Document:

EX-10.1

Exhibit
10(1)

February 20, 2009

John J. O’Connor

6 Stonefalls Court

Rye Brook, New York 10573

			
	          Re:	 	Restrictive Agreement and General Release

Dear John:

          You have advised us, and you hereby confirm, that you have elected to retire from employment
with Hess Corporation (the “Company”) effective as March 31, 2009 (your “Termination Date”), and to
resign as a director of the Company and as a director and officer of its subsidiaries and
affiliates on or prior to your Termination Date. This Restrictive Agreement (this “Agreement”),
together with the General Release attached hereto as Exhibit A (the “General Release”),
confirms the agreements we have made in connection with your retirement.

          You currently hold options to purchase shares of common stock of the Company (collectively,
the “Options”) granted pursuant to the Amerada Hess Corporation Second Amended and Restated 1995
Long-Term Incentive Plan (the “1995 Plan”) and your applicable stock option agreements. The grant
dates and number of shares covered by the portion of the Options that are not fully vested on the
date hereof are as follows:

	 	 	 	 	 
	Grant Date	 	Number of Shares
	February 7, 2007

	 	 	70,000	 
	February 6, 2008

	 	 	100,000	 

          The terms and conditions of your stock option agreements provide that these unvested Options
will be forfeited in their entirety and you will have no further rights with respect thereto upon
your Termination Date, and those Options which have vested will remain exercisable only for 60 days
after your Termination Date. Notwithstanding any contrary provision of your stock option
agreements evidencing the Options, but subject to the effectiveness of this Agreement and the
General Release and the limitations set forth below, the Company is prepared to provide that,
following your Termination Date, the Options listed in the schedule set forth above will continue
to become exercisable on the dates set forth in your
applicable stock option award agreements, and such Options, together with any other Options

1

 

held by you, to the extent exercisable, may be exercised at any time through the expiration date
stated in the applicable stock option agreements.

     You also currently hold awards of an aggregate of 170,000 shares of unvested restricted stock
pursuant to the 1995 Plan and your applicable restricted stock award letters dated as of March 6,
2008 and September 19, 2008. In accordance with the terms and conditions of your restricted stock
award letters these unvested restricted stock awards will be forfeited in their entirety and
returned to the Company, and you will have no further rights with respect thereto upon your
Termination Date. Subject to the effectiveness of this Agreement and the General Release and the
limitations set forth below, following your Termination Date, the Company will make the following
cash payments (“Additional Payments”) to you (or, in the event of your death, the legal
representative of your estate) on or within 30 days following the respective payment dates set
forth below:

	 	 	 	 	 
	Payment Date	 	Payment Amount
	February 7, 2010

	 	$	5,000,000	 
	March 5, 2011

	 	$	5,000,000	 

          (1) In consideration for the Company’s provision for the continued vesting and the extension
of the exercise period of Options and payment of the Additional Payment described above to which
you are not otherwise entitled, you agree that during the period commencing on your Termination
Date and ending on March 31, 2011 (the “Restricted Period”), you will not, directly or indirectly,
in any manner or capacity:

     (i) be employed by, serve as a director or manager of, act as a consultant to or
maintain any material ownership interest in, any business that competes with the business of
the Company or any subsidiary or affiliate thereof (“Subsidiary”), including, without
limitation, any business which is engaged in the business of exploring for, or developing or
producing, crude oil or natural gas (provided that your ownership of securities of
less than one percent (1%) of any class of securities of a public company shall not, by
itself, be considered to be a material ownership interest);

     (ii) disclose to or use for the benefit of yourself or any third party any confidential
or proprietary information of the Company or any Subsidiary, including, without limitation,
any such information relating to the Company’s or any Subsidiary’s exploration and
production business, except for information that is or becomes public other than through
your breach of this provision or as otherwise agreed in writing by the Company;

     (iii) employ, solicit for employment or assist or advise any other person in soliciting
for employment any employee or consultant of the Company or any Subsidiary (except on behalf
of the Company or any Subsidiary), or otherwise interfere with the relationship between the
Company or any Subsidiary and any such employee or consultant;

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     (iv) interfere with the relationship between the Company or any Subsidiary and any
person (including, without limitation, any business or governmental entity) that is, or,
during the six months immediately preceding any such activity, was, a client, customer,
supplier, licensee or partner of the Company or any Subsidiary, or had any other business
relationship with the Company or any Subsidiary;

     (v) make any statements, or assist any other person to make statements, or release
information, intended to disparage or defame the Company or any Subsidiary or their
respective directors, officers or employees; and

     (vi) otherwise engage in any activity materially detrimental to the business,
reputation or interests of the Company or any Subsidiary (each as determined by the
Compensation and Management Development Committee of the Board of Directors of the Company
(the “Committee”) in its discretion).

In the event that the Committee determines that during the Restrictive Period you have breached or
violated any provision of this Agreement or your confidentiality, intellectual property or other
restrictive covenants or agreements in favor of the Company or a Subsidiary, including without
limitation the Non-Disclosure Agreement and the Non-Competition and Assignment Agreement, each
dated October 15, 2001, between you and the Company (collectively, the “Prior Agreements”), or any
other material agreement between you and the Company or a Subsidiary, then: (a) you shall not be
entitled to receive any Additional Payments otherwise payable thereafter, (b) you shall re-pay to
the Company any Additional Payments previously paid to you, (c) the Options shall immediately
terminate in their entirety, and (d) you shall pay to the Company any Option Gain that you realized
as the result of any exercise of the Options; provided, however, that you shall be
entitled to retain $100,000 of Additional Payments in consideration for your release of claims
against the Company as provided in the General Release. For purposes of this Agreement, “Option
Gain” shall be the gain represented by the product of the excess of the Fair Market Value (as
defined in the 1995 Plan) of a share of Company common stock on the date of exercise of an Option
over the Per Share Exercise Price (as stated in your applicable stock option award agreement),
multiplied by the number of shares subject to the Option, or portion thereof, exercised, without
regard to any subsequent decrease or increase in the Fair Market Value of those shares, reduced by
the amount of any income or social security taxes that you paid to the Company or a Subsidiary in
respect of such exercise.

          (2) You shall satisfy any obligation that you owe to the Company under paragraph (1) above
promptly after you incur such obligation by payment in cash to the Company; however, in lieu
thereof, the Company may elect to deduct the unpaid amount of any such obligation owed by you to
the Company from any payment of any kind otherwise due to you, including, but not limited to, wages
or other compensation, fringe benefits, or vacation pay (to the extent permitted by applicable
law).

          (3) The Committee may release you from any or all obligations that you owe to the Company
pursuant to the foregoing provisions of this Agreement, and/or waive, in whole or in part, the
application of such provisions to you if the Committee determines, in its discretion, that such
release or waiver is in the best interests of the Company.

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          (4) The foregoing provisions of this Agreement shall not constitute the Company’s exclusive
remedy for your engagement in activities, or other circumstances, described in paragraph (1) above.
The Company may seek any additional legal or equitable remedy, including additional money damages
and injunctive relief, in any such circumstances. The foregoing provisions of this Agreement and
any amounts payable by you hereunder are intended to be in addition to any rights to repayment the
Company may have under Section 304 of the Sarbanes-Oxley Act of 2002 and other applicable law.

          In order to be eligible to receive the continued vesting and exercisability of the Options and
the Additional Payments, as described above, to which you are not otherwise entitled, you are
required to agree to the terms contained in this Agreement and in the General Release attached
hereto as Exhibit A, by signing and returning this Agreement and the General Release and not
revoking this Agreement or the General Release as provided below.

          You will promptly return to the Company all documents, materials and property in your
possession, custody or control that are the property of the Company or any Subsidiary.

          You agree that you will cooperate with the Company (or its subsidiaries, affiliates or related
entities) and its (or their) legal counsel in connection with any current or future investigation
or litigation relating to any matter with which you were involved or of which you have knowledge or
which occurred during your employment by the Company. Such assistance will include, but not be
limited to, depositions and testimony and will continue until such matters are resolved, and the
Company will provide you with reasonable notice whenever possible of the need for your cooperation.
You also agree during the Restricted Period to make yourself available to consult from time to
time with the Chief Executive Officer of the Company or any employee of the Company whom he shall
designate on such matters as the Chief Executive Officer may reasonably request. The Company shall
reimburse you for all reasonable out-of-pocket costs (excluding any attorneys’ fees or expenses)
incurred by you in connection with any such cooperation, assistance or consultation, subject to
receipt by the Company of reasonable documentation of such costs.

          You agree that any provisions of any applicable documents (including, but not limited to, the
Prior Agreements) which contain your obligations that extend beyond your employment with the
Company will continue to remain in full force and effect.

          All amounts payable or provided under this Agreement are subject to the withholding of all
applicable taxes and deductions required by any applicable law.

          Since your execution of the General Release releases the Company and certain other persons
from all claims you may have, you should review this Agreement and the General Release carefully
before signing this Agreement and the General Release. You can take twenty-one (21) days from your
receipt of this Agreement and the General Release to consider their meaning and effect and to
determine whether you wish to enter into them. During that time, you are advised to consult with
anyone of your choosing, including an attorney, prior to executing this Agreement and the General
Release.

          Once you have signed this Agreement and the General Release, you may choose to revoke your
execution within seven (7) days. Any revocation of this Agreement and the

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General Release must be
in writing and personally delivered to Brian Bohling, Senior Vice President, Hess Corporation, 1185
Avenue of the Americas, New York, NY 10036, or if mailed, postmarked within seven (7) days of the
date upon which it was signed by you.

          TO RECEIVE THE PAYMENTS AND OTHER BENEFITS DESCRIBED ABOVE, YOU MUST SIGN (AND HAVE NOTARIZED)
AND RETURN THIS AGREEMENT, AND SIGN AND RETURN THE ATTACHED GENERAL RELEASE ON MARCH 31, 2009, AND
DELIVER THE ATTACHED LETTER INDICATING THAT YOU HAVE NOT REVOKED THIS AGREEMENT AND THE GENERAL
RELEASE SEVEN (7) DAYS AFTER THE DATE YOU SIGN THE GENERAL RELEASE. This Agreement and the General
Release should be returned to Brian Bohling, Senior Vice President, Hess Corporation, 1185 Avenue
of the Americas, New York, NY 10036. The Company will not pay or provide any payments or benefits
pursuant to this Agreement until after the seven (7) day period expires and the Company receives
the attached letter indicating that you have not revoked this Agreement and General Release.

          If any portion of this Agreement and/or the General Release is found to be unenforceable but
such portion would be enforceable if some part thereof were deleted or modified, then such portion
will apply with such deletion or modification as is necessary to make it enforceable to the fullest
extent permitted by law. If any such portion cannot be modified to be enforceable, such portion
will be deemed severed from this Agreement and/or the General Release, as applicable, and will not
affect the validity or enforceability of the remainder of this Agreement and the General Release.

          This Agreement together with the General Release contain the entire understanding of the
parties relating to the subject matter hereof. You acknowledge that no representations, oral or
written, have been made other than those expressly set forth herein and in the General Release, and
that you have not relied on any other representations in executing this Agreement and the General
Release. This Agreement and the General Release may be modified only in a document signed by the
parties and referring specifically hereto.

	 	 	 	 	 	 	 
	 	 	Sincerely yours,	 	 
	 
	 	 	 	 	 	 
	 	 	Hess Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	by:	 	/s/ John B. Hess	 	 
	 

	 	 	 	 

John B. Hess
	 	 
	 

	 	 	 	Chairman of the Board and Chief Executive Officer	 	 

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ACKNOWLEDGMENT

          I AGREE TO THE TERMS AND CONDITIONS SPECIFIED IN THIS RESTRICTIVE AGREEMENT, AND, BY SIGNING
THE ATTACHED GENERAL RELEASE, I INTEND TO WAIVE AND RELEASE ALL CLAIMS THAT I MAY HAVE AGAINST THE
COMPANY AND OTHER PARTIES DESCRIBED IN THE ATTACHED GENERAL RELEASE. I UNDERSTAND THAT THE GENERAL
RELEASE CREATES A TOTAL AND UNLIMITED RELEASE OF ALL CLAIMS, WHETHER KNOWN OR UNKNOWN, EXISTING AS
OF ITS DATE THAT I MAY HAVE AGAINST THE COMPANY AND THE OTHER RELEASED PARTIES.

          I HAVE HAD AMPLE TIME TO REVIEW THIS AGREEMENT AND TO CONSIDER MY GENERAL RELEASE OF ALL
CLAIMS AS SET FORTH IN THE GENERAL RELEASE. I AM SIGNING THIS AGREEMENT AND, WHEN SIGNED, THE
GENERAL RELEASE KNOWINGLY, VOLUNTARILY AND WITH FULL UNDERSTANDING OF THEIR TERMS AND EFFECTS. I
UNDERSTAND THAT I CAN TAKE TWENTY-ONE (21) DAYS FROM RECEIPT OF THIS AGREEMENT AND THE GENERAL
RELEASE TO DETERMINE WHETHER I WISH TO SIGN THEM, THAT I HAVE BEEN ADVISED TO CONSULT WITH AN
ATTORNEY PRIOR TO SIGNING THEM, AND THAT I HAVE SEVEN (7) DAYS FROM THE DATE I SIGN THE GENERAL
RELEASE TO REVOKE THEM.

          I ACKNOWLEDGE THAT I HAVE NOT RELIED ON ANY REPRESENTATIONS OR STATEMENTS NOT SET FORTH HEREIN
AND/OR IN THE GENERAL RELEASE. I WILL NOT DISCLOSE THIS AGREEMENT AND/OR THE GENERAL RELEASE TO
ANYONE EXCEPT TO MY IMMEDIATE FAMILY AND ANY TAX, LEGAL OR OTHER COUNSEL THAT I HAVE CONSULTED
REGARDING THE MEANING OR EFFECT OF THIS AGREEMENT AND THE GENERAL RELEASE, EXCEPT AS OTHERWISE
REQUIRED BY LAW.

          In
witness hereof, I have executed this Restrictive Agreement this
fifth
day of March, 2009.

	 	 	 
	/s/ John J. O’Connor

	

John J. O’Connor

	 	 

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	STATE OF NEW YORK
	 	)	 	 
	 
	 	:	 	ss.:
	COUNTY OF NEW YORK
	 	)	 	 

          On
this
5th day of March, 2009, before me, a Notary Public of the State of New York,
personally appeared John J. O’Connor, to me known and known to me to be the person described and
who executed the foregoing agreement and did then and there acknowledge to me that he voluntarily
executed the same.

	 	 	 	 	 
	 

	 	/s/ Jacqueline Asadu-Adjaye	 	 
	 

	 	 

Notary Public
	 	 

YOU MUST RETURN THIS ENTIRE RESTRICTIVE AGREEMENT AND THE ATTACHED GENERAL RELEASE
AND THE ACKNOWLEDGMENT PAGES.

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April
8, 2009

Brian Bohling, Senior Vice President

Hess Corporation

1185 Avenue of the Americas

New York, New York 10036

			
	     Re:	 	Restrictive Agreement and General Release

Dear Mr. Bohling:

          On
March 5, 2009, I executed a Restrictive Agreement and on March 31, 2009 I executed the
General Release attached thereto between Hess Corporation and me. I was advised in writing to
consult with an attorney of my choosing prior to signing the Restrictive Agreement and the General
Release.

          At least seven (7) days have elapsed since I executed the above-mentioned Restrictive
Agreement and General Release, and I have not revoked my acceptance or execution thereof. I hereby
request continued vesting and exercisability of my Options and the Additional Payments (as defined
in that Restrictive Agreement), in accordance with the terms and conditions of that Restrictive
Agreement and General Release.

	 	 	 	 	 
	 	Very truly yours,

 	 
	 	/s/ John J. O’Connor
 	 
	 	John J. O’Connor 	 
	 	 	 
	 

-8-EX-10.1

Exhibit 10.1

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

SECOND AMENDED AND RESTATED 2004 STOCK INCENTIVE PLAN

RSU AWARD AGREEMENT

          This RSU Award Agreement (this “RSU Agreement”) sets forth the terms and conditions of
an award (this “Award”) of restricted stock units (“RSUs”) granted to you under the
Allied World Assurance Company Holdings, Ltd Second Amended and Restated 2004 Stock Incentive Plan
(the “Plan”).

     1. The Plan. This Award is made pursuant to the Plan, the terms of which are
incorporated in this RSU Agreement. Capitalized terms used in this RSU Agreement that are not
defined in this RSU Agreement, or in the attached Glossary of Terms, have the meanings as used or
defined in the Plan.

     2. Award. The number of RSUs subject to this Award is set forth at the end of this
RSU Agreement. Each RSU constitutes an unfunded and unsecured promise of Allied World to deliver
(or cause to be delivered) to you, subject to the terms of this RSU Agreement, one Common Share
(the “Share” or the “Shares” as the context requires) (or cash equal to the Fair
Market Value thereof) on the applicable Delivery Date as provided herein. Until such delivery, you
have only the rights of a general unsecured creditor, and no rights as a shareholder of Allied
World. THIS AWARD IS SUBJECT TO ALL TERMS, CONDITIONS AND PROVISIONS OF THE PLAN AND THIS AWARD
AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE CHOICE OF FORUM PROVISIONS SET FORTH IN PARAGRAPH 15.

     3. Vesting and Delivery.

          (a) Vesting. Except as provided in this Paragraph 3 and in Paragraphs 4 and 6, twenty
five percent (25%) of the RSUs shall vest and become exercisable on each of the first, second,
third and fourth anniversaries of the Date of Grant specified at the end of this RSU Agreement
(each, a “Vesting Date”). Unless the Committee determines otherwise, and except as
provided in Paragraph 6, if your Employment terminates for any reason prior to a Vesting Date, your
rights in respect of all of your then unvested RSUs shall terminate, and no Shares (and/or cash)
shall be delivered in respect of such RSUs.

          (b) Delivery. Except as provided in this Paragraph 3 and in Paragraphs 4, 6, 8 and 9,
on the Delivery Dates, the Company shall issue or transfer to you, or cause to be issued or
transferred to you, the number of Shares underlying the RSUs to be delivered, and shall either
(i) deliver, or cause to be delivered, to you a certificate or certificates therefor, registered in
your name; or (ii) cause such Shares to be credited to your account at a third-party stock plan
administrator as may be arranged for by the Company or the Committee from time to time for purposes
of the administration of outstanding Awards under the Plan. You shall be deemed the beneficial
owner of the Shares at the close of business on a Delivery Date and shall be entitled to any
dividend or distribution that has not already been made with respect to such Shares if the record
date for such dividend or distribution is after the close of business on such Delivery Date. The
Company may, at its option, deliver, or cause to be delivered, cash in lieu of all or any portion
of the Shares otherwise deliverable on a Delivery Date specified at the end of this RSU

 

 

Agreement. Such cash payment shall equal the product of the number of Shares to be delivered
on a Delivery Date and the Fair Market Value of one Share on such Delivery Date.

          (c) Death. Notwithstanding any other provision of this RSU Agreement, if you die
prior to a Delivery Date, and provided your rights in respect of your RSUs have not previously
terminated, the Shares (and/or cash) corresponding to your outstanding RSUs shall be delivered to
the representative of your estate as soon as practicable after the date of death and after such
documentation, as may be requested by the Company or third-party stock plan administrator, is
provided to the Company or such third-party stock plan administrator, as applicable.

          (d) Delay in Delivery. Notwithstanding anything contained herein to the contrary, any
delivery of Common Shares or cash otherwise required to be made hereunder to you at any date as a
result of the termination of your Employment for any reason shall be delayed for such period of
time as may be necessary to meet the requirements of section 409A(a)(2)(B)(i) of the U.S. Internal
Revenue Code of 1986, as amended (the “Code”), and shall be delivered and/or paid on the
earliest date on which such delivery or payments can be made without violating the requirements of
section 409A(a)(2)(B)(i) of the Code.

     4. Termination of RSUs and Non-Delivery of Shares.

          (a) Unless the Committee determines otherwise, and except as provided in Paragraphs 3(c) and
6, your rights in respect of your outstanding RSUs shall immediately terminate, and no Shares
(and/or cash) shall be delivered in respect of such unvested RSUs, if at any time prior to a
Vesting Date your Employment with the Company terminates for any reason, or you are otherwise no
longer actively Employed by the Company.

          (b) Unless the Committee determines otherwise, and except as provided in Paragraph 6, your
rights in respect of all of your RSUs (whether or not vested) shall immediately terminate, and no
Shares (and/or cash) shall be delivered in respect of such RSUs, if at any time prior to a Delivery
Date:

     (i) you attempt to have any dispute under this RSU Agreement or the Plan resolved in
any manner that is not provided for by Paragraph 15;

     (ii) any event that constitutes Cause has occurred;

     (iii) you in any manner, directly or indirectly, (A) Solicit any Client to transact
business with a Competitive Enterprise or to reduce or refrain from doing any business with
the Company, (B) interfere with or damage (or attempt to interfere with or damage) any
relationship between the Company and any such Client or (C) Solicit any person who is an
employee of the Company to resign from the Company or to apply for or accept employment with
any Competitive Enterprise; or

     (iv) you fail to certify to Allied World, in accordance with procedures established by
the Committee with respect to a Delivery Date that you have complied, or the Committee
determines that you have failed as of a Delivery Date to comply, with all of the terms and
conditions of this RSU Agreement. By accepting the delivery of Shares

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(and/or cash) under this RSU Agreement, you shall be deemed to have represented and
certified at such time that you have complied with all the terms and conditions of this RSU
Agreement.

          (c) Unless the Committee determines otherwise, if a Delivery Date in respect of any of your
outstanding RSUs occurs, and Shares (and/or cash) with respect to such outstanding RSUs would be
deliverable under the terms and conditions of this RSU Agreement, except that you have not complied
with the conditions or your obligations under Paragraph 4(b)(iv), all of your rights with respect
to your outstanding RSUs shall terminate no later than the Delivery Date for such Shares.

     5. Repayment. If following the delivery of Shares (and/or cash), the Committee
determines that all terms and conditions of this RSU Agreement in respect of such delivery were not
satisfied, the Company shall be entitled to receive, and you shall be obligated to pay the Company
immediately upon demand therefor, the Fair Market Value of the Shares (determined as of the
Delivery Date) and the amount of cash (to the extent that cash was delivered to you) delivered with
respect to the Delivery Date, without reduction for any Shares (and/or cash) applied to satisfy
withholding tax or other obligations in respect of such Shares (and/or cash).

     6. Disability and Retirement

          (a) Notwithstanding any other provision of this RSU Agreement, but subject to Paragraph 6(b),
if your Employment with the Company is terminated by reason of Disability or Retirement, the
condition set forth in Paragraph 4(a) shall be waived with respect to your then outstanding
unvested RSUs (as a result of which any such then unvested outstanding RSUs shall vest on the
Vesting Dates), but all other conditions of this RSU Agreement shall continue to apply.

          (b) Without limiting the application of Paragraph 4(b) or Paragraph 4(c), your rights in
respect of any outstanding RSUs that become vested solely by reason of Paragraph 6(a) shall
terminate immediately, and no Shares (and/or cash) shall be delivered in respect of such
outstanding RSUs if, following the termination of your Employment with the Company by reason of
Disability or Retirement and prior to a Delivery Date you (i) form, or acquire a 5% or greater
equity ownership, voting or profit participation interest in, any Competitive Enterprise or (ii)
associate in any capacity (including, but not limited to, association as an officer, employee,
partner, director, consultant, agent or advisor) with any Competitive Enterprise.

     7. Non-transferability. Except as otherwise may be provided by the Committee, the
limitations set forth in Section 3.5 of the Plan shall apply. Any assignment in violation of the
provisions of this Paragraph 7 shall be null and void.

     8. Withholding, Consent and Legends.

          (a) The delivery of Shares is conditioned on your satisfaction of any applicable withholding
taxes (in accordance with Section 3.3 of the Plan).

          (b) Your rights in respect of your RSUs are conditioned on the receipt by the Company or
third-party stock plan administrator, as applicable, to the full satisfaction of the

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Committee of any required consents (as defined in Section 3.4 of the Plan) that the Committee
may determine to be necessary or advisable (including, without limitation, your consenting to
deductions from your wages, or another arrangement satisfactory to the Committee, to reimburse the
Company for advances made on your behalf to satisfy withholding and other tax obligations in
connection with this Award).

          (c) Allied World may affix to Certificates representing Shares issued pursuant to this RSU
Agreement any legend that the Committee determines to be necessary or advisable (including to
reflect any restrictions to which you may be subject under a separate agreement with Allied World).
Allied World may advise the transfer agent to place a stop transfer order against any legended
Shares.

     9. Rights of Offset. The Company shall have the right to offset, or cause to be
offset, against the obligation to deliver Shares (and/or cash) under this RSU Agreement any
outstanding amounts (including, without limitation, travel and entertainment or advance account
balances, loans or amounts repayable to the Company pursuant to tax equalization, housing,
automobile or other employee programs) you then owe to the Company and any amounts the Committee
otherwise deems appropriate.

     10. No Rights to Continued Employment. Nothing in this RSU Agreement or the Plan
shall be construed as giving you any right to continued Employment by the Company or affect any
right that the Company may have to terminate or alter the terms and conditions of your Employment.

     11. Successors and Assigns of Allied World. The terms and conditions of this RSU
Agreement shall be binding upon, and shall inure to the benefit of, Allied World and its successor
entities.

     12. Committee Discretion. The Committee shall have full discretion with respect to
any actions to be taken or determinations to be made in connection with this RSU Agreement, and its
determinations shall be final, binding and conclusive.

     13. Amendment. The Committee reserves the right at any time to amend the terms and
conditions set forth in this RSU Agreement, and the Board may amend the Plan in any respect;
provided, that, notwithstanding the foregoing and Sections 1.3.1(i), 1.3.1(ii) and 3.1 of the Plan,
no such amendment shall materially adversely affect your rights and obligations under this RSU
Agreement without your consent, except that the Committee reserves the right to accelerate the
delivery of the Shares and in its discretion provide that such Shares may not be transferable until
the Delivery Date on which such Shares otherwise would have been delivered (and that in respect of
such Shares you may remain subject to the repayment obligations of Paragraph 5 in the circumstances
under which the Shares would not have been delivered pursuant to Paragraph 4 or Paragraph 6). Any
amendment of this RSU Agreement shall be in writing signed by an authorized member of the Committee
or a person or persons designated by the Committee.

     14. Adjustment. In the event of a recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, amalgamation, consolidation, rights offering,
separation, reorganization or liquidation, or any other change in the corporate structure or the

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Shares, subsequent to the date of the Date of Grant, the Committee or the Board shall make
such equitable adjustments, designed to protect dilution or enlargement of rights, as it may deem
appropriate, in the number and kind of Shares covered by the RSUs subject to this RSU Agreement.

     15. Governing Law; Venue. THIS AWARD SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. IN CONSIDERATION OF YOUR ACCEPTANCE OF THIS
AWARD, YOU HEREBY EXPRESSLY SUBMIT TO THE EXCLUSIVE JURISDITION OF AND VENUE IN THE COURTS OF
BERMUDA WITH RESPECT TO ANY SUIT OR CLAIM INSTITUTED BY THE COMPANY OR YOU RELATING TO THIS AWARD.

     16. Headings. The headings in this RSU Agreement are for the purpose of convenience
only and are not intended to define or limit the construction of the provisions hereof.

          IN WITNESS WHEREOF, Allied World has caused this RSU Agreement to be duly executed and
delivered as of the Date of Grant.

	 	 	 	 	 	 	 
	 	 	ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

Recipient:

Total Number of RSUs:

 - RSUs to be Settled in Cash:

 - RSUs to be settled in Shares:

	 	 	 	 	 	 	 	 	 
	Date of Grant:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Delivery Dates:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Receipt
	 	 	 	 	 	 	 	 
	Acknowledge:
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Address:
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Street
	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	City,
	 	State
	 	Zip Code	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Social Security No./Local I.D. No.	 	 

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Glossary of Terms

Solely for purposes of this Award of RSUs, the following terms shall have the meanings set forth
below. Capitalized terms not defined in this Glossary of Terms shall have the meanings as used or
defined in the applicable RSU Agreement or the Plan.

          “Cause” means, in the absence of any employment agreement between you and the Company
otherwise defining Cause, (i) your conviction, whether following trial or by plea of guilty or nolo
contendere (or similar plea), in a criminal proceeding (A) on a misdemeanor charge involving fraud,
false statements or misleading omissions, wrongful taking, embezzlement, bribery, forgery,
counterfeiting or extortion; (B) on a felony charge; or (C) on an equivalent charge to those in
clauses (A) and (B) in jurisdictions which do not use those designations; (ii) your engaging in any
conduct which constitutes an employment disqualification under applicable law (including statutory
disqualification as defined under the Exchange Act); (iii) your failure to perform your duties to
the Company; (iv) your violation of any securities or commodities laws, any rules or regulations
issued pursuant to such laws, or the rules and regulations of any securities or commodities
exchange or association of which Allied World or any of its subsidiaries or affiliates is a member;
(v) your violation of any Company policy concerning hedging or confidential or proprietary
information, or your material violation of any other Company policy as in effect from time to time;
(vi) your engaging in any act or making any statement which impairs, impugns, denigrates,
disparages or negatively reflects upon the name, reputation or business interests of the Company;
or (vii) your engaging in any conduct detrimental to the Company. In the event there is an
employment agreement between you and the Company defining Cause, “Cause” shall have the meaning
provided in such agreement. The determination as to whether “Cause” has occurred shall be made by
the Committee in its sole discretion, unless otherwise provided in an employment agreement between
you and the Company. The Committee shall also have the authority in its sole discretion to waive
the consequences under the Plan or any RSU Agreement of the existence or occurrence of any of the
events, acts or omissions constituting “Cause.”

          “Client” means any client or prospective client of the Company to whom you provided services,
or for whom you transacted business, or whose identity became known to you in connection with your
relationship with or Employment by the Company.

          “Competitive Enterprise” means a business enterprise that (i) engages in any activity, or (ii)
owns or controls a significant interest in any entity that engages in any activity, that, in either
case, competes anywhere with any activity in which the Company is engaged. The activities covered
by the previous sentence include, without limitation, all insurance and re-insurance, and insurance
and reinsurance related activities, and asset management located in Bermuda and abroad.

          “Delivery Date” means each date specified as the Delivery Date in the Award (or as soon as
practicable, but in no case more that 10 days, thereafter).

          “Disability” means, in the absence of any employment agreement between you and the Company
otherwise defining Disability, (i) total disability as defined in the long-term disability plan of
the Company, as in effect from time to time, or (ii) if there is no such plan at

 

 

the applicable time, physical or mental incapacity as determined solely by the Committee. In
the event there is an employment agreement between you and the Company defining Disability,
“Disability” shall have the meaning provided in such agreement.

          “Fair Market Value” means, with respect to a Common Share on any day, the fair market value as
determined in accordance with a valuation methodology approved by the Committee and consistent with
the requirements of Section 409A of the Code, or if there is a public market for the shares on such
date, (i) the methodology as determined by the Committee in its sole and absolute discretion, or
(ii) if the Committee has not set forth a pricing methodology, the closing price of the Common
Shares on such stock exchange on which the shares are principally trading on the date in question,
or, if there were no sales on such date, on the closest preceding date on which there were sales of
shares.

          “Retirement” means any termination of your Employment other than for Cause following the date
you attain age 65.

          “Solicit” means any direct or indirect communication of any kind whatsoever, regardless of by
whom initiated, inviting, advising, encouraging or requesting any person or entity, in any manner,
to take or refrain from taking any action.

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