Exhibit 10.7
ARCH CAPITAL GROUP LTD.
Restricted Share Unit Agreement
THIS AGREEMENT, dated as of September 22, 2004, between Arch Capital Group Ltd.
(the "Company"), a Bermuda company, and Ralph E. Jones, III (the "Employee").
WHEREAS, the Employee has been granted the following award 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 SHARE UNITS.
PURSUANT TO THE
PROVISIONS OF THE PLAN, THE TERMS OF WHICH ARE INCORPORATED HEREIN BY REFERENCE,
THE EMPLOYEE IS HEREBY AWARDED 6,000 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, COMMENCING ON THE DATE HEREOF
AND THEREAFTER ON THE FIRST AND SECOND ANNIVERSARIES THEREOF.
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.
IN THE EVENT THE EMPLOYEE CEASES TO BE AN EMPLOYEE OF THE
COMPANY PRIOR TO THE DATE THE RESTRICTED SHARE UNITS 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 JUNE 4, 2003, BETWEEN THE EMPLOYEE AND ARCH INSURANCE GROUP INC.), THE
RESTRICTED SHARE UNITS 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
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