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                                                                    EXHIBIT 10.4

                      PLATINUM UNDERWRITERS HOLDINGS, LTD.

                    SECTION 162(m) PERFORMANCE INCENTIVE PLAN

SECTION 1. PURPOSE

         The purpose of this Platinum Underwriters Holdings, Ltd. Section 162(m)
Performance Incentive Plan is to provide a means of determining both annual and
long-term incentive compensation for certain of the Company's executive officers
in a manner that qualifies as "performance-based compensation" within the
meaning of Section 162(m) of the Internal Revenue Code.

SECTION 2. DEFINITIONS

         The following capitalized words as used herein shall have the following
meanings:

                  (a) "Award" means any award granted under the Plan to an
         Eligible Employee by the Committee subject to such terms and conditions
         as the Committee may establish under the terms of the Plan.

                  (b) "Board" means the Board of Directors of the Company.

                  (c) "Cash-Based Award" means any Award denominated by
         reference to a dollar amount.

                  (d) "Committee" means the Compensation Committee of the Board
         (or such other committee of the Board that the Board shall designate
         from time to time) or any subcommittee thereof consisting of two or
         more directors each of whom is an "outside director" within the meaning
         of Section 162(m).

                  (e) "Common Shares" means the common shares of the Company,
         par value $0.01 per share.

                  (f) "Company" means Platinum Underwriters Holdings, Ltd., a
         Bermuda company.

                  (g) "Eligible Employee" means any employee or executive
         officer of the Company or any of its subsidiaries who is or, in the
         opinion of the Committee, may become a "covered employee" within the
         meaning of Section 162(m).

                  (h) "Fair Market Value" of a Common Share as of a given date
         shall have the same meaning as applies under the 2002 Share Incentive
         Plan.

                  (i) "GAAP" means accounting principles generally accepted in
         the United States of America from time to time.

                  (j) "Participant" means an Eligible Employee granted an Award
         under the Plan.

                  (k) "Performance Criteria" shall have the meaning set forth in
         Section 4(b) hereof.

                  (l) "Performance Goals" shall have the meaning set forth in
         Section 4(c) hereof.

                  (m) "Performance Period" means a period determined by the
         Committee of not more than five years over which the Performance Goals
         set forth in the Award are to be achieved.

                  (n) "Plan" means this Platinum Underwriters Holdings, Ltd.
         Section 162(m) Performance Incentive Plan, as it may be amended from
         time to time.

                  (o) "Restricted Shares" means Common Shares that are issued
         subject to such restrictions on transfer and other incidents of
         ownership and such forfeiture conditions as the Committee may
         determine.

                             Section 162(m) Performance Unit Plan (Exhibit 10.4)
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                  (p) "Share-Based Award" means any Award denominated by
         reference to a number of Common Shares (including Restricted Shares)
         and/or Share Units.

                  (q) "Share Incentive Plan" means the Company's 2002 Share
         Incentive Plan, as it may be amended and restated from time to time.

                  (r) "Share Units" means a non-voting unit of measurement based
         on the Fair Market Value of a Common Share, which entitles a
         Participant to receive a payment of cash or Common Shares, as
         determined by the Committee.

                  (s) "Section 162(m)" means Section 162(m) of the Internal
         Revenue Code of 1986, as amended from time to time, and any regulations
         promulgated thereunder.

                  (t) "Statutory Accounting Principles" means statutory
         accounting principles or practices required or permitted for financial
         reporting purposes by the National Association of Insurance
         Commissioners and by the department of insurance (or similar regulatory
         authority) of the jurisdiction of domicile of each insurance company
         subsidiary of the Company.

SECTION 3. ADMINISTRATION OF THE PLAN

         (a) Committee Members. The Plan shall be administered by the Committee.
The Committee shall have such powers and authority as may be necessary or
appropriate for the Committee to carry out its functions as described in the
Plan. No member of the Committee shall be liable for any action or determination
made in good faith by the Committee with respect to the Plan or any Award
thereunder.

         (b) Discretionary Authority. Subject to the express limitations of the
Plan, the Committee shall have authority in its discretion to determine the
Eligible Employees to whom, and the time or times at which, Awards may be
granted, whether an Award will be a Cash-Based Award or a Share-Based Award, the
Performance Period, the Performance Criteria and the Performance Goals, and all
other terms of the Award. The Committee shall also have discretionary authority
to interpret the Plan, to make all factual determinations under the Plan, and to
make all other determinations necessary or advisable for the administration of
the Plan. The Committee may prescribe, amend, and rescind rules and regulations
relating to the Plan. All interpretations, determinations, and actions by the
Committee shall be final, conclusive, and binding upon all parties.

         (c) Delegation of Authority. The Committee may delegate, to any
appropriate officer or employee of the Company, responsibility for certain
ministerial functions (but not the exercise of discretion) under this Plan.

SECTION 4. AWARDS

         (a) Grant of Awards. The Committee may grant to any Eligible Employee
Cash-Based Awards and/or Share-Based Awards under the Plan with respect to one
or more Performance Periods under the Plan. Performance Periods may run
consecutively and/or concurrently, as determined by the Committee. Before the
90th day of the Performance Period, the Committee will determine the type of the
Award, the duration of the Performance Period, the Performance Criteria, the
applicable Performance Goals relating to the Performance Criteria, and the
amount and terms of payment to be made upon achievement of the Performance
Goals.

         (b) Performance Criteria. For purposes of Awards granted under the
Plan, the "Performance Criteria" shall be one or any combination of the
following, for the Company or any identified subsidiary or business unit, as
determined by the Committee at the time of the Award: net income, earnings per
share, operating income, book value per share, return on equity, stock price
performance, cash flow, underwriting gain or loss. Each of the Performance
Criteria shall be applied and interpreted in accordance with GAAP, Statutory
Accounting Principles, if applicable, or such other objective measure as
established by the Committee at the time of the Award.

         (c) Performance Goals. For purposes of Awards granted under the Plan,
the "Performance Goals" shall be the levels of achievement relating to the
Performance Criteria selected by the Committee for the Award. The

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Performance Goals shall be expressed as an objective formula or standard that
precludes discretion to increase the amount of compensation payable that would
otherwise be due upon attainment of the goal. The Performance Goals may be
applied on an absolute basis or relative to an identified index or peer group,
as specified by the Committee. The Performance Goals may be applied by the
Committee after excluding charges for restructurings, discontinued operations,
extraordinary items, and other unusual or non-recurring items, and the
cumulative effects of accounting changes, each as determined in accordance with
GAAP, Statutory Accounting Principles, if applicable, or such other objective
measure established by the Committee, provided the adjustments are specified at
the time the Award is established.

         (d) Maximum Awards. The maximum amount that may become payable to any
one Participant during any one calendar year under all Cash-Based Awards is
limited to $3,000,000. The maximum number of Common Shares (including Restricted
Shares) and/or Share Units that may be subject to all Share-Based Awards granted
to any one Participant during any one calendar year is limited to 100,000 Common
Shares and/or Share Units.

         (e) Negative Discretion. Notwithstanding anything else contained in the
Plan to the contrary, the Committee shall have the right, in its discretion, (i)
to reduce or eliminate the amount otherwise payable to any Participant under an
Award and (ii) to establish rules or procedures that have the effect of limiting
the amount payable to any Participant to an amount that is less than the maximum
amount otherwise payable under an Award. The Committee shall not have discretion
to increase the amount that is otherwise payable to any Participant under an
Award.

SECTION 5. PAYMENT OF AWARDS

         (a) Certification. Following the conclusion of the Performance Period
of an Award, the Committee shall certify in writing whether the Performance
Goals for that Performance Period have been achieved, or certify the degree of
achievement, if applicable.

         (b) Payment. Upon certification of the Performance Goals for a
Cash-Based Award, the Committee shall determine the amount of payment to the
Participant pursuant to the Award, if any. Upon certification of the Performance
Goals for a Share-Based Award, the Committee shall determine the number of
Common Shares, Restricted Shares and/or Share Units payable to the Participant
pursuant to the Award, if any. Notwithstanding the foregoing, both Cash-Based
Awards and Share-Based Awards may be paid in any combination of cash, Common
Shares, Restricted Shares and/or Share Units, as determined by the Committee in
its discretion, based upon the Fair Market Value of the Common Shares at the
time of payment.

         (c) Share Restrictions. Any Common Shares, Restricted Shares or Share
Units payable in respect of an Award shall be subject to such terms, conditions,
restrictions and/or limitations as the Committee shall determine in its
discretion. Any Common Shares that become payable under an Award shall be paid
from the Common Shares authorized under the Company's 2002 Share Incentive Plan,
and shall be subject to the terms and conditions of such plan.

         (d) Employment Requirement. In the event of the termination of
employment of a Participant with the Company or a subsidiary before the payment
of an Award, the Award shall be forfeited and automatically be cancelled without
further action of the Company or the Committee, subject to such conditions as
may be approved by the Committee for certain circumstances of termination of
employment, such as death or disability, if approved by the Committee in its
sole discretion.

         (e) Tax Withholding. Any payment under this Plan shall be subject to
applicable federal, state or local income and employment taxes and any other
amounts that the Company is required by law to deduct and withhold from such
payment.

         (f) Deferral of Payments. The Committee may in its discretion grant an
Award that provides a Participant the opportunity to elect in writing to defer
up to 100% of the payment of amounts payable under the Award, with the election
to be made in the manner specified by the Committee. The Committee may in its
discretion provide for interest or other investment return on any such deferred
amounts.

SECTION 6. GENERAL PROVISIONS

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         (a) Effective Date. Subject to the approval of the Company's
shareholders, the Plan shall be effective with respect to calendar years
beginning on or after January 1, 2004.

         (b) Amendment and Termination. The Company may, from time to time, by
action of the Board, amend, suspend or terminate any or all of the provisions of
the Plan, but no such amendment, suspension or termination shall adversely
affect the rights of any Participant with respect to Awards then outstanding.
Notwithstanding the foregoing, no amendment will be effective without
shareholder approval if such approval is required to satisfy the requirements of
Section 162(m). For purposes of Section 162(m), the material terms of the Plan
must be re-approved by the shareholders no later than the 2008 Annual General
Meeting of Shareholders.

         (c) Other Compensation. Nothing contained in the Plan shall prohibit
the Company or any subsidiary from establishing other additional incentive
compensation arrangements for one or more employees of the Company or from
paying compensation outside of the terms of the Plan, whether or not such
compensation qualifies as performance-based compensation under Section 162(m).

         (d) No Right to Employment. Nothing in the Plan shall be deemed to give
any Participant the right to remain employed by the Company or any subsidiary or
to limit, in any way, the right of the Company or any subsidiary to terminate,
or to change the terms, of a Participant's employment at any time.

         (e) Governing Law. The Plan shall be governed by and construed in
accordance with the laws of New York, without regard to choice-of-law rules.

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