Document:

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                                                                   EXHIBIT 10.38

                      ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

                              AMENDED AND RESTATED
                            2004 STOCK INCENTIVE PLAN
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                                TABLE OF CONTENTS

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<S>                                                                                  <C>
ARTICLE I  GENERAL....................................................................1

  1.1   PURPOSE.......................................................................1
  1.2   DEFINITIONS OF CERTAIN TERMS..................................................1
  1.3   ADMINISTRATION................................................................2
  1.4   PERSONS ELIGIBLE FOR AWARDS...................................................3
  1.5   TYPES OF AWARDS UNDER PLAN....................................................3
  1.6   COMMON SHARES AVAILABLE FOR AWARDS............................................3

ARTICLE II AWARDS UNDER THE PLAN......................................................4

  2.1   AGREEMENTS EVIDENCING AWARDS..................................................4
  2.2   NO RIGHTS AS A SHAREHOLDER....................................................4
  2.3   GRANT OF RESTRICTED COMMON SHARES.............................................5
  2.4   GRANT OF RESTRICTED STOCK UNITS...............................................5
  2.5   GRANT OF DIVIDEND EQUIVALENT RIGHTS...........................................5
  2.6   OTHER STOCK-BASED AWARDS......................................................5
  2.7   CERTAIN RESTRICTIONS..........................................................6

ARTICLE III MISCELLANEOUS.............................................................6

  3.1   AMENDMENT OF THE PLAN.........................................................6
  3.2   CONFIDENTIALITY...............................................................6
  3.3   TAX WITHHOLDING...............................................................6
  3.4   REQUIRED CONSENTS AND LEGENDS.................................................6
  3.5   NONASSIGNABILITY; NO HEDGING..................................................7
  3.6   SUCCESSOR ENTITY..............................................................7
  3.7   RIGHT OF DISCHARGE RESERVED...................................................8
  3.8   NATURE OF PAYMENTS............................................................8
  3.9   NON-UNIFORM DETERMINATIONS....................................................8
  3.10  OTHER PAYMENTS OR AWARDS......................................................8
  3.11  PLAN HEADINGS.................................................................8
  3.12  TERMINATION OF PLAN...........................................................9
  3.13  GOVERNING LAW; VENUE..........................................................9
  3.14  SEVERABILITY; ENTIRE AGREEMENT................................................9
  3.15  WAIVER OF CLAIMS..............................................................9
  3.16  NO THIRD PARTY BENEFICIARIES..................................................9
  3.17  SUCCESSORS AND ASSIGNS OF ALLIED WORLD.......................................10
  3.18  DATE OF ADOPTION AND APPROVAL OF SHAREHOLDERS................................10
  3.19  SECTION 409A.................................................................10
</TABLE>
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                  ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

                              AMENDED AND RESTATED
                            2004 STOCK INCENTIVE PLAN

                                    ARTICLE I

                                     GENERAL

1.1   PURPOSE

The purpose of the Allied World Assurance Company Holdings, Ltd Amended and
Restated 2004 Stock Incentive Plan is to attract, retain and motivate officers,
directors, employees (including prospective employees), consultants and others
who may perform services for the Company, to compensate them for their
contributions to the long-term growth and profits of the Company, and to
encourage them to acquire a proprietary interest in the success of the Company.

1.2   DEFINITIONS OF CERTAIN TERMS

"ALLIED WORLD" means Allied World Assurance Company Holdings, Ltd or a successor
entity contemplated by Section 3.6.

"AWARD" means an award made pursuant to the Plan.

"AWARD AGREEMENT" means the written document by which each Award is evidenced.

"BOARD" means the Board of Directors of Allied World.

"CERTIFICATE" means a share certificate (or other appropriate document or
evidence of ownership) representing Common Shares of Allied World.

"COMMITTEE" has the meaning set forth in Section 1.3.1.

"COMMON SHARES" mean the common shares of Allied World.

"COMPANY" means Allied World and its subsidiaries.

"COVERED PERSON" has the meaning set forth in Section 1.3.3.

"EMPLOYMENT" means a grantee's performance of services for the Company, as
determined by the Committee. The terms "employ" and "employed" shall have their
correlative meanings.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from time
to time, and the applicable rules and regulations thereunder.

"PLAN" means the Allied World Assurance Company Holdings, Ltd Amended and
Restated 2004 Stock Incentive Plan, as described herein and as hereafter amended
from time to time.
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1.3   ADMINISTRATION

1.3.1 Except, as otherwise provided herein, the Plan shall be administered by a
committee (the "Committee") of the Board to be drawn solely from members of the
Board who are not and have not been officers of the Company. The Committee is
authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it deems necessary for the proper administration of the Plan and
to make such determinations and interpretations and to take such action in
connection with the Plan and any Award granted thereunder as it deems necessary
or advisable. All determinations and interpretations made by the Committee shall
be final, binding and conclusive on all grantees and on their legal
representatives and beneficiaries. The Committee shall have the authority, in
its absolute discretion, to determine the persons who shall receive Awards, the
time when Awards shall be granted, the terms of such Awards and the number of
Common Shares, if any, which shall be subject to such Awards. Unless otherwise
provided in an Award Agreement, the Committee shall have the authority, in its
absolute discretion, to (i) amend any outstanding Award Agreement in any
respect, whether or not the rights of the grantee of such Award are adversely
affected, including, without limitation, to accelerate the time or times at
which the Award becomes vested, unrestricted or may be exercised, waive or amend
any goals, restrictions or conditions set forth in such Award Agreement, or
impose new goals, restrictions and conditions, or reflect a change in the
grantee's circumstances; and (ii) determine whether, to what extent and under
what circumstances and method or methods (A) Awards may be (1) settled in cash,
Common Shares, other securities, other Awards or other property or (2) canceled,
forfeited or suspended, (B) Common Shares, other securities, other Awards or
other property, and other amounts payable with respect to an Award may be
deferred either automatically or at the election of the grantee thereof or of
the Committee and (C) Awards may be settled by the Company or any of its
designees. Notwithstanding anything to the contrary contained herein, the Board
may, in its sole discretion, at any time and from time to time, grant Awards
(including grants to members of the Board who are not employees of the Company)
or administer the Plan, in which case the Board shall have all of the authority
and responsibility granted to the Committee herein.

1.3.2 Actions of the Committee may be taken by the vote of a majority of its
members. The Committee may allocate among its members and delegate to any person
who is not a member of the Committee any of its powers, responsibilities or
duties in accordance with applicable law.

1.3.3 No member of the Board or the Committee or any employee of the Company
(each such person a "Covered Person") shall have any liability to any person
(including any grantee) for any action taken or omitted to be taken or any
determination made in good faith with respect to the Plan or any Award. Each
Covered Person shall be indemnified and held harmless by Allied World against
and from any loss, cost, liability or expense (including attorneys' fees) that
may be imposed upon or incurred by such Covered Person in connection with or
resulting from any action, suit or proceeding to which such Covered Person may
be a party or in which such Covered Person may be involved by reason of any
action taken or omitted to be taken under the Plan or any Award Agreement and
against and from any and all amounts paid by such Covered Person, with Allied
World's approval, in settlement thereof, or paid by such Covered Person in
satisfaction of any judgment in any such action, suit or proceeding against such
Covered Person, provided that Allied World shall have the right, at its own
expense, to assume and defend any

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such action, suit or proceeding and, once Allied World gives notice of its
intent to assume the defense, Allied World shall have sole control over such
defense with counsel of Allied World's choice. The foregoing right of
indemnification shall not be available to a Covered Person to the extent that a
court of competent jurisdiction in a final judgment or other final adjudication,
in either case, not subject to further appeal, determines that the acts or
omissions of such Covered Person giving rise to the indemnification claim
resulted from such Covered Person's fraud or dishonesty. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which Covered Persons may be entitled under Allied World's Memorandum of
Association or Bye-Laws, as a matter of law, or otherwise, or any other power
that Allied World may have to indemnify such persons or hold them harmless.

1.4   PERSONS ELIGIBLE FOR AWARDS

Awards under the Plan may be made to such officers, directors, employees
(including prospective employees), consultants and other individuals who may
perform services for the Company, as the Committee may select.

1.5   TYPES OF AWARDS UNDER PLAN

Awards may be made under the Plan in the form of (a) restricted stock, (b)
restricted stock units, (c) dividend equivalent rights and (d) other
equity-based or equity-related Awards that the Committee determines to be
consistent with the purposes of the Plan and the interests of the Company.
Allied World, however, will not grant stock options pursuant to the Plan.

1.6   COMMON SHARES AVAILABLE FOR AWARDS

1.6.1 Subject to adjustment as provided in Section 1.6.2 hereof, the maximum
number of shares that may be issued under the Plan is two million (2,000,000)
Common Shares. Such Common Shares may, in the discretion of the Committee, be
either authorized but unissued shares or shares previously issued and reacquired
by Allied World. If any Award shall expire, terminate or otherwise lapse, in
whole or in part, any Common Shares subject to such Award (or portion thereof)
shall again be available for issuance under the Plan. Any Common Shares
delivered by Allied World, any Common Shares with respect to which Awards are
made by Allied World and any Common Shares with respect to which Allied World
becomes obligated to make Awards, through the assumption of, or in substitution
for, outstanding awards previously granted by an acquired entity, shall not be
counted against the shares available for Awards under this Plan.

1.6.2 The Committee shall adjust the number of Common Shares authorized pursuant
to Section 1.6.1 and the terms of any outstanding Awards (including, without
limitation, the number of Common Shares covered by each outstanding Award, the
type of property to which the Award is subject and the exercise or strike price
of any Award), in such manner as it deems appropriate to preserve the benefits
or potential benefits intended to be made available to grantees of Awards, for
any increase or decrease in the number of issued Common Shares resulting from a
recapitalization, stock split, stock dividend, combination or exchange of Common
Shares, merger, amalgamation, consolidation, rights offering, separation,
reorganization or liquidation, or any other change in the corporate structure or
shares of Allied

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World. After any adjustment made pursuant to this Section 1.6.2, the number of
Common Shares subject to each outstanding Award shall be rounded down to the
nearest whole number. Notwithstanding the foregoing, in the event of (i) a
merger, amalgamation or consolidation involving Allied World in which Allied
World is not the surviving corporation; (ii) a merger, amalgamation or
consolidation involving Allied World in which Allied World is the surviving
corporation but the holders of shares of Common Shares receive securities of
another corporation and/or other property, including cash; (iii) a the sale of
greater than fifty percent (50%) of the securities of Allied World entitled to
vote in the election of directors to the Board; or (iv) the reorganization or
liquidation of Allied World (each, a "Corporate Event"), in lieu of providing
the adjustment set forth in subsection (b) above, the Committee may, in its
discretion, provide that all outstanding Awards shall terminate as of the
consummation of such Corporate Event, and either (x) accelerate the vesting of,
and cause all vesting restrictions to lapse on, all outstanding Awards to a date
at least ten days prior to the date of such Corporate Event, or (y) provide that
holders of Awards will receive a payment in respect of cancellation of their
Awards based on the amount of the per share consideration being paid for the
Common Shares in connection with such Corporate Event. Payments to holders
pursuant to the preceding sentence shall be made in cash, or, in the sole
discretion of the Committee, in such other consideration necessary for a holder
of an Award to receive property, cash or securities as such holder would have
been entitled to receive upon the occurrence of the transaction if the holder
had been, immediately prior to such transaction, the holder of the number of
Common Shares covered by the Award at such time.

1.6.3 There shall be no limit on the amount of cash, securities (other than
Common Shares as provided in this Section 1.6) or other property that may be
delivered pursuant to the Plan or any Award; provided, however, that Awards with
respect to no more than 16,667 Common Shares may be granted to any one grantee
in any calendar year, and provided further, that Awards of stock appreciation
rights with respect to no more than 16,667 Common Shares may be granted to any
one grantee in any calendar year.

                                   ARTICLE II

                              AWARDS UNDER THE PLAN

2.1   AGREEMENTS EVIDENCING AWARDS

Each Award granted under the Plan shall be evidenced by a written document that
shall contain such provisions and conditions as the Committee deems appropriate.
The Committee may grant Awards in tandem with or in substitution for any other
Award or Awards granted under this Plan or any award granted under any other
plan of the Company. By accepting an Award pursuant to the Plan, a grantee
thereby agrees that the Award shall be subject to all of the terms and
provisions of the Plan and the applicable Award Agreement.

2.2   NO RIGHTS AS A SHAREHOLDER

No grantee of an Award shall have any of the rights of a shareholder of Allied
World with respect to Common Shares subject to such Award until the delivery of
such shares. Except as

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otherwise provided in Section 1.6.2, no adjustments shall be made for dividends,
distributions or other rights (whether ordinary or extraordinary, and whether in
cash, Common Shares, other securities or other property) for which the record
date is prior to the date such shares are delivered.

2.3   GRANT OF RESTRICTED COMMON SHARES

The Committee may grant or offer for sale restricted Common Shares in such
amounts and subject to Section 2.7 and such terms and conditions as the
Committee shall determine. Upon the delivery of such shares, the grantee shall
have the rights of a shareholder with respect to the restricted stock, subject
to Section 2.7 and any other restrictions and conditions as the Committee may
include in the applicable Award Agreement. In the event that a Certificate is
issued in respect of restricted Common Shares, such Certificate may be
registered in the name of the grantee but may be held by Allied World or its
designated agent until the time the restrictions lapse.

2.4   GRANT OF RESTRICTED STOCK UNITS

The Committee may grant Awards of restricted stock units in such amounts and
subject to Section 2.7 and such terms and conditions as the Committee shall
determine. A grantee of a restricted stock unit will have only the rights of a
general unsecured creditor of Allied World until delivery of Common Shares, cash
or other securities or property is made as specified in the applicable Award
Agreement. On the delivery date specified in the Award Agreement, the grantee of
each restricted stock unit not previously forfeited or terminated shall receive
one Common Share, or cash, securities or other property equal in value to a
Common Share or a combination thereof as specified by the Committee.

2.5   GRANT OF DIVIDEND EQUIVALENT RIGHTS

The Committee may include in the Award Agreement with respect to any Award a
dividend equivalent right entitling the grantee to receive amounts equal to all
or any portion of the dividends that would be paid on the Common Shares covered
by such Award if such shares had been delivered pursuant to such Award. The
grantee of a dividend equivalent right will have only the rights of a general
unsecured creditor of Allied World until payment of such amounts is made as
specified in the applicable Award Agreement. In the event such a provision is
included in an Award Agreement, the Committee shall determine whether such
payments shall be made in cash, in Common Shares or in another form, whether
they shall be conditioned upon the exercise of the Award to which they relate,
the time or times at which they shall be made, and such other terms and
conditions as the Committee shall deem appropriate.

2.6   OTHER STOCK-BASED AWARDS

The Committee may grant other types of equity-based or equity-related Awards
(including the grant or offer for sale of unrestricted Common Shares) in such
amounts and subject to such terms and conditions, as the Committee shall
determine. Such Awards may entail the transfer of actual Common Shares to Award
recipients, or payment in cash or otherwise of amounts based on the value of
Common Shares, and may include, without limitation, Awards designed to comply
with or take advantage of the applicable local laws of jurisdictions other than
the United States.

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2.7   CERTAIN RESTRICTIONS

In the case of an Award in the form of restricted stock or restricted stock
units, at least one year must elapse before the delivery or payment of Common
Shares, cash or other property, except in the case of (i) termination of
employment due to death, disability, retirement at or after age 65 or change of
control; or (ii) an Award that the Committee determines is performance based, in
which case at least one year must elapse.

                                   ARTICLE III

                                  MISCELLANEOUS

3.1   AMENDMENT OF THE PLAN

3.1.1 Unless otherwise provided in an Award Agreement, the Board may from time
to time suspend, discontinue, revise or amend the Plan in any respect
whatsoever, including in any manner that adversely affects the rights, duties or
obligations of any grantee of an Award.

3.1.2 Unless otherwise determined by the Board, shareholder approval of any
suspension, discontinuance, revision or amendment shall be obtained only to the
extent necessary to comply with any applicable law or stock exchange listing
requirement.

3.2   CONFIDENTIALITY

In consideration of the grantee's acceptance of any Award, the grantee hereby
agrees to keep confidential the existence of, and any information concerning,
any dispute arising in connection with any Award, the Plan and any related
matters, except that the grantee may disclose information concerning such
dispute to the court that is considering such dispute or to the grantee's legal
counsel (provided that such counsel agrees not to disclose any such information
other than as necessary to the prosecution or defense of the dispute).

3.3   TAX WITHHOLDING

As a condition to the delivery of any Common Shares pursuant to any Award or the
lifting or lapse of restrictions on any Award, or in connection with any other
event that gives rise to a federal or other governmental tax withholding
obligation on the part of the Company relating to an Award (including, without
limitation, FICA tax), (a) the Company may deduct or withhold (or cause to be
deducted or withheld) from any payment or distribution to a grantee whether or
not pursuant to the Plan or (b) the Committee shall be entitled to require that
the grantee remit cash to the Company (through payroll deduction or otherwise),
in each case in an amount sufficient in the opinion of the Company to satisfy
such withholding obligation.

3.4   REQUIRED CONSENTS AND LEGENDS

3.4.1 If the Committee shall at any time determine that any consent (as
hereinafter defined) is necessary or desirable as a condition of, or in
connection with, the granting of any Award, the

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delivery of Common Shares or the delivery of any cash, securities or other
property under the Plan, or the taking of any other action thereunder (each such
action being hereinafter referred to as a "plan action"), then such plan action
shall not be taken, in whole or in part, unless and until such consent shall
have been effected or obtained to the full satisfaction of the Committee. The
Committee may direct that any Certificate evidencing shares delivered pursuant
to the Plan shall bear a legend setting forth such restrictions on
transferability as the Committee may determine to be necessary or desirable, and
may advise the transfer agent to place a stop transfer order against any
legended shares.

3.4.2 The term "consent" as used in this Section 3.4 with respect to any plan
action includes (a) any and all listings, registrations or qualifications in
respect thereof upon any securities exchange or under any federal, state or
local law, or law, rule or regulation of a jurisdiction outside the United
States; (b) or any other matter, which the Committee may deem necessary or
desirable to comply with the terms of any such listing, registration or
qualification or to obtain an exemption from the requirement that any such
listing, qualification or registration be made; (c) any and all other consents,
clearances and approvals in respect of a plan action by any governmental or
other regulatory body or any stock exchange or self-regulatory agency; and (d)
any and all consents required by the Committee. Nothing herein shall require
Allied World to list, register or qualify the Common Shares on any securities
exchange.

3.5   NONASSIGNABILITY; NO HEDGING

Except to the extent otherwise expressly provided in the applicable Award
Agreement or determined by the Committee, no Award (or any rights and
obligations thereunder) granted to any person under the Plan may be sold,
exchanged, transferred, assigned, pledged, hypothecated or otherwise disposed of
or hedged, in any manner (including through the use of any cash-settled
instrument), whether voluntarily or involuntarily and whether by operation of
law or otherwise, other than by will or by the laws of descent and distribution,
and all such Awards (and any rights thereunder) shall be exercisable during the
life of the grantee only by the grantee or the grantee's legal representative.
Any sale, exchange, transfer, assignment, pledge, hypothecation or other
disposition in violation of the provisions of this Section 3.5 shall be null and
void and any Award which is hedged in any manner shall immediately be forfeited.
All of the terms and conditions of this Plan and the Award Agreements shall be
binding upon any permitted successors and assigns.

3.6   SUCCESSOR ENTITY

Unless otherwise provided in the applicable Award Agreement and except as
otherwise determined by the Committee, in the event of a merger, amalgamation,
consolidation, mandatory share exchange or other similar business combination of
Allied World with or into any other entity or any transaction in which another
person or entity acquires all of the issued and outstanding Common Shares of
Allied World, or all or substantially all of the assets of Allied World,
outstanding Awards may be assumed or a substantially equivalent award may be
substituted by such successor entity or a parent or subsidiary of such successor
entity.

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3.7   RIGHT OF DISCHARGE RESERVED

Nothing in the Plan or in any Award Agreement shall confer upon any grantee the
right to continued Employment by the Company or affect any right that the
Company may have to terminate such Employment.

3.8   NATURE OF PAYMENTS

3.8.1 Any and all grants of Awards and deliveries of Common Shares, cash,
securities or other property under the Plan shall be in consideration of
services performed or to be performed for the Company by the grantee. Awards
under the Plan may, in the discretion of the Committee, be made in substitution
in whole or in part for cash or other compensation otherwise payable to a
grantee by the Company. Only whole Common Shares shall be delivered under the
Plan. Awards shall, to the extent reasonably practicable, be aggregated in order
to eliminate any fractional shares. Fractional shares shall be rounded down to
the nearest whole share and any such fractional shares shall be forfeited.

3.8.2 All such grants and deliveries shall constitute a special discretionary
incentive payment to the grantee and shall not be required to be taken into
account in computing the amount of salary or compensation of the grantee for the
purpose of determining any contributions to or any benefits under any pension,
retirement, profit-sharing, bonus, life insurance, severance or other benefit
plan of the Company or under any agreement with the grantee, unless the Company
specifically provides otherwise.

3.9   NON-UNIFORM DETERMINATIONS

The Committee's determinations under the Plan and Award Agreements need not be
uniform and may be made by it selectively among persons who receive, or are
eligible to receive, Awards under the Plan (whether or not such persons are
similarly situated). Without limiting the generality of the foregoing, the
Committee shall be entitled, among other things, to make non-uniform and
selective determinations under Award Agreements, and to enter into non-uniform
and selective Award Agreements, as to (a) the persons to receive Awards, (b) the
terms and provisions of Awards and (c) whether a grantee's Employment has been
terminated for purposes of the Plan.

3.10  OTHER PAYMENTS OR AWARDS

Nothing contained in the Plan shall be deemed in any way to limit or restrict
the Company from making any award or payment to any person under any other plan,
arrangement or understanding, whether now existing or hereafter in effect.

3.11  PLAN HEADINGS

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

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3.12  TERMINATION OF PLAN

The Board reserves the right to terminate the Plan at any time; provided,
however, that in any case, the Plan shall terminate on May 27, 2014, and
provided further, that all Awards made under the Plan prior to its termination
shall remain in effect until such Awards have been satisfied or terminated in
accordance with the terms and provisions of the Plan and the applicable Award
Agreements.

3.13  GOVERNING LAW; VENUE

THIS PLAN SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK. IN CONSIDERATION OF THE GRANTEE'S ACCEPTANCE OF THE
ISSUANCE OF ANY AWARD, THE GRANTEE HEREBY EXPRESSLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF AND VENUE IN THE COURTS OF BERMUDA WITH RESPECT TO ANY SUIT OR
CLAIM INSTITUTED BY THE COMPANY OR THE GRANTEE RELATING TO THIS PLAN OR THE
AWARD.

3.14  SEVERABILITY; ENTIRE AGREEMENT

If any of the provisions of this Plan or any Award Agreement is finally held to
be invalid, illegal or unenforceable (whether in whole or in part), such
provision shall be deemed modified to the extent, but only to the extent, of
such invalidity, illegality or unenforceability and the remaining provisions
shall not be affected thereby; provided, that if any of such provisions is
finally held to be invalid, illegal or unenforceable because it exceeds the
maximum scope determined to be acceptable to permit such provision to be
enforceable, such provision shall be deemed to be modified to the minimum extent
necessary to modify such scope in order to make such provision enforceable
hereunder. The Plan and any Award Agreements contain the entire agreement of the
parties with respect to the subject matter thereof and supersede all prior
agreements, promises, covenants, arrangements, communications, representations
and warranties between them, whether written or oral with respect to the subject
matter thereof.

3.15  WAIVER OF CLAIMS

Each grantee of an Award recognizes and agrees that prior to being selected by
the Committee to receive an Award he or she has no right to any benefits
hereunder. Accordingly, in consideration of the grantee's receipt of any Award
hereunder, he or she expressly waives any right to contest the amount of any
Award, the terms of any Award Agreement, any determination, action or omission
hereunder or under any Award Agreement by the Committee, Allied World or the
Board, or any amendment to the Plan or any Award Agreement (other than an
amendment to this Plan or an Award Agreement to which his or her consent is
expressly required by the express terms of an Award Agreement).

3.16  NO THIRD PARTY BENEFICIARIES

Except as expressly provided therein, neither the Plan nor any Award Agreement
shall confer on any person other than Allied World and the grantee of any Award
any rights or remedies

                                     - 9 -
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thereunder. The exculpation and indemnification provisions of Section 1.3.3
shall inure to the benefit of a Covered Person's estate and beneficiaries and
legatees.

3.17  SUCCESSORS AND ASSIGNS OF ALLIED WORLD

The terms of this Plan shall be binding upon and inure to the benefit of Allied
World and any successor entity contemplated by Section 3.6.

3.18  DATE OF ADOPTION AND APPROVAL OF SHAREHOLDERS

The Plan was originally adopted on February 19, 2004 by the Board and approved
by the shareholders of Allied World at the 2004 Annual General Meeting of
Shareholders, and was amended and restated by the Board on May 22, 2006 and
approved by the shareholders of Allied World at a Special General Meeting of
Shareholders on June 9, 2006.

3.19  SECTION 409A

The Plan and all Awards granted hereunder are intended to be exempt from the
provisions of Section 409A of the Internal Revenue Code of 1986, as amended
("Section 409A"). To the extent that any Awards, payments or benefits provided
hereunder are considered deferred compensation subject to Section 409A, the
Company intends for this Plan and all Awards to comply with the standards for
nonqualified deferred compensation established by 409A (the "409A Standards").
Notwithstanding anything herein to the contrary, to the extent that any terms of
the Plan or any Award would subject recipient of an Award to gross income
inclusion, interest or an additional tax pursuant to Section 409A, those terms
are, to that extent, superseded by the 409A Standards. The Company reserves the
right to amend Awards granted hereunder to cause such Awards to comply with or
be exempt from Section 409A.

                                     - 10 -<PAGE>
                                                                  Exhibit 10.39

                  ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD
                 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 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 provide in this Paragraph 3 and in
Paragraphs 4, 6, 8 and 9, the Shares underlying the RSUs shall be delivered on
the Delivery Dates. The Company may, at its option, deliver 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. 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.
<PAGE>
            (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, is provided to the Company.

            (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 (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.

                                      -2-
<PAGE>
            (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 to the full satisfaction of the 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).

                                      -3-
<PAGE>
            (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 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 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.

                                      -4-
<PAGE>
      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:

Number of RSUs:

Date of Grant:

Delivery Dates:

Receipt
Acknowledge:
                  -----------------------------------------------

Address:
                  -----------------------------------------------
                                    Street

                  -----------------------------------------------
                  City,             State                Zip Code

                  -----------------------------------------------
                  Social Security No./Local I.D. No.

                                      -5-
<PAGE>
                                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
<PAGE>
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, or if there is a public market for the
shares on such date, the average of the high and low closing bid prices 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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