b) solely because such expenses are
subject to a limit related to the period the arrangement is in effect and (iii)
such payments shall be made on or before the last day of the Executive’s
taxable year following the taxable year in which the expense was incurred.

          (d)
Whenever a payment under this Agreement specifies a payment period with
reference to a number of days (e.g., “payment shall be made within thirty (30)
days

22

after
termination of employment”), the actual date of payment within the specified
period shall be within the sole discretion of the Company.

          (e)(i)
The Company shall indemnify the Executive, as provided in this subsection (e),
if the Executive incurs additional tax under Code Section 409A as a result of a
violation of Code Section 409A (each an “Indemnified Code Section 409A
Violation”) that occurs as a result of (1) the Company’s clerical error
(other than an error cause by erroneous information provided to the Company by
the Executive), (2) the Company’s failure to administer this Agreement or any
benefit plan or program in accordance with its written terms (such written
terms, the “Plan Document”), or (3) following December 31, 2008, the
Company’s failure to maintain the Plan Documents in compliance with Code
Section 409A; provided, that the indemnification set forth in clause (3)
shall not be available to the Executive if (x) the Company has made a reasonable,
good faith attempt to maintain the applicable Plan Document in compliance with
Code Section 409A but has failed to do so or (y) the Company has maintained the
applicable Plan Document in compliance with Code Section 409A but subsequent
issuance by the Internal Revenue Service or the Department of the Treasury of
interpretive authority results in the applicable Plan Document not (or no
longer) complying with Code Section 409A (except that, if the Company is
permitted by such authority or other authority to amend the Plan Document to
bring the Plan Document into compliance with Code Section 409A and fails to do
so, then such indemnification shall be provided). 

          (ii)
In the event of an Indemnified Code Section 409A Violation, the Company shall
reimburse the Executive for (1) the 20% additional income tax described in
Code Section 409A(a)(1)(B)(i)(II) (to the extent that the Executive incurs the
20% additional income tax as a result of the Indemnified Code Section 409A
Violation), and (2) any interest or penalty that is assessed with respect
to the Executive’s failure to make a timely payment of the 20% additional
income tax described in clause (1), provided that the Executive pays the 20%
additional income tax promptly upon being notified that the tax is due (the
amounts described in clause (1) and clause (2) are referred to collectively as
the “Code Section 409A Tax”). In addition, in the event of an
Indemnified Code Section 409A Violation, the Company shall make a payment (the
“Code Section 409A Gross-Up Payment”) to the Executive such that the net
amount the Executive retains, after paying any federal, state, or local income
tax or FICA tax on the Code Section 409A Gross-Up Payment, shall be equal to
the Code Section 409A Tax. The procedures set forth in Section 9(c) and 9(d)
with respect to the Gross-Up Payment shall also apply to the payment of the
Code Section 409A Tax and the Code Section 409A Gross-Up Payment (including,
without limitation, the Company’s right to contest the Code Section 409A Tax); provided,
that, in addition to such procedures, the Executive shall reasonably cooperate
with measures identified by the Company that are intended to mitigate the Code
Section 409A Tax to the extent that such measures do not materially reduce or
delay the payments and benefits to the Executive hereunder.

23

          (f)
Any payment made by the Company in respect of any taxes imposed with regard to
the Company’s obligation to provide benefits in lieu of continued medical plan
coverage shall be paid to the Executive, his dependents or the applicable
taxing authority on their behalf, no later than the due date of such taxes.

          27.
HEADINGS.

          The
heading of the sections contained in this Agreement are for convenience only
and shall not be deemed to control or affect the meaning or construction of any
provision of this Agreement.

          28.
COUNTERPARTS.

          This
Agreement may be executed in one or more counterparts.

24

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

	
 

	
 

	
 

	
 

	
SECURITY
 CAPITAL ASSURANCE LTD

	
 

	
 

	
 

	
 

	
By:

	
/s/ Susan Comparato

	
 

	

	
 

	
Name:

	
Susan
 Comparato

	
 

	
Title: 

	
Senior Vice
 President and General

 Counsel

	
 

	
 

	
 

	
 

	
DAVID P.
 SHEA

	
 

	
 

	
 

	
By:

	
/s/ David P. Shea

	
 

	

	
 

	
 

	
 

	
 

	
GUARANTORS:

	
 

	
 

	
 

	
SCA HOLDINGS
 US INC

	
 

	
 

	
 

	
By:

	
 /s/ Susan
    Comparato

	
 

	

	
 

	
Name:

	
Susan
 Comparato

	
 

	
Title: 

	
Managing
 Director

	
 

	
 

	
 

	
 

	
XL FINANCIAL
 ASSURANCE LTD

	
 

	
 

	
 

	
By:

	
 /s/ Tom Currie

	
 

	

	
 

	
Name:

	
Tom Currie

	
 

	
Title: 

	
Senior Vice
 President

25

EXHIBIT A

CHANGE IN CONTROL

For purposes
of this Agreement, “Change in Control” shall mean:

          (i)
the acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of 30%
or more of either (1) the then outstanding shares of common stock
of the Company (the “Outstanding Company Common Stock”) or (2) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that the
following acquisitions shall not constitute a Change in Control: (i) any
acquisition by the Company or any of its Subsidiaries; (ii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its Subsidiaries; (iii) any
acquisition by any corporation with respect to which, following such
acquisition, more than 60% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such acquisition in
substantially the same proportions as their ownership, immediately prior to
such acquisition, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be (unless a Person’s ownership of
the acquiring corporation results in that Person directly or indirectly owning
30% or more of the Outstanding Company Common Stock or Outstanding Company
Voting Securities); or (iv) any acquisition by XL Capital Ltd or
its wholly-owned subsidiaries unless, at any time after the Effective Date and
prior to such acquisition, XL Capital Ltd and its subsidiaries own less than
30% of the Outstanding Company Voting Securities;

          (ii)
during any period of two consecutive years, individuals who, as of the
beginning of such period, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the
beginning of such period whose election, or nomination for election by the
Company’s shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such individual were a member of 

A-1

the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act);

          (iii)
consummation of a reorganization, scheme of arrangement, merger, consolidation
or similar transaction (collectively, a “Transaction”), in each case,
with respect to which all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding Company Common
Stock and outstanding Company Voting Securities immediately prior to such
Transaction, do not, following such Transaction, beneficially own, directly or
indirectly, more than 60% of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Transaction in substantially the same
proportions as their ownership, immediately prior to such Transaction, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be;

          (iv)
consummation of a sale or other disposition of all or substantially all of the
assets of the Company, other than to a corporation with respect to which
following such sale or other disposition, more than 60% of, respectively, the
then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such sale or other disposition in substantially the same proportions
as their ownership, immediately prior to such sale or other disposition, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be; or

          (v)
approval by the shareholders of the Company of a complete liquidation or
dissolution (or similar transaction) of the Company.

A-2

EXHIBIT B

GOOD REASON

          For
purposes of this Agreement, “Good Reason” shall mean any of the
following, unless done with the prior express written consent of the Executive:

                    (i)
A material diminution in the Executive’s base compensation; 

                    (ii)
A material diminution in the Executive’s authority, duties, or
responsibilities;

           (iii)
A material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Executive is required to report, including a requirement
that a Executive report to a corporate officer or employee instead of reporting
directly to the board of directors of a corporation (or similar governing body
with respect to an entity other than a corporation); 

                    (iv)
A material diminution in the budget over which the Executive retains authority;

                    (v)
A material change in the geographic location at which the Executive must
perform the services; or

           (vi)
Any other action or inaction that constitutes a material breach by the service
recipient of the agreement under which the Executive provides services. 

Notwithstanding
any provision in this Agreement to the contrary, the Executive must give
written notice of his intention to terminate his employment for Good Reason
within sixty (60) days after the act or omission which constitutes Good Reason,
and the Company shall have thirty (30) days from such notice to remedy the
condition, in which case Good Reason shall no longer exist with regard to such
condition. Any failure to give such written notice within such period will
result in a waiver by the Executive of his right to terminate for Good Reason
as a result of such act or omission. Any termination hereunder shall occur
within 120 days after the Good Reason event occurs.

B-1

EXHIBIT C

Form of General Release
and Covenant Not to Sue

          1.
General
Release of Claims. In consideration for the payments and
benefits paid to you under Section 8 of the Agreement, you hereby release and
forever discharge the Company, XL Global Services, Inc. and any and all of
their respective affiliates, predecessors, successors, assigns, and their
respective officers, directors, administrators and employees (the “Released
Parties”) of and from all actions, claims, liabilities, demands
and causes of action, known or unknown, fixed or contingent, in law or equity,
included but not limited to those arising under the Civil Rights Act of 1964,
the Reconstruction Era Civil Rights Act, the Age Discrimination in Employment
Act of 1967 (“ADEA”), the Employee Retirement Income Security Act of 1974, The
Americans with Disabilities Act, The Family and Medical Leave Act of 1993, The
New York State Human Rights Law Section 196 ET SEQ., the New York City Administrative
Code, as amended, and any and all other federal, state, and local laws, rules
and regulations prohibiting, without limitation, discrimination in employment,
tortuous or wrongful discharge, breach of an express or implied contract,
breach of a covenant of good faith and fair dealing, negligent or intentional
infliction of emotional distress, defamation, misrepresentation or fraud, which
you ever had, now have or hereafter can, shall or may have for, upon or by
reason of any matter, cause or thing, up to and including the day on which you
sign this Agreement (the “Claims”); provided, however, that you
are not waiving any right to claim benefits under employee benefit plans,
(including welfare benefit, retirement and equity-related plans), any right of
indemnification (including indemnification, legal defense and related rights
under the Company’s certificate of incorporation, by-laws or other such organic
documents), any rights under directors and officers’ liability insurance
policies, any amounts due to you on or after termination under your employment
agreement with the Company, any payments due to you under the Company’s
retention award program or any deferred cash payment, which the Compensation
Committee, in its discretion, determines is payable to you under the Company’s
Long Term Incentive Plan. Notwithstanding the foregoing, the proviso in the
immediately preceding sentence shall not apply to any unvested restricted
shares and options granted under the LTIP Plan, all of which shall be cancelled
and forfeited upon termination.

          2.
Effect
of General Release; Limitations on General Release. You
understand that by signing this General Release you are prevented from filing,
commencing or maintaining any action, complaint, or proceeding with regard to
any of the claims released hereby. However, nothing in the General Release of
Claims above precludes you from filing a charge with an administrative agency
or from participating in an agency investigation. You are, however, waiving
your right to recover money in connection with any such charge or
investigation. You are also waiving your right to recover money in connection
with a charge filed by any other individual or by the Equal Employment
Opportunity Commission or any other federal or state agency. 

          3.
Covenant
Not to Sue. In addition to waiving and releasing the claims and
rights covered by the General Release of Claims, you promise not to sue the
Company or any other Released Party in any forum on any claim which is covered
by (i.e., released under) the General Release of Claims. This covenant by you
not to sue is different from the General Release of Claims, which will provide
the Company a defense in the event you violate the General Release. If 

C-1

you violate
this Covenant Not to Sue by suing a Released Party, you may be liable to that
party for monetary damages. More specifically, if you sue a Released Party in
violation of this Covenant Not to Sue, you will be required to either: (1) pay
that Released Party’s attorneys’ fees and other costs incurred as a result of
having to defend against your suit; or (2) alternatively, at the Released
Party’s option, return to the Company all of the severance pay provided to you
under Section 8 of the Agreement, except for one-hundred dollars ($100.00). In
the event of such violation, the Company will also be excused from providing
you any remaining severance payments under Section 8 of the Agreement. However,
nothing in this Covenant Not to Sue or in any other part of this Agreement
prevents you from challenging the validity of this Agreement under the ADEA. 

          4.
Knowing
and Voluntary Decision to Sign. You further agree that no
statements, representations, promises, threats or suggestions have been made by
the Company or its representatives, officers, or employees to influence you to
sign this General Release except such statements as are expressly set forth
herein. You have signed this General Release upon reaching the considered
conclusion that it is best for you, and of your own free will, relying entirely
upon your own judgment, and the judgment of such lawyers and other personal
advisors who you have chosen to consult. You further acknowledge that you are
under no disability or impairment, which affects your decision to sign this General
Release. 

          5.
Time
to Consider the Agreement. You have actually read this General
Release, and have had adequate time of at least 21 days to consider its terms
and effect, and to ask any questions that you may have of the legal or other
personal advisors of your own choosing. 

          6.
Subsequent
Facts. No fact, evidence, event or transaction currently unknown
to you but which may hereafter become known to you shall affect in any way or
manner the final and unconditional nature of this General Release. 

	
 

	
 

	
READ,
 ACCEPTED & AGREED 

	
 

	
 

	
 

	
/s/ David P.
 Shea

	
 

	

	
 

	
David P.
 Shea

	
 

	
 

	
 

	
May 29, 2008

	
 

	

	
 

	
Dated

	
 

C-2

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