EXECUTIVE EMPLOYMENT AGREEMENT

On November 27, 2006 (“ Effective Date ”), CEO shall assume the position of chief executive officer of the Company as well as chief executive officer of any Company Affiliates (as defined below) of the Company (as may be specified in writing by the Chairman from time to time). CEO shall also serve on the Board as a director of the Company (a “ Director ”).

CEO shall have such responsibilities and duties as are customary for a chief executive officer of a company conducting business comparable to the Company (except as may be otherwise provided by the Board from time to time). CEO shall devote his full business time and efforts to his service as chief executive officer and as a Director and shall not engage in any other non-Company or non-Company Affiliate business activities without the written approval of the Board. Notwithstanding the foregoing, CEO shall be permitted to manage his and his family’s personal investments and affairs, engage in charitable activities and community affairs, and act as a member, director, or officer of industry trade associations or groups, provided that such activities do not interfere with his chief executive officer duties.

During the Term (as defined below), CEO shall report to the Board regarding the affairs of the Company and Company Affiliates at scheduled meetings of the Board and shall otherwise report to the Chairman. All other executives and other employees of the Company shall report to CEO (or his designees as approved by the Board).

Within six months of the Effective Date, CEO shall establish his and his family’s primary residence in the greater Philadelphia metropolitan area and shall be

provided by the Company with an office at the headquarters of the Company’s Affiliate in Bala Cynwyd, Pennsylvania. CEO shall be reimbursed, or the Company shall pay, for his and his family’s reasonable relocation and closing expenses (including documented realtor commissions incurred in selling his primary residence, but not to exceed 6%); provided that such reimbursement shall not exceed $180,000; provided further that CEO shall be responsible for repaying to the Company all such reimbursed amounts in the event that CEO resigns or is terminated for Cause (as defined below), in each case on or before the first anniversary of the Effective Date. Prior to establishing his family’s primary residence in the greater Philadelphia metropolitan area, CEO may commute from his current residence, but shall be present at the Company’s or the Company’s Affiliates’ facilities or at third party commercial facilities on behalf of the Company at least five days per week, except as may otherwise be approved by the Chairman. The Company shall reimburse CEO for his reasonable commuting expenses during the 135-calendar-day period commencing with the Effective Date, subject to applicable taxes and withholding.

The initial term of CEO’s employment under this Agreement shall be from the Effective Date through December 31, 2010. Such term will automatically be extended for additional one-year periods on a year-to-year basis unless CEO or the Company notifies in writing the other to the contrary not less than three months and not more than five months prior to the expiration of the initial term of this Agreement and of any renewal term (the initial term and any renewal term, collectively, the “ Term ”). Prior to the commencement of the Term and following the execution of this Agreement, CEO shall provide services to the Company as requested and as the Company determines are appropriate in light of any pre-Term commitments of CEO.

$2,100,000+. Commencing on the Effective Date, CEO will accrue base salary and be eligible for an annual bonus as provided below in consideration of his services to the Company and its Affiliates.

The Company agrees to pay CEO an annual base salary of $600,000 (“Base Salary”), commencing as of the Effective Date, in accordance with the Company’s normal payroll practices for executives. Following a termination by the

Company of CEO without Cause (as defined below) or a resignation by CEO for Good Reason (as defined below), CEO will receive salary payments over an 18-month period totaling $900,000, less any amounts paid during the relevant notice period and any taxes and withholdings, subject to the conditions described in the “Termination” Section below.

In respect of 2006, CEO shall receive (i) a lump sum payment of $100,000 on December 30, 2006 and (ii) a lump sum payment of $400,000 on or about March 15, 2007, in each case subject to applicable taxes and withholding and to CEO’s being employed by the Company in good standing on each such date. CEO shall repay any amounts received pursuant to the foregoing sentence to the Company if he is terminated for Cause or resigns without Good Reason on or before the first anniversary of the Effective Date, and such repayment shall occur within ten calendar days of CEO’s termination of employment.

In respect of each full calendar year (commencing in respect of 2007) during the Term (a “ Bonus Year ”), the Company shall provide CEO with a bonus opportunity of $1,500,000+ (“ Annual Bonus ”), subject to the following and determined, awarded and paid as follows:

A. Plan & Performance Score:

B. Bonus Computation: The Annual Bonus shall equal:

C.

First $500,000 of each Annual Bonus:

1.

Creation of a “wholesale brokerage” division fully complimenting the range

D.

Annual Bonus Cash Portion: To the extent an Annual Bonus amount exceeds $500,000 (but not including the tax liability payments made pursuant to paragraph c. of Section B above):

a.

The Performance Score and the amount of the Annual Bonus Cash Portion in respect to a Bonus Year (for purposes of this Section “Annual Bonus” and the Section “Additional Equity Participation” below, “ Target Year ”) shall be redetermined or trued-up on an Accident Year Basis within 15 days following the completion of the Company’s audited financial statements in respect of the third full calendar year succeeding such Target Year, with such redetermination or true-up assuming the capital structure of the Company as of the last day of the applicable Target Year (for purposes of computing consolidated net income, consolidated net income per share, and other capital structure dependent items that would affect computation of the true-up contemplated by this Section E). (The Performance Score and Annual Bonus Cash Portion as so redetermined are referred to hereinbelow as the “ Trued-Up Performance Score ” and the “ Trued-Up Annual Bonus Cash Portion ,” respectively.) Computation of the Trued-Up Performance Score and the Trued-Up Annual Bonus Cash Portion shall be verified by Company’s independent auditors and confirmed by the Board. All redeterminations hereunder shall (i) be made without regard to the tax liability payments made pursuant to paragraph c. of Section B above and (ii) not increase or reduce the number of restricted shares previously awarded to CEO pursuant to Section C of this “Annual Bonus” Section.

b.

Subject to paragraph c. (immediately succeeding), if the Trued-Up Annual Bonus Cash Portion in respect to a Target Year equals or exceeds the amount of the Annual Bonus Cash Portion originally determined in respect of such Target Year, then the following amounts shall be paid to CEO (whether or not CEO is then employed by the Company, unless pursuant to paragraph c. (immediately succeeding) CEO is no longer then entitled to payments under this

1.

The excess of the Trued-Up Annual Bonus Cash Portion in respect of the Target Year over the Annual Bonus Cash Portion originally determined in respect of the Target Year; plus

2.

The Retained Cash Bonus in respect to the Target Year; plus

3.

A deemed investment return on the amounts to be paid to CEO pursuant to paragraphs 1 & 2 (immediately preceding), which shall be calculated by utilizing the investment return realized by the Company and the Company Affiliates on their investable assets (including cash) over the period said amounts to be paid to CEO had been retained by the Company.

Cash Bonuses then or thereafter held by the Company. The remaining Retained Cash Bonus with respect to the Target Year, if any, shall then be paid to CEO within thirty days of the foregoing redetermination, along with a deemed investment return thereon, which shall be calculated by utilizing the investment return realized by the Company and the Company Affiliates on their investable assets (including cash) over the period such remaining Retained Cash Bonus had been retained by the Company.

Attached as Schedule II is an example of application of the Bonus provisions of this Agreement.

F.

Additional Matters: All bonus payments hereunder are intended to comply with Sections 162(m) and 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and to the extent applicable shall be governed by the terms of the Company’s incentive award plans.

Employee Benefits/Expenses:

During the Term:

A.

CEO shall be entitled to participate in or receive benefits under all employee benefit plans, including, but not limited to, any pension or retirement plan, savings plan, medical or health-and-accident plan, life, disability, and other insurance plans or arrangements generally made available by the Company to its executives and key management employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements and of this Agreement. Following a termination by the Company of CEO without Cause or a resignation by CEO for Good Reason, CEO will be entitled to be reimbursed for the cost of COBRA continuation coverage under the Company’s group health plans for up to eighteen months following his termination date, subject to CEO’s continued eligibility for such coverage under COBRA and to the conditions described in the “Termination” Section below;

B.

CEO shall be entitled to four weeks paid vacation per full year in accordance with the policies periodically

established by the Board for other senior executives of the Company; and

C.

The Company shall pay or reimburse CEO for all reasonable expenses incurred or paid by CEO in the performance of CEO’s duties hereunder in accordance with the generally applicable policies and procedures of the Company.

Additional Equity Participation:

A.

Share Purchase & Option Grant: As a condition precedent to all of the Company’s obligations and all of CEO’s rights pursuant to this Agreement, prior to the Effective Date, CEO shall purchase from the Company $1,000,000 of the Company’s Class A common shares (“ Shares ”) at the closing price (as reported in the Wall Street Journal ) on the trading day on the execution of this Agreement (rounded to the nearest whole share). CEO further agrees that the Shares shall not be transferable (other than for estate planning purposes where the ultimate beneficiary of the transfer is a member of CEO’s immediate family) earlier than (i) the end of the Term, (ii) the occurrence of a “Change of Control” (as defined below), or (iii) the date on which CEO is terminated. The Company shall grant CEO stock options in accordance with the following (the “ Stock Options ”):

a.

Each option shall represent the right to acquire from the Company one Class A common share of the Company, subject to paying to the Company the “Exercise Price” (as defined in the immediately succeeding paragraph);

b.

The “Exercise Price” (or strike price) of each option shall be equal to the closing price of the Company’s Class A Common Shares on the trading day on the execution of this Agreement (as reported in the Wall Street Journal ), and each such option shall be granted as of such trading day; and

c.

The number of options granted CEO shall equal the quotient obtained by dividing $10,000,000 by the Exercise Price (rounded to the nearest whole option).

B.

Time Vesting Options: 12.5% of the Stock Options shall vest on each of December 31, 2007, December 31, 2008, December 31, 2009, and December 31, 2010 (aggregating 50% of the Stock Options) if CEO is employed by the Company and in good standing as of such respective dates.

C.

Performance Vesting Options:

a .

An additional 12.5% of the Stock Options shall provisionally vest on each of December 31, 2007, December 31, 2008, December 31, 2009 and December 31, 2010 (aggregating the remaining 50% of the Stock Options (the “ Performance Stock Options ”)) if, in addition to the criteria described below, on such dates CEO is employed by the Company and in good standing. The number of provisionally vested Performance Stock Options in respect to a calendar year that shall vest conclusively shall be determined by multiplying the number of such provisionally vested Performance Stock Options by a fraction, the numerator of which fraction shall equal the excess over 90 of the Trued-Up Performance Score for the Target Year inclusive of the date on which such Performance Stock Options provisionally vested (capped at ten for this purpose) and the denominator of which fraction shall equal ten.

b.

Provisionally vested Performance Stock Options shall become exercisable only in the event such options become conclusively vested as verified by the Company’s independent auditors and confirmed by the Board.

D.

Special Vesting of Options :

a.

Notwithstanding paragraph a. of Section C (immediately preceding), all provisionally vested Performance Stock Options shall vest conclusively (and thereafter be exercisable) as of the 120 ^th day following a two-year consecutive period of either calendar years (i) 2009 and 2010 or (ii) calendar years 2010 and 2011 if:

1.

the Company’s return on equity (determined in accordance with GAAP) and the Company’s percentage increase in gross written premiums (over the relevant preceding year) exceeded the return on equity (determined in accordance with GAAP) and the percentage increase in gross written premiums (over the relevant preceding year), of more than 50% of the Peer Group (as hereafter defined), as determined by the Board in its discretion within 120 days after the close of the relevant two-year period. The Board, in its sole discretion, may make such adjustments to the determination required by this paragraph as it deems appropriate to account for unanticipated and/or extraordinary matters affecting the Company’s or Peer Group members’ results; and

2.

CEO was employed by the Company and in good standing on (i) December 31 of each year in which the Company’s performance satisfied the conditions of paragraph 1 (immediately preceding) and (ii) the date on which the relevant Board determination was made.

3.

For purposes of paragraph 1 of this Section D, the “ Peer Group ” shall consist of W.R. Berkley Corporation (BER), RLI Corporation (RLI), James River Group, Inc. (JRVR), Navigators Insurance Group

(NAVG), Philadelphia Consolidated Group (PHLY), Markel Corporation (MKL), HCC Insurance Holdings, Inc. (HCC), Argonaut Group (AGII) and NYMAGIC, Inc. (NYM). The companies constituting the Peer Group may be modified by the Board from time to time in its discretion so as to take into account new competitive entrants to the Company’s market niche, the departure of companies from the Company’s market niche, as well as mergers, acquisitions and other changes affecting companies included in the Peer Group.

1.

A “Change of Control” shall mean (i) the acquisition of all or substantially all of the Company’s assets by an Unaffiliated Person, (ii) a merger, consolidation, statutory share exchange or similar form of corporate transaction after which the resulting entity is controlled by an Unaffiliated Person, or (iii) the acquisition by an Unaffiliated Person of sufficient voting shares of the

Company to cause the election of a majority of the Company’s Directors.

E.

Shareholding Guidelines. In addition to any other transfer restrictions contained herein, beginning as of January 1, 2009 and for the remainder of the Term, CEO shall be obligated at all times to hold shares in the Company with a value of no less than two times his “Annual Compensation” (as defined below) (or if less, the aggregate value of the Shares, any shares which he has been granted pursuant to this Agreement and any vested “in the money” Time Vesting Options which he has been granted pursuant to this Agreement), or such higher amount as may be required by the Board pursuant to share ownership guidelines adopted with respect to the Company’s senior executive team. Such value shall include vested share options, assuming their exercise for the underlying shares. For purposes of this Section E, “Annual Compensation” shall be the Base Salary plus the Annual Bonus payable upon the achievement of a Performance Score of 100 and all applicable milestones and goals (including any retained portion of the Annual Bonus but excluding all tax liability payments).

F.

Equity Agreements. Any restricted shares or options which are granted pursuant to this Agreement shall be granted pursuant to the restricted share and share option agreements attached as Exhibits A, B and C hereto, and any grants hereunder shall be conditioned on (i) CEO’s execution of such agreements; and (ii) the Company’s shareholder-approved, publicly-filed equity compensation plan, i.e., its Share Incentive Plan, as such plan may be amended from time to time (or any successor thereto).

The parties have attempted in good faith to structure this Agreement to comply with or be exempt from Section 409A of the Code and the regulations and guidance relating thereto (“Section 409A”). Therefore, notwithstanding any other provisions hereof, this Agreement shall be administered in good faith compliance with Section 409A, and accordingly any payment or vesting in severance benefits hereunder may be subject to a six-month delay as required by Section 409A, as determined by the Board in good faith.

The Board may, in its absolute discretion, terminate CEO’s employment with the Company at any time prior to the expiration of the Term, with or without Cause, upon three full calendar months written notice (in which event CEO shall receive accrued and unpaid Base Salary through the termination date) and during such three-month period the Company may request that CEO resign his officerships and direct CEO to perform only those services (if any) it determines are necessary. If CEO’s employment terminates as a result of his death or “Disability” (such Disability occurring when a licensed physician selected by the Company determines that CEO is disabled and CEO is unable to perform or complete his duties under this Agreement for a period of 180 consecutive days or 180 days within any twelve-month period), CEO or his successors shall receive accrued and unpaid Base Salary through to the termination date. In the event CEO’s employment with the Company is terminated by the Company without Cause or as a result of a resignation by the CEO for Good Reason, CEO shall receive from the Company the salary amounts payable pursuant to the second sentence of the “Base Salary” paragraph of the “Annual Compensation” Section hereof, continued benefits as provided in the “Employee Benefits/Expenses” Section hereof, and continued vesting in any equity awarded as provided in this Agreement, provided that such payments, benefits and vesting shall be conditioned on (i) CEO executing a general release in favor of the Company, its Directors, and employees, Fox Paine, and its members and employees, and all Affiliates of each of the foregoing, (ii) CEO remaining in compliance with all of his Post-Termination Obligations, and (iii) the Company determining that it did not have Cause to terminate CEO while he was employed. CEO may terminate his employment with the Company at any time without Good

Reason upon written notice to the Chairman of at least three full calendar months (and upon such notice the Company may elect to terminate CEO without any further payment obligations whatsoever as if CEO was terminated with Cause). Any termination by the Executive for Good Reason shall be upon thirty (30) days advance written notice and subject to the cure and other provisions related to “Good Reason” as set forth in the “Cause/Good Reason” section below.

“ Cause ” shall mean (i) the engaging by CEO in malfeasance, fraud, dishonesty or gross misconduct adverse to the interests of the Company or its Affiliates, (ii) the material violation by CEO of any of the covenants hereof or other provisions of this Agreement after notice from the Company and a failure to cure such violation within 10 days of said notice (to the extent the Board reasonably determines such violation is curable and subject to notice), (iii) a breach by CEO of any representation or warranty contained herein, (iv) the Board’s determination that CEO has exhibited incompetence or gross negligence in the performance of his duties hereunder, (v) receipt of a final written directive or order of any governmental body or entity having jurisdiction over the Company requiring termination or removal of CEO, (vi) CEO being charged with a felony or other crime involving moral turpitude, (vii) failure to establish his and his family’s primary residence in the greater Philadelphia metropolitan area within six months of the Effective Date, or (viii) CEO substantially failing to perform his duties hereunder after notice from the Company and failure to cure such non-performance within 10 days of said notice (to the extent the Board reasonably determines such failure to perform is curable and subject to notice) or violating any material Company policies, including, without limitation, the Company’s corporate governance and ethics guidelines, conflicts of interests policies and code of conduct applicable to all Company employees or senior executives.

“ Good Reason ” shall mean a willful and substantial reduction in CEO’s material responsibilities and reporting as provided for in the “Responsibilities” and “Reporting” Sections of this Agreement which remains uncured for thirty (30) days after written notice thereof is provided by CEO to the Company setting forth in reasonable detail the alleged breach at issue; provided that CEO must provide such written notice within ten (10) days of the event

allegedly giving rise to Good Reason or such alleged event shall not provide a basis for such notice; provided further that (i) “dotted-line” or dual reporting to the Chairman by any Company or Company Affiliate executive shall not constitute Good Reason and (ii) a modification as to whom CEO shall report resulting from a Change of Control shall not constitute Good Reason.

As consideration for the payments made and equity awarded pursuant to this Agreement, along with other good and valuable consideration, including, without limitation, the trade secrets provided to CEO in connection with the performance of his duties, CEO agrees and acknowledges that he will be bound by the restrictive covenants set forth on Schedule II hereof.

CEO covenants and agrees to be subject to the policies applicable to a senior executive of the Company, including without limitation the Company’s corporate governance rules, procedures, and policies as may be adopted by the Board from time to time.

CEO represents that he is not a party to any agreement or arrangement that would limit in any manner his ability to perform the duties contemplated hereunder and that he will not use any confidential information belonging to his previous employer(s) in the performance of his duties hereunder. The Company may set-off against or otherwise deduct from any amounts owed or due CEO or Company shares or options in respect of Company shares held by CEO if and to the extent that CEO is in default in respect of amounts he is obligated to pay to the Company (or any Company Affiliate).

The obligations of CEO under this Agreement will continue after the termination of his employment with the Company for any reason, to the extent provided herein, and will be binding on his heirs, executors, and legal representatives.

This Agreement shall not be assignable by CEO. This Agreement is assignable by the Company to an Affiliate. The rights and obligations hereunder shall be binding upon and take effect for the benefit of any successor in interest of the Company created by merger, reorganization, sale of assets, assignment or otherwise, and the Company shall use commercially reasonable efforts to obtain an assumption

agreement with respect to this Agreement from such successor.

The Company shall, as provided for by its by-laws and charter, defend and indemnify CEO. The Company shall also include CEO in the coverage provisions of the directors and officers liability insurance policy that it maintains for its Directors and officers, including any applicable tail coverage that it provides to its current and former Directors, as may be applicable.

This Agreement is subject to the approval of the Board and its Compensation Committee. Only upon such approval and the manual execution hereof by CEO and the Chairman shall the Agreement become a legally binding agreement of the Company and CEO.

CEO and the Company agree that, due to the Company’s significant and ongoing contacts and business relationships (including its listing on NASDAQ) with the State of New York, this Agreement shall be governed by and construed in accordance with the laws of such state, without reference to principles of conflict of laws of that jurisdiction or any other jurisdiction.

All disputes between the Company and CEO or between CEO and any Affiliate shall be resolved by binding confidential arbitration in front of a single arbitrator in Philadelphia, Pennsylvania, United States conducted by the Judicial Arbitration and Mediation Services, Inc. (“JAMS”) in accordance with the comprehensive rules and procedures of JAMS, including the internal appeal process provided for in Rule 34 of the JAMS rules with respect to any initial judgment rendered in an arbitration. The Company, its Affiliates and CEO agree that the arbitrator shall have no authority to award any punitive or exemplary damages and waive, to the full extent permitted by law, any right to recover such damages in arbitration. The Company (or its Affiliate) shall pay the costs and fees of the arbitrator and appeal arbitrators. The Company (or its Affiliate) and CEO shall each bear its own respective costs, including attorney’s fees (and there shall not be any award of attorney’s fees). Judgment on the award rendered in such arbitration may be entered in any court having jurisdiction. Notwithstanding the foregoing, the Company and its Affiliates reserve the rig