EMPLOYMENT AGREEMENT

shall survive the Term of Employment and shall continue in effect through the periods provided therein and/or until the Company’s and/or the Executive’s obligations, as applicable, thereunder are satisfied.

2.                                        Position and Duties .

(a)                                   Positions, Duties, and Responsibilities . The Executive shall serve as the Chairman of the Board of Directors of the Company (the “Board”) and the President and Chief Executive Officer of the Company. As Chief Executive Officer of the Company, the Executive shall have such duties and responsibilities as are customarily assigned to such positions, and such other duties and responsibilities not inconsistent therewith as may from time to time be assigned to him by the Board. Unless otherwise determined by the Board, in his capacity as Chief Executive Officer, the Executive shall report solely to the Board. The Executive agrees to serve without additional compensation in such capacities (including, without limitation, as an employee or director) with Company affiliates (other than Tower and its affiliates) as the Board or a committee of the Board may in its discretion prescribe. Upon termination of the Executive’s employment with the Company, the Executive’s position as Chairman of the Board and any employment, board membership or other service relationship with any Company affiliate shall automatically terminate unless otherwise determined by the parties hereto.

(b)                                  Time and Attention . Excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive shall devote a substantial portion of his attention and time during normal working hours to the business and affairs of the Company and its affiliates. The Company agrees and acknowledges that Executive shall continue to serve Tower as its Chairman, President and Chief Executive Officer and to devote a substantial portion of his attention and time during normal working hours to the business and affairs of Tower and its affiliates. It shall not be considered a violation of the foregoing, however, for the Executive to (i) serve on corporate, industry, educational, religious, civic, or charitable boards or committees or (ii) make and attend to passive personal investments in such form as will not require any material time or attention to the operations thereof during normal working time and will not violate the provisions of section 10 hereof, so long as such activities in clauses (i) and (ii) do not materially interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement or violate section 10 of this Agreement.

3.                                        Compensation . Except as otherwise expressly set forth below, the Executive’s compensation shall be determined by, and in the sole discretion of, the Compensation Committee of the Board (the “Committee”).

(a)                                   Annual Base Salary . Subject to adjustment pursuant to this subsection 3(a), the Executive shall receive an annual base salary of $244,688 during the Term of Employment (the annual base salary in effect from time to time, “Annual Base Salary”). The Annual Base Salary shall be payable in accordance with the Company’s regular payroll practices for its senior officers, as in effect from time to time. The Annual Base Salary shall be reviewed from time to time, but not less frequently than annually, and, in the discretion of the Committee may be adjusted but not decreased below the amount set forth in the first sentence of this subsection 3(a). To the extent Annual Base Salary is adjusted, then such adjusted salary shall be the Executive’s Annual Base Salary for all purposes of this Agreement.

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(b)                                  Annual Bonus . The Executive shall have an opportunity to receive annual bonuses during the Term of Employment (the “Annual Bonus”), subject to such terms and conditions as the Committee shall prescribe. The Executive’s target Annual Bonus opportunity shall be $244,688, it being understood that the actual Annual Bonus received by the Executive will depend on the level of attainment of performance and other factors used by the Committee to determine Annual Bonus amounts and that there is no guarantee that an Annual Bonus will be earned. The Executive’s target Annual Bonus opportunity shall be reviewed from time to time, but not less frequently than annually, and, in the discretion of the Committee, may be adjusted but not decreased below the amount set forth in the second sentence of this subsection 3(b).

(c)                                   Employee Benefits; Fringe Benefits . In addition to the foregoing, during the Term of Employment,

(i)                                      As soon as reasonably practicable, but effective on the Effective Date, the Committee shall grant to the Executive an option to acquire 840,000 of the Company’s common shares at an exercise price per share equal to the offering price per share of the Company’s common shares in the Offering. The other terms of the stock option shall be as set forth in the Company’s 2006 Long-Term Equity Compensation Plan and the option award agreement entered into thereunder. The stock option award provided for in this subsection (i) is made as an inducement essential to the Executive’s entering into this Agreement.

(ii)                                   to the extent not duplicative of the specific benefits provided herein, subject to the following sentence, the Executive shall be eligible to participate in all incentive compensation, retirement, supplemental retirement, and deferred compensation plans, policies and arrangements that are provided generally to other senior officers of the Company.

(iii)                                the Executive and, as applicable, the Executive’s covered dependents shall be eligible to participate in all of the Company’s health and welfare benefit plans (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended);

(iv)                               the Executive shall be entitled to receive fringe benefits provided for senior officers of the Company, and shall be entitled to avail himself of paid holidays, as determined from time to time by the Company; and

(v)                                  the Executive may also participate in certain executive benefit plans, which may include a paid country club membership in Bermuda up to $10,000 annually and a monthly car allowance of up to $1,000.

(d)                                  Vacation . The Executive shall be entitled to not less than 6 weeks of paid vacation per calendar year during the Term of Employment. Executive agrees to make himself available during such periods of vacation to the extent needed by the Company. Vacation days not used within the year shall be carried forward to subsequent years, as determined by the Company and subject to such conditions or restrictions as the Company may prescribe.

(e)                                   Expenses . The Executive shall be reimbursed by the Company for reasonable business expenses actually incurred in rendering to the Company the services provided for hereunder during the Term of Employment, payable in accordance with customary

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Company practice, after the Executive presents written expense statements or such other supporting information as the Company may require of its senior officers for reimbursement of such expenses. If the Executive relocates to Bermuda, the Company will provide to the Executive benefits, including housing customarily provided to similarly situated senior executives residing in Bermuda, and travel to and from Bermuda for Executive’s immediate family pursuant to Company policies as in effect from time to time.

4.                                        Termination of Employment .

(a)                                   Termination of Employment and Term of Employment . The Company or the Executive may terminate the Executive’s employment at any time and for any reason in accordance with subsection 4(b) below. The Term of Employment shall be deemed to have ended on the last day of the Executive’s employment. The Term of Employment shall terminate upon the Executive’s death.

(b)                                  Notice of Termination . Any purported termination of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with the notice provisions contained in subsection 15(b) below. For purposes of this Agreement, a “Notice of Termination” shall mean a notice that indicates the Date of Termination and, with respect to a termination due to Disability, Cause or Good Reason, sets forth in reasonable detail the facts and circumstances that are alleged to provide a basis for such termination. A Notice of Termination from the Company shall specify whether the termination is with or without Cause or due to the Executive’s Disability. A Notice of Termination from the Executive shall specify whether the termination is with or without Good Reason and, if the termination is without Good Reason, whether the termination is due to his Disability or retirement. For avoidance of doubt, the Executive shall not be deemed to have retired for purposes of this Agreement if his employment is terminated by the Company (whether or not such termination is with or without Cause or due to the Executive’s Disability), by the Executive with Good Reason, due to a Disability or due to the Executive’s death.

(c)                                   Date of Termination . For purposes of this Agreement, “Date of Termination” shall mean the date specified in the Notice of Termination (but in no event shall such date be earlier than the 30th day following the date the Notice of Termination is given, unless expressly agreed to by the parties hereto) or the date of the Executive’s death.

(d)                                  No Waiver . The failure to set forth any fact or circumstance in a Notice of Termination, which fact or circumstance was not known to the party giving the Notice of Termination when the notice was given, shall not constitute a waiver of the right to assert such fact or circumstance in an attempt to enforce any right under or provision of this Agreement.

(e)                                   Cause . For purposes of this Agreement, the term “Cause” means: (i) the Executive’s gross negligence or gross misconduct or (ii) the Executive’s having been convicted of, or entered a plea of nolo contendere to, a crime involving moral turpitude or a felony. No act or failure to act directly related to Company action or inaction that constitutes Good Reason shall constitute Cause under this Agreement if the Executive has provided a Notice of Termination based on such Good Reason event prior to the Company’s giving of the Notice of Termination

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for Cause. The Executive’s termination for Cause shall be effective when and if a resolution is duly adopted by an affirmative vote of the entire Board (less the Executive), stating that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in the Notice of Termination, and such conduct constitutes Cause under this Agreement; provided, however, that the Executive shall have been given the opportunity (i) to cure any act or omission that constitutes Cause if capable of cure and (ii), together with counsel, during the 30-day period following the receipt by the Executive of the Notice of Termination and prior to the adoption of the Board’s resolution, to be heard by the Board.

(f)                                     Disability . For purposes of this Agreement, the Executive shall be deemed to have a Disability if the Executive is entitled to long-term disability benefits under the Company’s long-term disability plan or policy, as the case may be, as in effect on the Date of Termination.

(g)                                  Good Reason . For purposes of this Agreement, the term “Good Reason” means the occurrence (without the Executive’s express written consent) of any of the following acts or failures to act by the Company:

(i)                                      the assignment to the Executive of duties materially inconsistent with the Executive’s position of Chief Executive Officer or a substantial diminution in the Executive’s authority and duties, except as provided herein;

(ii)                                   any reduction in the Executive’s Annual Base Salary or target Annual Bonus opportunity, except as provided herein;

(iii)                                requiring the Executive to be based more than 50 miles away from Bermuda or New York City, New York;

(iv)                               the material breach by the Company of any of its other obligations under this Agreement; or

(v)                                  the failure of the Company to obtain the assumption of this Agreement as contemplated in subsection 13(b) hereof.

The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder; provided, however, that no such event described above shall constitute Good Reason unless the Executive has given a Notice of Termination to the Company specifying the condition or event relied upon for such termination within 90 days from the Executive’s actual knowledge of the occurrence of such event and, if capable of cure, the Company has failed to cure the condition or event constituting Good Reason within the 30 day period following receipt of the Executive’s Notice of Termination.

5.                                        Obligations of the Company upon Termination .

(a)                                   Termination by the Company for other than Cause or by the Executive for Good Reason. If the Executive’s employment is terminated by the Company for any reason other than Cause or Disability or by the Executive for Good Reason:

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(i)                                      The Company shall pay to the Executive, within thirty business days of the Date of Termination, any earned but unpaid Annual Base Salary;

(ii)                                   The Company shall pay to the Executive, within thirty business days of the Date of Termination, a prorated Annual Bonus based on (A) the target Annual Bonus opportunity in the year in which the Date of Termination occurs or the prior year if no target Annual Bonus opportunity has yet been determined (disregarding any reduction in target Annual Bonus opportunity that was the basis for a termination by the Executive for Good Reason) and (B) the fraction of the year the Executive was employed.

(iii)                                The Company shall pay to the Executive, within thirty business days of the Date of Termination, a lump-sum payment equal to the sum of 300% of (x) the Executive’s Annual Base Salary in effect immediately prior to the Date of Termination (disregarding any reduction in Annual Base Salary that was the basis for a termination by the Executive for Good Reason), and (y) the average of the Annual Bonuses paid to the Executive within the three years preceding his termination of employment or, if none, the most recent target Annual Bonus opportunity for Executive;

(iv)                               For a three (3) year period after the Date of Termination, the Company will arrange to provide the Executive (and any covered dependents), without cost to the Executive, with life, accident and health insurance benefits substantially similar to those the Executive and any covered dependents were receiving immediately prior to the Notice of Termination, except for any such benefits that were waived by the Executive in writing. If the Company arranges to provide the Executive and covered dependents with life, accident and health insurance benefits, those benefits will be reduced to the extent comparable benefits are actually received by, or made available to, the Executive by a subsequent employer or Tower without cost during the three (3) year period following the Executive’s Date of Termination. The Executive must report to the Company any such benefits that he actually receives or are made available. In lieu of the benefits described in this subsection 5(a)(iv), the Company, in its sole discretion, may elect to pay to the Executive a lump sum cash payment equal to the tot