Document:

Exhibit 10.6

 

ARCH CAPITAL GROUP
LTD.

Restricted Share Agreement

 

THIS AGREEMENT, dated as of February 26, 2004, between
Arch Capital Group Ltd. (the “Company”), a Bermuda company, and John Rathgeber
(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 2,387
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 four equal annual installments, commencing on
the date hereof and thereafter on the first, second and third 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. 
Except as otherwise set forth in Section 2(a) above, 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 by the Company not for Cause (as defined in the Company’s
Incentive Compensation Plan), 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(a) 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.

 

2

 

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.

 

3

 

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

 

	
   

  	
  ARCH CAPITAL
  GROUP LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dawna
  Ferguson

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John
  Rathgeber

  	
   

  
	
   

  	
  John
  Rathgeber

  

 

4Exhibit
10.7

 

AMENDED AND RESTATED LETTER OF
CREDIT AND

REIMBURSEMENT AGREEMENT AMENDMENT
NO. 2

 

This AMENDED AND RESTATED LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT AMENDMENT NO. 2, dated and effective as of August 10,
2004 (this “Amendment”), is by and among Arch
Reinsurance Ltd., Arch Reinsurance Company and Arch Insurance Company (the “Obligors”) and Fleet National Bank, as Agent and Issuing
Lender (“Fleet”), and Comerica Bank and
Barclays Bank (collectively with Fleet, the “Lenders”).

 

WHEREAS, the Obligors and the
Lenders are parties to an Amended and Restated Letter of Credit and
Reimbursement Agreement dated as of April 17, 2002 and Amended and Restated as
of August 12, 2003, as further amended by the Amended and Restated Letter of
Credit and Reimbursement Agreement Amendment No. 1 dated as of August 20, 2003
(as so amended and restated, the “Reimbursement Agreement”);
and

 

WHEREAS, the Obligors the
Lenders wish to amend the Reimbursement Agreement to extend the Facility
Termination Date as set forth below.

 

NOW
THEREFORE, the parties hereto agree as follows:

 

Section 1.               Defined
Terms.  Capitalized terms used herein
and not otherwise defined shall have the meanings assigned to them in the
Reimbursement Agreement.

 

Section 2.               Amendment
to the Reimbursement Agreement. 
Effective as of the effective date hereof and subject to the
satisfaction of the conditions precedent set forth in Section 3 hereof, the
Reimbursement Agreement is hereby amended as follows:

 

The definition of “Facility Termination Date” set
forth in Section 1.1 of the Reimbursement Agreement is deleted in its entirety
and the following is substituted in lieu thereof:

 

“Facility Termination
Date” means September 10, 2004.

 

Section 3.               Conditions
of Effectiveness.  This Amendment
shall become effective when, and only when, the Lenders shall have received a
counterpart of this Amendment executed by each of the parties hereto.  In addition, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Amendment shall be satisfactory in form and
substance to the Lenders and the Lenders shall have received any and all other
information and documents with respect to each Obligor which they may
reasonably request.

 

Section 4.               Representations
and Warranties of the Obligors.  Each
Obligor for itself represents as follows:

 

(a)           The
execution, delivery and performance by such Obligor of this Amendment has been
duly authorized by all necessary corporate action and does not and will not (i)
require any

 

 

consent or approval of
such Obligor’s shareholders; (ii) violate any provisions of the Constituent
Documents of such Obligor; (iii) violate any provision of, or require any
filing, registration, consent or approval under, any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to and binding upon such Obligor, except where such
violation or failure to file would not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise) of such
Obligor or the ability of such Obligor to perform its obligations with respect
to this Amendment or the Reimbursement Agreement, as amended; or (iv) result in
a breach of, cause a lien to arise under, or constitute a default or require
any consent under, any note, indenture or loan or agreement or any other
agreement of such Obligor except where such breach, default or failure to
obtain consent or approval would not reasonably be expected to have a material
adverse effect on the condition (financial or otherwise) of such Obligor or the
ability of such Obligor to perform its obligations with respect to this
Amendment or the Reimbursement Agreement, as amended.

 

(b)           This
Amendment and the Reimbursement Agreement, as amended hereby, constitute the
legal, valid and binding obligations of such Obligor, enforceable against such
Obligor in accordance with their respective terms, except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors’ rights generally and by general principles of
equity.

 

(c)           The
representations and warranties contained in Article IV of the Reimbursement
Agreement (as amended by this Amendment) are true, correct and complete in all
material respects on and as of the date hereof as though made on and as of such
date.

 

(d)           No
Default or Event of Default as described in Article VI of the Reimbursement
Agreement has occurred and is continuing or will result from the signing of
this Amendment or the transactions contemplated hereby.

 

(e)           There
has been no material adverse change in the condition (financial or otherwise)
of such Obligor or the ability of each Obligor to perform its obligations with
respect to the Reimbursement Agreement as amended hereby since the date of the
last financial statements furnished to the Lenders.

 

Section 5.               Reference
to and Effect on the Reimbursement Agreement.

 

(a)           Upon
the effectiveness of this Amendment, each reference in the Reimbursement
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like
import shall mean and be a reference to the Reimbursement Agreement as amended
hereby.

 

(b)           Except
as specifically amended above, the Reimbursement Agreement shall remain in full
force and effect and is hereby ratified and confirmed.

 

(c)           Except
as expressly provided herein, the execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of the

 

2

 

Lenders under the
Reimbursement Agreement, nor constitute a waiver of any provision of the
Reimbursement Agreement.

 

Section 6.               Costs,
Expenses and Taxes.  The Lenders
agree that they will be solely responsible for any and all costs and expenses
incurred by the Lenders in connection with the preparation, execution and
delivery of this Amendment and any other instruments and documents to be
delivered hereunder.

 

Section 7.               Execution
in Counterparts.  This Amendment may
be executed in multiple counterparts, each of which shall be deemed to be an
original and all of which when taken together shall constitute but one and the
same instrument.

 

Section 8.               Governing
Law.  This Amendment, and the rights
and obligations of the parties hereunder, shall be governed by, and construed
in accordance with the laws of the State of Connecticut without giving effect
to the choice of law or conflicts of the law principles thereof.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

3

 

IN WITNESS
WHEREOF, the parties have caused this Amendment to be duly executed and
delivered by their respective officers, as an instrument under seal, as of the
date first above written.

 

	
   

  	
  ARCH REINSURANCE LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Janine Trench

  	
   

  
	
   

  	
   

  	
  Name: Janine Trench

  
	
   

  	
   

  	
  Title: Controller

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARCH REINSURANCE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry E. Golub

  	
   

  
	
   

  	
   

  	
  Name: Barry E. Golub

  
	
   

  	
   

  	
  Title: Treasurer & Controller

  
	
   

  	
   

  	
   

  
	
   

  	
  ARCH INSURANCE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ramin Taraz

  	
   

  
	
   

  	
   

  	
  Name: Ramin Taraz

  
	
   

  	
   

  	
  Title: Controller

  
	
   

  	
   

  	
   

  
	
   

  	
  FLEET NATIONAL BANK, as Agent and Issuing Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Debra Basler

  	
   

  
	
   

  	
   

  	
  Name: Debra Basler

  
	
   

  	
   

  	
  Title: Principal

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COMERICA BANK, as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dru Steinly

  	
   

  
	
   

  	
   

  	
  Name: Dru Steinly

  
	
   

  	
   

  	
  Title: International Banking Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  BARCLAYS BANK, as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard Askey

  	
   

  
	
   

  	
  Name: Richard Askey

  
	
   

  	
  Title: Relationship Manager

  

 

4

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