Exhibit 10.17

Rules of the Endurance Specialty Holdings Ltd. 2005 Sharesave Scheme


Rules approved by HMRC under Schedule 3 to the Income Tax (Earnings and
Pensions) Act 2003 on 20 February 2006 under reference number SRS3011




                                    CONTENTS

RULE                                                                       PAGE

1.    DEFINITIONS...........................................................  1
2.    COMMENCEMENT AND TITLE................................................  3
3.    APPLICATIONS FOR OPTIONS..............................................  3
4.    SCALING DOWN..........................................................  4
5.    GRANT OF OPTIONS......................................................  5
6.    EXERCISE PRICE........................................................  5
7.    LIMITATIONS ON THE ISSUE OF SHARES....................................  6
8.    ALTERATIONS OF SHARE CAPITAL..........................................  6
9.    WHEN OPTIONS MAY BE EXERCISED.........................................  6
10.   LAPSE OF OPTIONS......................................................  8
11.   MANNER OF EXERCISE OF OPTIONS.........................................  8
12.   TAKEOVER AND LIQUIDATIONS.............................................  9
13.   EMPLOYMENT RIGHTS..................................................... 10
14.   ADMINISTRATION OF THE SCHEME.......................................... 11
15.   EXCLUSION OF THIRD PARTY RIGHTS....................................... 12
16.   TERMINATION OF THE SCHEME............................................. 12
17.   GOVERNING LAW......................................................... 12




                 RULES OF THE ENDURANCE SPECIALTY HOLDINGS LTD.
                                      2005
                                SHARESAVE SCHEME

1.    DEFINITIONS

      In these Rules (unless the context otherwise requires) the following words
      and phrases have the following meanings:

      "ACT" means the Income Tax (Earnings and Pensions) Act 2003;

      "APPLICATION PERIOD" means such period of not less than 14 days and not
      more than 21 days commencing on the day following an Invitation Date as
      may be determined by the Board;

      "ASSOCIATED COMPANY" has the meaning given to it in paragraph 47 of
      Schedule 3 to the Act except for the purposes of Rule 9.6 where it has the
      meaning given to it by paragraph 35(4) of Schedule 3 to the Act;

      "BOARD" means the board of directors from time to time of the Company (or
      the directors present at a duly convened meeting of such board) or a duly
      authorised committee of the board;

      "BONUS DATE" means:

      (a)  where Repayment under the relevant Savings Contract is taken as
           including the maximum bonus, the earliest date on which the maximum
           bonus is payable; and

      (b)  in any other case, the earliest date on which a bonus is payable
           under the Savings Contract;

      "COMMENCEMENT DATE" means the date on which the Scheme is approved by HMRC
      under Schedule 3 to the Act;

      "COMPANY" means Endurance Specialty Holdings Ltd;

      "CONTINUOUS SERVICE" means the aggregate amount of service with:

      (a)  any Participating Company (including service with such company before
           it became a Participating Company); and

      (b)  any other company which is or was a Subsidiary (including service
           with any such other company before it became a Subsidiary);

           provided that:

           (i)  all such service has been continuous; and

           (ii) in the case of an employee who is absent from such employment
                for any reason for a period during which such employee's
                contract of service subsists, or by reason of maternity leave,
                and who then returns to such employment, any such period of
                absence shall be deemed to have formed part of such employee's
                continuous service;

      "CONTROL" has the meaning given to it by section 719 of the Act;

      "DATE OF GRANT" means the date on which the Board grants an Option in
      accordance with Rule 4.1;


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      "DEALING DAY" means any day on which the New York Stock Exchange is open
      for the transaction of business;

      "ELIGIBLE EMPLOYEE" means any employee or a director of a Participating
      Company:

      (a)   who on the relevant Date of Grant shall have achieved at least such
            minimum period of Continuous Service (not exceeding five years) as
            the Board shall on or before the Invitation Date determine;

      (b)   whose earnings from his office or employment are (or would be if
            there were any) general earnings to which section 15 or 21 of the
            Act applies;

      (c)   who is not ineligible to participate in the Scheme by virtue of any
            of the provisions of the Act, including in particular paragraph 11
            of Schedule 3 to the Act; and

      (d)   who in the case of a director, works at least 25 hours per week
            excluding time off permitted for meal breaks;

      provided that:

            (i)   at the Invitation Date no notice of termination of such
                  employment has been served by either the employee concerned or
                  his employing Participating Company and the employee or
                  director in question has not ceased to hold office or
                  employment with a Participating Company; and

            (ii)  the Board may treat any employee or director of a
                  Participating Company who meets requirement (c) above as an
                  Eligible Employee;

      "EMPLOYEES' SHARE SCHEME" has the meaning given to it in section 743 of
      the Companies Act 1985;

      "EXERCISE PRICE" means the price per Share at which a Participant may
      exercise an Option, established in accordance with Rule 6;

      "FSA " means the Financial Services Authority acting in its capacity as
      the competent authority for the purposes of Part VI of the Financial
      Services and Markets Act 2000;

      "GROUP" means the Company and its Subsidiaries from time to time;

      "HMRC" means Her Majesty's Revenue and Customs and, where relevant, any
      predecessor body which carried out part of its functions and references to
      any approval by HMRC shall, where appropriate, include approval by an
      officer of Revenue and Customs;

      "INVITATION DATE" means the date upon which invitations to apply for
      Options are issued by the Board.

      "JOINTLY OWNED COMPANY" means any company which is treated as being
      controlled by the Company under paragraph 46 of Schedule 3 to the Act and
      which is eligible to be a participating company in the Scheme under that
      paragraph;

      "MEMBER OF THE GROUP" means the Company or any one of its Subsidiaries
      from time to time;

      "OPTION" means a right to acquire Shares at the Exercise Price in
      accordance with the Rules;

      "PARTICIPANT" means any individual who has been granted and remains (or
      would but for Rule 9.4 remain) entitled to exercise a Subsisting Option or
      (where the context admits) the personal representatives of any such
      individual;


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      "PARTICIPATING COMPANY" means any Member of the Group or any Jointly Owned
      Company which is for the time being designated by the Board as a
      participating company in the Scheme;

      "REPAYMENT" means, in relation to a Savings Contract, the amount of the
      contributions repayable and, where relevant, of any bonus and/or interest
      payable on the termination of the Savings Contract;

      "RULES" means these rules as from time to time amended in accordance with
      their provisions by the Board or by the Company in general meeting;

      "SAVINGS CONTRACT" means a certified contractual savings scheme within the
      meaning of section 326 of the Income and Corporation Taxes Act 1988 and
      which has been approved by HMRC for the purposes of Schedule 3 to the Act;

      "SCHEME" means this scheme as governed by the Rules;

      "SCHEME-RELATED EMPLOYMENT" means the office or employment by virtue of
      which a Participant is eligible to participate in the Scheme;

      "SHARE" means an ordinary share par value US$1.00 per share, in the
      capital of the Company which satisfies the conditions specified in
      paragraphs 18 to 22 inclusive of Schedule 3 to the Act;

      "SPECIFIED AGE" means 60;

      "SUBSIDIARY" means a company which is both under the Control of the
      Company and is a subsidiary of the Company (within the meaning of section
      736 of the Companies Act 1985);

      "SUBSISTING OPTION" means an Option which has neither lapsed nor been
      exercised.

      Where the context so permits, the singular shall include the plural and
      vice versa and the masculine gender shall include the feminine. Any
      reference to a statutory provision is to be construed as a reference to
      that provision as for the time being amended or re-enacted and shall
      include any regulations or other subordinate legislation made under it.

2.    COMMENCEMENT AND TITLE

      The Scheme shall commence on the Commencement Date and shall be known as
      the Endurance Specialty Holdings Ltd. 2005 Sharesave Scheme.

3.    APPLICATIONS FOR OPTIONS

3.1   On or prior to an Invitation Date the Board may decide in its absolute
      discretion:

      (a)   whether to invite applications for the grant of Options; and

      (b)   whether to invite applications for three year Options, five year
            Options or seven year Options (or whether to offer Eligible
            Employees a choice); and

      (c)   whether the Repayment shall be taken as including a bonus.

3.2   Where applications for the grant of Options are invited, such invitations
      shall be sent to all Eligible Employees and shall state:

      (a)   the Exercise Price or the method by which the Exercise Price for the
            Shares will be notified to Eligible Employees;


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      (b)   the date, being the last day of the Application Period, by which
            applications for the grant of Options must have been received by the
            Board or such person as the Board may direct; and

      (c)   whether applications may be made for three year Options, five year
            Options or seven year Options or any combination of them.

3.3   Any accidental failure or omission to deliver an invitation to an Eligible
      Employee shall not invalidate the grant of an Option to any other Eligible
      Employee.

3.4   Applications for Options under the Scheme shall be in such form as the
      Board may require and each:

      (a)   must incorporate or be accompanied by a duly completed application
            form to enter into a Savings Contract under which the applicant
            agrees to make a specified contribution, in multiples of (pound)1
            per month, of not less than (pound)5 per month nor (when aggregated
            with contributions made under any other savings contract linked to a
            SAYE option scheme approved under Schedule 3 to the Act) more than
            (pound)250 per month (or such other amounts as may from time to time
            be permitted under the Savings Contract); and

      (b)   shall empower the Board or any person authorised by it:

            (i)   to amend the amount of the specified contribution referred to
                  in Rule 3.4(a)to such lesser sum as may be required under Rule
                  4; and

            (ii)  to deduct from the Participant's pay such contribution as
                  shall be specified by the Participant pursuant to Rule 3.4(a)
                  (or as may be amended pursuant to Rule 3.4(b)(i)) and pay the
                  same on behalf of the Participant in discharge of the
                  Participant's obligations under the Savings Contract; and

      (c)   must state whether the application is for a three year Option, a
            five year Option or a seven year Option.

3.5   The Repayment due under each Participant's Savings Contract shall, as
      nearly as practicable, equal the amount for which Shares may be acquired
      under the related Option if exercised in full and, therefore, each
      application shall be treated as being for an Option over the largest whole
      number of Shares which can be acquired at the Exercise Price with the
      Repayment under the related Savings Contract (following any adjustment
      under Rule 3.4(b)(i).

4.    SCALING DOWN

      Where the Board in its discretion considers that it is desirable to limit
      the number of Shares in respect of which Options are granted in respect of
      any invitation and applications are received which would, if met in full,
      exceed that limit, the following steps shall be carried out successively
      to the extent necessary to eliminate the excess over the limit imposed:

      (a)   where the Bonus Date would otherwise have been the earliest date on
            which the maximum bonus is payable under the Savings Contract, the
            Bonus Date shall be the earliest date on which a bonus is so
            payable;

      (b)   the excess over (pound)5 of the monthly savings contribution chosen
            by each applicant under the Savings Contract shall be reduced pro
            rata to the extent necessary;

      (c)   where a bonus would otherwise have been included in the Repayment
            under the Savings Contract, no such bonus shall be so included;


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      (d)   applications shall be selected by lot, each based on a monthly
            savings contribution of (pound)5 and the inclusion of no bonus in
            the Repayment under the Savings Contract;

      provided that, if the number of Shares available is insufficient to enable
      Options to be granted to all Eligible Employees making valid applications,
      the Board may determine in its absolute discretion that no Options shall
      be granted.

5.    GRANT OF OPTIONS

5.1   Within 30 days of:

      (a)   the first Dealing Day by reference to which the Exercise Price was
            determined under Rule 6; or

      (b)   where the Exercise Price was not determined by reference to one or
            more Dealing Days, the Invitation Date;

      or in a case where the number of shares over which Options are to be
      granted is determined by Rule 4, within 42 days of such date, and subject
      to the limitations and conditions contained in the Scheme, the Board may
      grant Options pursuant to an invitation and, if it does so, shall grant an
      Option to each Eligible Employee who has made a valid application over
      that number of Shares for which an application is treated as having been
      made under Rule 3.5.

5.2   No payment shall be required from a Participant on the grant of an Option.
      The Board shall grant Options by deed in such form as the Board shall
      decide. A single deed of grant may be executed in favour of any number of
      Participants. Each Participant shall on, or as soon as possible after, the
      Date of Grant be issued with a certificate as evidence of the grant of an
      Option.

5.3   No Option shall be capable of being transferred by a Participant or his
      personal representatives or of being mortgaged, pledged or encumbered in
      any way whatsoever. In the event of any breach or purported breach of this
      provision, the Option shall lapse forthwith. This Rule 5.3 shall not
      prevent the personal representatives of a deceased Participant from
      exercising the Option in accordance with the Rules.

5.4   No Option may be granted under the Scheme later than ten years after the
      Commencement Date.

5.5   Notwithstanding the above, no Option shall be granted to any Eligible
      Employee who is ineligible to participate in the Scheme at the Date of
      Grant by virtue of either of paragraphs 10 and 11 of Schedule 3 to the
      Act.

6.    EXERCISE PRICE

6.1   The Exercise Price of an Option shall be such amount as the Board shall
      determine being an amount not less than the higher of:

      (a)   (in the case only of an Option to subscribe for Shares) the nominal
            value of a Share; and

      (b)   85 per cent. of the market value of a Share as determined in
            accordance with Rule 6.2.

6.2   For the purposes of Rule 6.1(b), the market value of a Share on the Date
      of Grant shall be:


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      (a)   the average of the highest and lowest prices at which shares of that
            class were traded on the New York Stock Exchange on the dealing day
            preceding the Invitation Date; and

      (b)   converted into Pounds Sterling at the noon buying rate in New York
            City USA for cable transfers payable in Pounds Sterling as certified
            for customs purposes by the Federal Reserve Bank for that day; or

      (c)   at any other time at which the Shares are not so traded, its market
            value as determined in accordance with Part VIII of the Taxation of
            Chargeable Gains Act 1992 and agreed in advance with HMRC.

6.3   The Exercise Price is subject to adjustment in accordance with Rule 8.

7.    LIMITATIONS ON THE ISSUE OF SHARES

7.1   Subject to such adjustments as may be made in accordance with Rule 8, no
      Option shall be granted on any Date of Grant or any proposed Date of Grant
      if, as a result, the aggregate number of Shares issued or committed to be
      issued pursuant to grants made under the Scheme and pursuant to grants or
      appropriations made during the ten years preceding such Date of Grant
      under all other Employees' Share Schemes established by the Company would
      exceed ten per cent. of the issued ordinary share capital of the Company
      on that Date of Grant.

7.2   For the avoidance of doubt, Shares which have been the subject of Options
      or of rights granted under any other Employees' Share Scheme which have
      lapsed shall not be taken into account for the purposes of this Rule 7.

8.    ALTERATIONS OF SHARE CAPITAL

8.1   In the event of any variation in the ordinary share capital of the Company
      by way of capitalisation of profits or reserves or by way of rights or any
      consolidation or sub-division or reduction of capital or otherwise, then
      the number and the nominal value of Shares subject to any Subsisting
      Options, the Exercise Price and, where an Option has been exercised but,
      as at the date of the variation of capital referred to above, no Shares
      have been allotted or transferred pursuant to such exercise, the number of
      Shares which may be so allotted or transferred and the price at which they
      may be acquired, may be adjusted by the Board in such manner and with
      effect from such date as the Board may determine to be appropriate
      provided always that any such adjustment is subject to the prior approval
      of HMRC.

8.2   The Board shall notify Participants in such manner as it thinks fit of any
      adjustment made under Rule 8.1 and may call in, cancel, endorse, issue or
      re-issue any option certificate as a result of any such adjustment.

9.    WHEN OPTIONS MAY BE EXERCISED

9.1   Save as otherwise provided in the Scheme, a Subsisting Option may not be
      exercised earlier than the Bonus Date of the related Savings Contract.

9.2   Subject only to the provisions of Rule 9.7, no Subsisting Option may be
      exercised later than six months after the Bonus Date of the related
      Savings Contract.

9.3   A Subsisting Option may be exercised within six months of the Bonus Date
      of the related Savings Contract by a Participant who is a director or
      employee of a Participating Company.


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9.4   Notwithstanding any other provision of these Rules, no Option may be
      exercised by any Participant at any time when he is excluded from
      participation in this Scheme by virtue of either of paragraphs 10 and 11
      of Schedule 3 to the Act.

9.5   If a Participant ceases to hold Scheme-related Employment by reason of:

      (a)   injury;

      (b)   disability;

      (c)   redundancy within the meaning of the Employment Rights Act 1996 or
            the Employment Rights (Northern Ireland) Order 1996;

      (d)   retirement on reaching the Specified Age or such other age at which
            he is bound to retire in accordance with the terms of his
            employment;

      a Subsisting Option shall become exercisable and remain exercisable at any
      time during the period of six months from the date on which he so ceases
      to hold such employment or office notwithstanding that the Bonus Date
      shall not have occurred.

9.6   No person shall be treated for the purposes of Rule 9.5 as ceasing to hold
      Scheme-related Employment until that person ceases to hold office or
      employment with:

      (a)   the Company; or

      (b)   any Associated Company of the Company; or

      (c)   any Company which is under the Control of the Company.

9.7   In the event of the death of a Participant:

      (a)   prior to the Bonus Date, a Subsisting Option may be exercised by his
            personal representatives at any time during the period of 12 months
            commencing on the date of his death (but not later) and the personal
            representatives shall be entitled to do so notwithstanding that the
            Bonus Date has not occurred; and

      (b)   within six months commencing on the Bonus Date, a Subsisting Option
            may be exercised by his personal representatives at any time during
            the period of 12 months commencing on the Bonus Date;

      provided that such personal representatives shall not be entitled to
      exercise the Option if, at the date of the Participant's death, the
      Participant was precluded from exercising the Option by reason of either
      of paragraphs 10 and 11 of Schedule 3 to the Act.

9.8   A Participant who reaches the Specified Age prior to the Bonus Date but
      continues to hold the office or employment by virtue of which he is
      eligible to participate in the Scheme may exercise an Option within six
      months after the date of his reaching the Specified Age.

9.9   If a Subsisting Option becomes exercisable under any provision of the
      Scheme before the Bonus Date, it shall be exercisable only over the number
      of Shares the aggregate Exercise Price of which equals (as nearly as may
      be), but does not exceed, the Repayment made under the related Savings
      Contract but excluding any contributions made directly by the Participant
      except to the extent that such are:

      (a)   made pursuant to any special arrangements relating to absence from
            employment; or

      (b)   made at the same rate of contribution and at the same intervals as
            those contributions previously deducted from his salary pursuant to
            the provisions of Rule


                                        7



            3.4(b)3.4(b)(ii) between the date of the Participant ceasing to be
            employed by any Member of the Group and the date on which the Option
            is exercised;

      and the Option shall cease to be exercisable over any Shares in excess of
      that number in respect of which it was granted. For the avoidance of
      doubt, any Repayment under the Savings Contract shall exclude the
      Repayment of any contributions made in advance under the Savings Contract
      the due date for payment of which falls or would have fallen more than one
      month after the date on which Repayment is made.

9.10  An Option shall be exhausted and automatically cancelled immediately after
      it is first exercised notwithstanding that it shall not have been
      exercised in respect of all of the Shares over which the Option was
      granted.

10.   LAPSE OF OPTIONS

10.1  A Subsisting Option, whenever granted, shall lapse and cease to be
      exercisable upon the earliest to happen of the following:

      (a)   the expiry of any of the periods for exercise under the provisions
            of Rule 9 (with the exception of Rule 9.8) except that if the
            Participant dies during the exercise period specified in Rule 9.5,
            an Options shall not lapse by reason of this Rule 10.1(a) until the
            expiry of the 12 months period in Rule 9.8, if later;

      (b)   subject only to the ability of the Participant to release an Old
            Option in consideration of the grant of a New Option pursuant to
            Rule 12.2, the date on which a company (the "ACQUIRING COMPANY")
            acquires Control of the Company;

      (c)   the date on which the Participant ceases to hold any office or
            employment with any Member of the Group or with any Associated
            Company for any reason other than any of the matters referred to in
            Rules 9.5 or 9.7;

      (d)   the date on which the Participant is adjudicated bankrupt;

      (e)   any breach or purported breach of Rule 5.3; or

      (f)   if the Participant omits seven or more times to make a monthly
            payment due under his Savings Contract or gives notice under the
            Savings Contract requiring Repayment before the Bonus Date unless
            such non-payment or notice is:

            (i)   in consequence of his ceasing to hold office or employment by
                  virtue of one of the causes mentioned in Rules 9.5 or 9.7; or

            (ii)  in the circumstances of Rule 9.8.

11.   MANNER OF EXERCISE OF OPTIONS

11.1  An Option shall be exercised by the Participant lodging with the Secretary
      of the Company at its registered office (or otherwise as may be notified
      to Participants from time to time):

      (a)   an option certificate in respect of the option to be exercised;

      (b)   a notice of exercise in such form as the Board may from time to time
            prescribe specifying the number of Shares in respect of which the
            Option is being exercised; and

      (c)   payment in cleared funds for that number of Shares, calculated by
            reference to the Exercise Price.


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11.2  The date of exercise of the Option shall be the date of receipt by the
      Company of the items referred to in Rule 11.1.

11.3  It is a condition of the exercise of an Option under the Scheme that
      payment for the Shares shall be made only with monies not exceeding the
      amount of the Repayment to the Participant under the Savings Contract to
      which he has contributed in relation to the Option. If, upon the exercise
      of an Option, the Repayment then due to a Participant under his Savings
      Contract is less than the amount required to pay for all the Shares in
      respect of which it is purportedly exercised, the Option shall be treated
      as exercised only in respect of such number of Shares as may be acquired
      by the amount of the Repayment and shall lapse as to the excess.

11.4  Subject to:

      (a)   receipt of the appropriate remittance; and

      (b)   the obtaining of any necessary consents from any competent authority
            and to the terms of any such consent;

      the Board shall within 30 days of the date of exercise of an Option cause
      the Company to allot and issue or procure the transfer of the relevant
      Shares and, in the case of certificated shares, send or cause to be sent
      to the Participant who has exercised the Option a share certificate for
      the Shares in respect of which the Option is exercised.

11.5  Shares issued pursuant to the Scheme will rank pari passu in all respects
      with the Shares already in issue except that they and any Shares
      transferred pursuant to the Scheme will not rank for any dividend or other
      distribution of the Company paid or made by reference to a record date
      falling prior to the date of exercise of the relevant Option.

11.6  If and for so long as the Shares are traded on the New York Stock
      Exchange, the Company shall as soon as practicable, apply for the Shares
      to be admitted to trading. Any application may be postponed at the
      discretion of the Board until application can be made in respect of such
      number of Shares as the Board considers appropriate. The Company shall
      also take all reasonable steps to file and maintain a Registration
      Statement on Form S-8 with the U.S. Securities and Exchange Commission
      relating to the shares issuable upon exercise of an Option.

11.7  The Company shall maintain sufficient unissued share capital to satisfy
      all rights to subscribe for Shares from time to time under Subsisting
      Options.

12.   TAKEOVER AND LIQUIDATIONS

12.1  Subject to Rule 12.2, in the event of a change of Control of the Company,
      a Participant will have no right to exercise an Option.

12.2  If an Acquiring Company has obtained Control of the Company by means of a
      company reorganisation within the meaning of paragraph 38(2) of Schedule 3
      to the Act any Participant may, within the relevant period set out in
      paragraph 38(3) of Schedule 3 to the Act, by agreement with the Acquiring
      Company release any Subsisting Option (the "OLD OPTION") in consideration
      of the grant to him of a new option (the "NEW OPTION") which satisfies the
      following conditions:

            (i)   the New Option shall be over shares in the Acquiring Company
                  (or another company which satisfies sub-paragraph (b) or (c)
                  of paragraph 18 of Schedule 3 to the Act in relation to the
                  Acquiring Company) and shall satisfy the conditions specified
                  in paragraphs 18 to 22 inclusive of Schedule 3 to the Act;


                                        9



            (ii)  the New Option shall be a right to acquire such number of such
                  shares in the Acquiring Company (or such other company) as
                  shall have on the grant of the New Option an aggregate market
                  value equal to the aggregate market value of the Shares
                  subject to the Old Option immediately before its release and
                  for this purpose market value shall be ascertained by the
                  application of Rule 6.2 as if references to the Invitation
                  Date were references to the date of release of the Old Option
                  and grant of the New Option and references to the Board were
                  references to the board of directors of the Acquiring Company;

            (iii) the New Option shall have an aggregate price payable on
                  complete exercise equal to the aggregate price which would
                  have been payable on complete exercise of the Old Option; and

            (iv)  the New Option shall be otherwise identical in terms to the
                  Old Option;

      AND the New Option shall, for all other purposes of the Scheme, be treated
      as having been acquired at the same time as the Old Option in
      consideration of the release of which it is granted. In relation to any
      New Option:

      -     Rules 1, 8, 11, 12, 13 and 14.5 shall be construed as if references
            therein to "the Company" were references to the Acquiring Company;
            and

      -     all the Rules (other than Rules 3 to 7 inclusive) shall be construed
            as if references therein to Shares were references to shares in the
            Acquiring Company or, as the case may be, the other company in
            respect of whose shares the New Option is granted.

13.   EMPLOYMENT RIGHTS

13.1  This Scheme shall not form part of any contract of employment between any
      Member of the Group and any employee of any such company and the rights
      and obligations of any individual under the terms of his office or
      employment with any Member of the Group shall not be affected by his
      participation in the Scheme or any right which he may have to participate
      therein.

13.2  Participation in the Scheme shall be on the express condition that:

      (a)   neither it nor cessation of participation shall afford any
            individual under the terms of his office or employment with any
            Member of the Group any additional or other rights to compensation
            or damages; and

      (b)   no damage or compensation shall be payable in consequence of the
            termination of such office or employment (whether or not in
            circumstances giving rise to a claim for wrongful or unfair
            dismissal) or for any other reason whatsoever to compensate him for
            the loss of any rights the Participant would otherwise have had
            (actual or prospective) under the Scheme howsoever arising but for
            such termination; and

      (c)   the Participant shall be deemed irrevocably to have waived any such
            rights to which he may otherwise have been entitled.

13.3  No individual shall have any claim against a Member of the Group arising
      out of his not being admitted to participation in the Scheme which (for
      the avoidance of all, if any, doubt) is governed entirely by the Rules.

13.4  No Participant shall be entitled to claim compensation from any Member of
      the Group in respect of any sums paid by him pursuant to the Scheme or for
      any diminution or extinction of his rights or benefits (actual or
      otherwise) under any Option held by him consequent upon the lapse for any
      reason of any Option held by him or otherwise in


                                       10



      connection with the Scheme and each Member of the Group shall be entirely
      free to conduct its affairs as it sees fit without regard to any
      consequences under, upon or in relation to the Scheme or any Option or
      Participant.

14.   ADMINISTRATION OF THE SCHEME

14.1  The Board may make and vary such regulations (not being inconsistent with
      the Scheme) as it thinks fit for the administration and implementation of
      the Scheme. The Board's decision on any matter concerning the Scheme or
      its interpretation shall be final and binding. The Board may delegate its
      authority to any authorized officer or officers of the Company as it deems
      appropriate.

14.2  The Scheme shall be administered under the direction of the Board (or any
      authorized officer of the Company) who may at any time and from time to
      time delete, amend or add to the Rules of the Scheme in any respect
      provided that:

      (a)   no deletion, amendment or addition shall operate to affect adversely
            in any way any rights already acquired by a Participant under the
            Scheme without the approval of the majority of the affected
            Participants first having been obtained; and

      (b)   no alteration to a key feature (as that term is defined in paragraph
            42(2B) of Schedule 3 to the Act) of the Plan shall have effect at
            any time at which the Scheme is and is intended to remain HMRC
            approved without the prior approval of HMRC and HMRC shall be
            informed as soon as practicable of any unapproved amendment as a
            result of which the Scheme stands to lose approval.

14.3  Subject to Rule 14.2(b) and notwithstanding anything to the contrary
      contained in these Rules, the Board (or any authorised officer of the
      Company) may at any time:

      (a)   amend the Scheme in any way to the extent necessary to obtain or
            maintain approval by HMRC or any other governmental or regulatory
            body pursuant to any present or future United Kingdom, United States
            or Bermuda legislation or any U.S. Securities and Exchange
            Commission rule or regulation; and

      (b)   establish further Schemes to apply in overseas territories governed
            by rules similar to these Rules but modified to take account of
            local tax, exchange control or securities laws, regulation or
            practice provided that any Shares made available under any such
            scheme shall be treated as counting against any limits on overall or
            individual participation in the Scheme.

14.4  The Board's decision on any matter relating to the interpretation of the
      Rules and any other matters concerning the Scheme (including the
      rectification of errors or mistakes of procedure or otherwise) shall be
      final and binding.

14.5  Any notice or other communication under or in connection with the Scheme
      may be given:

      (a)   by the Company to an Eligible Employee or Participant either
            personally or sent to him at his place of work by electronic mail or
            by post addressed to the address last known to the Company
            (including any address supplied by the relevant Participating
            Company or any Subsidiary) or sent through the Company's internal
            postal service; and

      (b)   to the Company either personally or by post to the Company
            Secretary.

      Items sent by post shall be pre-paid and shall be deemed to have been
      received 72 hours after posting.

14.6  The Company shall bear the costs of setting up and administering the
      Scheme. However, the Company may require any Participating Company to
      reimburse the Company for any


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      costs borne by the Company directly or indirectly in respect of such
      Participating Company's officers or employees.

14.7  The Company shall maintain all necessary books of account and records
      relating to the Scheme.

14.8  The Board shall be entitled to authorise any person to execute on behalf
      of a Participant, at the request of the Participant, any document relating
      to the Scheme, in so far as such document is required to be executed
      pursuant hereto.

14.9  The Company may send copies to Participants of any notice or document sent
      by the Company to the holders of Shares.

14.10 If any Option certificate shall be worn out, defaced or lost, it may be
      replaced on such evidence being provided as the Board may require.

15.   EXCLUSION OF THIRD PARTY RIGHTS

      The Contracts (Rights of Third Parties) Act 1999 shall not apply to this
      Scheme nor to any Option granted under it and no person other than the
      parties to an Option shall have any rights under it nor shall it be
      enforceable under that Act by any person other than the parties to it.

16.   TERMINATION OF THE SCHEME

      The Scheme may be terminated at any time by a resolution of the Board or
      by a resolution of the Company in general meeting and shall in any event
      terminate on the tenth anniversary of the Commencement Date. On
      termination, no further Options shall be granted but such termination
      shall not affect the subsisting rights of Participants.

17.   GOVERNING LAW

      These Rules shall be governed by and construed in accordance with English
      law.


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