Exhibit
10.6


 


ARCH
CAPITAL GROUP LTD.

Restricted Share Agreement


 


THIS AGREEMENT, dated as
of September 22, 2004, between Arch Capital Group Ltd. (the “Company”), a
Bermuda company, and _______ (the “Employee”).


 


WHEREAS, the Employee has
been granted the following award in connection with his or her retention as an
employee and as compensation for services to be rendered; and the following
terms reflect the Company’s 2002 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 Shares.  Pursuant to the provisions
of the Plan, the terms of which are incorporated herein by reference, the
Employee is hereby awarded ______ Restricted Shares (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 Shares 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, commencing on the date hereof and thereafter on the first and
second anniversaries thereof.  Unless
otherwise provided by the Company, all dividends and other amounts receivable
in connection with any adjustments to the Shares under Section 4(c) of the
Plan shall be subject to the vesting schedule in this Section 2(a).


 


(b)                                 Termination of Service; Forfeiture of
Unvested Shares.  In the event the Employee ceases to be an
employee of the Company prior to the date the Restricted Shares otherwise
become vested (i) due to his or her death or Permanent Disability (as defined
in the Company’s Incentive Compensation Plan) or (ii) due to termination (A) by
the Company not for Cause (as defined in the Company’s Incentive Compensation
Plan) or (B) by the Employee for Good Reason (as defined in the Employment
Agreement, dated as of _________, between the Employee and __________), the
Restricted Shares shall become immediately vested in full upon such termination
of employment.  In the event of
termination of employment (other than by the Company for Cause) after the
attainment of Retirement Age (as defined in the Company’s Incentive Compensation
Plan), the Restricted Shares 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 Shares
shall be forfeited by the Employee and become the property of the Company.  If the Employee ceases to be an

















 


Employee of the
Company for any other reason prior to the date the Restricted Shares become
vested, the Award shall be forfeited by the Employee and become the property of
the Company.  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.


 


(c)                                  Certificates.  Each certificate issued in
respect of Restricted Shares awarded hereunder shall be deposited with the
Company, or its designee, together with, if requested by the Company, a stock
power executed in blank by the Employee, and shall bear a legend disclosing the
restrictions on transferability imposed on such Restricted Shares by this Agreement
(the “Restrictive Legend”).  Upon the
vesting of Restricted Shares pursuant to Section 2 hereof and the
satisfaction of any withholding tax liability pursuant to Section 5
hereof, the certificates evidencing such vested Shares, not bearing the Restrictive
Legend, shall be delivered to the Employee.


 


(d)                                 Rights of a Stockholder.  Prior to the time a
Restricted Share is fully vested hereunder, the Employee shall have no right to
transfer, pledge, hypothecate or otherwise encumber such Restricted Share.  During such period, the Employee shall have
all other rights of a stockholder, including, but not limited to, the right to
vote and to receive dividends (subject to Section 2(a) hereof) at the time
paid on such Restricted Shares.


 


(e)                                  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 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,
and indemnify the Employee from and against 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. 
No later than the date of vesting of (or the date of an election by the
Employee under Section 83(b) of the Code with respect to) the Award
granted hereunder, 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 at such time with respect to
such 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 at such time.


 


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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.


 


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.


 


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


 


	
   

  	
  ARCH CAPITAL GROUP LTD.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
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