Exhibit 10.1


 


Consulting Agreement


 


This
Consulting Agreement (the “Agreement”) is entered into on this 17th day of
March, 2005, between Arch Capital Group Ltd. (the “Company”) and Robert
Clements (the “Executive”).


 


WHEREAS, the
Executive currently serves as the Chairman of the Board of Directors of the
Company and Chairman of the Board of Directors of Arch Capital Group (U.S.)
Inc., but he no longer wishes to serve the Company or Arch Capital Group (U.S.)
Inc. in those capacities; and


 


WHEREAS, the
Executive and the Company desire that the Executive provide consulting services
to the Company;


 


NOW,
THEREFORE, in consideration of the premises and agreements contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged by the parties hereto, it is hereby agreed as follows:


 


1.                                       The
Executive will cease to be a member of the Board of Directors of the Company
and the Board of Directors of Arch Capital Group (U.S.) Inc. on March 31,
2005.


 


2.                                       From
April 1, 2005 through December 31, 2009 (the “Consulting Term”), the
Executive shall make himself available to provide consulting services to the
Company, as reasonably requested by the Company, for up to 25 days per year
(or, in the case of calendar year 2005, a daily prorated portion thereof).  During the Consulting Term, the Executive
shall receive a retainer of $100,000 per calendar year, payable (except as set
forth below for 2005) in advance annually within ten days after the beginning
of the applicable calendar year (it being understood that the Company and the
Executive may mutually agree upon additional days during which the Executive
will provide consulting services to the Company and, in such case, the
Executive will be paid a daily prorated portion of the annual retainer amount
set forth above).  The retainer payable
for the period commencing on the first day of the Consulting Term and ending December 31,
2005 will be a daily prorated portion of the annual retainer, which payment
shall be made no later than ten days after the beginning of the Consulting
Term.  During the Consulting Term, the
Company will pay rent and utilities for office space occupied by the Executive
and will provide the Executive secretarial services, in each case, on a basis
consistent with those provided to him by the Company on the date hereof,
including the retention of his current assistant, to the extent she remains
available to do so, or a mutually agreeable substitute, who shall be
compensated in accordance with the Company’s compensation policies.  The Company shall reimburse the Executive for
all reasonable out-of-pocket expenses incurred by him in connection with his
provision of consulting services hereunder, upon presentation to the Company of
appropriate documentation.


 


3.                                       The
Executive shall, at the reasonable request of the Company, reasonably assist
and cooperate with the Company or its subsidiaries in the defense and/or
investigation of any third party claim or any investigation or proceeding,
whether actual or threatened, including, without limitation, participating as a
witness in any litigation, arbitration, hearing or other proceeding between the
Company or its subsidiaries and a third party or any government body.


 





















 


The Company shall reimburse the Executive for
all reasonable out-of-pocket expenses incurred by him in connection with such
assistance, including, without limitation, travel and lodging expenses, upon
presentation to the Company of appropriate documentation.


 


4.                                       The
Company and the Executive agree that any statements made by either of them, or
anyone acting on their behalf, with respect to matters discussed in the
attached press release shall be consistent with the press release.


 


5.                                       For
the avoidance of doubt, Sections 5 (Certain Additional Payments), 7 (Full
Settlement; Legal Expenses) and 8 (Confidential Information; Nonsolicitation of
Employees and Customers) of the Retention Agreement, dated January 4, 2002
between the Company, Arch Capital Group (U.S.) Inc. and the Executive, as
subsequently amended on April 10, 2003, shall continue in full force and
effect in accordance with their terms, and the first paragraph of Section 8
thereof shall apply to any confidential information obtained by the Executive
with respect to the Company and its subsidiaries in the course of his provision
of consulting services hereunder.


 


6.                                       Nothing
in this Agreement shall limit or otherwise affect such rights as the Executive
may have under any share option or warrant agreement with the Company.  Without limiting the generality of the
foregoing, neither this Agreement nor any action taken hereunder shall
accelerate any deadline to exercise any options or warrants now held by the
Executive or members of his immediate family.


 


7.                                       The
Company shall reimburse the Executive for his reasonable attorney fees incurred
in connection with entering into this Agreement.


 


8.                                       This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without reference to the principles of conflict of laws
thereof.


 


9.                                       This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.


 


10.                                 Each
of the paragraphs contained in this Agreement shall be enforceable
independently of every other paragraph in this Agreement, and the invalidity or
unenforceability of any paragraph shall not invalidate or render unenforceable
any other paragraph contained in this Agreement.


 


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The parties to
this Agreement have executed this Agreement on the day and year first written
above.


 


	
   

  	
  ARCH CAPITAL
  GROUP LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dawna
  Ferguson

  	
   

  
	
   

  	
  Name:

  	
  Dawna
  Ferguson

  
	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ROBERT
  CLEMENTS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Robert
  Clements

  	
   

  
						



 


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PRESS
RELEASE ATTACHMENT


 


(See Exhibit 99.1
to the Current Report on Form 8-K filed with the Securities Exchange
Commission by Arch Capital Group Ltd. on March 17, 2005.)