Exhibit 10.6
ARCH CAPITAL GROUP LTD.
Restricted Share Unit Agreement
THIS AGREEMENT, dated as of February 23, 2006, 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 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), 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 INCENTIVE COMPENSATION PLAN) 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 PARAGRAPH 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