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                                                                    EXHIBIT 10.9

                           MONTPELIER RE HOLDINGS LTD.
                                SHARE OPTION PLAN

1.    PURPOSE

      The purpose of the Montpelier Re Holdings Ltd. Share Option Plan (the
      "Plan") is to advance the interests of Montpelier Re Holdings Ltd. (the
      "Company") and its Members by providing long-term incentives to certain
      key employees of the Company and of its Subsidiaries.

2.    ADMINISTRATION

      The Plan shall be administered by a committee (the "Committee") comprised
      of the members of the Compensation Committee of the Board of Directors of
      the Company (the "Board"). The Committee shall have exclusive authority to
      select the employees to be granted options to purchase common shares of
      the Company under the Plan ("Options"), to determine the type, size and
      terms of the Options and to prescribe the form of the instruments
      embodying Options. The Committee shall be authorized to interpret the Plan
      and any instruments related to Options, to establish, amend and rescind
      any rules and regulations relating to the Plan or to Options and to make
      any other determinations that it believes are necessary or advisable for
      the administration of the Plan. The Committee may correct any defect or
      supply any omission or reconcile any inconsistency in the Plan or any
      instruments related to Options in the manner and to the extent the
      Committee deems desirable to carry it into effect. Any decision of the
      Committee in the administration of the Plan, as described herein, shall be
      final and conclusive. The Committee may act only by a majority of its
      members in office, except that the members thereof may authorize any one
      or more of their number or any officer of the Company to execute and
      deliver documents and to take other actions on behalf of the Committee. No
      member of the Committee shall be liable for anything done or omitted to be
      done by him or by any other member of the Committee in connection with the
      Plan, except for his own willful misconduct or as expressly provided by
      statute.

3.    PARTICIPATION

      (a)   Participation of Employees. Only those key employees of the Company
            or a Subsidiary thereof who are selected by the Committee shall be
            eligible to receive Options. No employee or other person shall have
            any claim or right to be granted an Option under the Plan and the
            granting of an Option to an employee shall not entitle that employee
            to any future grants of Options.

      (b)   Participation of Subsidiaries. If a Subsidiary of the Company wishes
            to participate in the Plan and its participation shall have been
            approved by the Board, the Board of Directors of the Subsidiary
            shall adopt a resolution in form and substance satisfactory to the
            Committee authorizing participation by the Subsidiary in the Plan. A
            Subsidiary may cease to participate in the Plan at any time by
            action of the Board or by action of the Board of Directors of such
            Subsidiary, which latter action shall be effective not earlier than
            the date of delivery to the Secretary of the Company of a certified
            copy of a resolution of the Subsidiary's Board of Directors taking
            such action. Termination of

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            participation in the Plan shall not relieve a Subsidiary of any
            obligations theretofore incurred by it under the Plan.

4.    TERMS AND CONDITIONS

      (a)   Number of Shares That May Be Issued. A maximum of 425,000 Shares,
            subject to adjustment as provided in paragraph 7, may be issued
            under the Plan. Shares subject to Options that are forfeited or
            expire unexercised shall again be available for issuance under the
            Plan.

      (b)   Rights With Respect to Shares. An employee to whom Options are
            granted (and any person succeeding to such employee's rights
            pursuant to the Plan) shall have no rights as a holder with respect
            to any Share issuable pursuant thereto until the date of the
            exercise of the Option and the entry of the holder's name and
            address in the Company's Register of Members. Except as provided in
            paragraph 7, no adjustment shall be made for dividends,
            distributions or other rights (whether ordinary or extraordinary,
            and whether in cash, securities or other property), the record date
            for which is prior to the date such Share certificate is issued.

      (c)   Unless otherwise determined by the Committee and except as otherwise
            provided in an Option agreement, each Option shall comply with the
            following terms and conditions:

            (i)   The exercise price shall not be less than the greater of (i)
                  the fair market value of the Shares subject to such Option at
                  the time of grant, as determined in good faith by the
                  Committee, or (ii) the par value of such Shares.

            (ii)  The Option shall not be transferable by the optionee otherwise
                  than by will or the laws of descent and distribution, and
                  shall be exercisable during his lifetime only by him.

            (iii) The Option shall not be exercisable:

                  (A)   after the expiration of ten years from the date it is
                        granted;

                  (B)   except during such period and at such time or times as
                        the Committee may establish;

                  (C)   unless payment in full is made in United States dollars
                        by cash or check for the Shares being acquired
                        thereunder at the time of exercise (including any taxes
                        which the Committee determines are required to be
                        withheld in respect of such Shares);

                  (D)   unless the person who was granted the Option has been,
                        at all times during the period beginning with the date
                        of grant of the Option and ending on the date three
                        months prior to such exercise, an employee of the
                        Company or a Subsidiary, except that:

                        (1)   if such person shall cease to be an employee of
                              the Company or a Subsidiary solely by reason of a
                              period of Related Employment, he may exercise the
                              Option as if he had continued to be an employee
                              during such period of Related Employment (but in
                              no event after the Option would otherwise expire
                              notwithstanding his termination of employment); or

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                        (2)   if an optionee's employment is terminated because
                              he has become Disabled, he may, at any time within
                              three years of the date of the termination of his
                              employment (but in no event after the Option would
                              otherwise expire notwithstanding his termination
                              of employment), exercise (x) the portion of the
                              Option that was exercisable on the date his
                              employment terminated, and (y) if the Option is
                              not fully exercisable on the date his employment
                              terminated, the portion of the Option that would
                              have become exercisable had he remained an
                              employee through the next two dates on which the
                              Option would have become exercisable with respect
                              to additional Shares; or

                        (3)   if an optionee shall die while holding an Option,
                              his executors, administrators, heirs or
                              distributees, as the case may be, at any time
                              within one year after the date of such death (but
                              in no event after the Option would otherwise
                              expire notwithstanding his termination of
                              employment), may exercise (x) the portion of the
                              Option that was exercisable on the date of his
                              death, and (y) if the Option is not fully
                              exercisable on the date of his death and the
                              optionee was an employee of the Company or a
                              Subsidiary at the time of his death, the portion
                              of the Option that would have become exercisable
                              had he remained an employee through the next two
                              dates on which the Option would have become
                              exercisable with respect to additional Shares (for
                              purposes of clarification, the Option shall not
                              become exercisable as to any Shares in addition to
                              those as to which the decedent could have
                              exercised the Option at the time of his death if
                              death occurs following the date the participant's
                              employment terminated); or

                        (4)   if such person shall retire under an approved
                              retirement program of the Company or a Subsidiary
                              (or such other plan as may be approved by the
                              Committee, in its sole discretion, for this
                              purpose) while holding an Option which has not
                              expired and has not been fully exercised, such
                              person, at any time within three years after his
                              retirement (but in no event after the Option would
                              otherwise expire notwithstanding his termination
                              of employment), may exercise the portion of the
                              Option that was exercisable on the date he retired
                              and, if the Option is not fully exercisable on the
                              date his employment terminated, the unexercisable
                              portion shall be forfeited; or

                        (5)   notwithstanding anything herein to the contrary,
                              the Board may determine that the optionee may
                              exercise the Option with respect to some or all of
                              the Shares subject to the Option as to which it
                              would not otherwise be exercisable on the date of
                              his termination of employment (regardless of the
                              reason); provided, however, that in no event may
                              such exercise take place after the Option would
                              otherwise expire notwithstanding termination of
                              his employment.

            (iv)  Notwithstanding anything herein to the contrary,

                  (A)   in the event an Unfriendly Change in Control of the
                        Company occurs, then as of the Acceleration Date, each
                        Option granted hereunder shall become exercisable in
                        full; and

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               (B)  in the event of a Change in Control of the Company or the
                    business of the Company for which the optionee's services
                    are principally performed is disposed of by the Company
                    pursuant to a sale or other disposition of all or
                    substantially all of the business or business-related assets
                    of the Company or all or substantially all of the assets or
                    shares of a Subsidiary of the Company for which the
                    participant's services are principally performed, and, on
                    the date of such transaction or within 24 months thereafter,
                    (1) there is a Termination Without Cause of an optionee's
                    employment, (2) there is a Constructive Termination of an
                    optionee's employment, or (3) there occurs an Adverse Change
                    in the Plan that affects an optionee's outstanding
                    Option(s), then each of the optionee's outstanding Options
                    shall become exercisable in full as of the date of the
                    termination of employment or Adverse Change in the Plan, as
                    the case may be, and, in the case of a Termination Without
                    Cause or a Constructive Termination, the optionee may
                    exercise such outstanding Option(s) at any time within three
                    months after such termination of employment (but in no event
                    after the Option would otherwise expire notwithstanding his
                    termination of employment).

5.    RESTRICTIONS ON DISTRIBUTIONS OF SHARES AND SHARE TRANSFERABILITY

      Notwithstanding anything herein to the contrary, no Shares shall be issued
      hereunder unless counsel for the Company is satisfied that such issuance
      will be in compliance with applicable laws (including, without limitation,
      United States federal and state securities laws, Bermuda law and any
      applicable Bermuda Monetary Authority permissions required) and applicable
      requirements of any securities exchange or similar entity, and unless the
      optionee's tax obligations have been satisfied pursuant to subparagraph
      8(c). The Committee may require each individual purchasing Shares pursuant
      to an Option to represent to and agree with the Company in writing that
      such individual is acquiring the Shares without a view to distribution
      thereof. The Committee may impose such restrictions on any Shares acquired
      pursuant to Options as it may deem advisable, including, without
      limitation, restrictions to comply with Bermuda law, applicable securities
      laws, the requirements of any stock exchange or market upon which such
      Shares are then listed and/or traded and with any blue sky or state
      securities laws applicable to such Shares.

6.    DEFINITIONS

      For the purposes of the Plan and instruments entered into pursuant to the
      Plan, unless otherwise defined herein or in any related agreements, the
      following terms shall have the meanings set forth below:

      (a)   "Acceleration Date" means the date on which a majority of the
            Company's Continuing Directors adopts a resolution (or takes other
            action) making the determination that a Change in Control of the
            Company has occurred.

      (b)   "Adverse Change in the Plan" means

            (i)   termination of the Plan pursuant to paragraph 12;

            (ii)  amendment of the Plan pursuant to paragraph 9 that materially
                  diminishes the value of Options that may be granted under the
                  Plan, either to individual participants or in the aggregate,
                  unless there is substituted concurrently authority to grant
                  long-term

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                  incentive awards of comparable value to individual
                  participants in the Plan or in the aggregate, as the case may
                  be; or

            (iii) in respect of any holder of an Option, a material diminution
                  in his rights held under such Option (except as may occur
                  under the terms of the Option as originally granted), unless
                  there is substituted concurrently a long-term incentive award
                  with a value at least comparable to the loss in value
                  attributable to such diminution in rights.

      (c)   "Board" means the Board of Directors of the Company.

      (d)   "Cause" means:

            (i)   an act or omission by the participant that constitutes a
                  felony or any crime involving moral turpitude; or

            (ii)  gross negligence or willful gross misconduct by the
                  participant in connection with his employment by the Company
                  or by a Subsidiary of the Company.

      (e)   "Change in Control of the Company" means the occurrence of any of
            the following:

            (i)   any person or group (within the meaning of Section 13(d) and
                  14(d)(2) of the Exchange Act), other than the Company or its
                  Subsidiaries, becomes the beneficial owner (within the meaning
                  of Rule 13d-3 under the Exchange Act) of thirty-five percent
                  (35%) or more of the Company's then outstanding Shares; or

            (ii)  the Continuing Directors cease for any reason to constitute a
                  majority of the Board of the Company.

            A Change in Control of the Company within the meaning of this
            subparagraph 6(e) also may constitute an Unfriendly Change in
            Control of the Company within the meaning of subparagraph 6(o).
            Notwithstanding anything herein to the contrary, a Change in Control
            shall not occur upon an underwritten public offering of the
            Company's shares.

      (f)   "Committee" means the committee designated pursuant to paragraph 2
            that administers the Plan and Options granted under the Plan.

      (g)   "Constructive Termination" means a termination of employment with
            the Company or a Subsidiary of the Company at the initiative of the
            participant that the participant declares by prior written notice
            delivered to the Secretary of the Company to be a Constructive
            Termination by the Company or a Subsidiary of the Company and which
            follows:

            (i)   a material decrease in his salary; or

            (ii)  a material diminution in the authority, duties or
                  responsibilities of his position with the result that the
                  participant makes a determination in good faith that he cannot
                  continue to carry out his job in substantially the same manner
                  as it was intended to be carried out immediately before such
                  diminution. Notwithstanding anything herein to the contrary,
                  Constructive Termination shall not occur within the meaning of
                  this subparagraph 6(g) until and unless 30 days have elapsed
                  from the date the Company receives such written notice without
                  the Company curing or causing to be cured the circumstance or
                  circumstances described in this subparagraph 6(g) on the basis
                  of which the declaration of Constructive Termination is given.

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      (h)   "Continuing Director" means a member of the Board:

            (i)   who is not an employee of the Company or a Subsidiary of the
                  Company or of a holder of (or an employee or an affiliate of
                  an entity or group that holds) thirty-five percent (35%) or
                  more of the Company's Shares; and

            (ii)  who either was a member of the Board on January 1, 2002, or
                  who subsequently became a director of the Company and whose
                  election, or nomination for election, by the Company's holders
                  was approved by a vote of a majority of the Continuing
                  Directors then on the Board (which term, for purposes of this
                  definition, shall mean the whole Board and not any committee
                  thereof). Any action, approval of which shall require the
                  approval of a majority of the Continuing Directors, may be
                  authorized by one Continuing Director, if he is the only
                  Continuing Director on the Board, but no such action may be
                  taken if there are no Continuing Directors on the Board.

      (i)   "Disabled" means the physical or mental condition of an optionee,
            which the Committee determines would entitle him to payment of
            monthly disability benefits under any long-term disability plan of
            the Company or a Subsidiary of the Company in which he is a
            participant.

      (j)   "Exchange Act" means the United States Securities Exchange Act of
            1934, as amended.

      (k)   "Related Employment" means the employment of an individual by an
            employer which is neither the Company nor a Subsidiary provided:

            (i)   such employment is undertaken and continued by the individual
                  at the request of the Company or a Subsidiary;

            (ii)  immediately prior to undertaking such employment, the
                  individual was an employee of the Company or a Subsidiary, or
                  was engaged in Related Employment; and

            (iii) such employment is recognized by the Committee, in its sole
                  discretion, as Related Employment for the purposes of the Plan
                  and the optionee's Option(s). For purposes of the Plan and an
                  optionee's Option(s), an optionee's Related Employment shall
                  be treated as employment by the Company and termination of
                  Related Employment shall be treated as a termination of
                  employment with the Company.

      (l)   "Shares" means common shares of the Company, par value U.S. $0.01
            per Share.

      (m)   "Subsidiary" means a "subsidiary corporation" as defined in Section
            86 of the Companies Act 1981, as amended.

      (n)   "Termination Without Cause" means a termination of the participant's
            employment with the Company or a Subsidiary of the Company by the
            Company or the Subsidiary other than:

            (i)   because of the participant's death or Disability; or

            (ii)  for Cause.

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            Notwithstanding anything herein to the contrary, unless otherwise
            determined by the Committee, if the participant's employment with
            the Company and its Subsidiaries shall terminate due to the
            disposition of the business of the Company for which the
            participant's services are principally performed pursuant to a sale
            or other disposition of all or substantially all of the business or
            business-related assets of the Company or all or substantially all
            of the assets or shares of a Subsidiary of the Company for which the
            participant's services are principally performed, such termination
            shall be deemed to be a "Termination Without Cause" for purposes of
            subparagraph 4(c)(iv)(B) hereof.

      (o)   "Unfriendly Change in Control of the Company" means the occurrence
            of the following:

            (i)   any person or group (within the meaning of Section 13(d) and
                  14(d)(2) of the Exchange Act), other than the Company, becomes
                  the beneficial owner (within the meaning of Rule 13d-3 under
                  the Exchange Act) of thirty-five percent (35%) or more of the
                  Company's then outstanding Shares through a transaction that
                  is opposed by the Company's Chairman; and

            (ii)  a majority of the Company's Continuing Directors, by
                  resolution adopted within 30 days following the date the
                  Company becomes aware that subparagraph 6(o)(i) has been
                  satisfied, determines that a Change in Control has occurred.

7.    ANTI-DILUTION AND OTHER ADJUSTMENTS

      In the event of any change in the outstanding Shares of the Company by
      reason of any share split, share dividend, recapitalization, merger,
      consolidation, reorganization, combination or exchange of Shares or other
      similar event, and if the Committee shall determine, in its sole
      discretion, that such change equitably requires an adjustment in the
      number or kind of Shares that may be issued under the Plan pursuant to
      paragraph 4, in the number or kind of Shares subject to, or the exercise
      price per Share under, any outstanding Option, then such adjustment shall
      be made by the Committee and shall be conclusive and binding.

8.    MISCELLANEOUS PROVISIONS

      (a)   Limitation of Rights. Neither the Plan nor any action taken
            hereunder shall be construed as giving an employee any right to be
            retained in the employ of the Company or any Subsidiary of the
            Company.

      (b)   Transferability. A participant's rights and interest under the Plan
            may not be assigned or transferred in whole or in part either
            directly or by operation of law or otherwise (except in the event of
            a participant's death), including but not limited to, execution,
            levy, garnishment, attachment, pledge, bankruptcy or in any other
            manner and no such right or interest of any participant in the Plan
            shall be subject to any obligation or liability of such participant.

      (c)   Withholding. The Company and its Subsidiaries shall have the right
            to deduct from any payment made under the Plan any federal, state or
            local income or other taxes required by law to be withheld with
            respect to such payment. It shall be a condition to the obligation
            of the Company to issue Shares upon exercise of an Option that the
            participant pay to the Company, upon its demand, such amount as may
            be required by the Company for the purpose of satisfying any tax
            withholding obligations. If the amount requested is not paid, the
            Company may refuse to issue Shares.

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      (d)   Expenses. The expenses of the Plan shall be borne by the Company.
            However, if an Option is made to an employee of a Subsidiary:

            (i)   if such Option results in payment of cash to the participant,
                  such Subsidiary shall pay to the Company an amount equal to
                  such cash payment; and

            (ii)  if the Option results in the issuance to the participant of
                  Shares, such Subsidiary shall pay to the Company an amount
                  equal to fair market value thereof, as determined by the
                  Committee, on the date such Shares are issued.

      (e)   Unfunded Plan. The Plan shall be unfunded. The Company shall not be
            required to establish any special or separate fund or to make any
            other segregation of assets to assure the payment of any Option
            under the Plan.

      (f)   Acceptance and Ratification by Participants. By accepting any Option
            or other benefit under the Plan, each participant and each person
            claiming under or through him shall be conclusively deemed to have
            indicated his acceptance and ratification of, and consent to, any
            action taken under the Plan by the Company, the Board or the
            Committee.

      (g)   Gender and Number. Except where otherwise indicated by the context,
            any masculine term used herein also shall include the feminine, the
            plural shall include the singular and the singular shall include the
            plural.

      (h)   Headings Not Part of Plan. Headings of paragraphs and subparagraphs
            hereof are inserted for convenience and reference only; they do not
            constitute part of the Plan.

      (i)   Governing Law. To the extent not preempted by United States Federal
            law, the Plan, and all agreements hereunder, shall be construed in
            accordance with, and governed by, the laws of Bermuda.

9.    AMENDMENT

      The Plan and any Option instruments may be amended at any time and from
      time to time by the Board; provided, however that no amendment of the Plan
      or an Option instrument shall adversely affect any right of any
      participant with respect to any Option previously granted without such
      participant's written consent. For purposes of this paragraph 9, an
      adjustment made in good faith by the Committee pursuant to paragraph 7
      shall not be deemed to have adversely affected an Option previously
      granted hereunder.

10.   SUCCESSORS

      All obligations of the Company under the Plan with respect to Options
      granted hereunder shall be binding on any successor to the Company,
      whether the existence of such successor is the result of a direct or
      indirect purchase, merger, consolidation, share exchange, or other
      transaction involving all or substantially all of the business and/or
      assets of the Company.

11.   EFFECTIVE DATE OF PLAN

      The Plan shall be effective as of January 8, 2002.

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12.   TERMINATION

      The Plan shall terminate upon the earlier of the following dates or events
      to occur:

      (a)   the adoption of a resolution of the Board terminating the Plan; or

      (b)   January 8, 2012.

      No termination of the Plan shall alter or impair any of the rights or
      obligations of any person, without his consent, under any Option
      previously granted under the Plan.

                        AS ORIGINALLY APPROVED BY THE BOARD OF DIRECTORS ON
                        JANUARY 8, 2002.

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                                                                   EXHIBIT 10.10

                           MONTPELIER RE HOLDINGS LTD.
                              PERFORMANCE UNIT PLAN

1.    PURPOSE

      The purpose of the Montpelier Re Holdings Ltd. Performance Unit Plan (the
      "Plan") is to advance the interests of Montpelier Re Holdings Ltd. (the
      "Company") and its Members by providing long-term incentives to certain
      key employees of the Company and of its Subsidiaries.

2.    ADMINISTRATION

      The Plan shall be administered by a committee (the "Committee") comprised
      of the members of the Compensation Committee of the Board of Directors of
      the Company (the "Board"). The Committee shall have exclusive authority to
      select the employees to be granted performance unit awards under the Plan
      ("Awards"), to determine the size and terms of the Awards, to determine
      the performance targets, and to prescribe the form of the instruments
      embodying Awards. The Committee shall be authorized to interpret the Plan
      and any instruments related to Awards, to establish, amend and rescind any
      rules and regulations relating to the Plan or to Awards and to make any
      other determinations that it believes are necessary or advisable for the
      administration of the Plan. The Committee may correct any defect or supply
      any omission or reconcile any inconsistency in the Plan or in any
      instruments related to Awards in the manner and to the extent the
      Committee deems desirable to carry it into effect. Any decision of the
      Committee in the administration of the Plan, as described herein, shall be
      final and conclusive. The Committee may act only by a majority of its
      members in office, except that the members thereof may authorize any one
      or more of their number or any officer of the Company to execute and
      deliver documents and to take other actions on behalf of the Committee. No
      member of the Committee shall be liable for anything done or omitted to be
      done by him or by any other member of the Committee in connection with the
      Plan, except for his own willful misconduct or as expressly provided by
      statute.

3.    PARTICIPATION

      (a)   Participation of Employees. Only those key employees of the Company
            or a Subsidiary thereof who are selected by the Committee shall be
            eligible to receive Awards. No employee or other person shall have
            any claim or right to be granted an Award under the Plan and the
            granting of an Award to an employee shall not entitle that employee
            to any future grants of Awards.

      (b)   Participation of Subsidiaries. If a Subsidiary of the Company wishes
            to participate in the Plan and its participation shall have been
            approved by the Board, the Board of Directors of the Subsidiary
            shall adopt a resolution in form and substance satisfactory to the
            Committee authorizing participation by the Subsidiary in the Plan. A
            Subsidiary may cease to participate in the Plan at any time by
            action of the Board or by action of the Board of Directors of such
            Subsidiary, which latter action shall be effective not earlier than
            the date of delivery to the Secretary of the Company of a certified
            copy of a resolution of the Subsidiary's Board of Directors taking
            such action. Termination of participation in the Plan shall not
            relieve a Subsidiary of any obligations theretofore incurred by it
            under the Plan.

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4.    AWARDS

      (a)   Type of Awards. Awards shall be limited to Performance Units.

      (b)   Rights With Respect to Performance Units Paid with Shares. An
            employee to whom Performance Units are granted (and any person
            succeeding to such employee's rights pursuant to the Plan) shall
            have no rights as a holder with respect to any Share issuable
            pursuant thereto until the date of the entry of the holder's name
            and address in the Company's Register of Members. Except as provided
            in paragraph 8, no adjustment shall be made for dividends,
            distributions or other rights (whether ordinary or extraordinary,
            and whether in cash, securities or other property) the record date
            for which is prior to the date such Share certificate is issued.

5.    PERFORMANCE UNITS

      The Award of Performance Units to a participant will entitle him to
      receive, without payment to the Company, all or part of a specified amount
      (the "Actual Value") determined by the Committee, if the terms and
      conditions specified herein and in the Award are satisfied. Payment in
      respect of an Award shall be made as provided in subparagraphs 5(e) or
      5(f), as the case may be. Each Award of Performance Units shall be subject
      to the following terms and conditions:

      (a)   Number of Awards and Terms and Conditions. The Committee shall
            determine the number of Performance Units to be granted to each
            participant. Performance Units may be issued in different classes or
            series having different terms and conditions.

      (b)   Award Period. The award period (the "Award Period") in respect of
            any Award of Performance Units shall be such period as the Committee
            shall determine commencing as of the beginning of the fiscal year of
            the Company in which such Award is made. An Award Period may contain
            a number of performance periods; each performance period shall
            commence on or after the first day of the Award Period and shall end
            no later than the last day of the Award Period.

      (c)   Performance Objectives. At the time each Award is made, the
            Committee shall establish individual and/or Company performance
            objectives to be attained within the performance periods as the
            means of determining Actual Value. The performance objectives shall
            be selected by the Committee in its sole discretion. The performance
            objectives may relate to the Company, one or more of its
            Subsidiaries or one or more of its divisions, units, partnerships,
            joint venturers or minority investments, product lines or products
            or any combination of the foregoing, and may be applied on an
            absolute basis and/or be relative to one or more peer group
            companies or indices, or any combination thereof, all as the
            Committee shall determine. In addition, the performance objectives
            may be calculated without regard to extraordinary items.

      (d)   Termination of Employment. Except as otherwise determined by the
            Committee, a participant's Performance Units shall be cancelled if
            the participant's continuous employment with the Company and all of
            its Subsidiaries shall terminate for any reason prior to the end of
            the Award Period, except solely by reason of a period of Related
            Employment, and except as otherwise specified in this subparagraph
            5(d) or in subparagraph 5(e). Notwithstanding the foregoing, if the
            participant's employment terminates because he has:

                                       2
<PAGE>
            (i)   died or become Disabled prior to the end of the Award Period,
                  the Performance Units shall be cancelled at the end of the
                  next ending performance period and he, or his legal
                  representative, as the case may be, shall receive payment in
                  respect of such Performance Units which he would have received
                  had he been in continuous employment with the Company through
                  the end of that period and had the individual performance
                  objectives, if any, that were imposed been achieved; provided,
                  however, that no such continuation shall be deemed to have
                  occurred for purposes of applying subparagraph 5(e) in the
                  event of an Adverse Change in the Plan in respect of the
                  participant following a Change in Control; or

            (ii)  retired under an approved retirement program of the Company or
                  a Subsidiary of the Company (or such other plan as may be
                  approved by the Committee, in its sole discretion, for this
                  purpose) prior to the end of the Award Period, and

                  (A)   at the time of his retirement, the participant is 65
                        years old or older, the Performance Units shall be
                        cancelled at the end of the next ending performance
                        period, and he shall receive the Maximum Value in
                        respect to such Performance Units, at the date of
                        cancellation,

                  (B)   at the time of his retirement the participant is less
                        than 65 years old and his retirement occurs prior to the
                        end of the first performance period in the Award Period,
                        and before 24 months have elapsed since the first day of
                        the Award Period, the participant shall receive payment
                        with respect to the Actual Value of one-ninth of the
                        Performance Units awarded to him under the Award, and

                  (C)   at the time of his retirement the participant is less
                        than 65 years old and his retirement occurs prior to the
                        end of the first performance period in the Award Period
                        and after at least 24 months have elapsed since the
                        first day of the Award Period, the participant shall
                        receive payment with respect to the Actual Value of
                        two-ninths of the Performance Units awarded to him under
                        the Award.

      (e)   Change in Control or Unfriendly Change in Control of the Company. If
            there occurs,

            (i)   either a Change in Control of the Company or the disposition
                  by the Company of the business of the Company for which the
                  participant's services are principally performed pursuant to a
                  sale or other disposition of all or substantially all of the
                  business or business-related assets of the Company or all or
                  substantially all of the assets or shares of a Subsidiary of
                  the Company for which the participant's services are
                  principally performed, and on the date of such transaction or
                  within 24 months thereafter (but in any event prior to the end
                  of the Award Period):

                  (A)   there is a Termination Without Cause of the employment
                        of a participant;

                  (B)   there is a Constructive Termination of the employment of
                        a participant; or

                  (C)   there occurs an Adverse Change in the Plan in respect of
                        a participant, or

            (ii)  an Unfriendly Change in Control of the Company, then:

                  (A)   the participant shall receive the Maximum Value of:

                                       3
<PAGE>
                  (1) that number of Performance Units which is in the same
                  proportion to the total number of Performance Units awarded to
                  the participant under such Award as

                        (x) the number of full months which have elapsed since
                        the first day of the Award Period to the end of the
                        first month in which occurs the Unfriendly Change in
                        Control of the Company or one of the events described in
                        clauses (A), (B) or (C) of subparagraph 5(e)(i) is to

                        (y) the total number of months in the Award Period, less

                  (2) the number of Performance Units awarded to the participant
                  under the Award in respect of which payment has already been
                  made to the participant or his beneficiary, and

            (B) if the number of Performance Units determined pursuant to
            subpart (1) of clause (A) above is less than the number of
            Performance Units subject to the particular Award, the participant
            shall receive the Actual Value of the remaining Performance Units.
            The Actual Value of the remaining Performance Units shall be
            determined as follows:

                  (x) if the Committee shall have determined, prior to the
                  Change in Control or Unfriendly Change in Control of the
                  Company, as the case may be, of the Company and based on the
                  most recent performance status reports, that the performance
                  objectives for the particular Award were being met at the date
                  of the determination, the Actual Value of the remaining
                  Performance Units subject to the particular Award shall be
                  equal to their Maximum Value, and

                  (y) if the determination of the Committee was that the
                  performance objectives for the particular Award were not being
                  met at the date of the determination, the Actual Value of the
                  remaining Performance Units subject to the particular Award
                  shall be such amount as shall have been determined by the
                  Committee as provided above in this subparagraph 5(e), but in
                  no event shall Actual Value be less than fifty percent (50%)
                  of Maximum Value for this purpose.

      Payment of any amount in respect of Performance Units as described above
      in this subparagraph 5(e) shall be made as promptly as possible after the
      occurrence of one of the events described in clauses 5(e)(i)(A) through
      5(e)(i)(C) or 5(e)(ii), as the case may be. Notwithstanding anything
      herein to the contrary, if, following a Change in Control of the Company
      (other than an Unfriendly Change in Control of the Company), a
      participant's employment remains continuous through the end of a
      performance period, then the participant shall be paid with respect to
      those Performance Units for which he would have been paid had there not
      been a Change in Control of the Company and the Actual Value of those
      Shares shall be determined in accordance with subparagraph 5(f).

(f)   Payment of Awards.

      (i)   Except as otherwise provided in subparagraph 5(e), as soon as
            practicable after the end of the performance period or such earlier
            date as the Committee in its sole discretion may designate, the
            Committee shall determine whether the conditions of subparagraphs
            5(c) and/or 5(d) have been met and, if so, shall certify such fact
            to

                                       4
<PAGE>
            the Board and shall ascertain the Actual Value of the Performance
            Units. The Committee shall cause an amount equal to the Actual Value
            of the Performance Units earned by the participant to be paid to him
            or his beneficiary.

      (ii)  Payment of any amount in respect of the Performance Units shall be
            made by the Company as promptly as practicable or, if the
            participant elects, shall be deferred to such other time or times as
            the Committee shall determine, and may be made in cash, in Shares,
            or partly in cash and partly in Shares as determined by the
            Committee. Such deferred payments may be made by undertaking to pay
            cash in the future, together with such additional amounts as may
            accrue thereon until the date or dates of payment, as determined by
            the Committee in its discretion.

6.    RESTRICTIONS ON DISTRIBUTIONS OF SHARES AND SHARE TRANSFERABILITY

      Notwithstanding anything herein to the contrary, no Shares shall be issued
      hereunder unless counsel for the Company is satisfied that such issuance
      will be in compliance with applicable laws (including, without limitation,
      United States federal and state securities laws, Bermuda law and any
      applicable Bermuda Monetary Authority permissions required) and applicable
      requirements of any securities exchange or similar entity, and unless the
      participant's tax obligations have been satisfied pursuant to subparagraph
      10(c). The Committee may require each individual receiving Shares pursuant
      to an Award to represent to and agree with the Company in writing that
      such individual is acquiring the Shares without a view to distribution
      thereof. The Committee may impose such restrictions on any Shares acquired
      pursuant to Awards as it may deem advisable, including, without
      limitation, restrictions to comply with Bermuda law, applicable securities
      laws, the requirements of any stock exchange or market upon which such
      Shares are then listed and/or traded and with any blue sky or state
      securities laws applicable to such Shares.

7.    DEFINITIONS

      For the purposes of the Plan and instruments entered into pursuant to the
      Plan, unless otherwise defined herein or in any related agreements, the
      following terms shall have the meanings set forth below:

      (a)   "Actual Value" means the potential value of an Award, as determined
            by the Committee pursuant to paragraph 5.

      (b)   "Adverse Change in the Plan" means

            (i)   termination of the Plan pursuant to paragraph 14;

            (ii)  amendment of the Plan pursuant to paragraph 11 that materially
                  diminishes the value of Awards that may be granted under the
                  Plan, either to individual participants or in the aggregate,
                  unless there is substituted concurrently authority to grant
                  long-term incentive awards of comparable value to individual
                  participants in the Plan or in the aggregate, as the case may
                  be; or

            (iii) in respect of any holder of an Award, a material diminution in
                  his rights held under such Award (except as may occur under
                  the terms of the Award as originally granted), unless there is
                  substituted concurrently a long-term incentive award with a
                  value at least comparable to the loss in value attributable to
                  such diminution in rights.

                                       5
<PAGE>
      (c)   "Award" means, individually or collectively, a grant of Performance
            Units under the Plan.

      (d)   "Award Period" means the period during which an Award is scheduled
            to be outstanding, as described in subparagraph 5(b).

      (e)   "Board" means the Board of Directors of the Company.

      (f)   "Cause" means:

            (i)   an act or omission by the participant that constitutes a
                  felony or any crime involving moral turpitude; or

            (ii)  gross negligence or willful gross misconduct by the
                  participant in connection with his employment by the Company
                  or by a Subsidiary of the Company.

      (g)   "Change in Control of the Company" means the occurrence of any of
            the following:

            (i)   any person or group (within the meaning of Section 13(d) and
                  14(d)(2) of the Exchange Act), other than the Company or its
                  Subsidiaries, becomes the beneficial owner (within the meaning
                  of Rule 13d-3 under the Exchange Act) of thirty-five percent
                  (35%) or more of the Company's then outstanding Shares; or

            (ii)  the Continuing Directors cease for any reason to constitute a
                  majority of the Board of the Company.

            A Change in Control of the Company within the meaning of this
            subparagraph 7(g) also may constitute an Unfriendly Change in
            Control of the Company within the meaning of subparagraph 7(s).
            Notwithstanding anything herein to the contrary, a Change in Control
            shall not occur upon an underwritten public offering of the
            Company's Shares.

      (h)   "Committee" means the committee established pursuant to paragraph 2
            that administers the Plan and Awards granted under the Plan.

      (i)   "Constructive Termination" means a termination of employment with
            the Company or a Subsidiary of the Company at the initiative of the
            participant that the participant declares by prior written notice
            delivered to the Secretary of the Company to be a Constructive
            Termination by the Company or a Subsidiary of the Company and which
            follows:

            (i)   a material decrease in his salary; or

            (ii)  a material diminution in the authority, duties or
                  responsibilities of his position with the result that the
                  participant makes a determination in good faith that he cannot
                  continue to carry out his job in substantially the same manner
                  as it was intended to be carried out immediately before such
                  diminution. Notwithstanding anything herein to the contrary,
                  Constructive Termination shall not occur within the meaning of
                  this subparagraph 7(i) until and unless 30 days have elapsed
                  from the date the Company receives such written notice without
                  the Company curing or causing to be cured the circumstance or
                  circumstances described in this subparagraph 7(i) on the basis
                  of which the declaration of Constructive Termination is given.

      (j)   "Continuing Director" means a member of the Board:

                                       6
<PAGE>
            (i)   who is not an employee of the Company or a Subsidiary of the
                  Company or of a holder of (or an employee or an affiliate of
                  an entity or group that holds) thirty-five percent (35%) or
                  more of the Company's Shares, and

            (ii)  who either was a member of the Board on January 1, 2002, or
                  who subsequently became a director of the Company and whose
                  election, or nomination for election, by the Company's holders
                  was approved by a vote of a majority of the Continuing
                  Directors then on the Board (which term, for purposes of this
                  definition, shall mean the whole Board and not any committee
                  thereof). Any action, approval of which shall require the
                  approval of a majority of the Continuing Directors, may be
                  authorized by one Continuing Director, if he is the only
                  Continuing Director on the Board, but no such action may be
                  taken if there are no Continuing Directors on the Board.

      (k)   "Disabled" means the physical or mental condition of a participant,
            which the Committee determines would entitle him to payment of
            monthly disability benefits under any long-term disability plan of
            the Company or a Subsidiary of the Company in which he is a
            participant.

      (l)   "Exchange Act" means the United States Securities Exchange Act of
            1934, as amended.

      (m)   "Maximum Value" means, with respect to each Performance Unit, the
            book value per Share as stated in the most recent audited accounts
            of the Company on the date the Award is paid or becomes payable to
            participants or, in the event that Shares are publicly traded on a
            recognized stock exchange, the closing price of the Shares as at the
            date prior to the day that the Award is paid.

      (n)   "Performance Units" means a hypothetical unit used as a measure of a
            participant's potential benefit under the Plan, which has a value
            determined pursuant to the terms of the Plan.

      (o)   "Related Employment" means the employment of an individual by an
            employer which is neither the Company nor a Subsidiary provided:

            (i)   such employment is undertaken and continued by the individual
                  at the request of the Company or a Subsidiary;

            (ii)  immediately prior to undertaking such employment, the
                  individual was an employee of the Company or a Subsidiary, or
                  was engaged in Related Employment; and

            (iii) such employment is recognized by the Committee, in its sole
                  discretion, as Related Employment for the purposes of the Plan
                  and the participant's Award(s). For purposes of the Plan and a
                  participant's Award(s), a participant's Related Employment
                  shall be treated as employment by the Company and termination
                  of Related Employment shall be treated as a termination of
                  employment with the Company.

      (p)   "Shares" means common shares of the Company, par value U.S. $0.01
            per Share.

      (q)   "Subsidiary" means a "subsidiary corporation" as defined in Section
            86 of the Companies Act 1981, as amended.

                                       7
<PAGE>
      (r)   "Termination Without Cause" means a termination of the participant's
            employment with the Company or a Subsidiary of the Company by the
            Company or the Subsidiary other than:

            (i)   because of the participant's death or Disability, or

            (ii)  for Cause.

            Notwithstanding anything herein to the contrary, unless otherwise
            determined by the Committee, if the participant's employment with
            the Company and its Subsidiaries shall terminate due to the
            disposition of the business of the Company for which the
            participant's services are principally performed pursuant to a sale
            or other disposition of all or substantially all of the business or
            business-related assets of the Company or all or substantially all
            of the assets or shares of a Subsidiary of the Company for which the
            participant's services are principally performed, such termination
            shall be deemed to be a "Termination Without Cause" for purposes of
            subparagraph 5(e) hereof.

      (s)   "Unfriendly Change in Control of the Company" means the occurrence
            of the following:

            (i)   any person or group (within the meaning of Section 13(d) and
                  14(d)(2) of the Exchange Act), other than the Company, becomes
                  the beneficial owner (within the meaning of Rule 13d-3 under
                  the Exchange Act) of thirty-five percent (35%) or more of the
                  Company's then outstanding Shares through a transaction that
                  is opposed by the Company's Chairman; and

            (ii)  a majority of the Company's Continuing Directors, by
                  resolution adopted within 30 days following the date the
                  Company becomes aware that subparagraph 7(s)(i) has been
                  satisfied, determines that a Change in Control has occurred.

8.    ANTI-DILUTION AND OTHER ADJUSTMENTS

      In the event of any change in the outstanding Shares of the Company by
      reason of any share split, share dividend, recapitalization, merger,
      consolidation, reorganization, combination or exchange of Shares or other
      similar event, and if the Committee shall determine, in its sole
      discretion, that such change equitably requires an adjustment of the
      Maximum Value or Actual Value of Performance Units which have been awarded
      to any participant, the Award Periods, or the performance objectives or
      performance periods, then such adjustment shall be made by the Committee
      and shall be conclusive and binding.

9.    DESIGNATION OF BENEFICIARY BY PARTICIPANT

      A participant may name a beneficiary to receive any payment to which he
      may be entitled in respect of Performance Units under the Plan in the
      event of his death, on a form to be provided by the Committee. A
      participant may change his beneficiary from time to time in the same
      manner. If no designated beneficiary is living on the date on which any
      amount becomes payable to a participant's executors or administrators, the
      term "beneficiary" as used in the Plan shall include such person or
      persons.

                                       8
<PAGE>
10.   MISCELLANEOUS PROVISIONS

      (a)   Limitation of Rights. Neither the Plan nor any action taken
            hereunder shall be construed as giving an employee any right to be
            retained in the employ of the Company or any Subsidiary of the
            Company.

      (b)   Transferability. A participant's rights and interest under the Plan
            may not be assigned or transferred in whole or in part either
            directly or by operation of law or otherwise (except in the event of
            a participant's death), including but not limited to, execution,
            levy, garnishment, attachment, pledge, bankruptcy or in any other
            manner and no such right or interest of any participant in the Plan
            shall be subject to any obligation or liability of such participant.

      (c)   Withholding. The Company and its Subsidiaries shall have the right
            to deduct from any payment (whether in shares or cash) made under
            the Plan any federal, state or local income or other taxes required
            by law to be withheld with respect to such payment. It shall be a
            condition to the obligation of the Company to issue Shares or cash
            upon payment of a Performance Unit that the participant (or any
            beneficiary) pay to the Company, upon its demand, such amount as may
            be required by the Company for the purpose of satisfying any tax
            withholding obligations. If the amount requested is not paid, the
            Company may refuse to issue payment.

      (d)   Expenses. The expenses of the Plan shall be borne by the Company.
            However, if an Award is made to an employee of a Subsidiary:

            (i)   if such Award results in payment of cash to the participant,
                  such Subsidiary shall pay to the Company an amount equal to
                  such cash payment; and

            (ii)  if the Award results in the issuance to the participant of
                  Shares, such Subsidiary shall pay to the Company an amount
                  equal to fair market value thereof, as determined by the
                  Committee, on the date such Shares are issued (or, in the case
                  of issuance of Restricted Share or of Shares subject to
                  transfer and forfeiture conditions, equal to the fair market
                  value thereof on the date on which such Shares are no longer
                  subject to applicable restriction), minus the amount, if any,
                  received by the Company in exchange for such Shares.

      (e)   Unfunded Plan. The Plan shall be unfunded. The Company shall not be
            required to establish any special or separate fund or to make any
            other segregation of assets to assure the payment of any Award under
            the Plan.

      (f)   Acceptance and Ratification by Participants. By accepting any Award
            or other benefit under the Plan, each participant and each person
            claiming under or through him shall be conclusively deemed to have
            indicated his acceptance and ratification of, and consent to, any
            action taken under the Plan by the Company, the Board or the
            Committee.

      (g)   Gender and Number. Except where otherwise indicated by the context,
            any masculine term used herein also shall include the feminine, the
            plural shall include the singular and the singular shall include the
            plural.

      (h)   Headings Not Part of Plan. Headings of paragraphs and subparagraphs
            hereof are inserted for convenience and reference only; they do not
            constitute part of the Plan.

                                       9
<PAGE>
      (i)   Governing Law. To the extent not preempted by United States Federal
            law, the Plan, and all agreements hereunder, shall be construed in
            accordance with, and governed by, the laws of Bermuda.

11.   AMENDMENT

      The Plan and any Award instruments may be amended at any time and from
      time to time by the Board. No amendment of the Plan or an Award instrument
      shall adversely affect any right of any participant with respect to any
      Award previously granted without such participant's written consent. For
      purposes of this paragraph 11, an adjustment made in good faith by the
      Committee pursuant to paragraph 8 shall not be deemed to have adversely
      affected an Award previously granted hereunder.

12.   SUCCESSORS

      All obligations of the Company under the Plan with respect to Awards
      granted hereunder shall be binding on any successor to the Company,
      whether the existence of such successor is the result of a direct or
      indirect purchase, merger, consolidation, share exchange, or other
      transaction involving all or substantially all of the business and/or
      assets of the Company.

13.   EFFECTIVE DATE OF PLAN

      The Plan shall be effective as of January 8, 2002.

14.   TERMINATION

      The Plan shall terminate upon the earlier of the following dates or events
      to occur:

      (a)   the adoption of a resolution of the Board terminating the Plan; or

      (b)   January 8, 2012.

      No termination of the Plan shall alter or impair any of the rights or
      obligations of any person, without his consent, under any Award previously
      granted under the Plan.

                        AS ORIGINALLY APPROVED BY THE BOARD OF DIRECTORS ON
                        JANUARY 8, 2002.

                                       10

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