Document:

Exhibit 10.1 

AGREEMENT AND RELEASE

                    This
Agreement and Release (“Agreement”) is entered into as of this 29th
day of November, 2011, between XL Group plc (the “Company”) and David B. Duclos
(the “Executive”). 

                    The
Executive and the Company agree as follows: 

                    1.
The employment relationship between the Executive and the Company will continue
until December 31, 2011 (the “Termination Date”), at which time it shall terminate.
Effective on the Termination Date or such earlier date requested in writing by
the Company, the Executive will resign all officer positions with the Company
and its Affiliates (as defined below) as well as his membership on all Boards
of Directors and Committees of the Company and its Affiliates. 

                    2.
In consideration for the covenants of the Executive and the release of claims
by the Executive contained herein and in full payment of all obligations of any
nature or kind whatsoever owed or owing to the Executive by the Company and any
of its Affiliates, the Company shall pay, or provide benefits to, the Executive
as follows:

	
  

 	
  

 
	
  

 	
           (a)
 the Company shall pay the Executive’s base salary, at the rate in effect on
 the date hereof, through the Termination Date in accordance with its normal
 payroll practices; 

 
	
  

 	
  

 
	
  

 	
           (b)
 provided the Executive executes, on December 31, 2011, the general release of
 claims attached hereto as Exhibit A and does not revoke such release prior to
 the end of the seven day statutory revocation period, the Company shall make
 a lump sum cash payment to the Executive on February 29, 2012 in an
 amount equal to $2,134,375;

 
	
  

 	
  

 
	
  

 	
           (c)
 the Executive shall be eligible to receive an annual bonus for calendar year
 2011 as determined by the Management Development and Compensation Committee
 (the “MDCC”) of the Board of Directors of the Company in its discretion, and
 any such annual bonus shall be paid to the Executive on or after
 January 1, 2012 and on or prior to March 15, 2012, with the actual
 payment date to be determined by the Company within such range;

 

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           (d)
 the Executive shall be reimbursed for business expenses reasonably incurred
 by him prior to the Termination Date in accordance with the Company’s expense
 reimbursement program; 

 
	
  

 	
  

 
	
  

 	
           (e)
 stock options and restricted stock granted to the Executive under the
 Company’s equity-based incentive compensation plans (a complete list of which
 is attached hereto as Exhibit B) will, to the extent unvested, become vested
 on the Termination Date, all of the Company stock options held by the
 Executive will expire on the earlier of the term set forth in the applicable
 option agreement or five (5) years following the Termination Date;

 
	
  

 	
  

 
	
  

 	
           (f)
 the Executive will be entitled to elect medical benefit plan coverage
 (including dental and vision benefits if provided under the applicable plans)
 continuation for the Executive (and the Executive’s dependents, if any) for a
 period of twenty-four (24) months following the Termination Date under the
 Company’s medical benefit plans upon substantially the same terms and
 conditions as is then in existence for other executives during the coverage
 period; 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 further provided that the Executive shall pay the full
 cost thereof (contemplated to be the COBRA premium cost) and monthly during
 such period (whether or not the Executive elects such coverage) the Company
 shall pay the Executive an amount equal to the difference between such amount
 and the amount paid by active executives for comparable coverage plus an
 additional amount such that the Executive shall have no after tax cost for
 such payment and the additional amount;

 
	
  

 	
  

 
	
  

 	
           (g)
 the Executive’s vested accrued benefits under the Company’s pension and
 deferred compensation plans shall be paid to the Executive in accordance with
 the terms of such plans; 

 
	
  

 	
  

 
	
  

 	
           (h)
 a portion of the Executive’s 107,318 Performance Units granted as of February
 28, 2010 (60,208) and 2011 (47,110), respectively, will vest equal to (i) the
 percentage of the Performance Units earned based upon the extent, if any, of
 attainment of the performance goals for the Performance Units as measured at
 the end of calendar year 2011 (as determined by the MDCC), multiplied by (ii)
 a fraction, the numerator of which is the number of days during the
 Performance Period for the Performance Units ending on the Termination Date
 and the denominator of which is the number of days in the full Performance
 Period. Shares of Company common stock equal to the number of such vested Performance
 Units will be distributed to the Executive on or after January 1, 2012
 and on or prior to March 15, 2012, with the actual payment date to be
 determined by the Company within such range; and

 

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           (i)
 the Company shall pay the Executive an amount equal to $192,467 (representing
 the total of the amounts due to the Executive under the Company’s 2009 Cash
 Long-Term Program and the Executive’s unvested supplemental deferred cash
 award), and such amount shall be paid to the Executive on or after
 January 1, 2012 and on or prior to March 15, 2012, with the actual
 payment date to be determined by the Company within such range.

 

                    3.
The Executive acknowledges and agrees that he is not entitled to any salary,
bonuses, long-term or short-term incentive compensation or other compensation,
payments, rights or benefits of any kind in respect of his employment with the
Company and/or other positions with its Affiliates, the termination of such
employment and/or other positions, or under any of the compensation or benefit
plans of the Company or its Affiliates, except as provided by this Agreement or
under any benefit or equity plan or arrangement or as indemnification or
director and officers liability insurance coverage. 

                    4.
In consideration of the above, the sufficiency of which the Executive hereby
acknowledges, the Executive, on behalf of the Executive and the Executive’s
heirs, executors, administrators, representatives, agents and assigns (the
“Releasors”) hereby irrevocably and unconditionally releases and forever
discharges the Company and its members, shareholders, parents, Affiliates,
subsidiaries, divisions, any and all current and former directors, officers,
employees, agents, and contractors (in their capacities as such) and their
heirs and assigns, and any and all employee pension benefit or welfare benefit
plans of the Company or its Affiliates, including current and former trustees
and administrators of such employee pension benefit and welfare benefit plans
(collectively, the “Releasees”), from all claims, actions, causes of action,
rights, judgments, obligations, damages, charges, accountings, demands or
liabilities of whatever kind or character, in law or in equity, whether known
or unknown, (collectively, the “Claims”) which may have existed or which may
now exist from the beginning of time to the date of this Agreement, including,
without limitation, any Claims the Releasors may have arising from or relating
to the Executive’s employment, hiring or entering into employment or
termination from employment with the Company or its Affiliates or relating to
the Employment Agreement or any other agreement between the Executive and the
Company or an Affiliate, and any Claims the Releasors may have under: the Civil
Rights Act of 1964, as amended, and the Civil Rights Act of 1991 (which
prohibit discrimination in employment based upon race, color, sex, religion and
national origin); the Americans with Disabilities Act of 1990, as amended, and
the Rehabilitation Act of 1973 (which prohibit discrimination based upon
disability); the Family and Medical Leave Act of 1993 (which prohibits
discrimination based on requesting or taking a family or medical leave);
Section 1981 of the Civil Rights Act of 1866 (which prohibits discrimination
based upon race); Section 1985(3) of the Civil Rights Act of 1871 (which
prohibits conspiracies to discriminate); the Employee Retirement Income
Security Act of 1974, as amended (which governs employee benefits); any other
federal, state, local or foreign laws against discrimination; or any other
federal, state, local or foreign statute, or common law relating to employment,
wages, hours,

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or any other
terms and conditions of employment. This includes a release by the Releasors of
any Claims for wrongful discharge, breach of contract, torts or any other
Claims in any way related to the Executive’s employment with, hiring by or
termination from the Company or its Affiliates. This release also includes a
release of any Claims for age discrimination under the Age Discrimination in
Employment Act of 1967, as amended by the Older Workers’ Benefit Protection Act
and the applicable rules and regulations promulgated thereunder (“ADEA”). The
ADEA requires that the Executive be advised to consult with an attorney before
the Executive waives any claim under ADEA. In addition, the ADEA provides the
Executive with at least twenty-one (21) days to decide whether to waive claims
under ADEA and seven (7) days after the Executive signs the Agreement to revoke
that waiver. This release does not release the Company from any obligations due
to the Executive under this Agreement, under any benefit or equity plan, under
Sections 9 and 18 of the Employment Agreement dated as of July 25, 2008 between
Executive and the Company, and the Executive is not waiving any right of
indemnification or rights of advancement of legal fees he may have under the Company’s
charter documents, the Deed Poll entered into by XL Group Ltd on July 1, 2010,
applicable law or otherwise or the right to coverage under any directors &
officers liability insurance maintained by the Company. 

                    5.
The Executive understands that by signing this Agreement the Executive is
prevented from filing, commencing or maintaining any action, complaint, or
proceeding with regard to any of the Claims released hereby. However, nothing
in this Agreement precludes the Executive from filing a charge with an
administrative agency or from participating in an agency investigation to the
extent such rights cannot be waived under applicable law. The Executive is,
however, waiving his right to recover money in connection with any such charge
or investigation. The Executive is also waiving his 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. In
addition to waiving and releasing the Claims covered by the release of Claims
above, the Executive promises not to sue any Releasee in any forum for any
reason covered by the release of Claims set forth above, provided that the
foregoing shall not apply to class actions provided the Executive opts out
immediately when given the opportunity. This covenant by the Executive not to
sue is different from the release of Claims, which will provide the Company a
defense in the event the Executive violates the release of Claims. If the
Executive violates this covenant not to sue by suing a Releasee, the Executive
may be liable to that party for monetary damages. More specifically, if the
Executive sues a Releasee in violation of this covenant not to sue, the
Executive will be required to pay that Releasee’s attorneys’ fees and other
costs incurred as a result of having to defend against the suit. However, nothing
in this Agreement prevents the Executive from challenging the validity of the
release set forth in Section 4 above solely as it relates to the ADEA. This
Section shall not apply to any rights or claims that the Executive may have for
a breach of this Agreement. 

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                    6.
The Executive understands and agrees that the consideration provided for herein
is more than the Executive would otherwise be entitled to if he did not agree
to the provisions of Section 4 above.

                    7.
The Executive waives any right to reinstatement or future employment with the
Company following the Executive’s separation from the Company.

                    8.
For 24 months following the Executive’s termination of employment, (i) the
Executive agrees not to make any disparaging statements about the Company, its
Affiliates or their current or former officers, directors and/or employees, to
anyone, including but not limited to the Company’s customers, competitors,
suppliers, employees, former employees or the press or other media and (ii) the
Company agrees that it, officially, and its directors, members of its
Leadership Team or members of its Insurance Segment Executive Board shall not
make any disparaging statements about the Executive to anyone, except, in
either case, if placed under legal compulsion to do so by a court or other
governmental authority or such statements are normal competitive type
statements or rebuttal of statements by the other.

                    9.
(a) 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 made in the course of 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, legal advice and other
information with respect to the affairs, business, clients, customers, agents
or other business relationships of the Company or its Affiliates. The 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 the 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 9 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 MDCC as evidenced by the
signature of the Company’s
General Counsel.

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                    (b)
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 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
Executive’s right, title and interest, if any, pertaining to the 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.

                    (c)
Since the Executive has obtained in the course of the 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, the Executive hereby
undertakes that for the period from the date hereof through the first
anniversary of the Termination Date without the prior written consent of the
Company:

	
  

 	
  

 
	
  

 	
           (i)
 the 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 senior underwriting,
 claims, actuarial or business development employee of the Insurance Segment
 of the Company or its Affiliates (or any individual who was within the prior
 twelve months such an officer or employee of the Company or its Affiliates), or encourage, entice,
 solicit or endeavor to encourage, entice or solicit any such officer or
 employee to violate the terms of any employment agreement or arrangement
 between such individual and the Company or any of its Affiliates, provided
 that the foregoing shall not be violated by advertising not specifically
 targeted at the foregoing persons or by serving as a personal referral at any
 such person’s request to any entity with which Executive is not associated;

 
	
  

 	
  

 
	
  

 	
           (ii)
 the 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 

 

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 Affiliates,
 on the other hand, (including any insured or 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 the 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;
 and

 
	
  

 	
  

 
	
  

 	
           (iii)
 the Executive will not (either alone or jointly with or on behalf of others
 and whether directly or indirectly) whether as an employee, consultant,
 partner, principal, agent, distributor, representative or stockholder (except
 solely as a less than one percent stockholder of a publicly traded company),
 engage in any activities in Bermuda, the United States or greater London if
 such activities are competitive with the businesses that (i) are then being
 conducted by the Company or its Affiliates and (ii) during the period of the
 Executive’s employment were either being conducted by the Company or its Affiliates
 or actively being developed by the Company or its Affiliates.

 

                    
(d) For purposes of this Agreement, an “Affiliate” of the Company includes any
person, directly or indirectly, through one or more intermediaries,
controlling, controlled by, or under common control with the Company, and such
term shall specifically include, without limitation, the Company’s
majority-owned subsidiaries.

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

                    (f)
While the restrictions aforesaid are considered by both parties to be
reasonable in all the circumstances, it is 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,
duration 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.

                    (g)
The Executive acknowledges that the Company and its Affiliates will suffer
irreparable injury, not readily susceptible of valuation in monetary damages,
if the Executive breaches his obligations under Section 9 hereof. Accordingly,
the 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 the Executive of

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his
obligations under Section 9 hereof 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 the Executive maintains his residence or his principal place of business.
The 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 or otherwise enforce this
Agreement, and the 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 the Executive known to the Company or its Affiliates, or in any
other manner authorized by law. The 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 the Executive of his obligations
under Section 9 hereof he will forfeit any and all rights to any payments,
distributions or benefits to which he might otherwise then be entitled by
virtue of this Agreement and such payments, distributions or benefits may be
suspended so long as any good faith dispute with respect thereto is continuing.

                    10.
The Executive shall be provided indemnification by the Company to the maximum
extent permitted by applicable law and its charter documents against expenses
incurred and damages paid or payable by the Executive with respect to claims
based on actions or failures to act by the Executive in his capacity as an
officer, director or employee of the Company or its Affiliates on in any other
capacity, including any fiduciary capacity, in which the Executive served at
the request of the Company or an Affiliate. In addition, he shall be covered by
a directors & officers liability policy with coverage for all directors and
officers of the Company in an amount equal to at least US$75,000,000. Such
directors & officers liability insurance shall be maintained in effect for
a period of six years following the Termination Date. The indemnification in
this Section is in addition to, and not in lieu of, any indemnification or
insurance rights that exist at law or pursuant to the Company’s charter
documents, employee benefit plans or the Deed Poll executed by XL Group Ltd on
July 1, 2010.

                    11.
On or before the Termination Date (or such other date specified by the Company
in a written notice to the Executive), the Executive shall return all property
of the Company and its Affiliates in the Executive’s possession or control,
including, but not limited to, the Company’s credit, telephone, identification
and similar cards, keys, cellular phones, computer equipment, software and
peripherals and originals and copies of books, records, and other information
pertaining to the business of the Company or its Affiliates. Notwithstanding
the foregoing, subject to oversight by the Company’s Information Security
Department, Executive may retain his rolodex and electronic address books
provided that they only contain contact information.

                    12.
The Executive shall, at the request of the Company, reasonably cooperate with
the Company in the defense and/or investigation of any third party claim,
dispute or 

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any
investigation or proceeding, whether actual or threatened, including, without
limitation, meeting with attorneys and/or other representatives of the Company
to provide reasonably requested information regarding same and/or participating
as a witness in any litigation, arbitration, hearing or other proceeding
between the Company or an Affiliate and a third party or any government body
with regard to matters related to Executive’s employment period with the
Company. The Company shall reimburse the Executive for all reasonable expenses
and costs incurred by him in connection with such assistance including, without
limitation, reasonable travel expenses.

                    13.
This Agreement shall be governed by and construed in accordance with the laws
of New York, without reference to the principles of conflict of laws thereof. 

                    14.
The Company may withhold from any amounts payable under this Agreement such
federal, state, local or foreign taxes as shall be required to be withheld therefrom
pursuant to any applicable law or regulation.

                    15.
This Agreement represents the complete agreement between the Executive and the
Company concerning the subject matter in this Agreement and supersedes all
prior agreements or understandings, written or oral, including the Employment
Agreement. This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective successors
and legal representatives.

                    16.
Each of the sections contained in this Agreement shall be enforceable
independently of every other section in this Agreement, and the invalidity or
nonenforceability of any section shall not invalidate or render unenforceable
any other section contained in this Agreement.

                    17.
For a period of seven (7) days following the execution of this Agreement, the
Executive may revoke this Agreement, and this Agreement shall not become effective
or enforceable until the revocation period has expired. Any such revocation
must be effected by delivery of a written notification of revocation of the
Agreement to the Associate General Counsel, Global Labor & Employment Matters
of the Company prior to the end of such seven (7) day revocation period. In the
event that the Agreement is revoked by the Executive, the Company shall have no
obligations under the Agreement, no amounts will be payable under this
Agreement, and this Agreement shall be deemed to be void ab initio
and of no further force or effect.

                    18.
This Agreement has been entered into voluntarily and not as a result of
coercion, duress, or undue influence. The Executive acknowledges that he has read
and fully understands the terms of this Agreement and has been advised to
consult with, and has consulted with, an attorney before executing this
Agreement. Additionally, the Executive acknowledges that he has been afforded
the opportunity of at least 21 days to consider this Agreement.

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                    19.
The Company will require any successor or assignee, whether direct or indirect,
by purchase, merger, consolidation or otherwise, of all, or substantially all,
of the business and/or assets of the Company 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 such succession or assignment had not taken place.

                    20.
This Agreement shall inure to the benefit of and be enforceable by the
Executive’s personal and legal representatives, executors, administrators,
heirs, distributees, devisees and legatees. If the Executive dies while any
amounts are still payable to his hereunder, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement
to the Executive’s devisee, legatee, or other designee or, if there be no such
designee, to the Executive’s estate.

                    21.
It is intended that this Agreement will comply with Sections 409A and 457A
of the Internal Revenue Code of 1986, as amended (the “Code”) and any
regulations and guidelines issued thereunder, to the extent the Agreement is
subject thereto, and the Agreement shall be interpreted on a basis consistent
with such intent. Except in the event of the Company’s failure to comply with
its obligations, the Company shall not have any obligation to indemnify or
otherwise protect the Executive from any obligation to pay any taxes pursuant
to Sections 409A or 457A of the Code. With respect to any reimbursement or
in-kind benefit arrangements of the Company and its subsidiaries that
constitute deferred compensation for purposes of Section 409A, except as
otherwise permitted by Section 409A, the following conditions shall be
applicable: (i) the amount eligible for reimbursement, or in-kind benefits
provided, under any such arrangement in one calendar year may not affect the
amount eligible for reimbursement, or in-kind benefits to be provided, under
such arrangement in any other calendar year (except that the health and dental
plans may impose a limit on the amount that may be reimbursed or paid),
(ii) any reimbursement must be made on or before the last day of the
calendar year following the calendar year in which the expense was incurred,
and (iii) the right to reimbursement or in-kind benefits is not subject to
liquidation or exchange for another benefit. Whenever payments under this
Agreement are to be made in installments, each such installment shall be deemed
to be a separate payment for purposes of Section 409A.

                    22.
Each of XL Insurance Ltd and XL Re 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. In case of the failure of the Company to
punctually pay any of the amounts necessary to satisfy the obligations, the
Guarantor shall cause such amounts to be paid punctually when and as the same
shall become due and payable as if such payment were made by the Company. This
is a guaranty of payment and not collection. 

                    23.
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 

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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 arty may subsequently by similar process give notice
of:

	
  

 	
  

 	
  

 
	
  

 	
 If to the
 Company: 

 
	
  

 	
  

 
	
  

 	
  

 	
 XL Group plc

 
	
  

 	
  

 	
 No. 1 Hatch
 Street Upper, 4th Floor

 
	
  

 	
  

 	
 Dublin 2,
 Ireland

 
	
  

 	
  

 	
 Att’n:
 General Counsel

 
	
  

 	
  

 	
  

 
	
  

 	
 If to the Executive:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 To the last
 address delivered to 

 
	
  

 	
  

 	
 the Company
 by the Executive in 

 
	
  

 	
  

 	
 the manner
 set forth herein.

 

                    24.
This Agreement may be executed and delivered (including by facsimile
transmission) in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed and delivered shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.

-12-

                    The
parties to this Agreement have executed this Agreement as of the day and year
first written above.

	
  

 	
  

 	
  

 
	
  

 	
 XL GROUP PLC

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Kirstin
 R. Gould

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name:
 Kirstin Romann Gould

 
	
  

 	
  

 	
 Title: EVP,
 General Counsel & Secretary

 
	
  

 	
  

 	
  

 
	
  

 	
 DAVID B.
 DUCLOS

 
	
  

 	
  

 	
  

 
	
  

 	
 /s/ David B.
 Duclos

 
	
  

 	

 

 
	
  

 	
  

 
	
  

 	
 GUARANTORS:

 
	
  

 	
  

 	
  

 
	
  

 	
 XL INSURANCE
 (BERMUDA) LTD

 
	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Kirstin
 R. Gould

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name:
 Kirstin Romann Gould

 
	
  

 	
  

 	
 Title: EVP,
 General Counsel & Secretary

 
	
  

 	
  

 	
  

 
	
  

 	
 XL RE LTD

 
	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Kirstin
 R. Gould

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name:
 Kirstin Romann Gould

 
	
  

 	
  

 	
 Title: EVP,
 General Counsel & Secretary

 

Exhibit A 

General Release

                    This
General Release (“Release”) is executed on this 31st day of December
2011, by David B. Duclos (the “Executive”) pursuant to the Agreement and
Release between XL Group plc (the “Company”) and the Executive (the
“Agreement”).

                    1.
As a condition to, and in consideration for, the payments set forth in the
Agreement, the Executive, on behalf of the Executive and the Executive’s heirs,
executors, administrators, representatives, agents and assigns (the
“Releasors”) hereby irrevocably and unconditionally releases and forever
discharges the Company and its members, shareholders, parents, Affiliates,
subsidiaries, divisions, any and all current and former directors, officers,
employees, agents, and contractors (in their capacities as such) and their
heirs and assigns, and any and all employee pension benefit or welfare benefit
plans of the Company or its Affiliates (as defined in the Agreement), including
current and former trustees and administrators of such employee pension benefit
and welfare benefit plans (collectively, the “Releasees”), from all claims,
actions, causes of action, rights, judgments, obligations, damages, charges,
accountings, demands or liabilities of whatever kind or character, in law or in
equity, whether known or unknown, (collectively, the “Claims”) which may have
existed or which may now exist from the beginning of time to the date of this
Agreement, including, without limitation, any Claims the Releasors may have
arising from or relating to the Executive’s employment, hiring or entering into
employment or termination from employment with the Company or its Affiliates or
relating to the Employment Agreement (as defined in the Agreement) or any other
agreement between the Executive and the Company or an Affiliate, and any Claims
the Releasors may have under: the Civil Rights Act of 1964, as amended, and the
Civil Rights Act of 1991 (which prohibit discrimination in employment based upon
race, color, sex, religion and national origin); the Americans with
Disabilities Act of 1990, as amended, and the Rehabilitation Act of 1973 (which
prohibit discrimination based upon disability); the Family and Medical Leave
Act of 1993 (which prohibits discrimination based on requesting or taking a
family or medical leave); Section 1981 of the Civil Rights Act of 1866 (which
prohibits discrimination based upon race); Section 1985(3) of the Civil Rights
Act of 1871 (which prohibits conspiracies to discriminate); the Employee
Retirement Income Security Act of 1974, as amended (which governs employee
benefits); any other federal, state, local or foreign laws against
discrimination; or any other federal, state, local or foreign statute, or
common law relating to employment, wages, hours, or any other terms and
conditions of employment. This includes a release by the Releasors of any
Claims for wrongful discharge, breach of contract, torts or any other Claims in
any way related to the Executive’s employment with, hiring by or termination
from the Company or its Affiliates. This release also includes a release of any
Claims for age discrimination under the Age Discrimination in Employment Act of
1967, as amended by the Older Workers’ Benefit Protection Act and the applicable
rules and regulations promulgated thereunder (“ADEA”). The ADEA requires that
the Executive be advised to consult with an attorney before the Executive
waives any claim

under ADEA. In addition, the ADEA provides the Executive with
at least twenty-one (21) days to decide whether to waive claims under ADEA and
seven (7) days after the Executive signs the Agreement to revoke that waiver.
This release does not release the Company from any obligations due to the
Executive under the Agreement, under any benefit or equity plan or under
Sections 9 and 18 of the Employment Agreement dated as of January 25, 2008
between Executive and the Company, and the Executive is not waiving any right
of indemnification or rights to advancement of legal fees he may have under the
Company’s charter documents, the Deed Poll executed by XL Group Ltd on July 1,
2010, applicable law or otherwise or the right to coverage under any directors
& officers liability insurance maintained by the Company. 

                    2.
The Executive understands that by signing this Release the Executive is
prevented from filing, commencing or maintaining any action, complaint, or
proceeding with regard to any of the Claims released hereby. However, nothing
in this Agreement precludes the Executive from filing a charge with an
administrative agency or from participating in an agency investigation to the
extent such rights cannot be waived under applicable law. The Executive is,
however, waiving his right to recover money in connection with any such charge
or investigation. The Executive is also waiving his 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. In
addition to waiving and releasing the Claims covered by the release of Claims
above, the Executive promises not to sue any Releasee in any forum for any
reason covered by the release of Claims set forth above, provided that the
foregoing shall not apply to class actions provided Executive opts out
immediately when given the opportunity. This covenant by the Executive not to
sue is different from the release of Claims, which will provide the Company a
defense in the event the Executive violates the release of Claims. If the
Executive violates this covenant not to sue by suing a Releasee, the Executive
may be liable to that party for monetary damages. More specifically, if the
Executive sues a Releasee in violation of this covenant not to sue, the
Executive will be required to pay that Releasee’s attorneys’ fees and other
costs incurred as a result of having to defend against the suit. However,
nothing in this Release prevents the Executive from challenging the validity of
the release solely as it relates to the ADEA. This Section shall not apply to
any rights or claims that the Executive may have for a breach of the Agreement.

                    3.
This Release has been entered into voluntarily and not as a result of coercion,
duress, or undue influence. The Executive acknowledges that he has read and
fully understands the terms of this Release and has been advised to consult
with, and has consulted with, an attorney before executing this Release.
Additionally, the Executive acknowledges that he has been afforded the opportunity
of at least 21 days to consider this Release.

                    4.
For a period of seven (7) days following the execution of this Release, the
Executive may revoke this Release, and this Release shall not become effective
or enforceable until the revocation period has expired. Any such revocation
must be effected by delivery of a written notification of revocation of the
Agreement to the Associate General Counsel, Global Labor & Employment
Matters of the Company prior to the end of such seven (7) day revocation
period. In the event that the Release is revoked by the Executive, the 

Company shall
have no obligations under Section 2(b) of the Agreement, and no amount will be
payable to the Executive under Section 2(b) of the Agreement. 

                    5.
This Release shall be governed by and construed in accordance with the laws of
New York, without reference to the principles of conflict of laws thereof. 

                    IN
WITNESS WHEREOF, the undersigned has duly executed this Release on the date
first written above.

	
  

 	
  

 
	
  

 	
 DAVID B.
 DUCLOS

 
	
  

 	
  

 
	
  

 	
  

 
	
  

 	
  

 
	
  

 	
  

 
	
  

 	

 

 

Exhibit B

Options

	
  
 	
  
 	
  
 	
  
 	
  
 	
  
 	
  
 	
  
 	
  
 	
  
 	
  
 
	
 Grant Date
 	
  
 	
 Shares
 Subject 

 to Option
 	
  
 	
 Option
 Price
 	
  
 	
  
 	
 Expiration Date
 	
  
 
	

 
 	
  
 	

 
 	
  
 	

 
 	
  
 	
  
 	

 
 	
  
 
	
  
 	
  
 	
  
 	
  
 	
  
 	
  
 	
  
 	
  
 	
  
 	
  
 	
  
 
	
 03/05/2004
 	
  
 	
 5,000
	
  
 	
 $77.10
	
  
 	
  
 	
 03/05/2014
 	
  
 
	
 03/04/2005
 	
  
 	
 20,000
	
  
 	
 $75.48
	
  
 	
  
 	
 03/04/2015
 	
  
 
	
 02/24/2006
 	
  
 	
 30,000
	
  
 	
 $67.93
	
  
 	
  
 	
 02/24/2016
 	
  
 
	
 01/01/2008
 	
  
 	
 50,000
	
  
 	
 $50.31
	
  
 	
  
 	
 12/31/2016
 	
  
 
	
 02/21/2008
 	
  
 	
 50,000
	
  
 	
 $36.90
	
  
 	
  
 	
 12/31/2016
 	
  
 
	
 08/11/2008
 	
  
 	
 100,000
	
  
 	
 $19.62
	
  
 	
  
 	
 12/31/2016
 	
  
 
	
 02/27/2009
 	
  
 	
 150,000
	
  
 	
 $3.31
	
  
 	
  
 	
 12/31/2016
 	
  
 
	
 02/28/2010
 	
  
 	
 122,087
	
  
 	
 $18.27
	
  
 	
  
 	
 12/31/2016
 	
  
 
	
 02/28/2011
 	
  
 	
 112,821
	
  
 	
 $23.35
	
  
 	
  
 	
 12/31/2016
 	
  
 

Restricted Shares

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Grant Date

 	
  

 	
 Unvested
 Shares
 (Vest on Termination 

 Date)

 	
  

 
	

 

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 03/10/2007

 	
  

 	
  

 	
 1,250

 	
  

 
	
 02/28/2008

 	
  

 	
  

 	
 5,750

 	
  

 
	
 02/28/2008

 	
  

 	
  

 	
 500

 	
  

 

Performance Units

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Grant Date

 	
  

 	
 Target
 Units at Grant

 	
  

 	
 Proration
 Factor*

 	
  

 	
 Prorated
 Target Units 

 at Term**

 	
  

 
	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 02/28/2010

 	
  

 	
  

 	
 60,208

 	
  

 	
  

 	
 66.6058

 	
 %

 	
  

 	
 40,103

 	
  

 
	
 02/28/2011

 	
  

 	
  

 	
 47,110

 	
  

 	
  

 	
 33.3029

 	
 %

 	
  

 	
 15,689

 	
  

 

* Proration
factor calculated as the number of active service days within the applicable
three year cycle divided by the number of actual days within the three year
performance cycle

** Prorated Target Units for
each performance unit award will be adjusted for actual performance through
2011 fiscal year end and delivered as shares to the participants brokerage account
at Merrill Lynch by March 15, 2012Exhibit 10.2

CONSULTING AGREEMENT

                    CONSULTING
AGREEMENT, dated as of November 29, 2011, by and between XL Group plc, an Irish
corporation and XL Specialty Insurance Company, Inc. (collectively, the “Company”),
and David B. Duclos (the “Consultant”), an individual. 

                    WHEREAS,
the Consultant was employed by the Company as its Chief Executive, Insurance
Operations; and

                    WHEREAS,
the Company desires to retain the services of the Consultant, and the
Consultant desires to be retained by the Company, subject to and in accordance
with the terms and conditions set forth herein; and 

                    WHEREAS,
the Consultant and the Company have agreed to the noncompetition,
nonsolicitation and confidentiality provisions set forth herein.

                    NOW,
THEREFORE, in consideration of the conditions and covenants set forth herein,
the parties hereto hereby agree as follows:

                    1. Agreement. The Company hereby retains the Consultant as a consultant to the
Company on and subject to the terms and conditions set forth herein, and the
Consultant hereby accepts such consultancy, on and subject to such terms and
conditions.

                    2. Consulting Services. During the Consulting Term (as defined below), the
Consultant shall provide such consulting services to the Company commensurate
with his status and experience as the former Chief Executive, Insurance
Operations of the Company with respect to such matters as shall be reasonably
requested from time to time by the Chief Executive Officer of the Company. Such
services shall include services in connection with the Company’s ongoing
operations consistent with Company guidelines as set forth in the attached appendix
and/or in connection with the defense and/or investigation of any third party
claim or any investigation or proceeding relating to the Company or its
Affiliates (as defined below). The Company and the Consultant intend that the
Consultant’s services pursuant to this Agreement will be no greater than 35
hours per month, which is less than 20% of the average level of services
performed by the Consultant over the last three years of his employment with
the Company. The Consultant shall not, by virtue of the consulting services
provided hereunder, be considered an officer or employee of the Company, and he
shall have no power or authority to contract in the name of or bind the Company
or its Affiliates. The Consultant shall be free at all times to arrange the
time and manner of performance of the consulting services described herein. As
an independent contractor, the mode, manner, method and means used by the
Consultant in the performance of services shall be of the Consultant’s
selection and under the sole control and direction of the Consultant. The
Consultant shall be responsible for all risks incurred in the operation of the
Consultant’s business and shall enjoy all the benefits thereof. In addition,
the Consultant will comply, at the Consultant’s own expense, with the
provisions of all state, local, and federal laws, regulations, ordinances,
requirements, and codes which are applicable to the performance

 of services hereunder. The forgoing
requirement includes, but is not limited to, all state, local, and federal laws
relating to employment discrimination.

                    3.
Consulting Fee. During the Consulting Term, in consideration of the
services to be provided by the Consultant to the Company described herein and
in consideration for the covenants of the Consultant set forth herein, the
Company shall pay the Consultant a fee in the amount of $500,000 per year,
payable in the amount of $125,000 on each of March 31, 2012, July 31, 2012, October
31, 2012 and December 31, 2012. The Consultant shall not be entitled to
participate in any employee benefit plans maintained by the Company or any of
its Affiliates by reason of this Agreement. 

                    4.
Consulting Term. The period during which the Consultant will be retained
by the Company to provide the consulting services hereunder shall commence on
January 1, 2012 and shall terminate on [December 31, 2012], unless sooner
terminated as provided in this Section 4 (the “Consulting Term”).
Notwithstanding the foregoing, the Consulting Term will end on the date of the
Consultant’s death or termination of service due to his Permanent Disability
(as defined below), and the Consulting Term may be terminated by the Company
for Cause (as defined below). For purposes of this Agreement, the term “Cause”
shall mean the Consultant’s (a) fraud or dishonesty in connection with the
performance or provision by the Consultant of his services under this
Agreement, (b) material breach of any of the terms of this Agreement or
(c) the Consultant’s conviction of, or plea of nolo contendere to, a
felony. For purposes of this Agreement, the term “Permanent Disability”
means those circumstances where the Consultant has been unable to provide his
services as described in this Agreement for at least 60 continuous days because
of physical, mental or emotional incapacity resulting from injury, sickness or
disease, and will be unable to continue to provide his services as described in
this Agreement for a total of six (6) months in any twelve (12) month period because
of physical, mental or emotional incapacity resulting from injury, sickness or
disease. Any questions as to the existence of a Permanent Disability shall be
determined by a qualified, independent physician selected by the Company and
approved by the Consultant (which approval shall not be unreasonably withheld).
The determination of any such physician shall be final and conclusive for all
purposes of this Agreement.

                    5.
Reimbursement of Expenses. The Company shall reimburse the Consultant
for all reasonable expenses incurred by him in the course of performing his
services under this Agreement (which expenses are consistent with the Company’s
policies in effect from time to time with respect to travel and other business
expenses), subject to the Company’s requirements with respect to reporting and
documentation of expenses. 

                    6.
Noncompetition and Nonsolicitation. Since the Consultant has obtained in the
course of his employment with the Company, and is likely to obtain in the
course of his service as a consultant hereunder, 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, the Consultant
hereby undertakes that, during the period beginning on the date hereof and
ending on December 31, 2012:

-2-

                    (a)
the Consultant 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 senior underwriting,
claims, actuarial or business development employee of the Insurance Segment of
the Company or its Affiliates (or any individual who was within the prior
twelve months such an officer or employee of the Company or its Affiliates), or
encourage, entice, solicit or endeavor to encourage, entice or solicit any such
officer or employee to violate the terms of any employment agreement or
arrangement between such individual and the Company or any of its Affiliates;

                    (b)
the Consultant 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 insured or reinsured party) who
during the period of twenty-four months immediately preceding the date of this
Agreement 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 the date of
this Agreement shall have supplied services to any such person, nor will the
Consultant 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; and

                    (c)
the Consultant will not (either alone or jointly with or on behalf of others
and whether directly or indirectly) whether as an employee, consultant,
partner, principal, agent, distributor, representative or stockholder (except
solely as a less than one percent stockholder of a publicly traded company),
engage in any activities in Bermuda, the United States or greater London if
such activities are competitive with the businesses that (i) are then being
conducted by the Company or its Affiliates and (ii) during the period of the
Consultant’s employment or consultancy were either being conducted by the Company
or its Affiliates or actively being developed by the Company or its Affiliates.

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

               The
limitations on the Consultant set forth in this Section 6 shall also apply to
any agent or other representative acting on behalf of the Consultant.

               While
the restrictions aforesaid are considered by both parties to be reasonable in
all the circumstances it is 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, duration 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

-3-

 said restrictions shall apply with such
modifications as may be necessary to make them valid and effective.

                    7.
Confidential Information. The Consultant covenants that he shall not,
without the prior written consent of the Company, use for his 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 Consultant of his duties as
a consultant to 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, legal advice and other information with respect to the affairs,
business, clients, customers, agents or other business relationships of the Company or its Affiliates (the
“Confidential Information”). The Consultant 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 the Consultant during his employment or consultancy, unless
and until such information has become known to the public generally (other than
as a result of unauthorized
disclosure by the Consultant) 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 Consultant shall be without
limitation as to time and geographic application. The Consultant 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 Management Development and
Compensation Committee of the Company’s Board of Directors as evidenced by the
signature of the Company’s
General Counsel.

                    8.
Return of Company Property. The Consultant agrees that, upon the
expiration or termination of the Consulting Term, he will immediately return to
the Company all materials containing or reflecting the Confidential Information
and all copies, reproductions and summaries thereof, in his possession or under
his control and shall erase all Confidential Information from all media in his
possession or under his control, and, if the Company so requests, shall certify
in writing that he has done so. All Confidential Information is and shall
remain the property of the Company or its Affiliates, as the case may be. 

                    9.
Indemnification. The Company shall indemnify the Consultant against
expenses incurred and damages paid or payable by him with respect to claims
based on actions or failures to act by the Consultant in his capacity as a
consultant under this Agreement, but not including expenses incurred or damages
paid or payable by the Consultant arising out of his gross negligence or
willful misconduct. 

                    10.
General Provisions.

                    (a)
This Agreement constitutes the entire understanding of the Company and the
Consultant with respect to the subject matter hereof and supersedes all prior
understandings, written or oral, with respect thereto. The terms of this
Agreement may be changed, modified or discharged only by an instrument in
writing signed by the parties hereto. A failure of the Com-

-4-

pany or the
Consultant to insist on strict compliance with any provision of this Agreement
shall not be deemed a waiver of such provision or any other provision hereof.
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.

                     (b)
This Agreement shall be construed, enforced and interpreted in accordance with
and governed by the laws of the State of New York, without regard to its
conflict of laws provisions.

                     (c)
This Agreement may be executed in any number of counterparts and by different
parties on separate counterparts, each of which counterparts, when so executed
and delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.

                     (d)
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: 

 
	
  

 	
  

 
	
  

 	
  

 	
 XL Group plc

 
	
  

 	
  

 	
 No. 1 Hatch
 Street Upper, 4th Floor

 
	
  

 	
  

 	
 Dublin 2, Ireland

 
	
  

 	
  

 	
 Att’n: General
 Counsel

 
	
  

 	
  

 	
  

 
	
  

 	
 If to the Consultant:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 To the last
 address delivered to 

 
	
  

 	
  

 	
 the Company
 by the Consultant in 

 
	
  

 	
  

 	
 the manner
 set forth herein.

 

                     (e)
The Consultant and the Company agree that the Consultant is acting as an
independent contractor to the Company for all purposes with regard to the
performance of his services hereunder during the Consulting Term, including,
without limitation, for US Federal (including social security and
unemployment), state and local tax purposes. The Consultant shall be solely
responsible for fulfilling when due all Federal, state and local income tax and
self-employment tax obligations arising in connection with his consultancy for
the Company. Should the Company be required to pay any such tax or payment, the
Consultant shall promptly reimburse the Company for such tax or payments,
including any interest and penalties with respect thereto. Should it be
determined that any payment hereunder is subject to withholding of tax under applicable
law, all payments to be made hereunder shall be net of applicable income, employment,
social security or other taxes required to be withheld therefrom.

                     (f)
The Consultant acknowledges that the Company and its Affiliates will suffer
irreparable injury, not readily susceptible of valuation in monetary damages,
if the Consultant

-5-

breaches his
obligations under Section 6 or 7 hereof. Accordingly, the Consultant 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 the Consultant of his obligations under Section 6 or 7
hereof 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 the Consultant
maintains his residence or his principal place of business. The Consultant
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 or otherwise enforce this
Agreement, and the Consultant 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 the Consultant known to the Company or its Affiliates, or in
any other manner authorized by law. The Consultant 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 the Consultant of his
obligations under Section 6 or 7 hereof he will forfeit any and all rights to
any payments to which he might otherwise then be entitled by virtue of this
Agreement and such payments may be suspended so long as any good faith dispute
with respect thereto is continuing.

                    (g)
This Agreement shall be binding upon and inure to the benefit of the successors
and assigns of the Company. No rights or obligations of the Consultant under
this Agreement may be assigned or transferred by him. 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.

                    (h)
It is intended that this Agreement will comply with Section 409A and Section
457A of the Internal Revenue Code of 1986, as amended (the “Code”) to
the extent the Agreement is subject thereto, and the Agreement shall be
interpreted on a basis consistent with such intent. If an amendment of the
Agreement is necessary in order for it to so comply, the parties hereto will
negotiate in good faith to amend the Agreement in a manner that preserves the
original intent of the parties to the extent reasonably possible. No action or
failure to act, pursuant to this Section 10(h) shall subject the Company to any
claim, liability, or expense, and the Company shall not have any obligation to
indemnify or otherwise protect the Consultant from the obligation to pay any
taxes pursuant to Section 409A or 457A of the Code. With respect to any
reimbursement arrangements of the Company and its Affiliates that constitute
deferred compensation for purposes of Section 409A, except as otherwise
permitted by Section 409A, the following conditions shall be applicable:
(i) the amount eligible for reimbursement under any such arrangement in
one calendar year may not affect the amount eligible for reimbursement under
such arrangement in any other calendar year, (ii) any reimbursement must
be made on or before the last day of the calendar year following the calendar
year in which the expense was incurred, and (iii) the right to reimbursement is
not subject to liquidation or exchange for another benefit. 

-6-

Whenever
payments under this Agreement are to be made in installments, each such installment
shall be deemed to be a separate payment for purposes of Section 409A.

          IN
WITNESS WHEREOF, the Company has caused this Agreement to be signed by its duly
authorized representative and the Consultant has hereunto set his hand as of
the day and year first above written.

	
  

 	
  

 	
  

 
	
  

 	
 CONSULTANT

 
	
  

 	
  

 	
  

 
	
  

 	
 /s/ David B.
 Duclos

 
	
  

 	

 

 
	
  

 	
 David B.
 Duclos

 
	
  

 	
  

 
	
  

 	
 XL GROUP PLC

 
	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
  /s/ Kirstin R. Gould                  
                      
                          
               .

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name:
 Kirstin Romann Gould

 
	
  

 	
  

 	
 Title: EVP,
 General Counsel & Secretary

 
	
  

 	
  

 	
  

 
	
  

 	
 XL SPECIALTY INSURANCE COMPANY, INC.

 
	
  

 	
  

 
	
  

 	
 By: 

 	
  /s/ Daniel J. Losito                  
                      
                          
                .

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name: Daniel
 J. Losito

 
	
  

 	
  

 	
 Title:
 Assistant Secretary

 

-7-

Appendix:
Scope of Services

It is
expected, that in the course of Mr. Duclos’s Consulting Term that, as a
representative of XL Group, he will:

	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 Maintain key
 broker relationships and work to ensure a transition plan for key contacts to
 a new internal resource.

 
	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 Provide
 assistance with regulatory agencies. 

 
	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 Attend and
 represent XL at key industry events as needed and requested by the Insurance
 CE and/or XL’s Chief Executive Officer.

 
	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 Act as a
 senior advisor to XL’s Chief Executive Officer on key Insurance business
 matters including, but not limited to, potential acquisitions, and the
 addition of new business lines.

 
	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 Assist with
 on-boarding the Manager of Global Networks to ensure a smooth transition into
 the Company. 

 
	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 Continue to
 work with the “Distribution Team” to ensure successful implementation of
 remaining goals.

 
	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 Act as a
 sounding board for other strategic work streams like playbook and operations
 sub teams.

 
	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 Continue
 search for the Chief Executive of International Property and Casualty role.

 
	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 Advise and
 assist the IPC business as needed during transition to new leadership.

 

-8-

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