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                                                                    Exhibit 10.4


                           UNITED NATIONAL GROUP, LTD.
                              SHARE INCENTIVE PLAN

SECTION 1. PURPOSE; DEFINITIONS

            The purpose of the Plan is to give United National Group, Ltd., a
Cayman Islands exempted company formed with limited liability whose office is
located c/o Walkers SPV Limited, Walker House, P.O. Box 908GT, Grand Cayman,
Cayman Islands (the "Company"), and its Affiliates (as defined below) a
competitive advantage in attracting, retaining and motivating officers,
employees, consultants and non-employee directors, and to provide the Company
and its Affiliates with a stock plan providing incentives linked to the
financial results of the Company's businesses and increases in shareholder
value.

            For purposes of the Plan, the following terms are defined as set
forth below:

            "Affiliate" of a Person means a Person, directly or indirectly,
controlled by, controlling or under common control with such Person and with
respect to the Company, includes without limitation its Subsidiaries and its
Parent.

            "Award" means any award under this Plan of any Stock Option,
Restricted Stock, or Other Stock-Based Award.

            "Award Agreement" means a Restricted Stock Agreement or an Option
Agreement. An Award Agreement may include provisions included in an employment
or consulting agreement of the Company or any of its Affiliates.

            "Board" means the Board of Directors of the Company.

            "California Participant" means, in the case of individuals, any
Participant residing in California or working primarily in the California
offices of the Company or an Affiliate of the Company, or, in the case of an
entity, any Participant having its principal place of business in California.

            "Cause" means, unless otherwise provided in the Participant's
employment or consulting agreement with the Company or any of its Affiliates,
that (i) the Participant is charged with or has committed a felony or other
crime involving moral turpitude or conduct adverse to the interests of the
Company, (ii) the Participant commits fraud, embezzlement or other conduct
adverse to the interests of the Company or its Affiliates, (iii) the Participant
substantially fails to perform his duties or obligations to the Company or its
Affiliates, provided that he has been given notice and an opportunity to cure
not to exceed thirty (30) days under circumstances in which the Board
determines, in its sole discretion, that such failure to perform is in fact
curable, or (iv) the Participant violates Company policies or policies of its
Affiliates or materially breaches any representation made to the Company or its
Affiliates.
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            "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.

            "Committee" means (a) (i) before an IPO or date any class of common
equity securities of the Company are required to be registered under Section 12
of the Exchange Act (a "Registration Event"), a committee (or subcommittee) of
the Board that the Board may designate to administer or make decisions required
to be made under the Plan, and (ii) after a Registration Event, such committee
(or subcommittee) of the Board that the Board may designate to administer or
make decisions required to be made under the Plan, whose membership shall be
composed of not less than two Non-Employee Directors and, to the extent required
by Section 162(m) of the Code and any regulations thereunder, an "outside
director" as defined under Section 162(m) of the Code, each of whom shall be
appointed by and serve at the pleasure of the Board or (b) if at any time no
such committee of the Board is so designated by the Board, the Board.

            "Common Stock" means the Class A common shares, par value $0.0001
per share, of the Company having the rights, preferences and privileges set out
in the Company's Articles of Association, as amended from time to time.

            "Company" has the meaning set forth in the preamble hereto and any
successors by operation of law.

            "Disability" means permanent and total disability as defined in
Section 22(e)(3) of the Code. A Disability shall only be deemed to occur at the
time of the determination by the Committee of the Disability.

            "Employment" means, unless otherwise defined in an applicable Award
Agreement or employment or consulting agreement, employment with, or service as
a director or officer of, or as a consultant to, the Company or any of its
Affiliates.

            "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.

            "Exercise Price" has the meaning set forth in Section 5(a).

            "Fair Market Value" of the Common Stock means (unless otherwise
provided in the applicable Award Agreement), as of any given date, the closing
price on the applicable date of the Common Stock on the New York Stock Exchange,
Inc. or, if not listed on such exchange, on any other national securities
exchange on which the Common Stock is listed or, if not so listed, on The Nasdaq
Stock Market, Inc. and, if not so quoted, the average of the closing bid and ask
prices for the Common Stock in the over-the-counter market on which the Common
Stock is actively traded. If such sales prices are not so available or the
Common Stock is not actively traded, as determined by the Committee in its sole
discretion, the Fair Market Value of the Common Stock shall mean the fair value
as determined by the Committee in light of all circumstances, including
comparable recent bona fide sales of applicable or similar securities. For
purposes of the grant of any Stock Option, the applicable date shall be the date
on which the Stock Option is granted.

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            "Family Member" means, solely to the extent provided for in Rule 701
under the Securities Act or, following the filing of a Securities Act Form S-8
with respect to the Plan, solely to the extent provided for in Securities Act
Form S-8, any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the employee's household (other than
a tenant or employee), a trust in which these persons have more than fifty
percent (50%) of the beneficial interest, a foundation in which these persons
(or the employee) control the management of assets, and any other entity in
which these persons (or the employee) own more than fifty percent (50%) of the
voting interests or as otherwise defined in Rule 701 under the Securities Act or
Securities Act Form S-8, as applicable.

            "FPC" means Fox Paine & Company, LLC, its subsidiaries and related
entities (including without limitation Fox Paine Capital, LLC, Fox Paine Capital
Fund, L.P., Fox Paine Capital Fund II GP, LLC, Fox Paine Capital Fund II L.P.,
Fox Paine Capital Fund II International, L.P., Fox Paine Capital Fund II
Co-Investors International, L.P.), and all Persons that are partners or
shareholders or members in any such related entities) and all partners, members,
directors, employees, shareholders and agents of any of the foregoing.

            "Incentive Stock Option" means a Stock Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code.

            "IPO" means the consummation of a registered underwritten public
offering or offerings of Common Stock or other equity security of the Company
after the date hereof with gross proceeds to the Company in the aggregate of at
least $60 million.

            "Management Shareholders' Agreement" means the Management
Shareholders' Agreement, dated as of September 5, 2003, among the Company the
FPC Stockholder and the Management Investors, as defined therein, as amended
from time to time.

            "Non-Employee Director" means a member of the Board who qualifies as
a Non-Employee Director (as defined in Rule 16b-3(b)(3) as promulgated by the
SEC under the Exchange Act, or any successor definition adopted by the SEC).

            "Nonstatutory Stock Option" means a Stock Option not intended to
qualify as an Incentive Stock Option.

            "Option Agreement" means an agreement setting forth the terms and
conditions of a Stock Option Award.

            "Other Stock-Based Award" means any Award granted under Section 7.

            "Parent" means any parent corporation of the Company within the
meaning of Section 424(e) of the Code.

            "Participant" has the meaning set forth in Section 4.

            "Performance Criteria" has the meaning set forth in Exhibit A.

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            "Performance Goal" means the objective performance goals established
by the Committee and, if desirable for purposes of Section 162(m) of the Code,
based on one or more Performance Criteria.

            "Performance Period" means three consecutive fiscal years of the
Company, or such shorter period as determined by the Committee in its
discretion.

            "Person" means an individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization, government
(or any department or agency thereof) or other entity.

            "Plan" means the U.N. Holdings, Inc. Stock Incentive Plan, as set
forth herein and as hereinafter amended from time to time.

            "Plan Shares" has the meaning set forth in Section 10(a).

            "Restricted Stock" means an Award of Common Stock granted under
Section 6.

            "Restricted Stock Purchase Agreement" means an agreement setting
forth the terms and conditions of an Award of Restricted Stock.

            "Retirement" means a Participant's Termination of Employment without
Cause at or after age fifty-five (55).

            "SEC" means the Securities and Exchange Commission or any successor
agency.

            "Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor thereto.

            "Stock Award" means an Award consisting of either shares of Common
Stock or a right to receive shares of Common Stock in the future, each pursuant
to Section 6 of the Plan.

            "Stock Option" means any Nonstatutory Stock Option or Incentive
Stock Option.

            "Subsidiary" means any subsidiary corporation of the Company within
the meaning of Section 424(f) of the Code.

            "Termination of Employment" means (i) a termination of service (for
reasons other than a military or personal leave of absence granted by the
Company) of a Participant from the Company or an Affiliate, unless the
Participant thereupon becomes employed by the Company or another affiliate.

            In addition, certain other terms used herein have definitions
otherwise ascribed to them herein.

SECTION 2. ADMINISTRATION

            This Plan shall be administered by the Committee.

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            Among other things, the Committee shall have the authority, subject
to the terms of the Plan, to:

            (a) select the Participants to whom Awards may from time to time be
granted and designate the Affiliates of the Company for purposes of the Plan;

            (b) determine whether and to what extent Awards are to be granted
hereunder;

            (c) determine the number of shares of Common Stock to be covered by
each Award granted hereunder;

            (d) determine the terms and conditions of any Award granted
hereunder (including, but not limited to, the Exercise Price (subject to Section
5(a)), any vesting conditions, restrictions or limitations (which may be related
to the performance of the Participant, the Company or any of its Affiliates))
and any acceleration of vesting or waiver or cancellation regarding any Award
and the shares of Common Stock relating thereto, based on such factors as the
Committee shall determine;

            (e) subject to Section 8 hereof, modify, amend or adjust the terms
and conditions of any Award, at any time or from time to time; provided,
however, that the Committee may not, without shareholder approval, either (1)
reduce the Exercise Price of an outstanding Stock Option or Other Stock Based
Award or (2) simultaneously cancel Stock Options for which the Exercise Price
exceeds the then current Fair Market Value of the underlying Common Stock and
grant a new Award with an Exercise Price equal to the then current Fair Market
Value of the underlying Common Stock.

            (f) determine to what extent and under what circumstances Common
Stock and other amounts payable with respect to an Award shall be deferred;

            (g) adopt, alter and repeal such administrative rules, guidelines
and practices governing the Plan as it shall from time to time deem advisable;

            (h) interpret the terms and provisions of the Plan and any Award
issued under the Plan (and any agreement, including, but not limited to, an
Award Agreement relating thereto);

            (i) adopt any sub-plans applicable to residents of any specified
jurisdiction as it deems necessary or appropriate in order to comply with or
take advantage of any tax laws or other laws applicable to the Company, its
Affiliates, or to Participants or to otherwise facilitate the administration of
the Plan, which sub-plans may include additional restrictions or conditions
applicable to Awards or Plan Shares acquired upon exercise of Awards; and

            (j) otherwise supervise and administer of the Plan.

            The Committee may act only by a majority of its members then serving
thereon, except that, if permissible under applicable law, the Committee may
designate or allocate all or any portion of its responsibilities and powers to
any one or more of their number or any officer of the Company. Any such
designation or allocation may be revoked by the Committee at any time.

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            Any dispute or disagreement which may arise under, or as a result
of, or in any way relate to, the interpretation, construction or application of
the Plan or an Award (or related Award Agreement) granted hereunder shall be
determined and resolved by the Committee. Any determination or resolution made
by the Committee pursuant to the provisions of the Plan with respect to the
Plan, any Award or Award Agreement shall be made in the sole discretion of the
Committee and, with respect to an Award, at the time of the grant of the Award
or, unless in contravention of any express term of the Plan or the Award
Agreement, at any time thereafter. Except as otherwise set forth herein or in
any Award Agreement, all decisions made by the Committee in accordance with the
terms of this Plan or the Award Agreements shall be final, conclusive and
binding on all Persons, including the Company, its Affiliates and the
Participants.

            To the maximum extent permitted by applicable law and the Articles
of Association of the Company and to the extent not covered by insurance
directly insuring such person, each officer and member or former member of the
Committee or the Board shall be indemnified and held harmless by the Company
against any cost or expense (including reasonable fees and expenses of counsel
reasonably acceptable to the Committee) or liability (including any sum paid in
settlement of a claim with the approval of the Committee), and advanced amounts
necessary to pay the foregoing at the earliest time and to the fullest extent
permitted, arising out of any act or omission to act in connection with the
administration of this Plan, except to the extent arising out of such officer's,
member's or former member's own fraud or bad faith. Such indemnification shall
be in addition to any rights of indemnification the employees, officers,
directors or members or former officers, directors or members may have under
applicable law or under the Articles of Association of the Company or any
Affiliate. Notwithstanding anything else herein, this indemnification will not
apply to the actions or determinations made by an individual with regard to
Awards granted to him or her under this Plan.

SECTION 3. COMMON STOCK SUBJECT TO PLAN

            The total number of shares of Common Stock reserved and available
for grant under the Plan shall be 2,000,000 (subject to any increase or decrease
pursuant to this Section 3). Shares subject to an Award under the Plan may be
authorized and unissued shares of Common Stock or Common Stock held in or
acquired for the treasury of the Company or both.

            If any shares of Restricted Stock or Other Stock-Based Awards are
cancelled or if any Stock Option terminates without being exercised, the shares
subject to such Awards shall again be available for distribution in connection
with Awards under the Plan. In addition, in determining the number of shares of
Common Stock available for Awards other than Incentive Stock Options, if Common
Stock has been delivered or exchanged by a Participant as full or partial
payment to the Company for payment of the exercise price, or for payment of
withholding taxes, or if the number shares of Common Stock otherwise deliverable
has been reduced for payment of the exercise price or for payment of withholding
taxes, the number of shares of Common Stock exchanged or reduced as payment in
connection with the exercise or for withholding shall again be available for
purposes of Awards other than Incentive Stock Options under this Plan.

            The total number of shares of Common Stock subject to any Stock
Option which may be granted under this Plan to each Participant on and after a
Registration Event shall not exceed

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800,000 shares (subject to any increase or decrease pursuant to this Section 3)
during each fiscal year of the Company. The individual Participant limitations
set forth in this Section 3 shall be cumulative; that is, to the extent that
shares of Common Stock for which Options are permitted to be granted to a
Participant pursuant to this Section during a fiscal year of the Company are not
covered by a grant of an Option in the Company's fiscal year, such shares of
Common Stock available for grants to such Participant automatically increase in
the subsequent fiscal years during the term of the Plan until used.

            No individual may be granted in any fiscal year of the Company Other
Stock-Based Awards that are contingent upon the attainment of Performance Goals
covering more than 400,000 Shares (as such number may be adjusted from time to
time).

            In the event any merger, reorganization, consolidation,
recapitalization, spin-off, stock dividend, share split, reverse share split,
extraordinary distribution with respect to the Common Stock, any sale or
transfer of all or part of the Company's assets or business or other change in
corporate structure affecting the Common Stock occurs or is proposed, the
Committee or the Board may make such substitution or adjustment in the aggregate
number and kind of shares or other property reserved for issuance under the Plan
or any limitations under the Plan, in the number, kind and Exercise Price (as
defined herein) of shares or other property subject to outstanding Stock
Options, in the number and kind of shares or other property subject to
Restricted Stock Awards or other Awards, and/or such other substitution or
adjustments as the Committee or the Board may determine to be fair and
appropriate in its sole discretion, provided that, in no case shall such
determination adversely affect in any material respect the rights of a
Participant hereunder or under any Award Agreement or the value of the Awards
then held thereunder. In connection with any event described in this paragraph,
the Committee may provide, in its sole discretion, for the cancellation of any
outstanding Stock Option and payment in cash or other property in exchange
therefor.

            In the event of a merger or consolidation in which the Company is
not the surviving entity or in the event of any transaction that results in the
acquisition of substantially all of the Company's outstanding Common Stock by a
single person or entity or by a group of persons and/or entities acting in
concert, or in the event of the sale or transfer of all or substantially all of
the Company's assets (all of the foregoing being referred to as "Acquisition
Events"), then the Committee may, in its sole discretion, terminate all
outstanding Stock Options, effective as of the date of the Acquisition Event, by
delivering notice of termination to each Participant at least 20 days prior to
the date of consummation of the Acquisition Event, in which case during the
period from the date on which such notice of termination is delivered to the
consummation of the Acquisition Event, each such Participant shall have the
right to exercise in full all of his or her Stock Options that are then
outstanding (without regard to any limitations on exercisability otherwise
contained in the Stock Option agreements), but any such exercise shall be
contingent upon and subject to the occurrence of the Acquisition Event, and,
provided that, if the Acquisition Event does not take place within a specified
period after giving such notice for any reason whatsoever, the notice and
exercise pursuant thereto shall be null and void.

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SECTION 4. PARTICIPANTS

            The following persons shall be "Participants" eligible to be granted
Awards under the Plan: (i) Persons who are officers, directors, employees or
consultants of the Company and/or any of its Affiliates; (ii) Persons who at the
time of grant may be performing (or subject to being required to perform)
services for the Company or any of its Affiliates (including, without
limitation, officers, directors, employees, Affiliates and consultants of FPC);
and (iii) Non-Employee Directors of the Company and its Affiliates who are
responsible for or contribute to the management, growth and profitability of the
business of the Company and its Affiliates. However, Incentive Stock Options may
be granted only to employees of the Company its Subsidiaries or its Parent.

SECTION 5. STOCK OPTIONS

            The Committee shall have the authority to grant to Participants
Stock Options. Stock Options shall be evidenced by Option Agreements, which
shall include such terms and provisions as the Committee may determine from time
to time. The grant of a Stock Option shall occur on the date the Committee by
resolution selects an individual to receive a grant of a Stock Option,
determines the number of shares of Common Stock to be subject to such Stock
Option to be granted to such individual and specifies the terms and provisions
of the Stock Option, or on such other date as the Committee may determine. The
Company shall notify a Participant of any grant of a Stock Option, and a written
Option Agreement shall be duly executed and delivered by the Company to the
Participant. Such Option Agreement shall become effective upon execution and
delivery by the Participant to the Company.

            Stock Options shall be subject to the following terms and
conditions, and shall contain such additional terms and conditions as the
Committee shall deem desirable:

            (a) Exercise Price. The price per share of Common Stock purchasable
under a Stock Option shall be such price as determined by the Committee and set
forth in the Option Agreement (the "Exercise Price"); provided that the Exercise
Price shall not be less than the nominal or par value of the Common Stock, and:

                  (i) in the case of an Incentive Stock Option

                        (A) granted to an employee of the Company, its
Subsidiaries or its Parent who, at the time of the grant of such Incentive Stock
Option, owns shares representing more than ten percent (10%) of the voting power
of all share classes of the Company or its Subsidiaries or its Parent (a "Ten
Percent Shareholder"), the per share Exercise Price shall be no less than one
hundred ten percent (110%) of the Fair Market Value per share on the date of
grant; and

                        (B) granted to any employee of the Company, its
Subsidiaries or its Parent other than a Ten Percent Shareholder, the per share
Exercise Price shall be no less than one hundred percent (100%) of the Fair
Market Value per share on the date of grant.

                  (ii) in the case of a Nonstatutory Stock Option, granted to a
California Participant

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                        (A) who is a Ten Percent Shareholder, the per share
Exercise Price shall be no less than one hundred ten percent (110%) of the Fair
Market Value per share on the date of the grant; and

                        (B) who is not a Ten Percent Shareholder, the per share
Exercise Price shall be no less than eighty-five percent (85%) of the Fair
Market Value per share on the date of grant.

                  (iii) in the case of any other Stock Option granted, the per
share Exercise Price as determined by the Committee.

      (b) Option Term. The term of each Stock Option shall be fixed by the
Committee provided, however, that no Stock Option shall be exercisable more than
ten (10) years after the date such Stock Option is granted. Absent any such term
being fixed by the Committee, pursuant to an Option Agreement or otherwise, such
term shall be ten (10) years; provided, however, that the term of an Incentive
Stock Option granted to a Ten Percent Shareholder shall not exceed five (5)
years.

      (c) Exercisability. Except as otherwise provided herein, Stock Options
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee; provided that Stock Options
granted to California Participants (other than an officer, director, manager or
consultant) shall become exercisable at a rate of no less than twenty percent
(20%) per year over five (5) years from the date the Stock Options are granted.
If the Committee provides that any Stock Option is exercisable only in
installments, the Committee may at any time waive such installment exercise
provisions, in whole or in part, based on such factors as the Committee may
determine. In addition, the Committee may at any time accelerate the
exercisability of any Stock Option.

      (d) Method of Exercise. Subject to the provisions of this Section 5,
vested Stock Options may be exercised, in whole or in part, at any time during
the option term by giving written notice of exercise to the Company specifying
the number of shares of Common Stock subject to the Stock Option to be
purchased.

      Such notice shall be accompanied by payment in full of the Exercise Price
per share by certified or bank check or such other instrument or method of
payment as the Committee may accept. Unless determined otherwise by the
Committee at the time of grant and set forth in the Option Agreement, payment,
in full or in part, may also be made in the form of fully vested Common Stock
(other than Restricted Stock) already owned by the Participant (for at least six
months or such other period necessary to avoid a charge, for accounting
purposes, against the Company's earnings as reported in the Company's financial
statements if acquired upon exercise of a Stock Option or received upon the
lapse of restrictions on an Award of Restricted Stock) of the same class as the
Common Stock subject to the Stock Option (based on the Fair Market Value of the
Common Stock on the date the Stock Option is exercised) or, if the Common Stock,
is traded on a national securities exchange, The Nasdaq Stock Market, Inc. or
quoted on a national quotation system sponsored by the National Association of
Securities Dealers, and the Committee authorizes, to the extent permitted by
law, through a procedure whereby the

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Participant delivers irrevocable instructions to a broker reasonably acceptable
to the Committee to deliver promptly to the Company an amount equal to the
purchase price.

      No shares of Common Stock shall be issued until full payment therefore has
been made. Except as otherwise provided in the Management Shareholders'
Agreement, if the Participant is a party to the Management Shareholders'
Agreement, and subject to Sections 10(b), 10(e) and 10(h) hereof and the
applicable Option Agreement, a Participant shall have all of the rights of a
shareholder of the Company holding the class or series of Common Stock that is
subject to such Stock Option (including, if applicable, the right to vote the
shares and the right to receive dividends and distributions), when the
Participant has given written notice of exercise, has paid in full for such
shares and, if requested, has given the representations referred to in Section
10(b) or as may otherwise be required in accordance with Sections 10(e) and
10(h).

      (e) Nontransferability of Stock Options. No Stock Option shall be
transferable by the Participant other than (i) by will or by the laws of descent
and distribution, or (ii) as otherwise expressly permitted under the applicable
Option Agreement, to a Family Member, subject to the restrictions in the
Management Shareholders' Agreement. All Stock Options granted to California
Participants shall not be transferable by such Participants except as permitted
by the California Code of Regulations Section 260.140.41(d). All Stock Options
granted to an individual shall be exercisable, subject to the terms of the Plan,
during the Participant's lifetime, only by the Participant or any Person to whom
such Stock Option is transferred pursuant to the preceding sentence, including
such Participant's guardian, legal representative and other transferee. The term
"Participant" includes the estate of the Participant or the legal representative
of the Participant named in the Option Agreement and any Person to whom an
Option is otherwise transferred in accordance with this Section 5(e), by will or
the laws of descent and distribution; provided, however, that references herein
to Employment of a Participant or termination of Employment of a Participant
shall continue to refer to the Employment or termination of Employment of the
applicable grantee of an Award hereunder.

      (f) Termination of Employment.

            (i) Termination for Any Reason (other than Cause). Except as
otherwise determined by the Committee and expressly provided in the applicable
Option Agreement or applicable employment or consulting agreement, upon the
termination of the Participant's Employment for any reason (other than Cause),
including death or Disability, vesting ceases, the term of unvested stock
options lapses and vested and unvested options will become unexercisable, except
that such Participant shall have ninety (90) days to exercise the portion of the
Participant's Stock Option that is vested on the date of the Participant's
termination of Employment. In no event shall the Committee grant a Stock Option
to a California Participant that provides the California Participant with less
than thirty (30) days after the date of such California Participant's
termination of Employment if such termination was caused by other than death,
Disability or Cause to exercise the Stock Option with respect to any vested
shares. Furthermore, in no event shall the Committee grant a Stock Option to a
California Participant that provides the California Participant with less than
six months after the California Participant's termination due to death or
Disability to exercise the Stock Option with respect to any vested shares.
Notwithstanding anything contained herein to the contrary, the Participant shall
not be permitted to exercise any Stock Option at a time beyond the initial
option term.

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            (ii) Termination for Cause. All outstanding and unexercised Stock
Options, whether vested or unvested, as of the time the Participant is notified
that his or her Employment is terminated for Cause or at the time the
Participant voluntarily terminates employment within ninety (90) days after the
occurrence of an event that would be grounds for a termination for Cause, will
be cancelled immediately.

SECTION 6. RESTRICTED STOCK

      The Committee shall determine the Participants to whom and the time or
times at which grants of Restricted Stock will be awarded, the number of shares
to be awarded to any Participant, the purchase price, the conditions for
vesting, the time or times within which such Awards may be subject to
cancellation, repurchase and restrictions on transfer and any other terms and
conditions of the Awards (including provisions (i) relating to placing legends
on certificates representing shares of Restricted Stock, (ii) permitting the
Company to require that shares of Restricted Stock be held in custody by the
Company with a share transfer certificate from the owner thereof until
restrictions lapse and (iii) relating to any rights to repurchase Restricted
Stock on the part of the Company), in addition to those contained in the
Management Shareholders' Agreement, if the Participant is a party to the
Management Shareholders' Agreement. Each Participant receiving shares of
Restricted Stock shall be issued a stock certificate in respect of such shares
of Restricted Stock, unless the Committee elects to use another system, such as
book entries by the transfer agent, as evidencing ownership of shares of
Restricted Stock. Unless otherwise specified in the Restricted Stock Agreement,
upon a Participant's termination for any reason during the relevant restriction
period, all unvested Restricted Stock will be forfeited to the Company, without
compensation.

      Any right of the Company to repurchase shares of Restricted Stock from a
California Participant upon termination of Employment shall be at a repurchase
price that is at least equal to the lesser of (x) the Fair Market Value of such
stock on the date of termination of Employment (provided that such repurchase
right shall terminate as of the Registration Event) or (y) the original purchase
price, provided that in the case of (y) such repurchase right lapses at a rate
of no less than twenty percent (20%) of the shares per year over five years from
the date the Restricted Stock is granted; and provided that in the case of both
(x) and (y) such repurchase right is exercised within ninety (90) days of
termination of Employment. Furthermore, in addition to the foregoing
restrictions, Restricted Stock held by an officer, director or consultant of the
Company or one of its Affiliate may be subject to additional or greater
restrictions and any restrictions set forth in the Company's Articles of
Association. The terms and conditions of Restricted Stock Awards shall be set
forth in a Restricted Stock Agreement, which shall include such terms and
provisions as the Committee may determine from time to time, and which shall be
duly executed and delivered by the Company to the Participant and become
effective upon execution and delivery by the Participant to the Company. Except
as provided in this Section 6, the Restricted Stock Agreement, the Management
Shareholders' Agreement and any other relevant agreements, the Participant shall
have, with respect to the shares of Restricted Stock, all of the rights of a
shareholder of the Company holding the class or series of Common Stock that is
the subject of the Restricted Stock Award, including, if applicable, the right
to vote the shares and, subject to the following sentence, the right to receive
any cash dividends or distributions (but, subject to the third paragraph of
Section 3, not the right to receive non-cash dividends or distributions). If so
determined by the Committee in the applicable Restricted Stock Agreement,

                                       11
<PAGE>
cash dividends and distributions on the class or series of Common Stock that is
the subject of the Restricted Stock Award shall be automatically deferred and
reinvested in additional Restricted Stock, held subject to the vesting of the
underlying Restricted Stock, or held subject to meeting conditions applicable
only to dividends and distributions.

SECTION 7. OTHER STOCK-BASED AWARDS

      The Committee is authorized to grant to Participants Other Stock-Based
Awards that are payable in, valued in whole or in part by reference to, or
otherwise based on or related to shares of Common Stock, including but not
limited to, shares of Common Stock awarded purely as a bonus and not subject to
any restrictions or conditions, shares of Common Stock in payment of the amounts
due under an incentive or performance plan sponsored or maintained by the
Company or a Subsidiary, stock appreciation rights (either separately or in
tandem with Options), stock equivalent units, and Awards valued by reference to
book value of shares of Common Stock.

      Subject to the provisions of this Plan, the Committee shall have authority
to determine the persons to whom and the time or times at which such Awards
shall be made, the number of shares of Common Stock to be awarded pursuant to or
referenced by such Awards, and all other conditions of the Awards. Grants of
Other Stock-Based Awards may be subject to such conditions, restrictions and
contingencies as the Committee may determine which may include, but are not
limited to, continuous service with the Company or an Affiliate and/or the
achievement of Performance Goals. Except as provided in the last sentence of
this paragraph, the criteria that may be used by the Committee in granting Other
Stock-Based Awards contingent on Performance Goals shall consist of the
attainment of one or more of the Performance Goals. The Committee may select one
or more Performance Goals for measuring performance and the measuring may be
stated in absolute terms or relative to comparable companies. The measurements
used in Performance Goals set under the Plan shall be determined in accordance
with Generally Accepted Accounting Principles ("GAAP"), except, to the extent
that any objective Performance Goals are used, if any measurements require
deviation from GAAP, such deviation shall be at the discretion of the Committee
at the time the Performance Goals are set or at such later time to the extent
permitted under Section 162(m) of the Code. Other Performance Goals may be used
to the extent such goals satisfy Section 162(m) of the Code or the Other-Stock
Based Award is not intended to satisfy the requirements of Section 162(m) of the
Code.

      Other Stock-Based Awards made pursuant to this Section 7 are subject to
the following terms and conditions:

      (a) Dividends. Unless otherwise determined by the Committee at the time of
Award, subject to the provisions of the Award agreement and this Plan, the
recipient of an Award under this Section 7 shall be entitled to receive,
currently or on a deferred basis, dividends or dividend equivalents with respect
to the number of shares of Common Stock covered by the Award, as determined at
the time of the Award by the Committee, in its sole discretion.

      (b) Vesting. Any Award under this Section 7 and any Common Stock covered
by any such Award shall vest or be forfeited to the extent so provided in the
Award agreement, as determined by the Committee, in its sole discretion.

                                       12
<PAGE>
      (c) Waiver of Limitation. In the event of the Participant's Retirement,
Disability or death, or in cases of special circumstances, the Committee may, in
its sole discretion, waive in whole or in part any or all of the limitations
imposed hereunder (if any) with respect to any or all of an Award under this
Article.

      (d) Purchase Price. Common Stock issued on a bonus basis under this
Section 7 may be issued for no cash consideration; Common Stock purchased
pursuant to a purchase right awarded under this Section 7 shall be priced as
determined by the Committee.

      (e) Committee Certification. At the expiration of the Performance Period,
the Committee shall determine and certify in writing the extent to which the
Performance Goals have been achieved.

SECTION 8. TERM, AMENDMENT AND TERMINATION

      This Plan will expire on September 5, 2013, ten years from its adoption by
the Board. Awards outstanding as of such date shall not be affected or impaired
by the expiration of the Plan and shall be subject to the terms of the Plan.

      The Board or the Committee may at any time amend, suspend, or terminate
the Plan, prospectively or retroactively; provided, however, that, unless
otherwise required by law or specifically provided herein, no amendment,
suspension or termination shall be made that is adverse to the rights of a
Participant under an Award theretofore granted without such Participant's
consent; provided, further, without the approval of the shareholders of the
Company in accordance with the laws of the State of Delaware, to the extent
required by the applicable provisions of Rule 16b-3 or Section 162(m) of the
Code or the rules of any exchange or system on which the Common Stock is listed
or traded, or, with regard to Incentive Stock Options, Section 422 of the Code,
no amendment may be made which would (i) increase the aggregate number of shares
of Common Stock that may be issued under this Plan or the maximum individual
Participant limitations under Section 3; (ii) change the classification of
Participants eligible to receive Awards under this Plan; (iii) decrease the
minimum Exercise Price of any Stock Option; (iv) extend the maximum Stock Option
period or (v) require shareholder approval in order for the Plan to continue to
comply with the applicable provisions of Rule 16b-3 or Section 162(m) of the
Code, or, with regard to Incentive Stock Options, Section 422 of the Code.

      The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but no such amendment shall be made that is
adverse to the rights of the Participant thereunder without the Participant's
consent.

SECTION 9. UNFUNDED STATUS OF PLAN

      It is presently intended that the Plan constitute an "unfunded" plan for
incentive and deferred compensation. The Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Common Stock or make payments; provided, however, that unless the
Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the Plan.

                                       13
<PAGE>
SECTION 10. GENERAL PROVISIONS

      (a) Awards and Certificates. Shares of Restricted Stock and shares of
Common Stock issuable upon the exercise of a Stock Option (together, "Plan
Shares") shall be evidenced in such manner as the Committee may deem
appropriate, including book entry registration or issuance of one or more stock
certificates. Any certificate issued in respect of Plan Shares shall be
registered in the name of such Participant and shall bear appropriate legends
referring to the terms, conditions, and restrictions applicable to such Award,
substantially in the following form:

            "The securities represented by this certificate have not been
            registered under the Securities Act of 1933, as amended, or under
            the securities laws of any state and may not be transferred, sold or
            otherwise disposed of except while such a registration is in effect
            or pursuant to an exemption from registration under said Act and
            applicable state securities laws."

            "The securities represented by this certificate are subject to the
            terms and conditions set forth in a Management Shareholders'
            Agreement, dated as of September 5, 2003, as amended from time to
            time, copies of which may be obtained from the issuer or from the
            holder of this security. No transfer of such securities will be made
            on the books of the issuer unless accompanied by evidence of
            compliance with the terms of such agreement."

      Such Plan Shares may bear other legends to the extent the Committee or the
Board determines it to be necessary or appropriate, including any required by
the Management Shareholders' Agreement. If and when all restrictions expire
without a prior cancellation of the Plan Shares theretofore subject to such
restrictions, upon surrender of legended certificates representing such shares
new certificates for such shares shall be delivered to the Participant without
the second legend listed above.

      (b) Representations and Warranties. The Committee may require each Person
purchasing or receiving Plan Shares to (i) represent to and agree with the
Company in writing that such Person is acquiring the shares without a view to
the distribution thereof and (ii) make any other representations and warranties
that the Committee deems appropriate.

      (c) Additional Compensation. Nothing contained in the Plan shall prevent
the Company or any of its Affiliates from adopting other or additional
compensation arrangements for its employees.

      (d) No Right of Employment. Adoption of the Plan or grant of any Award
shall not confer upon any employee or any other individual any right to
continued Employment, nor shall it interfere in any way with the right of the
Company or any of its Affiliates to terminate the Employment of any eligible
Participant at any time.

      (e) Withholding Taxes. No later than the date as of which an amount first
becomes includible in the gross income of a Participant for income tax purposes
or subject to Federal Insurance Contributions Act withholdings with respect to
any Award, including, without limitation, upon exercise of any Stock Option,
under the Plan, such Participant shall pay to the Company or, if appropriate,
one of its Affiliates, or make arrangements satisfactory to the

                                       14
<PAGE>
Committee regarding the payment of, any United States federal, state or local or
foreign taxes of any kind required by law to be withheld with respect to such
amount. If approved by the Committee, minimum required statutory withholding
obligations may be settled with Common Stock, including Common Stock that is
part of the Award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional on such payment
or arrangements, and the Company and its Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
otherwise due to the Participant. The Committee may establish such procedures as
it deems appropriate, including making irrevocable elections, for the settlement
of withholding obligations with Common Stock.

      (f) Beneficiaries. The Committee shall establish such procedures as it
deems appropriate for a Participant to designate a beneficiary to whom any
amounts payable in the event of the Participant's death are to be paid or by
whom any rights of the Participant, after the Participant's death, may be
exercised.

      (g) Governing Law. The Plan and all Awards made and actions taken
thereunder shall be governed by and construed and enforced in accordance with
the laws of the State of Delaware without regard to the principles of conflicts
of law thereof.

      (h) Compliance with Laws. If any law or any regulation of any governmental
body, commission or agency having jurisdiction shall require the Company or a
Participant seeking to exercise Stock Options to take any action with respect to
the Plan Shares to be issued upon the exercise of Stock Options then the date
upon which the Company shall issue or cause to be issued the Plan Shares or the
rights associated therewith shall be postponed until full compliance (as
determined by the Committee in its sole discretion) has been made with all such
requirements of law or regulation; provided, that the Company shall use its
reasonable efforts to take all necessary action to comply with such requirements
of law or regulation. Moreover, in the event that the Company shall determine
that, in compliance with the Securities Act or other applicable statutes or
regulations (including state "Blue Sky" or other securities laws), it is
necessary to register any of the Plan Shares with respect to which an exercise
of a Stock Option has been made, or to qualify any such Plan Shares (or the
Company) for exemption from any of the requirements of the Securities Act or any
other applicable statute or regulation, no Stock Options may be exercised and no
Plan Shares shall be issued to the exercising Participant until the required
action has been completed; provided, that the Company shall use its reasonable
efforts to take all necessary action to comply with such requirements of law or
regulation. Notwithstanding anything to the contrary contained herein, neither
the Board nor the members of the Committee owes a fiduciary duty to any
Participant in his or her capacity as such.

      (i) Fractional Shares. No fractional shares shall be issued under the Plan
and no cash settlements shall be made with respect to fractional shares
eliminated by rounding.

      (j) Shareholder Approval. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months before or after the date
the Plan is adopted. Such shareholder approval shall be obtained in the degree
and manner required under applicable state and federal or foreign law and the
rules of any stock exchange upon which the Company's common shares are listed,
quoted or actively traded.

                                       15
<PAGE>
      (k) Information to Participants. The Company shall provide to each
California Participant, not less frequently than annually, copies of annual
financial statements. The Company shall also provide such statements to each
individual who acquires Common Stock pursuant to the Plan while such individual
owns such Common Stock. The Company shall not be required to provide such
statements to key employees whose duties in connection with the Company assure
their access to equivalent information.

      (l) Agreement. As a condition to the grant of any Award, if requested by
the Company and the lead underwriter of any IPO (the "Lead Underwriter"), a
Participant shall irrevocably agree not to sell, contract to sell, grant any
option to purchase, transfer the economic risk of ownership in, make any short
sale of, pledge or otherwise transfer or dispose of, any interest in any Common
Stock or any securities convertible into, derivative of, or exchangeable or
exercisable for, or any other rights to purchase or acquire Common Stock (except
Common Stock included in such IPO or acquired on the public market after such
offering) during such period of time following the effective date of a
registration statement of the Company filed under the Securities Act that the
Lead Underwriter shall specify (the "Lock-up Period"). The Participant shall
further agree to sign such documents as may be requested by the Lead Underwriter
to effect the foregoing and agree that the Company may impose stop-transfer
instructions with respect to Common Stock acquired pursuant to an Award until
the end of such Lock-up Period.

      (m) Management Shareholders' Agreement and Other Requirements.
Notwithstanding anything herein to the contrary, as a condition to the receipt
of Plan Shares, to the extent required by the Committee, the Participant shall
execute and deliver a shareholders' agreement or such other documentation which
shall set forth certain restrictions on transferability of the Plan Shares, a
right of first refusal of the Company with respect to Plan Shares, the right of
the Company to purchase Plan Shares and such other terms as the Board or
Committee shall from time to time establish. Such shareholders' agreement shall
apply to all Plan Shares acquired under the Plan. The Company may require, as a
condition of grant or exercise of any Award, the Participant to become a party
to any other existing shareholders' agreement.

      (n) California Provisions. Notwithstanding anything herein to the
contrary, the provisions in the Plan applicable to Awards granted to California
Participants shall apply only to the extent necessary to comply with Title 10 of
the California Code of Regulations at the time an Award is granted and shall not
apply if the Common Stock is an exempt security under Section 25100 of the
California Corporations Code.

                                       16
<PAGE>
                                   APPENDIX A

                              PERFORMANCE CRITERIA

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


      Performance Goals established for purposes of an Award of
Performance-Based Awards intended to comply with Section 162(m) of the Code
shall be based on one or more of the following performance criteria
("Performance Criteria"): (i) the attainment of certain target levels of, or a
specified percentage increase in, revenues, income before taxes and
extraordinary items, net income, operating income, earnings before income tax,
earnings before interest, taxes, depreciation and amortization or a combination
of any or all of the foregoing; (ii) the attainment of certain target levels of,
or a percentage increase in, after-tax or pre-tax profits including, without
limitation, that attributable to continuing and/or other operations; (iii) the
attainment of certain target levels of, or a specified increase in, operational
cash flow; (iv) the achievement of a certain level of, reduction of, or other
specified objectives with regard to limiting the level of increase in, all or a
portion of, the Company's bank debt or other long-term or short-term public or
private debt or other similar financial obligations of the Company, which may be
calculated net of such cash balances and/or other offsets and adjustments as may
be established by the Committee; (v) earnings per share or the attainment of a
specified percentage increase in earnings per share or earnings per share from
continuing operations; (vi) the attainment of certain target levels of, or a
specified increase in return on capital employed or return on invested capital;
(vii) the attainment of certain target levels of, or a percentage increase in,
after-tax or pre-tax return on stockholders' equity; (viii) the attainment of
certain target levels of, or a specified increase in, economic value added
targets based on a cash flow return on investment formula; (ix) the attainment
of certain target levels in the fair market value of the shares of the Company's
common stock; (x) the growth in the value of an investment in the Company's
common stock assuming the reinvestment of dividends; or (xi) the attainment of a
certain level of, reduction of, or other specified objectives with regard to
limiting the level in or increase in, all or a portion of controllable expenses
or costs or other expenses or costs. For purposes of item (i) above,
"extraordinary items" shall mean all items of gain, loss or expense for the
fiscal year determined to be extraordinary or unusual in nature or infrequent in
occurrence or related to a corporate transaction (including, without limitation,
a disposition or acquisition) or related to a change in accounting principle,
all as determined in accordance with standards established by Opinion No. 30 of
the Accounting Principles Board.

      In addition, such Performance Criteria may be based upon the attainment of
specified levels of Company (or subsidiary, division or other operational unit
of the Company) performance under one or more of the measures described above
relative to the performance of other corporations. To the extent permitted under
Section 162(m) of the Code, but only to the extent permitted under Section
162(m) of the Code (including, without limitation, compliance with any
requirements for stockholder approval), the Committee may: (i) designate
additional business criteria on which the Performance Criteria may be based or
(ii) adjust, modify or amend the aforementioned business criteria.

                                       17
<PAGE>
                                 AMENDMENT NO. 1
                           UNITED NATIONAL GROUP, LTD.
                              SHARE INCENTIVE PLAN

            This AMENDMENT No. 1 (the "Amendment") dated 25 September 2003
amends the terms and conditions of the United National Group, Ltd. Share
Incentive Plan dated 5 September 2003 (the "Plan").

            WHEREAS, by written resolution of the Directors of United National
Group, Ltd., an exempted company incorporated with limited liability under the
law of the Cayman Islands (the "Company"), dated 15 September 2003, the Plan was
unanimously approved by the Directors of the Company; and

            WHEREAS, the Board of Directors of the Company desire to effect the
revisions to the Plan set forth herein effective the date hereof.

            NOW, THEREFORE, the Plan is amended as follows:

      1.    The first sentence of Section 3 of the Plan is amended to read in
            its entirety as follows:

            "The total number of shares of Common Stock reserved and available
            for grant under the Plan shall be 2,500,000 (subject to any increase
            or decrease pursuant to this Section 3)."

      2.    The phrase "the laws of the State of Delaware" in Section 8 of the
            Plan is removed and replaced with the words "applicable law."