Exhibit 10.1

USI HOLDINGS CORPORATION

MANAGEMENT INCENTIVE PLAN

(as amended and restated, effective as of January 1, 2006)

SECTION 1. Purpose.

USI Holdings Corporation (the “Company”) has, subject to shareholder approval,
amended and restated this Management Incentive Plan (the “Plan”), effective as
of January 1, 2006, in order to provide the Company with an additional means to
attract and retain executive officers and other key executives by providing them
with an opportunity to earn annual incentive compensation, contingent on the
achievement of certain performance goals, as an incentive and reward for their
contributions to the growth, profitability and success of the Company from year
to year.

The Company intends that compensation payable under the Plan will constitute
“qualified performance-based compensation” under Section 162(m) of the Code (as
hereinafter defined). The Plan shall be interpreted and construed in a manner
consistent with such intent.

SECTION 2. Definitions.

2.1. “Award” means the amount of incentive compensation to which a Participant
is entitled for each Plan Year as determined by the Committee pursuant to
Sections 4 and 5 of the Plan.

2.2. “Board” means the Company’s Board of Directors.

2.3. “Code” means the Internal Revenue Code of 1986, as amended, including
applicable regulations thereunder.

2.4. “Committee” means the Compensation Committee of the Board, which shall be
comprised solely of at least two persons who, to the extent required to satisfy
the exception for performance-based compensation under Section 162(m) of the
Code, are “outside directors” within the meaning of such section. However, no
act of the Committee shall be void or deemed to be without authority due to the
failure of a member to meet any qualification requirement at the time the action
is taken.

2.5. “Determination Date” means the day not later than the 90th day of a Plan
Year or such other date by which the Committee may establish performance goals
for a Plan Year without causing an Award to be treated as other than
performance-based compensation under Section 162(m) of the Code.

2.6. “Eligible Employee” means any executive officer (as that term is defined in
Rule 3b-7 under the Securities Exchange Act of 1934, as amended) or other key
executive of the Company or its subsidiaries.

2.7. “Participant” means an Eligible Employee who has been selected by the
Committee to potentially receive an Award for a given Plan Year, subject to
achievement of one or more performance goals and satisfaction of other
conditions under the Plan or specified by the Committee.

2.8. “Plan Year” means the fiscal year of the Company or such other period
established by the Committee.

SECTION 3. Administration.

The Plan shall be administered by the Committee or, with respect to
non-executive officers who are Eligible Employees, its designee. The Committee
or, with respect to non-executive officers who are Eligible Employees,

 

B-1

--------------------------------------------------------------------------------

its designee, shall have the authority to establish performance goals for the
awarding of Awards for each Plan Year; to determine the Participants for each
Plan Year; to determine whether performance goals for each Plan Year have been
achieved; to authorize payment of Awards under the Plan, including determining
the form and timing of payment and any conditions (such as further service
requirements) that will apply to such payment; to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
deem advisable; and to interpret the terms and provisions of the Plan. All
determinations made by the Committee or its designee with respect to the Plan
and Awards thereunder shall be final and binding on all persons, including the
Company and all Eligible Employees.

SECTION 4. Determination of Awards.

The amount of a Participant’s Award for any Plan Year shall be an amount not
greater than $3,000,000, which amount shall be determined based on the
achievement of one or more performance goals established by the Committee with
respect to a Participant. Performance goals may vary as among Participants and
shall be based upon one or more of the following criteria, as the Committee may
deem appropriate: (1) earnings per share (basic or fully diluted); (2) revenues;
(3) earnings, before or after taxes, from operations (generally or specified
operations), or before or after interest expense, depreciation, amortization,
incentives, or extraordinary or special items; (4) cash flow, free cash flow,
cash flow return on investment (discounted or otherwise), net cash provided by
operations, or cash flow in excess of cost of capital; (5) return on net assets,
return on assets, return on investment, return on capital, return on equity;
(6) economic value created or economic profit; (7) operating margin or operating
expense; (8) net income; (9) Share price or total stockholder return; (10) book
value; (11) expense ratio, (12) operating income; (13) strategic business
criteria, consisting of one or more objectives based on meeting specified market
penetration, geographic business expansion goals, cost targets, customer
satisfaction, supervision of litigation and information technology, and goals
relating to acquisitions or divestitures; (14) loss ratio; (15) new business
production; (16) investment programs initiated; (17) operating margin;
(18) efficiency goals; and (19) employee retention or customer retention.
Performance goals may be expressed as absolute goals, goals compared to past
performance, goals compared to the performance of a published or special index
or benchmark deemed applicable by the Committee, or otherwise as determined by
the Committee. The performance goals may be determined by reference to the
performance of the Company and/or a subsidiary or affiliate of the Company, or
of a division or unit of any of the foregoing. No later than the Determination
Date for a Plan Year, the Committee shall designate (i) the Participants for
such Plan Year, (ii) the performance goals for such Plan Year and (iii) the
corresponding Award amounts payable to each Participant under the Plan upon
achievement of such performance goals and satisfaction of other conditions under
the Plan or specified by the Committee. So long as an Award is fully contingent
upon a measure of performance as specified in this Section 4, the Committee may
consider other measures of performance or other circumstances in its exercise of
discretion (“negative discretion”) to reduce the final Award. The Committee may
specify at the time an Award opportunity is authorized or at any other time such
other performance measures or other terms upon which it will exercise negative
discretion.

SECTION 5. Payment of Award.

An Award (if any) to a Participant for a Plan Year shall be paid following the
end of the Plan Year; provided, however, that the Committee shall have first
certified in writing (i) that the applicable performance goal or goals with
respect to such Participant for such Plan Year were satisfied and the level of
the attainment of such goal or goals, (ii) that all other material terms upon
which payment of the Award is conditioned were satisfied and (iii) the amount of
each Participant’s Award. The Committee, unless it determines otherwise, may
exercise negative discretion to reduce the amount that would otherwise be
payable under an Award by reason of the applicable performance goal’s having
been achieved. Payments will be in cash, subject to any conditions the Committee
may impose; provided, however, that the Committee may also provide that an Award
will be paid in whole or in part in shares of the Company’s common stock or
other Company common stock-based awards, including restricted shares, restricted
share units or other share awards, if and to the extent that shares are
available under a separate equity compensation plan of the Company and permitted
to be granted in connection

 

B-2

--------------------------------------------------------------------------------

with such incentive awards, in any case with an aggregate fair market value at
the time of payment not to exceed $3,000,000. If a Participant dies after the
end of a Plan Year but before receiving payment of any Award, the amount of such
Award shall be paid to a designated beneficiary or, if no beneficiary has been
designated, to the Participant’s estate, in the form of a lump sum payment in
cash as soon as practicable after the Award for the Plan Year has been
determined and certified in accordance with this Section 5. Except as set forth
in the preceding sentence or as otherwise determined by the Committee, as a
condition to the receipt of payment under an Award, a Participant must be
employed by the Company or a subsidiary at the time of such payment.
Notwithstanding the foregoing, the Committee may determine, by separate
agreement with any Participant or otherwise, that all or a portion of an Award
for a Plan Year shall be payable to the Participant upon the Participant’s
death, disability or termination of employment with the Company or a subsidiary,
or upon a change of control of the Company, during the Plan Year.

SECTION 6. Non-transferability.

No Award or rights under this Plan may be transferred or assigned other than by
will or by the laws of descent and distribution.

SECTION 7. Amendments and Termination.

The Board may terminate the Plan at any time and may amend it from time to time,
provided, however, that no termination or amendment of the Plan shall materially
and adversely affect the rights of a Participant or a beneficiary with respect
to a previously certified Award except with the written consent of such
Participant or beneficiary. Amendments to the Plan may be made without
shareholder approval except as required to satisfy Section 162(m) of the Code.

SECTION 8. General Provisions.

8.1. Nothing set forth in this Plan shall prevent the Board or the Committee
from adopting other or additional compensation arrangements. Neither the
adoption of the Plan or any Award hereunder shall confer upon any person any
right to continued employment.

8.2. No member of the Board or the Committee, nor any officer or employee of the
Company acting on behalf of the Board or the Committee, shall be personally
liable for any action, determination or interpretation taken or made with
respect to the Plan, and all members of the Board or the Committee and all
officers or employees of the Company acting on their behalf shall, to the extent
permitted by law, be fully indemnified and protected by the Company in respect
of any such action, determination or interpretation.

8.3. The Committee is authorized to make adjustments in the terms and conditions
of, and the criteria included in, the authorization of Awards and performance
goals in recognition of unusual or nonrecurring events, including stock splits,
stock dividends, reorganizations, mergers, consolidations, large, special and
non-recurring dividends, and acquisitions and dispositions of businesses and
assets, affecting the Company and its subsidiaries or any business unit thereof,
or the financial statements of the Company or any subsidiary, or in response to
changes in applicable laws, regulations, accounting principles, tax rates and
regulations or business conditions or in view of the Committee’s assessment of
the business strategy of the Company, any subsidiary or affiliate or business
unit thereof, performance of comparable organizations, economic and business
conditions, and any other circumstances deemed relevant; provided, however, that
no such adjustment shall be authorized or made if and to the extent that the
existence or exercise of such authority would cause an Award potentially
grantable hereunder to fail to qualify as “performance-based compensation” under
Section 162(m) of the Code.

8.4. The Company shall deduct from any payment in settlement of a Participant’s
Award or other payment to the Participant any Federal, state, or local
withholding or other tax or charge which the Company is then required to deduct
under applicable law with respect to the Award.

 

B-3

--------------------------------------------------------------------------------

8.5. The validity, construction, and effect of the Plan and any rules and
regulations or document hereunder shall be determined in accordance with the
laws (including those governing contracts) of New York, without giving effect to
principles of conflicts of laws.

SECTION 9. Effective Date; Shareholder Approval

The Plan as amended and restated shall become effective as of January 1, 2006,
subject to approval by the stockholders of the Company at the Company’s 2006
Annual Meeting of Stockholders. The Company currently intends that the Plan will
subsequently be submitted for reapproval of shareholders no later than the first
meeting of shareholders that occurs in the fifth year following the year in
which shareholders of the Company previously approved the Plan.

 

B-4