Exhibit 10.10.11


 


ARCH
CAPITAL GROUP LTD.


 


Restricted
Share Unit Agreement


 


THIS AGREEMENT, dated as of May 6, 2009,
between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Mark
Lyons (the “Employee”).


 


WHEREAS, the Employee has been granted the
following award under the Company’s 2007 Long Term Incentive and Share Award
Plan (the “Plan”);


 


NOW, THEREFORE, in consideration of the
premises and mutual covenants contained herein, the parties hereto agree as
follows.


 


1.             Award of Share
Units.  Pursuant to the provisions of the Plan, the terms of
which are incorporated herein by reference, the Employee is hereby awarded 7,600
Restricted Share Units (the “Award”), subject to the terms and conditions
herein set forth.  Capitalized terms used
herein and not defined shall have the meanings set forth in the Plan.  In the event of any conflict between this
Agreement and the Plan, the Plan shall control.


 


2.             Terms and
Conditions.  It is understood and agreed that the Award of
Restricted Share Units evidenced hereby is subject to the following terms and
conditions:


 


(a)           Vesting of Award.  Subject to Section 2(b) below and
the other terms and conditions of this Agreement, this Award shall become
vested in three equal annual installments on the first, second and third
anniversaries of the date hereof.  Unless
otherwise provided by the Company, all amounts receivable in connection with
any adjustments to the Shares under Section 4(c) of the Plan or Section 2(e) below
shall be subject to the vesting schedule in this Section 2(a).


 


(b)           Termination of
Service; Forfeiture of Unvested Share Units.


 


(i)        In the event the Employee ceases to be an employee of the Company
prior to the date the Restricted Share Units otherwise become vested due to his
or her death or Permanent Disability (as defined in the Company’s Incentive
Compensation Plan on the date hereof), the Restricted Share Units shall become
immediately vested in full upon such termination of employment.


 





















 


(ii)       In the event of termination of employment (other than by the
Company for Cause, as such term is defined in the Company’s Incentive
Compensation Plan on the date hereof) after the attainment of Retirement Age
(as defined in the Company’s Incentive Compensation Plan on the date hereof),
the Restricted Share Units shall continue to vest on the schedule set forth in Section 2(a) above
so long as the Employee does not engage in any activity in competition with any
activity of the Company or any of its Subsidiaries other than serving on the
board of directors (or similar governing body) of another company or as a
consultant for no more than 26 weeks per calendar year (“Competitive Activity”).  In the event the Employee engages in a
Competitive Activity, any unvested Restricted Share Units shall be forfeited by
the Employee and become the property of the Company.


 


(iii)      In the event the Employee ceases to be an employee of the Company
after a Change in Control (as defined below) due to termination (A) by the
Company not for Cause or (B) by the Employee for Good Reason (as defined
in the Employment Agreement, dated as of August 1, 2006, as amended, between
the Employee and Arch Insurance Group Inc.), in either case, on or before the
second anniversary of the occurrence of the Change in Control, the Restricted
Share Units, to the extent not already vested, shall become immediately vested
in full upon such termination of employment.


 


(iv)      If the Employee ceases to be an Employee of the Company for any
other reason prior to the date the Restricted Share Units become vested, the
unvested Restricted Share Units shall be forfeited by the Employee and become
the property of the Company; provided that, in the event of a Redundancy (as
defined below), the Committee, in its sole discretion, may, in accordance with
its authority under the Plan, determine that the Restricted Share Units, to the
extent not vested, shall become vested upon such termination of employment.


 


(v)       For purposes of this Agreement, service with any of the Company’s
Subsidiaries (as defined in the Plan) shall be considered to be service with
the Company.


 


(vi)      “Change in Control” shall mean:


 


(A)                  any person
(within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
Voting Securities representing 50% or more of the total voting power or value
of all the then outstanding Voting Securities; or


 


(B)                    the individuals
who, as of the date hereof, constitute the Board of Directors of the Company
(the “Board”) together with those who become directors subsequent to such date
and whose recommendation, election or nomination for election to the Board was
approved by a vote of at least a majority of 


 


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the
directors then still in office who either were directors as of such date or
whose recommendation, election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the members of the
Board; or


 


(C)                    the
consummation of a merger, consolidation, recapitalization, liquidation, sale or
disposition by the Company of all or substantially all of the Company’s assets,
or reorganization of the Company, other than any such transaction which would (x) result
in more than 50% of the total voting power and value represented by the voting
securities of the surviving entity outstanding immediately after such
transaction being beneficially owned by the former shareholders of the Company
and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or
(B) of this paragraph.


 


“Permitted
Persons” means (A) the Company; (B) any Related Party; (C) Warburg
Pincus or any of its subsidiaries or any investment funds managed or controlled
by Warburg Pincus or any of its subsidiaries; or (D) any group (as defined
in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.


 


“Related
Party” means (A) a majority-owned subsidiary of the Company; (B) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any majority-owned subsidiary of the Company; or (C) any
entity, 50% or more of the voting power of which is owned directly or
indirectly by the shareholders of the Company in substantially the same
proportion as their ownership of Voting Securities immediately prior to the
transaction.


 


“Voting Security” means any security of the Company
which carries the right to vote generally in the election of directors.


 


(vii)         “Redundancy” shall
mean termination of employment by the Company due to its need to reduce the
size of its workforce, including due to closure of a business or a particular
workplace or change in business process.  Whether a termination of employment
is due to a “redundancy” shall be determined by the Committee in its sole and 


 


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absolute
discretion, such determination being final and binding on all parties hereto
and all persons claiming through, in the name of or on behalf of such parties.


 


(c)             Distribution
of Shares.  At the time the Employee
ceases to be an employee of the Company for any reason prior to attaining
Retirement Age, the Company shall distribute to the Employee (or his or her
heirs in the event of the Employee’s death) a number of Shares equal to the
number of vested Restricted Share Units then held by the Employee.  In the event the Employee ceases to be an
employee of the Company after attaining Retirement Age, a number of Shares
equal to the number of vested Restricted Share Units held by the Employee will
be distributed by the Company to the Employee (or his or her heirs in the event
of the Employee’s death) at the later of (i) the time the Employee ceases
to be an employee of the Company, and (ii) the date the Restricted Share
Units are scheduled to vest pursuant to the schedule set forth in Section 2(a) above
(without regard to any acceleration of such vesting), so long as the Restricted
Share Units are not forfeited before such time as provided in Section 2(b).


 


(d)           Rights and
Restrictions.  The Restricted Share Units shall not be
transferable, other than pursuant to will or the laws of descent and
distribution.  Prior to vesting of the
Restricted Share Units and delivery of the Shares to the Employee following his
termination of employment, the Employee shall not have any rights or privileges
of a shareholder as to the Shares subject to the Award.  Specifically, the Employee shall not have the
right to receive dividends or the right to vote such Shares prior to vesting of
the Award and delivery of the Shares.


 


(e)           Adjustments for
Recapitalization and Dividends.  In
the event that, prior to the distribution of Shares pursuant to Section 2(c) above,
any dividend in Shares, recapitalization, Share split, reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other such change affects the Shares such that they are
increased or decreased or changed into or exchanged for a different number or
kind of shares, other securities of the Company or of another corporation or
other consideration, then in order to maintain the proportionate interest of
the Employee and preserve the value of the Award, there shall automatically be
substituted for each Share subject to the Award the number and kind of shares,
other securities or other consideration (including cash) into which each
outstanding Share shall be changed or for which each such Share shall be
exchanged.


 


(f)            Dividend
Equivalents.  As of each date on
which a cash dividend is paid on Shares, there shall be granted to the Employee
that number of additional Restricted Share Units (including fractional units)
determined by (i) multiplying the amount of such dividend per Share by the
number of Restricted Share Units held by the Employee, and (ii) dividing
the total so determined by the Fair Market Value of a Share on the date of
payment of such cash dividend.  The
Restricted Share Units granted pursuant to this Section 2(f) will
have the same terms and conditions (including vesting dates) as the Restricted
Share Units with respect to which they are granted.


 


(g)           No Right to
Continued Employment.  This Award
shall not confer upon the Employee any right with respect to continuance of
employment by the Company nor shall 


 


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this
Award interfere with the right of the Company to terminate the Employee’s
employment at any time.


 


3.             Transfer of
Shares.  The Shares delivered
hereunder, or any interest therein, may be sold, assigned, pledged,
hypothecated, encumbered, or transferred or disposed of in any other manner, in
whole or in part, only in compliance with the terms, conditions and
restrictions as set forth in the governing instruments of the Company, applicable
United States federal and state securities laws or any other applicable laws or
regulations and the terms and conditions hereof.


 


4.             Expenses of
Issuance of Shares.  The issuance of
stock certificates hereunder shall be without charge to the Employee.  The Company shall pay any issuance, stamp or
documentary taxes (other than transfer taxes) or charges imposed by any
governmental body, agency or official (other than income taxes) or by reason of
the issuance of Shares.


 


5.             Withholding.  The Employee shall pay to the Company or make
arrangements satisfactory to the Committee regarding payment of any federal,
state or local taxes of any kind required by law to be withheld with respect to
the Award and the Company shall, to the extent permitted or required by law,
have the right to deduct from any payment of any kind otherwise due to the Employee,
federal, state and local taxes of any kind required by law to be withheld.


 


6.             References.  References
herein to rights and obligations of the Employee shall apply, where
appropriate, to the Employee’s legal representative or estate without regard to
whether specific reference to such legal representative or estate is contained
in a particular provision of this Agreement.


 


7.             Notices.  Any
notice required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been given when delivered personally or by
courier, or sent by certified or registered mail, postage prepaid, return
receipt requested, duly addressed to the party concerned at the address
indicated below or to such changed address as such party may subsequently by
similar process give notice of:


 


If to the Company:


 


Arch
Capital Group Ltd.

Wessex House, 4th Floor

45 Reid Street

Hamilton HM 12 Bermuda 

Attn.: Secretary


 


If to the Employee:


 


To the
last address delivered to the Company by the 

Employee in the manner set forth herein.


 


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8.             Governing Law.  This
Agreement shall be governed by and construed in accordance with the laws of New
York, without giving effect to principles of conflict of laws.


 


9.             Entire Agreement.  This Agreement and the Plan constitute the
entire agreement among the parties relating to the subject matter hereof, and
any previous agreement or understanding among the parties with respect thereto
is superseded by this Agreement and the Plan.


 


10.           Counterparts.  This
Agreement may be executed in two counterparts, each of which shall constitute
one and the same instrument.


 


11.           Section 409A.  It is intended that this Agreement and the
Award will comply with Section 409A of the Code (and any regulations and
guidelines issued thereunder), to the extent the Agreement and Award are
subject thereto, and the Agreement shall be interpreted on a basis consistent
with such intent.  If an amendment of the
Agreement is necessary in order for it to comply with Section 409A, the
parties hereto will negotiate in good faith to amend the Agreement in a manner
that preserves the original intent of the parties to the extent reasonably
possible.  Notwithstanding any provision
of this Agreement to the contrary, for purposes of this Agreement, the Employee’s
employment will be deemed to have terminated on the date of the Employee’s “separation
from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with
the Company.  Notwithstanding any
provision to the contrary in this Agreement, if the Employee is deemed on the
date of his or her “separation from service” (within the meaning of Treas. Reg.
Section 1.409A-1(h)) to be a “specified employee” (within the meaning of
Treas. Reg. Section 1.409A-1(i)), then with regard to any payment that is
required to be delayed pursuant to Section 409A(a)(2)(B) of the Code
(after taking into account any applicable exceptions to such requirement), such
payment shall not be made prior to the earlier of (i) the expiration of
the six (6)-month period measured from the date of the Employee’s “separation
from service,” or (ii) the date of the Employee’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all
payments delayed pursuant hereto (whether they would have otherwise been
payable in a single sum or in installments in the absence of such delay) shall
be paid to the Employee in a lump sum and any remaining payments due under this
Agreement shall be paid in accordance with the normal payment dates specified
for them herein.  No action or failure to
act, pursuant to this Section 11 shall subject the Company to any claim,
liability, or expense, and the Company shall not have any obligation to
indemnify or otherwise protect the Employee from the obligation to pay any
taxes, interest or penalties pursuant to Section 409A of the Code.


 


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IN WITNESS WHEREOF, the undersigned have
executed this Agreement as of the date first above written.


 


	
   

  	
  ARCH CAPITAL GROUP LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dawna Ferguson

  
	
   

  	
   

  	
  Name: Dawna Ferguson

  
	
   

  	
   

  	
  Title: Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Mark D.
  Lyons

  
	
   

  	
  Mark D. Lyons

  



 


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