EX-10.37: SEPARATION AGREEMENT

Exhibit 10.37

 

[MRH Letterhead]

 

October 1, 2006

 

C. Russell Fletcher III

Sky Top

18 Shore Lane

St. George’s HS 02

 

Dear Russ,

 

We understand that you wish to take up employment with White Mountains Re Group Ltd. on or about October 1, 2006. This Letter Agreement sets out our agreement with respect to the termination of your employment and directorships with Montpelier Reinsurance Ltd., including any subsidiaries or affiliates thereof (the “Company”), in order to allow you to do so.

 

Your last day of employment with the Company shall be September 30, 2006 (the “Termination Date”).

 

You will be paid your current salary and all benefits (including housing allowance, pension, health insurance benefits, accounting and legal expenses) in accordance with your Statement of Employment dated March 30, 2005 and your Service Agreement dated January 1, 2002 and any agreements ancillary thereto or amendments thereof (collectively the “Service Agreement”) until the Termination Date. Payment of tax gross ups on your housing allowance will be subject to claw back per your prior agreement with the Company in the event that the U.S. Treasury Department issues guidance resulting in an overpayment by the Company for the period 1/1/06 - 9/30/06. Subsequent to September 30, 2006, responsibility for any and all compensation-related taxes shall pass from the Company to you.

 

The Company will pay you any dividend declared on the Restricted Share Units (as that term is defined in the Montpelier Re Holdings Ltd. Long-Term Incentive Plan and any Award Agreements made pursuant thereto) held by you as of the Termination Date. All those Restricted Share Units, and all future dividends thereon, and all Performance Shares and Performance Units held by you, will be forfeited as of October 1, 2006.

 

The 29,097 restricted common shares of the Company to which you are entitled pursuant to the March 5, 2005 exercise of options will vest in your name on the Termination Date. You will be responsible for all taxes and any and all expenses or costs resulting from the vesting of those restricted shares.

 

In full and final settlement of any and all claims and rights of action (if any) however so arising whether contractual (including, for the avoidance of doubt, any claim for a guaranteed bonus for 2006), common law, statuto