Document:

EX-10.2

Exhibit 10.2

ALTERRA CAPITAL HOLDINGS LIMITED

2008 STOCK INCENTIVE PLAN

1. Purpose. The purpose of the Alterra Capital Holdings Limited 2008 Stock Incentive Plan is
to provide a means through which the Company and its Affiliates may attract and retain key
personnel and to provide a means whereby directors, officers, employees, consultants and advisors
(and prospective directors, officers, employees, consultants and advisors) of the Company and its
Affiliates can acquire and maintain an equity interest in the Company, or be paid incentive
compensation, which may (but need not) be measured by reference to the value of Common Shares,
thereby strengthening their commitment to the welfare of the Company and its Affiliates and
aligning their interests with those of the Company’s shareholders.

2. Definitions. The following definitions shall be applicable throughout the Plan:

(a) “Affiliate” means (i) any person or entity that directly or indirectly controls,
is controlled by or is under common control with the Company and/or (ii) to the extent provided by
the Committee, any person or entity in which the Company has a significant interest. The term
“control” (including, with correlative meaning, the terms “controlled by” and “under common control
with”), as applied to any person or entity, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such person or entity,
whether through the ownership of voting or other securities, by contract or otherwise.

(b) “Award” means, individually or collectively, any Incentive Stock Option,
Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Stock
Bonus Award, and Performance Compensation Award granted under the Plan.

(c) “Board” means the Board of Directors of the Company.

(d) “Business Combination” has the meaning given such term in the definition of
“Change in Control.”

(e) “Cause” means, in the case of a particular Award, unless the applicable Award
agreement states otherwise, (i) the Company or an Affiliate having “cause” to terminate a
Participant’s employment or service, as defined in any employment or consulting agreement between
the Participant and the Company or an Affiliate in effect at the time of such termination or
(ii) in the absence of any such employment or consulting agreement (or the absence of any
definition of “Cause” contained therein), (A) the Participant’s commission of, conviction for, plea
of guilty or nolo contendere to a felony or a crime involving moral turpitude, or other material
act or omission involving dishonesty or fraud, (B) the Participant’s conduct that brings or is
reasonably likely to bring the Company or any of its Affiliates into public disgrace or disrepute
and that affects the Company’s or any Affiliate’s business in any material way, (C) the
Participant’s failure to perform duties as reasonably directed by the Company or the Participant’s
material violation of any rule, regulation, policy or plan for the conduct of any service provider
to the Company or its Affiliates or its or their business (which, if curable, is not cured within
10 days after notice thereof is provided to the Participant) or (D) the Participant’s gross
negligence, willful malfeasance or material act of disloyalty with respect to the Company or its
Affiliates (which, if curable, is not cured within 10 days after notice thereof is provided to the
Participant). Any determination of whether Cause exists shall be made by the Committee in its sole
discretion.

(f) “Change in Control” shall, in the case of a particular Award, unless the
applicable Award agreement states otherwise or contains a different definition of “Change in
Control,” be deemed to occur upon:

(i)  Any sale, lease, exchange or other transfer (in one or a series of related transactions)
of all or substantially all of the assets of the Company or Alterra Bermuda Ltd.;

(ii)  Any “person” as such term is used in Section 13(d) and Section 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) is or becomes, directly or indirectly, the
“beneficial owner” as defined in Rule 13d-3 under the Exchange Act of securities of the Company
that represent 51% or more of the combined voting power of the Company’s then outstanding voting
securities (the “Outstanding Company Voting Securities”); provided, however, that,
for purposes of this Section 2(f), the following acquisitions shall not constitute a Change in
Control: (I) any acquisition directly from the Company, (II) any acquisition by the Company, (III)
any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Affiliate, (IV) any acquisition by any corporation pursuant to a transaction that
complies with Sections 2(f)(iv)(A) and 2(f)(iv)(B), (V) any acquisition involving beneficial
ownership of less than 50% of the then-outstanding Common Shares (the “Outstanding Company Common
Shares”) or the Outstanding Company Voting Securities that is determined by the Board, based on
review of public disclosure by the acquiring Person with respect to its passive investment intent,
not to have a purpose or effect of changing or influencing the control of the Company;
provided, however, that for purposes of this clause (V), any such acquisition in
connection with (x) an actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or consents or (y) any
“Business Combination” (as defined below) shall be presumed to be for the purpose or with the
effect of changing or influencing the control of the Company;

(iii)  During any period of two (2) consecutive years, the individuals who at the beginning of
such period constituted the Board together with any individuals subsequently elected to the Board
whose nomination by the shareholders of the Company was approved by a vote of the then incumbent
Board (i.e. those members of the Board who either have been directors from the beginning of such
two-year period or whose election or nomination for election was previously approved by the Board
as provided in this Section 2(f)(iii)) cease for any reason to constitute a majority of the Board;

(iv)  The Board or the shareholders of the Company approve and consummate a merger,
amalgamation or consolidation (a “Business Combination”) of the Company with any other corporation,
unless, following such Business Combination, (A) all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, for
a non-corporate entity, equivalent securities) and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of directors (or, for
a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting
from such Business Combination (including, without limitation, an entity that, as a result of such
transaction, owns the Company or all or substantially all of the Company’s assets either directly
or through one or more subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities, as the case may be, and (B) at least a majority of the
members of the board of directors (or, for a non-corporate entity, equivalent governing body) of
the entity resulting from such Business Combination were members of the incumbent Board at the time
of the execution of the initial agreement or of the action of the Board providing for such Business
Combination; or

(v) The Board or shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company (in one or a series of
transactions) of all or substantially all of the Company’s assets.

(g) “Code” means the Internal Revenue Code of 1986, as amended, and any successor
thereto. Reference in the Plan to any section of the Code shall be deemed to include any
regulations or other interpretative guidance under such section, and any amendments or successor
provisions to such section, regulations or guidance.

(h) “Committee” means a committee of at least two people as the Board may appoint to
administer the Plan or, if no such committee has been appointed by the Board, the Board.

(i) “Common Shares” means the common shares, par value $1.00 per share, of the Company
(and any stock or other securities into which such common shares may be converted or into which
they may be exchanged).

(j) “Company” means Alterra Capital Holdings Limited, a Bermuda company, and any
successor thereto.

(k) “Confidential Information” means any and all confidential and/or proprietary trade
secrets, knowledge, data, or information of the Company including, without limitation, any: (A)
drawings, inventions, methodologies, mask works, ideas, processes, formulas, source and object
codes, data, programs, software source documents, works of authorship, know-how, improvements,
discoveries, developments, designs and techniques, and all other work product of the Company,
whether or not patentable or registrable under trademark, copyright, patent or similar laws; (B)
information regarding plans for research, development, new service offerings and/or products,
marketing, advertising and selling, distribution, business plans and strategies, business
forecasts, budgets and unpublished financial statements, licenses, prices and costs, suppliers,
customers, customer history, customer preferences, or distribution arrangements; (C) any
information regarding the skills or compensation of employees, suppliers, agents, and/or
independent contractors of the Company; (D) concepts and ideas relating to the development and
distribution of content in any medium or to the current, future and proposed products or services
of the Company; (E) information about the Company’s investment program, trading methodology, or
portfolio holdings; or (F) any other information, data or the like that is labeled confidential or
described as confidential.

(l) “Date of Grant” means the date on which the granting of an Award is authorized, or
such other date as may be specified in such authorization.

(m) “Effective Date” means May 6, 2008.

(n) “Eligible Director” means a person who is (i) a “non-employee director” within the
meaning of Rule 16b-3 under the Exchange Act, and (ii) an “outside director” within the meaning of
Section 162(m) of the Code.

(o) “Eligible Person” means any (i) individual employed by the Company or an
Affiliate; provided, however, that no such employee covered by a collective
bargaining agreement shall be an Eligible Person unless and to the extent that such eligibility is
set forth in such collective bargaining agreement or in an agreement or instrument relating
thereto; (ii) director of the Company or an Affiliate; (iii) consultant or advisor to the Company
or an Affiliate who may be offered securities registrable on Form S-8 under the Securities Act; or
(iv) prospective employees, directors, officers, consultants or advisors who have accepted offers
of employment or consultancy from the Company or its Affiliates (and would satisfy the provisions
of clauses (i) through (iii) above once he or she begins employment with or begins providing
services to the Company or its Affiliates).

(p) “Exchange Act” has the meaning given such term in the definition of “Change in
Control,” and any reference in the Plan to any section of (or rule promulgated under) the Exchange
Act shall be deemed to include any rules, regulations or other interpretative guidance under such
section or rule, and any amendments or successor provisions to such section, rules, regulations or
guidance.

(q) “Exercise Price” has the meaning given such term in Section 7(b) of the Plan.

(r) “Fair Market Value” means, as of any date, the value of Common Shares determined
as follows:

(i) If the Common Shares are listed on any established stock exchange or a national market
system, including without limitation the Nasdaq Global Select Market, the Nasdaq Global Market or
the Nasdaq Capital Market of The Nasdaq Stock Market, the Fair Market Value will be the closing
sales price for such shares (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;

(ii) If the Common Shares are regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Common Share will be the mean between the high
bid and low asked prices for the Common Shares on the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or

(iii) In the absence of an established market for the Common Shares, the Fair Market Value
will be determined in good faith by the Administrator.

(s) “Immediate Family Members” shall have the meaning set forth in Section 16(b).

(t) “Incentive Stock Option” means an Option that is designated by the Committee as an
incentive stock option as described in Section 422 of the Code and otherwise meets the requirements
set forth in the Plan.

(u) “Indemnifiable Person” shall have the meaning set forth in Section 4(e) of the
Plan.

(v) “Intellectual Property Products” shall have the meaning set forth in Section 15(c)
of the Plan.

(w) “Mature Shares” means Common Shares owned by a Participant that are not subject to
any pledge or security interest and that have been either previously acquired by the Participant on
the open market or meet such other requirements, if any, as the Committee may determine are
necessary in order to avoid an accounting earnings charge on account of the use of such shares to
pay the Exercise Price or satisfy a withholding obligation of the Participant.

(x) “Negative Discretion” shall mean the discretion authorized by the Plan to be
applied by the Committee to eliminate or reduce the size of a Performance Compensation Award
consistent with Section 162(m) of the Code.

(y) “Nonqualified Stock Option” means an Option that is not designated by the
Committee as an Incentive Stock Option.

(z) “Option” means an Award granted under Section 7 of the Plan.

(aa) “Option Period” has the meaning given such term in Section 7(c) of the Plan.

(bb) “Outstanding Company Common Shares” has the meaning given such term in the
definition of “Change in Control.”

(cc) “Outstanding Company Voting Securities” has the meaning given such term in the
definition of “Change in Control.”

(dd) “Participant” means an Eligible Person who has been selected by the Committee to
participate in the Plan and to receive an Award pursuant to Section 6 of the Plan.

(ee) “Performance Compensation Award” shall mean any Award designated by the Committee
as a Performance Compensation Award pursuant to Section 11 of the Plan.

(ff) “Performance Criteria” shall mean the criterion or criteria that the Committee
shall select for purposes of establishing the Performance Goal(s) for a Performance Period with
respect to any Performance Compensation Award under the Plan.

(gg) “Performance Formula” shall mean, for a Performance Period, the one or more
objective formulae applied against the relevant Performance Goal to determine, with regard to the
Performance Compensation Award of a particular Participant, whether all, some portion but less than
all, or none of the Performance Compensation Award has been earned for the Performance Period.

(hh) “Performance Goals” shall mean, for a Performance Period, the one or more goals
established by the Committee for the Performance Period based upon the Performance Criteria.

(ii) “Performance Period” shall mean the one or more periods of time, as the Committee
may select, over which the attainment of one or more Performance Goals will be measured for the
purpose of determining a Participant’s right to, and the payment of, a Performance Compensation
Award.

(jj) “Permitted Transferee” shall have the meaning set forth in Section 16(b) of the
Plan.

(kk) “Person” has the meaning given such term in the definition of “Change in
Control.”

(ll) “Plan” means this Alterra Capital Holdings Limited 2008 Stock Incentive Plan.

(mm) “Restricted Period” means the period of time determined by the Committee during
which an Award is subject to restrictions or, as applicable, the period of time within which
performance is measured for purposes of determining whether an Award has been earned.

(nn) “Restricted Stock Unit” means an unfunded and unsecured promise to deliver Common
Shares, cash, other securities or other property, subject to certain restrictions (including,
without limitation, a requirement that the Participant remain continuously employed or provide
continuous services for a specified period of time), granted under Section 9 of the Plan.

(oo) “Restricted Stock” means Common Shares, subject to certain specified restrictions
(including, without limitation, a requirement that the Participant remain continuously employed or
provide continuous services for a specified period of time), granted under Section 9 of the Plan.

(pp) “SAR Period” has the meaning given such term in Section 8(b) of the Plan.

(qq) “Securities Act” means the Securities Act of 1933, as amended, and any successor
thereto. Reference in the Plan to any section of the Securities Act shall be deemed to include any
rules, regulations or other interpretative guidance under such section, and any amendments or
successor provisions to such section, rules, regulations or guidance.

(rr) “Stock Appreciation Right” or “SAR” means an Award granted under
Section 8 of the Plan.

(ss) “Stock Bonus Award” means an Award granted under Section 10 of the Plan.

(tt) “Strike Price” means, except as otherwise provided by the Committee in the case
of Substitute Awards, (i) in the case of a SAR granted in tandem with an Option, the Exercise Price
of the related Option, or (ii) in the case of a SAR granted independent of an Option, the Fair
Market Value on the Date of Grant.

(uu) “Subsidiary” means, with respect to any specified Person:

(1) any corporation, association or other business entity of which more than 50% of the total
voting power of shares of Outstanding Company Voting Securities (without regard to the occurrence
of any contingency and after giving effect to any voting agreement or shareholders’ agreement that
effectively transfers voting power) is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

(2) any partnership (or any comparable foreign entity (a) the sole general partner (or
functional equivalent thereof) or the managing general partner of which is such Person or
Subsidiary of such Person or (b) the only general partners (or functional equivalents thereof) of
which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

(vv) “Substitute Award” has the meaning given such term in Section 5(e).

3. Effective Date; Duration. The Plan shall be effective as of the Effective Date. The
expiration date of the Plan, on and after which date no Awards may be granted hereunder, shall be
the tenth anniversary of the Effective Date; provided, however, that such
expiration shall not affect Awards then outstanding, and the terms and conditions of the Plan shall
continue to apply to such Awards.

4. Administration. (a) The Committee shall administer the Plan. To the extent required to
comply with the provisions of Rule 16b-3 promulgated under the Exchange Act (if the Board is not
acting as the Committee under the Plan) or necessary to obtain the exception for performance-based
compensation under Section 162(m) of the Code, as applicable, it is intended that each member of
the Committee shall, at the time he takes any action with respect to an Award under the Plan, be an
Eligible Director. However, the fact that a Committee member shall fail to qualify as an Eligible
Director shall not invalidate any Award granted by the Committee that is otherwise validly granted
under the Plan. The acts of a majority of the members present at any meeting at which a quorum is
present or acts approved in writing by a majority of the Committee shall be deemed the acts of the
Committee. Whether a quorum is present shall be determined based on the Committee’s charter as
approved by the Board.

(b) Subject to the provisions of the Plan and applicable law, the Committee shall have the
sole and plenary authority, in addition to other express powers and authorizations conferred on the
Committee by the Plan, to: (i) designate Participants; (ii) determine the type or types of Awards
to be granted to a Participant; (iii) determine the number of Common Shares to be covered by, or
with respect to which payments, rights, or other matters are to be calculated in connection with,
Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what
extent, and under what circumstances Awards may be settled or exercised in cash, Common Shares,
other securities, other Awards or other property, or canceled, forfeited, or suspended and the
method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended;
(vi) determine whether, to what extent, and under what circumstances the delivery of cash, Common
Shares, other securities, other Awards or other property and other amounts payable with respect to
an Award shall be deferred either automatically or at the election of the Participant or of the
Committee; (vii) interpret, administer, reconcile any inconsistency in, correct any defect in
and/or supply any omission in the Plan and any instrument or agreement relating to, or Award
granted under, the Plan; (viii) establish, amend, suspend, or waive any rules and regulations and
appoint such agents as the Committee shall deem appropriate for the proper administration of the
Plan; (ix) accelerate the vesting or exercisability of, payment for or lapse of restrictions on,
Awards; and (x) make any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan.

(c) The Committee may delegate to one or more officers of the Company or any Affiliate the
authority to act on behalf of the Committee with respect to any matter, right, obligation, or
election that is the responsibility of or that is allocated to the Committee herein, and that may
be so delegated as a matter of law, except for grants of Awards to persons (i) subject to
Section 16 of the Exchange Act or (ii) who are, or who are reasonably expected to be, “covered
employees” for purposes of Section 162(m) of the Code.

(d) Unless otherwise expressly provided in the Plan, all designations, determinations,
interpretations, and other decisions under or with respect to the Plan or any Award or any
documents evidencing Awards granted pursuant to the Plan shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive and binding upon all persons or
entities, including, without limitation, the Company, any Affiliate, any Participant, any holder or
beneficiary of any Award, and any shareholder of the Company.

(e) No member of the Board, the Committee, delegate of the Committee or any employee or agent
of the Company (each such person, an “Indemnifiable Person”) shall be liable for any action taken
or omitted to be taken or any determination made in good faith with respect to the Plan or any
Award hereunder. Each Indemnifiable Person shall be indemnified and held harmless by the Company
against and from any loss, cost, liability, or expense (including attorneys’ fees) that may be
imposed upon or incurred by such Indemnifiable Person in connection with or resulting from any
action, suit or proceeding to which such Indemnifiable Person may be a party or in which such
Indemnifiable 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 Indemnifiable
Person with the Company’s approval, in settlement thereof, or paid by such Indemnifiable Person in
satisfaction of any judgment in any such action, suit or proceeding against such Indemnifiable
Person, provided, that the Company shall have the right, at its own expense, to assume and
defend any such action, suit or proceeding and once the Company gives notice of its intent to
assume the defense, the Company shall have sole control over such defense with counsel of the
Company’s choice. The foregoing right of indemnification shall not be available to an
Indemnifiable Person to the extent that a final judgment or other final adjudication (in either
case not subject to further appeal) binding upon such Indemnifiable Person determines that the acts
or omissions of such Indemnifiable Person giving rise to the indemnification claim resulted from
such Indemnifiable Person’s bad faith, fraud or willful criminal act or omission or that such right
of indemnification is otherwise prohibited by law or by the Company’s Certificate of Incorporation
or Bye-Laws. The foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such Indemnifiable Persons may be entitled under the Company’s Certificate
of Incorporation or Bye-Laws, as a matter of law, or otherwise, or any other power that the Company
may have to indemnify such Indemnifiable Persons or hold them harmless.

(f) Notwithstanding anything to the contrary contained in the Plan, the Board may, in its sole
discretion, at any time and from time to time, grant Awards and administer the Plan with respect to
such Awards. In any such case, the Board shall have all the authority granted to the Committee
under the Plan.

5. Grant of Awards; Shares Subject to the Plan; Limitations. (a) The Committee may, from time
to time, grant Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Stock
Bonus Awards and/or Performance Compensation Awards to one or more Eligible Persons.

(b) Awards granted under the Plan shall be subject to the following limitations: (i) subject
to Section 12 of the Plan, the Committee is authorized to deliver under the Plan 4,500,000 shares;
(ii) subject to Section 12 of the Plan, grants of Options or SARs under the Plan in respect of no
more than 600,000 Common Shares may be made to any single Participant during any calendar year;
(iii) subject to Section 12 of the Plan, no more than 600,000 Common Shares may be earned in
respect of Performance Compensation Awards granted pursuant to Section 11 of the Plan to any single
Participant for a single calendar year during a Performance Period, or in the event such
Performance Compensation Award is paid in cash, other securities, other Awards or other property,
no more than the fair market value of 600,000 Common Shares on the last day of the Performance
Period to which such Award relates; and (iv) the maximum amount that can be paid to any single
Participant in any one calendar year pursuant to a cash bonus Award described in Section 11(a) of
the Plan shall be $15,000,000.

(c) Common Shares used to pay the required Exercise Price or tax obligations, or shares not
issued in connection with settlement of an Option or SAR or that are used or withheld to satisfy
tax obligations of the Participant shall, notwithstanding anything herein to the contrary, not be
available again for other Awards under the Plan. Shares underlying Awards under the Plan that are
forfeited, cancelled, expire unexercised, or are settled in cash are available again for Awards
under the Plan.

(d) Common Shares delivered by the Company in settlement of Awards may be authorized and
unissued shares, shares held in the treasury of the Company, shares purchased on the open market or
by private purchase, or a combination of the foregoing.

(e) Awards may, in the sole discretion of the Committee, be granted under the Plan in
assumption of, or in substitution for, outstanding awards previously granted by an entity acquired
by the Company or with which the Company combines (“Substitute Awards”). The number of Common
Shares underlying any Substitute Awards shall be counted against the aggregate number of Common
Shares available for Awards under the Plan.

6. Eligibility. Participation shall be limited to Eligible Persons who have entered into an
Award agreement or who have received written notification from the Committee, or from a person
designated by the Committee, that they have been selected to participate in the Plan.

7. Options. (a) Generally. Each Option granted under the Plan shall be evidenced by
an Award agreement (whether in paper or electronic medium (including email or the posting on a web
site maintained by the Company or a third party under contract with the Company)). Each Option so
granted shall be subject to the conditions set forth in this Section 7, and to such other
conditions not inconsistent with the Plan as may be reflected in the applicable Award agreement.
All Options granted under the Plan shall be Nonqualified Stock Options unless the applicable Award
agreement expressly states that the Option is intended to be an Incentive Stock Option. Incentive
Stock Options shall be granted only to Eligible Persons who are employees of the Company and its
Affiliates, and no Incentive Stock Option shall be granted to any Eligible Person who is ineligible
to receive an Incentive Stock Option under the Code. No Option shall be treated as an Incentive
Stock Option unless the Plan has been approved by the shareholders of the Company in a manner
intended to comply with the stockholder approval requirements of Section 422(b)(1) of the Code,
provided that any Option intended to be an Incentive Stock Option shall not fail to be effective
solely on account of a failure to obtain such approval, but rather such Option shall be treated as
a Nonqualified Stock Option unless and until such approval is obtained. In the case of an
Incentive Stock Option, the terms and conditions of such grant shall be subject to and comply with
such rules as may be prescribed by Section 422 of the Code. If for any reason an Option intended
to be an Incentive Stock Option (or any portion thereof) shall not qualify as an Incentive Stock
Option, then, to the extent of such nonqualification, such Option or portion thereof shall be
regarded as a Nonqualified Stock Option appropriately granted under the Plan.

(b) Exercise Price. Except as otherwise provided by the Committee in the case of
Substitute Awards, the exercise price (“Exercise Price”) per Common Share for each Option shall not
be less than 100% of the Fair Market Value of such share (determined as of the Date of Grant);
provided, however, that in the case of an Incentive Stock Option granted to an employee who, at the
time of the grant of such Option, owns shares representing more than 10% of the voting power of all
classes of shares of the Company or any Affiliate, the Exercise Price per share shall not be less
than 110% of the Fair Market Value per share on the Date of Grant and provided further that,
notwithstanding any provision herein to the contrary, the Exercise Price shall not be less than the
par value per Common Share.

(c) Vesting and Expiration. Options shall vest and become exercisable in such manner
and on such date or dates determined by the Committee and shall expire after such period, not to
exceed ten years, as may be determined by the Committee (the “Option Period”); provided,
however, that the Option Period shall not exceed five years from the Date of Grant in the
case of an Incentive Stock Option granted to a Participant who on the Date of Grant owns shares
representing more than 10% of the voting power of all classes of shares of the Company or any
Affiliate; provided, further, that notwithstanding any vesting dates set by the
Committee, the Committee may, in its sole discretion, accelerate the exercisability of any Option,
which acceleration shall not affect the terms and conditions of such Option other than with respect
to exercisability. Unless otherwise provided by the Committee in an Award agreement: (i) an
Option shall vest and become exercisable with respect to 100% of the Common Shares subject to such
Option on the third anniversary of the Date of Grant; (ii) the unvested portion of an Option shall
expire upon termination of employment or service of the Participant granted the Option, and the
vested portion of such Option shall remain exercisable for (A) one year following termination of
employment or service by reason of such Participant’s death or disability (as determined by the
Committee), but not later than the expiration of the Option Period or (B) 90 days following
termination of employment or service for any reason other than such Participant’s death or
disability, and other than such Participant’s termination of employment or service for Cause, but
not later than the expiration of the Option Period; and (iii) both the unvested and the vested
portion of an Option shall expire upon the termination of the Participant’s employment or service
by the Company for Cause.

(d) Method of Exercise and Form of Payment. No Common Shares shall be delivered
pursuant to any exercise of an Option until payment in full of the Exercise Price therefor is
received by the Company and the Participant has paid to the Company an amount equal to any federal,
state, local and non-U.S. income and employment taxes required to be withheld. Options that have
become exercisable may be exercised by delivery of written or electronic notice of exercise to the
Company in accordance with the terms of the Option accompanied by payment of the Exercise Price.
The Exercise Price shall be payable (i) in cash, check, cash equivalent and/or Common Shares valued
at the fair market value at the time the Option is exercised (including, pursuant to procedures
approved by the Committee, by means of attestation of ownership of a sufficient number of Common
Shares in lieu of actual delivery of such shares to the Company); provided, that such
Common Shares are not subject to any pledge or other security interest and are Mature Shares and;
(ii) by such other method as the Committee may permit in accordance with applicable law, in its
sole discretion, including without limitation: (A) in other property having a fair market value on
the date of exercise equal to the Exercise Price or (B) if there is a public market for the Common
Shares at such time, by means of a broker-assisted “cashless exercise” pursuant to which the
Company is delivered a copy of irrevocable instructions to a stockbroker to sell the Common Shares
otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an
amount equal to the Exercise Price or (C) by a “net exercise” method whereby the Company withholds
from the delivery of the Common Shares for which the Option was exercised that number of Common
Shares having a fair market value equal to the aggregate Exercise Price for the Common Shares for
which the Option was exercised. Any fractional Common Shares shall be settled in cash.

(e) Notification upon Disqualifying Disposition of an Incentive Stock Option. Each
Participant awarded an Incentive Stock Option under the Plan shall notify the Company in writing
immediately after the date he makes a disqualifying disposition of any Common Shares acquired
pursuant to the exercise of such Incentive Stock Option. A disqualifying disposition is any
disposition (including, without limitation, any sale) of such Common Shares before the later of
(A) two years after the Date of Grant of the Incentive Stock Option or (B) one year after the date
of exercise of the Incentive Stock Option. The Company may, if determined by the Committee and in
accordance with procedures established by the Committee, retain possession of any Common Shares
acquired pursuant to the exercise of an Incentive Stock Option as agent for the applicable
Participant until the end of the period described in the preceding sentence.

(f) Compliance With Laws, etc. Notwithstanding the foregoing, in no event shall a
Participant be permitted to exercise an Option in a manner that the Committee determines would
violate the Sarbanes-Oxley Act of 2002, or any other applicable law or the applicable rules and
regulations of the Securities and Exchange Commission or the applicable rules and regulations of
any securities exchange or inter-dealer quotation system on which the securities of the Company are
listed or traded.

8. Stock Appreciation Rights. (a) Generally. Each SAR granted under the Plan shall
be evidenced by an Award agreement (whether in paper or electronic medium (including email or the
posting on a web site maintained by the Company or a third party under contract with the Company)).
Each SAR so granted shall be subject to the conditions set forth in this Section 8, and to such
other conditions not inconsistent with the Plan as may be reflected in the applicable Award
agreement. Any Option granted under the Plan may include tandem SARs. The Committee also may
award SARs to Eligible Persons independent of any Option.

(b) Vesting and Expiration. A SAR granted in connection with an Option shall become
exercisable and shall expire according to the same vesting schedule and expiration provisions as
the corresponding Option. A SAR granted independent of an Option shall vest and become exercisable
and shall expire in such manner and on such date or dates determined by the Committee and shall
expire after such period, not to exceed ten years, as may be determined by the Committee (the “SAR
Period”); provided, however, that notwithstanding any vesting dates set by the Committee, the
Committee may, in its sole discretion, accelerate the exercisability of any SAR, which acceleration
shall not affect the terms and conditions of such SAR other than with respect to exercisability.
Unless otherwise provided by the Committee in an Award agreement: (i) a SAR shall vest and become
exercisable with respect to 100% of the Common Shares subject to such SAR on the third anniversary
of the Date of Grant; (ii) the unvested portion of a SAR shall expire upon termination of
employment or service of the Participant granted the SAR, and the vested portion of such SAR shall
remain exercisable for (A) one year following termination of employment or service by reason of
such Participant’s death or disability (as determined by the Committee), but not later than the
expiration of the SAR Period or (B) 90 days following termination of employment or service for any
reason other than such Participant’s death or disability, and other than such Participant’s
termination of employment or service for Cause, but not later than the expiration of the SAR
Period; and (iii) both the unvested and the vested portion of a SAR shall expire upon the
termination of the Participant’s employment or service by the Company for Cause.

(c) Method of Exercise. SARs that have become exercisable may be exercised by
delivery of written or electronic notice of exercise to the Company in accordance with the terms of
the Award, specifying the number of SARs to be exercised and the date on which such SARs were
awarded. Notwithstanding the foregoing, if on the last day of the Option Period (or in the case of
a SAR independent of an option, the SAR Period), the fair market value exceeds the Strike Price,
the Participant has not exercised the SAR or the corresponding Option (if applicable), and neither
the SAR nor the corresponding Option (if applicable) has expired, such SAR shall be deemed to have
been exercised by the Participant on such last day and the Company shall make the appropriate
payment therefor.

(d) Payment. Upon the exercise of a SAR, the Company shall pay to the Participant an
amount equal to the number of shares subject to the SAR that are being exercised multiplied by the
excess, if any, of the fair market value of one Common Share on the exercise date over the Strike
Price, less an amount equal to any federal, state, local and non-U.S. income and employment taxes
required to be withheld. The Company shall pay such amount in cash, in Common Shares valued at
fair market value, or any combination thereof, as determined by the Committee. Any fractional
Common Share shall be settled in cash.

9. Restricted Stock and Restricted Stock Units. (a) Generally. Each grant of
Restricted Stock and Restricted Stock Units shall be evidenced by an Award agreement (whether in
paper or electronic medium (including email or the posting on a web site maintained by the Company
or a third party under contract with the Company)). Each such grant shall be subject to the
conditions set forth in this Section 9, and to such other conditions not inconsistent with the Plan
as may be reflected in the applicable Award agreement.

(b) Restricted Accounts; Escrow or Similar Arrangement. Upon the grant of Restricted
Stock, a book entry in a restricted account shall be established in the Participant’s name at the
Company’s transfer agent and, if the Committee determines that the Restricted Stock shall be held
by the Company or in escrow rather than held in such restricted account pending the release of the
applicable restrictions, the Committee may require the Participant to additionally execute and
deliver to the Company (i) an escrow agreement satisfactory to the Committee, if applicable, and
(ii) the appropriate share power (endorsed in blank) with respect to the Restricted Stock covered
by such agreement. If a Participant shall fail to execute an agreement evidencing an Award of
Restricted Stock and, if applicable, an escrow agreement and blank share power within the amount of
time specified by the Committee, the Award shall be null and void. Subject to the restrictions set
forth in this Section 9 and the applicable Award agreement, the Participant generally shall have
the rights and privileges of a shareholder as to such Restricted Stock, including without
limitation the right to vote such Restricted Stock and the right to receive dividends, if
applicable. To the extent shares of Restricted Stock are forfeited, any share certificates issued
to the Participant evidencing such shares shall be returned to the Company, and all rights of the
Participant to such shares and as a shareholder with respect thereto shall terminate without
further obligation on the part of the Company.

(c) Vesting; Acceleration of Lapse of Restrictions. Unless otherwise provided by the
Committee in an Award agreement: (i) the Restricted Period shall lapse with respect to 100% of the
Restricted Stock and Restricted Stock Units on the third anniversary of the Date of Grant; and
(ii) the unvested portion of Restricted Stock and Restricted Stock Units shall terminate and be
forfeited upon termination of employment or service of the Participant granted the applicable
Award.

(d) Delivery of Restricted Stock and Settlement of Restricted Stock Units. (i) Upon
the expiration of the Restricted Period with respect to any shares of Restricted Stock, the
restrictions set forth in the applicable Award agreement shall be of no further force or effect
with respect to such shares, except as set forth in the applicable Award agreement. If an escrow
arrangement is used, upon such expiration, the Company shall deliver to the Participant, or his
beneficiary, without charge, the share certificate evidencing the shares of Restricted Stock that
have not then been forfeited and with respect to which the Restricted Period has expired (rounded
down to the nearest full share). Dividends, if any, that may have been withheld by the Committee
and attributable to any particular share of Restricted Stock shall be distributed to the Committee
and attributable to any particular share of Restricted Stock shall be distributed to the
Participant in cash or, at the sole discretion of the Committee, in shares of Common Stock having a
fair market value equal to the amount of such dividends, upon the release of restrictions on such
share and, if such share is forfeited, the Participant shall have no right to such dividends
(except as otherwise set forth by the Committee in the applicable Award agreement).

(ii) Unless otherwise provided by the Committee in an Award agreement, upon the expiration of
the Restricted Period with respect to any outstanding Restricted Stock Units, the Company shall
deliver to the Participant, or his beneficiary, without charge, one Common Share for each such
outstanding Restricted Stock Unit; provided, however, that the Committee may, in
its sole discretion, elect to (i) pay cash or part cash and part Common Share in lieu of delivering
only Common Shares in respect of such Restricted Stock Units or (ii) defer the delivery of Common
Shares (or cash or part Common Shares and part cash, as the case may be) beyond the expiration of
the Restricted Period. If a cash payment is made in lieu of delivering Common Shares, the amount
of such payment shall be equal to the fair market value of the Common Shares as of the date on
which the Restricted Period lapsed with respect to such Restricted Stock Units, less an amount
equal to any federal, state, local and non-U.S. income and employment taxes required to be
withheld.

10. Stock Bonus Awards. The Committee may issue unrestricted Common Shares, or other Awards
denominated in Common Shares, under the Plan to Eligible Persons, either alone or in tandem with
other awards, in such amounts as the Committee shall from time to time in its sole discretion
determine. Each Stock Bonus Award granted under the Plan shall be evidenced by an Award agreement
(whether in paper or electronic medium (including email or the posting on a web site maintained by
the Company or a third party under contract with the Company)). Each Stock Bonus Award so granted
shall be subject to such conditions not inconsistent with the Plan as may be reflected in the
applicable Award agreement.

11. Performance Compensation Awards. (a) Generally. The Committee shall have the
authority, at the time of grant of any Award described in Sections 7 through 10 of the Plan, to
designate such Award as a Performance Compensation Award intended to qualify as “performance-based
compensation” under Section 162(m) of the Code. The Committee shall have the authority to make an
award of a cash bonus to any Participant and designate such Award as a Performance Compensation
Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code.

(b) Discretion of Committee with Respect to Performance Compensation Awards. With
regard to a particular Performance Period, the Committee shall have sole discretion to select the
length of such Performance Period, the type(s) of Performance Compensation Awards to be issued, the
Performance Criteria that will be used to establish the Performance Goal(s), the kind(s) and/or
level(s) of the Performance Goals(s) that is (are) to apply and the Performance Formula. Within
the first 90 days of a Performance Period (or, if longer or shorter, within the maximum period
allowed under Section 162(m) of the Code), the Committee shall, with regard to the Performance
Compensation Awards to be issued for such Performance Period, exercise its discretion with respect
to each of the matters enumerated in the immediately preceding sentence and record the same in
writing.

(c) Performance Criteria. The Performance Criteria that will be used to establish the
Performance Goal(s) shall be based on the attainment of specific levels of performance of the
Company (and/or one or more Affiliates, divisions or operational units, or any combination of the
foregoing) and shall include the following: (i) net earnings or net income (before or after
taxes); (ii) basic or diluted earnings per share (before or after taxes); (iii) net revenue or
revenue growth; (iv) gross profit or gross profit growth; (v) operating profit (before or after
taxes); (vi) return measures (including, but not limited to, return on assets, capital, invested
capital, equity, or sales); (vii) cash flow (including, but not limited to, operating cash flow,
free cash flow, and cash flow return on capital); (viii) earnings before or after taxes, interest,
depreciation and/or amortization; (ix) gross or operating margins; (x) productivity ratios;
(xi) share price (including, but not limited to, growth measures and total shareholder return);
(xii) expense targets; (xiii) margins; (xiv) operating efficiency; (xv) objective measures of
customer satisfaction; (xvi) working capital targets; (xvii) measures of economic value added;
(xviii) inventory control; (xix) enterprise value; (xx) sales; (xxi) debt levels and net debt;
(xxii) combined ratio; (xxiii) timely launch of new facilities; (xxiv) client retention;
(xxv) employee retention; (xxvi) timely completion of new product rollouts; and (xxvii)  objective
measures of personal targets, goals or completion of projects. Any one or more of the Performance
Criteria may be used on an absolute or relative basis to measure the performance of the Company
and/or one or more Affiliates as a whole or any business unit(s) of the Company and/or one or more
Affiliates or any combination thereof, as the Committee may deem appropriate, or any of the above
Performance Criteria may be compared to the performance of a selected group of comparison
companies, or a published or special index that the Committee, in its sole discretion, deems
appropriate, or as compared to various stock market indices. The Committee also has the authority
to provide for accelerated vesting of any Award based on the achievement of Performance Goals
pursuant to the Performance Criteria specified in this paragraph. To the extent required under
Section 162(m) of the Code, the Committee shall, within the first 90 days of a Performance Period
(or, if longer or shorter, within the maximum period allowed under Section 162(m) of the Code),
define in an objective fashion the manner of calculating the Performance Criteria it selects to use
for such Performance Period and thereafter promptly communicate such Performance Criteria to the
Participant.

(d) Modification of Performance Goal(s). In the event that applicable tax and/or
securities laws change to permit Committee discretion to alter the governing Performance Criteria
without obtaining shareholder approval of such alterations, the Committee shall have sole
discretion to make such alterations without obtaining shareholder approval. The Committee is
authorized at any time during the first 90 days of a Performance Period (or, if longer or shorter,
within the maximum period allowed under Section 162(m) of the Code), or at any time thereafter to
the extent the exercise of such authority at such time would not cause the Performance Compensation
Awards granted to any Participant for such Performance Period to fail to qualify as
“performance-based compensation” under Section 162(m) of the Code, in its sole discretion, to
adjust or modify the calculation of a Performance Goal for such Performance Period, based on and in
order to appropriately reflect the following events: (i) asset write-downs; (ii) litigation or
claim judgments or settlements; (iii) the effect of changes in tax laws, accounting principles, or
other laws or regulatory rules affecting reported results; (iv) any reorganization and
restructuring programs; (v) extraordinary nonrecurring items as described in Accounting Principles
Board Opinion No. 30 (or any successor pronouncement thereto) and/or in management’s discussion and
analysis of financial condition and results of operations appearing in the Company’s annual report
to shareholders for the applicable year; (vi) acquisitions or divestitures; (vii) any other
specific unusual or nonrecurring events, or objectively determinable category thereof;
(viii) foreign exchange gains and losses; and (ix) a change in the Company’s fiscal year.

(e) Payment of Performance Compensation Awards. (i) Condition to Receipt of
Payment. Unless otherwise provided in the applicable Award agreement, a Participant must be
employed by the Company on the last day of a Performance Period to be eligible for payment in
respect of a Performance Compensation Award for such Performance Period.

(ii) Limitation. A Participant shall be eligible to receive payment in respect of a
Performance Compensation Award only to the extent that: (A) the Performance Goals for such period
are achieved; and (B) all or some of the portion of such Participant’s Performance Compensation
Award has been earned for the Performance Period based on the application of the Performance
Formula to such achieved Performance Goals.

(iii) Certification. Following the completion of a Performance Period, the Committee
shall review and certify in writing whether, and to what extent, the Performance Goals for the
Performance Period have been achieved and, if so, calculate and certify in writing that amount of
the Performance Compensation Awards earned for the period based upon the Performance Formula. The
Committee shall then determine the amount of each Participant’s Performance Compensation Award
actually payable for the Performance Period and, in so doing, may apply Negative Discretion.

(iv) Use of Negative Discretion. In determining the actual amount of an individual
Participant’s Performance Compensation Award for a Performance Period, the Committee may reduce or
eliminate the amount of the Performance Compensation Award earned under the Performance Formula in
the Performance Period through the use of Negative Discretion if, in its sole judgment, such
reduction or elimination is appropriate. The Committee shall not have the discretion, except as is
otherwise provided in the Plan, to (A) grant or provide payment in respect of Performance
Compensation Awards for a Performance Period if the Performance Goals for such Performance Period
have not been attained; or (B) increase a Performance Compensation Award above the applicable
limitations set forth in Section 5 of the Plan.

(f) Timing of Award Payments. Performance Compensation Awards granted for a
Performance Period shall be paid to Participants as soon as administratively practicable following
completion of the certifications required by this Section 11, but in no event later than
two-and-one-half months following the end of the fiscal year during which the Performance Period is
completed.

12. Changes in Capital Structure and Similar Events. In the event of (a) any dividend or
other distribution (whether in the form of cash, Common Shares, other securities or other property)
other than regular cash dividends, recapitalization, stock split, reverse stock split,
reorganization, merger, amalgamation, consolidation, split-up, split-off, combination, repurchase
or exchange of Common Shares or other securities of the Company, issuance of warrants or other
rights to acquire Common Shares or other securities of the Company, or other similar corporate
transaction or event (including, without limitation, a Change in Control) that affects the Common
Shares including, without limitation, the value thereof or (b) unusual or nonrecurring events
(including, without limitation, a Change in Control) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or changes in applicable rules, rulings,
regulations or other requirements of any governmental body or securities exchange or inter-dealer
quotation system, accounting principles or law, such that in either case an adjustment is
determined by the Committee in its sole discretion to be necessary or appropriate, then the
Committee shall make any such adjustments in such manner as it may deem equitable, including
without limitation any or all of the following:

(i) adjusting any or all of (A) the number of Common Shares or other securities of the Company
(or number and kind of other securities or other property) that may be delivered in respect of
Awards or with respect to which Awards may be granted under the Plan (including, without
limitation, adjusting any or all of the limitations under Section 5 of the Plan) and (B) the terms
of any outstanding Award, including, without limitation, (1) the number of Common Shares or other
securities of the Company (or number and kind of other securities or other property) subject to
outstanding Awards or to which outstanding Awards relate, (2) the Exercise Price or Strike Price
with respect to any Award or (3) any applicable performance measures (including, without
limitation, Performance Criteria and Performance Goals);

(ii) providing for a substitution or assumption of Awards, accelerating the exercisability of,
lapse of restrictions on, or termination of, Awards or providing for a period of time for exercise
prior to the occurrence of such event; and

(iii) canceling any one or more outstanding Awards and causing to be paid to the holders
thereof, in cash, Common Shares, other securities or other property, or any combination thereof,
the value of such Awards, if any, as determined by the Committee (which if applicable may be based
upon the price per Common Share received or to be received by other shareholders of the Company in
such event), including without limitation, in the case of an outstanding Option or SAR, a cash
payment in an amount equal to the excess, if any, of the fair market value (as of a date specified
by the Committee) of the Common Shares subject to such Option or SAR over the aggregate Exercise
Price or Strike Price of such Option or SAR, respectively (it being understood that, in such event,
any Option or SAR having a per share Exercise Price or Strike Price equal to, or in excess of, the
fair market value of a Common Share subject thereto may be canceled and terminated without any
payment or consideration therefor);

provided, however, that in the case of any “equity restructuring” (within the
meaning of the Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 123 (revised 2004)), the Committee shall make an equitable or proportionate adjustment to
outstanding Awards to reflect such equity restructuring. Any adjustment in Incentive Stock Options
under this Section 12 (other than any cancellation of Incentive Stock Options) shall be made only
to the extent not constituting a “modification” within the meaning of Section 424(h)(3) of the
Code, and any adjustments under this Section 12 shall be made in a manner that does not adversely
affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act. The Company shall
give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall be
conclusive and binding for all purposes.

13. Effect of Change in Control. Except to the extent otherwise provided in an Award
agreement, in the event of a Change in Control, notwithstanding any provision of the Plan to the
contrary, the Committee may provide that, with respect to all or any portion of a particular
outstanding Award or Awards:

(a) the then outstanding Options and SARs shall become immediately exercisable as of a time
prior to the Change in Control;

(b) the Restricted Period shall expire as of a time prior to the Change in Control (including
without limitation a waiver of any applicable Performance Goals);

(c) Performance Periods in effect on the date the Change in Control occurs shall end on such
date, and the Committee shall (i) determine the extent to which Performance Goals with respect to
each such Performance Period have been met based upon such audited or unaudited financial
information or other information then available as it deems relevant and (ii) cause the Participant
to receive partial or full payment of Awards for each such Performance Period based upon the
Committee’s determination of the degree of attainment of the Performance Goals, or assuming that
the applicable “target” levels of performance have been attained or on such other basis determined
by the Committee; and

(d) the Awards previously deferred shall be settled in full as soon as practicable.

To the extent practicable, any actions taken by the Committee under the immediately preceding
clauses (a) through (d) shall occur in a manner and at a time which allows affected Participants
the ability to participate in the Change in Control transactions with respect to the Common Shares
subject to their Awards.

14. Amendments and Termination. (a) Amendment and Termination of the Plan. The Board
may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time;
provided, that (i) no amendment to Section 11(c) or Section 14(b) (to the extent required
by the proviso in such Section 14(b)) shall be made without shareholder approval and (ii) no such
amendment, alteration, suspension, discontinuation or termination shall be made without shareholder
approval if such approval is necessary to comply with any tax or regulatory requirement applicable
to the Plan (including, without limitation, as necessary to comply with any rules or requirements
of any securities exchange or inter-dealer quotation system on which the Common Shares may be
listed or quoted or to prevent the Company from being denied a tax deduction under Section 162(m)
of the Code); provided, further, that any such amendment, alteration, suspension,
discontinuance or termination that would materially and adversely affect the rights of any
Participant or any holder or beneficiary of any Award theretofore granted shall not to that extent
be effective without the consent of the affected Participant, holder or beneficiary. If the Board
so delegates, the Committee may amend or modify the Plan, except to the extent that such amendment
involves increasing the maximum number of Common Shares available for issuance under the Plan.

(b) Amendment of Award Agreements. The Committee may, to the extent consistent with
the terms of any applicable Award agreement, waive any conditions or rights under, amend any terms
of, or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted or the
associated Award agreement, prospectively or retroactively; provided that any such waiver,
amendment, alteration, suspension, discontinuance, cancellation or termination that would
materially and adversely affect the rights of any Participant with respect to any Award theretofore
granted shall not to that extent be effective without the consent of the affected Participant;
provided, further, that without shareholder approval, except as otherwise permitted
under Section 12 of the Plan, (i) no amendment or modification may reduce the Exercise Price of any
Option or the Strike Price of any SAR, (ii) the Committee may not cancel any outstanding Option or
SAR and replace it with a new Option or SAR, another Award or cash and (iii) the Committee may not
take any other action that is considered a “repricing” for purposes of the shareholder approval
rules of the applicable securities exchange or inter-dealer quotation system on which the Common
Shares are listed or quoted.

15. Restrictive Covenants. (a) Confidentiality. By accepting an Award under the
Plan, and as a condition thereof, each Participant agrees not to, at any time, either during their
employment or thereafter, divulge, use, publish or in any other manner reveal, directly or
indirectly, to any person, firm, corporation or any other form of business organization or
arrangement, and to keep in the strictest confidence any Confidential Information, except (i) as
may be necessary to the performance of the Participant’s duties to the Company, (ii) with the
Company’s express written consent, (iii) to the extent that any such information is in or becomes
in the public domain other than as a result of the Participant’s breach of any of his or her
obligations under this Section 15(a), or (iv) where required to be disclosed by court order,
subpoena or other government process and in such event, the Participant shall cooperate with the
Company in attempting to keep such information confidential to the maximum extent possible. Upon
the request of the Company or an Affiliate, the Participant agrees to promptly deliver to the
Company the originals and all copies, in whatever medium, of all such Confidential Information.

(b) Non-Disparagement. By accepting an Award under the Plan, and as a condition
thereof, the Participant acknowledges and agrees that he or she will not defame or publicly
criticize the services, business, integrity, veracity or personal or professional reputation of the
Company, including its officers, directors, partners, executives or agents, in either a
professional or personal manner at any time during or following his or her employment.

(c) Post-Employment Property. By accepting an Award under the Plan, and as a
condition thereof, the Participant agrees that any work of authorship, invention, design,
discovery, development, technique, improvement, source code, hardware, device, data, apparatus,
practice, process, method or other work product whatever (whether patentable or subject to
copyright, or not, and hereinafter collectively called “discovery”) related to the business of the
Company that the Participant, either solely or in collaboration with others, has made or may make,
discover, invent, develop, perfect, or reduce to practice during his or her employment, whether or
not during regular business hours and created, conceived or prepared on the Company’s premises or
otherwise shall be the sole and complete property of the Company. More particularly, and without
limiting the foregoing, the Participant agrees that all of the foregoing and any (i) inventions
(whether patentable or not, and without regard to whether any patent therefor is ever sought), (ii)
marks, names, or logos (whether or not registrable as trade or service marks, and without regard to
whether registration therefor is ever sought), (iii) works of authorship (without regard to whether
any claim of copyright therein is ever registered), and (iv) trade secrets, ideas, and concepts
((i) — (iv) collectively, “Intellectual Property Products”) created, conceived, or prepared on the
Company’s premises or otherwise, whether or not during normal business hours, shall perpetually and
throughout the world be the exclusive property of the Company, as shall all tangible media
(including, but not limited to, papers, computer media of all types, and models) in which such
Intellectual Property Products shall be recorded or otherwise fixed. The Participant further
agrees promptly to disclose in writing and deliver to the Company all Intellectual Property
Products created during his or her engagement by the Company, whether or not during normal business
hours. The Participant agrees that all works of authorship created by the Participant during his
or her engagement by the Company shall be works made for hire of which the Company is the author
and owner of copyright. To the extent that any competent decision-making authority should ever
determine that any work of authorship created by the Participant during his or her engagement by
the Company is not a work made for hire, by accepting an Award, the Participant assigns all right,
title and interest in the copyright therein, in perpetuity and throughout the world, to the
Company. To the extent that this Plan does not otherwise serve to grant or otherwise vest in the
Company all rights in any Intellectual Property Product created by the Participant during his or
her engagement by the Company, by accepting an Award, the Participant assigns all right, title and
interest therein, in perpetuity and throughout the world, to the Company. The Participant agrees
to execute, immediately upon the Company’s reasonable request and without charge, any further
assignments, applications, conveyances or other instruments, at any time, whether or not the
Participant is engaged by the Company at the time such request is made, in order to permit the
Company and/or its respective assigns to protect, perfect, register, record, maintain, or enhance
their rights in any Intellectual Property Product; provided, that, the Company
shall bear the cost of any such assignments, applications or consequences. Upon termination of the
Participant’s employment by the Company for any reason whatsoever, and at any earlier time the
Company so requests, the Participant will immediately deliver to the custody of the person
designated by the Company all originals and copies of any documents and other property of the
Company in the Participant’s possession, under the Participant’s control or to which he or she may
have access.

For purposes of this Section 15, the term “Company” shall include the Company and its
Affiliates.

16. General. (a) Award Agreements. Each Award under the Plan shall be evidenced by
an Award agreement, which shall be delivered to the Participant (whether in paper or electronic
medium (including email or the posting on a web site maintained by the Company or a third party
under contract with the Company)) and shall specify the terms and conditions of the Award and any
rules applicable thereto, including without limitation, the effect on such Award of the death,
disability or termination of employment or service of a Participant, or of such other events as may
be determined by the Committee.

(b) Nontransferability. (i) Each Award shall be exercisable only by a Participant
during the Participant’s lifetime, or, if permissible under applicable law, by the Participant’s
legal guardian or representative. No Award may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Participant other than by will or by the laws of descent
and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer
or encumbrance shall be void and unenforceable against the Company or an Affiliate; provided that
the designation of a beneficiary shall not constitute an assignment, alienation, pledge,
attachment, sale, transfer or encumbrance.

(ii) Notwithstanding the foregoing, the Committee may, in its sole discretion, permit Awards
(other than Incentive Stock Options) to be transferred by a Participant, without consideration,
subject to such rules as the Committee may adopt consistent with any applicable Award agreement to
preserve the purposes of the Plan, to: (A) any person who is a “family member” of the Participant,
as such term is used in the instructions to Form S-8 under the Securities Act (collectively, the
“Immediate Family Members”); (B) a trust solely for the benefit of the Participant and his or her
Immediate Family Members; or (C) a partnership or limited liability company whose only partners or
stockholders are the Participant and his or her Immediate Family Members; or (D) any other
transferee as may be approved either (I) by the Board or the Committee in its sole discretion, or
(II) as provided in the applicable Award agreement. (each transferee described in clauses (A), (B)
(C) and (D) above is hereinafter referred to as a “Permitted Transferee”); provided, that
the Participant gives the Committee advance written notice describing the terms and conditions of
the proposed transfer and the Committee notifies the Participant in writing that such a transfer
would comply with the requirements of the Plan.

(iii) The terms of any Award transferred in accordance with the immediately preceding sentence
shall apply to the Permitted Transferee and any reference in the Plan, or in any applicable Award
agreement, to a Participant shall be deemed to refer to the Permitted Transferee, except that
(A) Permitted Transferees shall not be entitled to transfer any Award, other than by will or the
laws of descent and distribution; (B) Permitted Transferees shall not be entitled to exercise any
transferred Option unless there shall be in effect a registration statement on an appropriate form
covering the Common Shares to be acquired pursuant to the exercise of such Option if the Committee
determines, consistent with any applicable Award agreement, that such a registration statement is
necessary or appropriate; (C) the Committee or the Company shall not be required to provide any
notice to a Permitted Transferee, whether or not such notice is or would otherwise have been
required to be given to the Participant under the Plan or otherwise; and (D) the consequences of
the termination of the Participant’s employment by, or services to, the Company or an Affiliate
under the terms of the Plan and the applicable Award agreement shall continue to be applied with
respect to the Participant, including, without limitation, that an Option shall be exercisable by
the Permitted Transferee only to the extent, and for the periods, specified in the Plan and the
applicable Award agreement.

(c) Tax Withholding. (i) A Participant shall be required to pay to the Company or any
Affiliate, and the Company or any Affiliate shall have the right and is hereby authorized to
withhold, from any cash, Common Shares, other securities or other property deliverable under any
Award or from any compensation or other amounts owing to a Participant, the amount (in cash, Common
Shares, other securities or other property) of any required withholding taxes in respect of an
Award, its exercise, or any payment or transfer under an Award or under the Plan and to take such
other action as may be necessary in the opinion of the Committee or the Company to satisfy all
obligations for the payment of such withholding and taxes.

(ii) Without limiting the generality of clause (i) above, the Committee may, in its sole
discretion, permit a Participant to satisfy, in whole or in part, the foregoing withholding
liability by (A) the delivery of Common Shares (which are not subject to any pledge or other
security interest and are Mature Shares) owned by the Participant having a fair market value equal
to such withholding liability or (B) having the Company withhold from the number of Common Shares
otherwise issuable or deliverable pursuant to the exercise or settlement of the Award a number of
shares with a fair market value equal to such withholding liability (but no more than the minimum
required statutory withholding liability).

(d) No Claim to Awards; No Rights to Continued Employment; Waiver. No employee of the
Company or an Affiliate, or other person, shall have any claim or right to be granted an Award
under the Plan or, having been selected for the grant of an Award, to be selected for a grant of
any other Award. There is no obligation for uniformity of treatment of Participants or holders or
beneficiaries of Awards. The terms and conditions of Awards and the Committee’s determinations and
interpretations with respect thereto need not be the same with respect to each Participant and may
be made selectively among Participants, whether or not such Participants are similarly situated.
Neither the Plan nor any action taken hereunder shall be construed as giving any Participant any
right to be retained in the employ or service of the Company or an Affiliate, nor shall it be
construed as giving any Participant any rights to continued service on the Board. The Company or
any of its Affiliates may at any time dismiss a Participant from employment or discontinue any
consulting relationship, free from any liability or any claim under the Plan, unless otherwise
expressly provided in the Plan or any Award agreement. By accepting an Award under the Plan, a
Participant shall thereby be deemed to have waived any claim to continued exercise or vesting of an
Award or to damages or severance entitlement related to non-continuation of the Award beyond the
period provided under the Plan or any Award agreement, notwithstanding any provision to the
contrary in any written employment contract or other agreement between the Company and its
Affiliates and the Participant, whether any such agreement is executed before, on or after the Date
of Grant.

(e) International Participants. With respect to Participants who reside or work
outside of the United States of America and who are not (and who are not expected to be) “covered
employees” within the meaning of Section 162(m) of the Code, the Committee may in its sole
discretion amend the terms of the Plan or outstanding Awards with respect to such Participants in
order to conform such terms with the requirements of local law or to obtain more favorable tax or
other treatment for a Participant, the Company or its Affiliates.

(f) Designation and Change of Beneficiary. Each Participant may file with the
Committee a written designation of one or more persons as the beneficiary(ies) who shall be
entitled to receive the amounts payable with respect to an Award, if any, due under the Plan upon
his death. A Participant may, from time to time, revoke or change his beneficiary designation
without the consent of any prior beneficiary by filing a new designation with the Committee. The
last such designation received by the Committee shall be controlling; provided,
however, that no designation, or change or revocation thereof, shall be effective unless
received by the Committee prior to the Participant’s death, and in no event shall it be effective
as of a date prior to such receipt. If no beneficiary designation is filed by a Participant, the
beneficiary shall be deemed to be his or her spouse or, if the Participant is unmarried at the time
of death, his or her estate.

(g) Termination of Employment/Service. Unless determined otherwise by the Committee
at any point following such event: (i) neither a temporary absence from employment or service due
to illness, vacation or leave of absence nor a transfer from employment or service with the Company
to employment or service with an Affiliate (or vice-versa) shall be considered a termination of
employment or service with the Company or an Affiliate; and (ii) if a Participant’s employment with
the Company and its Affiliates terminates, but such Participant continues to provide services to
the Company and its Affiliates in a non-employee capacity (or vice-versa), such change in status
shall not be considered a termination of employment with the Company or an Affiliate.

(h) No Rights as a Stockholder. Except as otherwise specifically provided in the Plan
or any Award agreement, no person shall be entitled to the privileges of ownership in respect of
Common Shares that are subject to Awards hereunder until such shares have been issued or delivered
to that person.

(i) Government and Other Regulations. (i) The obligation of the Company to settle
Awards in Common Shares or other consideration shall be subject to all applicable laws, rules, and
regulations, and to such approvals by governmental agencies as may be required. Notwithstanding
any terms or conditions of any Award to the contrary, the Company shall be under no obligation to
offer to sell or to sell, and shall be prohibited from offering to sell or selling, any Common
Shares pursuant to an Award unless such shares have been properly registered for sale pursuant to
the Securities Act with the Securities and Exchange Commission or unless the Company has received
an opinion of counsel, satisfactory to the Company, that such shares may be offered or sold without
such registration pursuant to an available exemption therefrom and the terms and conditions of such
exemption have been fully complied with. The Company shall be under no obligation to register for
sale under the Securities Act any of the Common Shares to be offered or sold under the Plan. The
Committee shall have the authority to provide that all certificates for Common Shares or other
securities of the Company or any Affiliate delivered under the Plan shall be subject to such stop
transfer orders and other restrictions as the Committee may deem advisable under the Plan, the
applicable Award agreement, the federal securities laws, or the rules, regulations and other
requirements of the Securities and Exchange Commission, any securities exchange or inter-dealer
quotation system upon which such shares or other securities are then listed or quoted and any other
applicable federal, state, local or non-U.S. laws, and, without limiting the generality of
Section 9 of the Plan, the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions. Notwithstanding any provision in
the Plan to the contrary, the Committee reserves the right to add any additional terms or
provisions to any Award granted under the Plan that it in its sole discretion deems necessary or
advisable in order that such Award complies with the legal requirements of any governmental entity
to whose jurisdiction the Award is subject.

(ii) The Committee may cancel an Award or any portion thereof if it determines, in its sole
discretion, that legal or contractual restrictions and/or blockage and/or other market
considerations would make the Company’s acquisition of Common Shares from the public markets, the
Company’s issuance of Common Shares to the Participant, the Participant’s acquisition of Common
Shares from the Company and/or the Participant’s sale of Common Shares to the public markets,
illegal, impracticable or inadvisable. If the Committee determines to cancel all or any portion of
an Award in accordance with the foregoing, the Company shall pay to the Participant an amount equal
to the excess of (A) the aggregate fair market value of the Common Shares subject to such Award or
portion thereof canceled (determined as of the applicable exercise date, or the date that the
shares would have been vested or delivered, as applicable), over (B) the aggregate Exercise Price
or Strike Price (in the case of an Option or SAR, respectively) or any amount payable as a
condition of delivery of Common Shares (in the case of any other Award). Such amount shall be
delivered to the Participant as soon as practicable following the cancellation of such Award or
portion thereof.

(j) Payments to Persons Other Than Participants. If the Committee shall find that any
person to whom any amount is payable under the Plan is unable to care for his affairs because of
illness or accident, or is a minor, or has died, then any payment due to such person or his estate
(unless a prior claim therefor has been made by a duly appointed legal representative) may, if the
Committee so directs the Company, be paid to his spouse, child, relative, an institution
maintaining or having custody of such person, or any other person deemed by the Committee to be a
proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be
a complete discharge of the liability of the Committee and the Company therefor.

(k) Nonexclusivity of the Plan. Neither the adoption of this Plan by the Board nor
the submission of this Plan to the shareholders of the Company for approval shall be construed as
creating any limitations on the power of the Board to adopt such other incentive arrangements as it
may deem desirable, including, without limitation, the granting of stock options or other
equity-based awards otherwise than under this Plan, and such arrangements may be either applicable
generally or only in specific cases.

(l) No Trust or Fund Created. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary relationship between the
Company or any Affiliate, on the one hand, and a Participant or other person or entity, on the
other hand. No provision of the Plan or any Award shall require the Company, for the purpose of
satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or
other entity to which contributions are made or otherwise to segregate any assets, nor shall the
Company maintain separate bank accounts, books, records or other evidence of the existence of a
segregated or separately maintained or administered fund for such purposes. Participants shall
have no rights under the Plan other than as unsecured general creditors of the Company, except that
insofar as they may have become entitled to payment of additional compensation by performance of
services, they shall have the same rights as other employees under general law.

(m) Reliance on Reports. Each member of the Committee and each member of the Board
shall be fully justified in acting or failing to act, as the case may be, and shall not be liable
for having so acted or failed to act in good faith, in reliance upon any report made by the
independent public accountant of the Company and its Affiliates and/or any other information
furnished in connection with the Plan by any agent of the Company or the Committee or the Board,
other than himself.

(n) Relationship to Other Benefits. No payment under the Plan shall be taken into
account in determining any benefits under any pension, retirement, profit sharing, group insurance
or other benefit plan of the Company except as otherwise specifically provided in such other plan.

(o) Governing Law. Except as otherwise provided in an Award agreement, the validity,
construction and effect of the Plan, and any rules and regulations relating to the Plan and any
Award agreement shall be determined in accordance with the laws of Bermuda.

(p) Severability. If any provision of the Plan or any Award or Award agreement is or
becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any
person or entity or Award, or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended to conform to the
applicable laws, or if it cannot be construed or deemed amended without, in the determination of
the Committee, materially altering the intent of the Plan or the Award, such provision shall be
construed or deemed stricken as to such jurisdiction, person or entity or Award and the remainder
of the Plan and any such Award shall remain in full force and effect.

(q) Obligations Binding on Successors. The obligations of the Company under the Plan
shall be binding upon any successor corporation or organization resulting from the merger,
amalgamation, consolidation or other reorganization of the Company, or upon any successor
corporation or organization succeeding to substantially all of the assets and business of the
Company.

(r) Code Section 162(m) Approval. If so determined by the Committee, the provisions
of the Plan regarding Performance Compensation Awards shall be disclosed and reapproved by
shareholders no later than the first shareholder meeting that occurs in the fifth year following
the year in which shareholders previously approved such provisions, in each case in order for
certain Awards granted after such time to be exempt from the deduction limitations of Section
162(m) of the Code. Nothing in this clause, however, shall affect the validity of Awards granted
after such time if such shareholder approval has not been obtained.

(s) Expenses; Gender; Titles and Headings. The expenses of administering the Plan
shall be borne by the Company and its Affiliates. Masculine pronouns and other words of masculine
gender shall refer to both men and women. The titles and headings of the sections in the Plan are
for convenience of reference only, and in the event of any conflict, the text of the Plan, rather
than such titles or headings shall control.

(t) Other Agreements. Notwithstanding the above, the Committee may require, as a
condition to the grant of and/or the receipt of Common Shares under an Award, that the Participant
execute lock-up, shareholder or other agreements, as it may determine in its sole and absolute
discretion.

(u) Payments. Participants shall be required to pay, to the extent required by
applicable law, any amounts required to receive Common Shares under any Award made under the Plan.

* * *

As adopted by the Board of Directors of Alterra Capital Holdings Limited on December 20, 2010.EX-10.3

Exhibit 10.3

ALTERRA CAPITAL HOLDINGS LIMITED

2006 EQUITY INCENTIVE PLAN

1. Purpose; Restatement.

The purpose of the Alterra Capital Holdings Limited 2006 Equity Incentive Plan is to advance
the interests of Alterra Capital Holdings Limited (the “Company”) and its shareholders by
providing a means to attract, retain and motivate employees, consultants and directors of the
Company and its Affiliates, upon whose judgment, initiative and efforts the continued success,
growth and development of the Company is dependent.

The Plan was originally adopted effective January 1, 2006. The Plan was amended and restated
effective as of November 30, 2007, March 3, 2010 and December 22, 2010.

2. Definitions.

For purposes of the Plan, the following terms shall be defined as set forth below:

(a) “Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such first Person. For these
purposes, “control” (including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
policies of a Person by reason of ownership of voting securities, by contract or otherwise.

(b) “Amalgamation” means the amalgamation of Harbor Point Limited and Alterra Holdings
Limited pursuant to that certain Agreement and Plan of Amalgamation, dated as of March 3, 2010
among Harbor Point Limited, Max Capital Group Ltd. and Alterra Holdings Limited.

(c) “Award” means any Option, SAR or Restricted Stock granted to a Participant under
the Plan.

(d) “Award Letter” means a letter sent by the Company to a Participant setting forth
the terms and conditions of an Option Award, SAR Award or Restricted Stock Award. The Committee
shall have the sole discretion to determine the form of an Award Letter, including specifying that
different forms may be used for different Participants and that different forms may be used for the
same type of Award.

(e) Except as otherwise provided in an Award Letter, “Beneficiary” means the person,
persons, trust or trusts which have been designated by such Participant in his or her most recent
written beneficiary designation filed with the Company to receive the benefits specified under this
Plan upon the death of the Participant, or, if there is no designated Beneficiary or surviving
designated Beneficiary, then the person, persons, trust or trusts entitled by will or the laws of
descent and distribution to receive such benefits.

(f) “Board” means the Board of Directors of the Company.

(g) “Cause” means, in the case of a particular Award, unless the applicable Award
Letter states otherwise, (i) the Company or an Affiliate having “cause” to terminate a
Participant’s employment or service, as defined in any employment or consulting agreement between
the Participant and the Company or an Affiliate in effect at the time of such termination or
(ii) in the absence of any such employment or consulting agreement (or the absence of any
definition of “Cause” contained therein), (A) the Participant’s commission of, conviction for, plea
of guilty or nolo contendere to a felony or a crime involving moral turpitude, or other material
act or omission involving dishonesty or fraud, (B) the Participant’s conduct that brings or is
reasonably likely to bring the Company or any of its Affiliates into public disgrace or disrepute
and that affects the Company’s or any Affiliate’s business in any material way, (C) the
Participant’s failure to perform duties as reasonably directed by the Company or the Participant’s
material violation of any rule, regulation, policy or plan for the conduct of any service provider
to the Company or its Affiliates or its or their business (which, if curable, is not cured within
10 days after notice thereof is provided to the Participant) or (D) the Participant’s gross
negligence, willful malfeasance or material act of disloyalty with respect to the Company or its
Affiliates (which, if curable, is not cured within 10 days after notice thereof is provided to the
Participant). Any determination of whether Cause exists shall be made by the Committee in its sole
discretion

(h) “Change in Control” shall, in the case of a particular Award, unless the
applicable Award Letter states otherwise or contains a different definition of “Change in Control,”
be deemed to occur upon:

(i)  Any sale, lease, exchange or other transfer (in one or a series of related transactions)
of all or substantially all of the assets of the Company or Alterra Bermuda Ltd.;

(ii)  Any “person” as such term is used in Section 13(d) and Section 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) is or becomes, directly or indirectly, the
“beneficial owner” as defined in Rule 13d-3 under the Exchange Act of securities of the Company
that represent 51% or more of the combined voting power of the Company’s then outstanding voting
securities (the “Outstanding Company Voting Securities”); provided, however, that,
for purposes of this Section 2(h), the following acquisitions shall not constitute a Change in
Control: (I) any acquisition directly from the Company, (II) any acquisition by the Company, (III)
any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Affiliate, (IV) any acquisition by any corporation pursuant to a transaction that
complies with Sections 2(h)(iv)(A) and 2(h)(iv)(B), (V) any acquisition involving beneficial
ownership of less than 50% of the then-outstanding Common Shares (the “Outstanding Company Common
Shares”) or the Outstanding Company Voting Securities that is determined by the Board, based on
review of public disclosure by the acquiring Person with respect to its passive investment intent,
not to have a purpose or effect of changing or influencing the control of the Company;
provided, however, that for purposes of this clause (V), any such acquisition in
connection with (x) an actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or consents or (y) any
“Business Combination” (as defined below) shall be presumed to be for the purpose or with the
effect of changing or influencing the control of the Company;

(iii)  During any period of two (2) consecutive years, the individuals who at the beginning of
such period constituted the Board together with any individuals subsequently elected to the Board
whose nomination by the shareholders of the Company was approved by a vote of the then incumbent
Board (i.e. those members of the Board who either have been directors from the beginning of such
two-year period or whose election or nomination for election was previously approved by the Board
as provided in this Section 2(h)(iii)) cease for any reason to constitute a majority of the Board;

(iv)  The Board or the shareholders of the Company approve and consummate a merger,
amalgamation or consolidation (a “Business Combination”) of the Company with any other corporation,
unless, following such Business Combination, (A) all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, for
a non-corporate entity, equivalent securities) and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of directors (or, for
a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting
from such Business Combination (including, without limitation, an entity that, as a result of such
transaction, owns the Company or all or substantially all of the Company’s assets either directly
or through one or more subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities, as the case may be, and (B) at least a majority of the
members of the board of directors (or, for a non-corporate entity, equivalent governing body) of
the entity resulting from such Business Combination were members of the incumbent Board at the time
of the execution of the initial agreement or of the action of the Board providing for such Business
Combination; or

(v) The Board or shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company (in one or a series of
transactions) of all or substantially all of the Company’s assets.

(i) “Change in Control Price” means the price per Share paid in conjunction with any
transaction resulting in a Change in Control (as determined in good faith by the Committee if any
part of the offered price is payable other than in cash).

(j) “Code” means the U.S. Internal Revenue Code of 1986, as amended.

(k) “Committee” means the Compensation Committee of the Board, or such other committee
as may be designated by the Board to administer the Plan.

(l) “Company” means Alterra Capital Holdings Limited, an exempted limited liability
company organized under the laws of Bermuda, or any successor entity.

(m) “Disability” means, unless otherwise provided in a Participant’s Award Letter, if
a Participant is party to an employment agreement with the Company or any of its Subsidiaries that
has a different definition of “Disability” (or analogous term), the definition in such employment
agreement shall apply for purposes of the Plan with respect to such Participant. In the absence of
such a definition, the term “Disability” shall mean the Participant is unable, by reason of a
medically determinable physical or mental impairment, to engage in any substantial gainful
activity, which condition is expected to have a duration of not less than 180 days. The
Committee’s reasoned and good faith judgment of Disability shall be final and shall be based on
such competent medical evidence as shall be presented to it by the Participant or by any physician
or group of physicians or other competent medical expert employed by the Participant or the Company
to advise the Committee.

(n) “Dividend Equivalents” means dividends paid by the Company with respect to Shares
corresponding to vested Awards awarded under the Plan.

(o) “Effective Date” has the meaning set forth in Section 8(l).

(p) “Fair Market Value” means, with respect to Shares or other property, as of any
date of determination, the fair market value of such Shares or other property as determined in good
faith by the Board. Following a Public Offering, “Fair Market Value” means, with respect to
Shares, as of any date of determination, the closing sale price per Share on such date as reported
on the principal stock exchange on which such Shares are then listed.

(q) “Good Reason” means, unless otherwise provided in a Participant’s Award Letter, if
the Participant is subject to an employment agreement (or other similar agreement) with the Company
or a Subsidiary that provides a definition of termination for “good reason,” then, for purposes of
the Plan, the term “Good Reason” shall have meaning set forth in such agreement. In the absence of
such a definition, the term “Good Reason” shall mean either of (i) a reduction in the Participant’s
salary rate; or (ii) the assignment to Participant of duties that are significantly different from,
and that result in a substantial diminution of, the Participant’s duties that occurs without the
Participant’s consent and that is not corrected by the Company within 20 days of delivery of a
written notice to the Company by the Participant that identifies the circumstances that the
Participant believes constitute a reduction in salary rate or duties.

(r) “ISO” means any Option intended to be and designated as an incentive stock option
within the meaning of section 422 of the Code and the regulations thereunder.

(s) “NQSO” means any Option that is not an ISO.

(t) “Option” means a right, granted under the Plan, to purchase Shares at an exercise
price established by the Committee.

(u) “Participant” means an employee, consultant or director of the Company or any of
its Affiliates, who has been granted an Award; provided, that, Awards may not be
granted under the Plan to individuals who were providing services to the Company (formerly Max
Capital Group Ltd.) or its subsidiaries at the time the Amalgamation was consummated.

(v) “Person” means any natural person, firm, partnership, limited liability company,
association, corporation, company, trust, business trust, governmental authority or other entity.

(w) “Plan” means this Alterra Capital Holdings Limited 2006 Equity Incentive Plan.

(x) “Public Offering” means the first day as of which sales of voting securities of
the Company are made to the public.

(y) “Restricted Stock” means an Award of Shares under the Plan that may be subject to
certain restrictions and to a risk of forfeiture.

(z) “Restriction Period” means the period specified in Section 5(d), without regard to
any election under section 83(b) of the Code.

(aa) “Retirement” means, unless otherwise provided in a Participant’s Award Letter, if
the Participant is subject to an employment agreement (or other similar agreement) with the Company
or a Subsidiary that provides a definition of termination for “retirement,” then, for purposes of
the Plan, the term “Retirement” shall have meaning set forth in such agreement. In the absence of
such a definition, the term “Retirement” shall mean termination by the Participant without Good
Reason after the date on which the Participant attains at least age 55 and has been employed by the
Company and its Affiliates for at least five years.

(bb) “SAR” means a right, granted under the Plan, to receive, in cash or Shares value
equal to or otherwise based on the excess of the Fair Market Value of a specified number of Shares
at the time of exercise over an exercise price established by the Committee.

(cc) “Shares” means common shares, par value $1.00 per share, of the Company.

(dd) “Subsidiary” means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company if each of the corporations (other than the last
corporation in the unbroken chain) owns shares possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the chain.

3. Administration.

(a) Authority of the Committee. The Plan shall be administered by the Committee. The
Committee shall, consistent with the Plan, select Participants and determine the type and number of
Awards to be granted, the number of Shares to which an Award may relate, the terms and conditions
of any Award granted under the Plan and all other matters to be determined in connection with an
Award, including (i) any exercise price or purchase price, (ii) any restriction, and any schedule
for lapse of any restriction relating to transferability, forfeiture, exercisability, waiver or
acceleration and (iii) any waivers of performance conditions relating to an Award, in all cases,
based on such considerations as the Committee shall determine. The Committee may also adopt,
amend, suspend, waive and rescind such rules and regulations, and appoint such agents as the
Committee may deem necessary or advisable to administer the Plan, and the Committee may correct any
defect or supply any omission or reconcile any inconsistency in the Plan and construe and interpret
the Plan and any rules and regulations, Award Letter or other instrument hereunder, and make all
other decisions and determinations as may be required under the terms of the Plan or as the
Committee may deem necessary or advisable for the administration of the Plan.

(b) Manner of Exercise of Committee Authority. The Committee shall have sole
discretion in exercising its authority under the Plan. Any action of the Committee with respect to
the Plan shall be final, conclusive and binding on all persons, including the Company, its
Subsidiaries, Participants, any person claiming any rights under the Plan from or through any
Participants. The express grant of any specific power to the Committee, and the taking of any
action by the Committee, shall not be construed as limiting any power or authority of the
Committee. The Committee may delegate its powers to officers or employees of the Company or any
Subsidiary or Affiliate, subject to such terms as the Committee shall determine.

(c) Limitation of Liability. Each member of the Committee shall be entitled to, in
good faith, rely or act upon any report or other information furnished to him or her by any officer
or employee of the Company or any Subsidiary or Affiliate, the Company’s independent certified
public accountants, or other professional retained by the Company to assist in the administration
of the Plan. No member of the Committee, nor any officer or employee of the Company acting on
behalf of the Committee, shall be personally liable for any action, determination or interpretation
taken or made in good faith with respect to the Plan, and all members of the Committee and any
officer or employee of the Company acting on their behalf shall, to the extent permitted by law, be
fully indemnified and protected by the Company with respect to any such action, determination or
interpretation.

4. Shares Subject to the Plan.

(a) Subject to adjustment as provided in Section 4(b) hereof, the total number of Shares
reserved for issuance in connection with Awards shall be 6,609,575. No Award may be granted if the
number of Shares to which such Award relates, when added to the number of Shares previously issued
under the Plan, exceeds the number of Shares reserved under the preceding sentence. Shares used to
pay the required exercise price or tax obligations, or Shares not issued in connection with
settlement of an Award or that are used or withheld to satisfy tax obligations of the Participant
shall, notwithstanding anything herein to the contrary, not be available again for other Awards
under the Plan. Shares underlying Awards under the Plan that are forfeited, cancelled, expire
unexercised, or are settled in cash are available again for Awards under the Plan.

(b) In the event that the Committee shall determine that any dividend in Shares, extraordinary
dividend, recapitalization, share split, reverse split, reorganization, merger, consolidation,
amalgamation, spin-off, combination, repurchase or share exchange, or other similar corporate
transaction or event (other than an ordinary or regular cash dividend) affects the Shares
(including with respect to the value thereof) such that an adjustment is appropriate in order to
prevent dilution or enlargement of the rights of Participants under the Plan, then the Committee
shall make such equitable changes or adjustments as it deems appropriate to any outstanding Awards
hereunder; provided that, with respect to ISOs, any such adjustment shall be made in accordance
with section 424(a) of the Code, unless the Committee determines otherwise, and with respect to
Options and SARs intended at the time of grant to be outside the scope of section 409A of the Code,
any such adjustment shall not cause the exercise price to be less than the fair market value of the
Option or SAR on the date of grant. The Committee may make adjustments in the terms and conditions
of, and the criteria and performance objectives included in, Award Letters in recognition of
unusual or non-recurring events (including events described in the preceding sentence) affecting
the Company or any Subsidiary or Affiliate or the financial statements of the Company or any
Subsidiary or Affiliate, or in response to changes in applicable laws, regulations, or accounting
principles. Such adjustments made by the Committee and its determination shall be final, binding
and conclusive. Except as the Committee determines, no issuance by the Company of shares of any
class, or securities convertible into shares of any class, shall affect, and no adjustment by
reason hereof shall be made with respect to, the number or price of Shares subject to an Award.

(c) Any Shares distributed pursuant to an Award may consist, in whole or in part, of
authorized and unissued Shares or, to the extent permitted by applicable law, treasury Shares,
including Shares acquired by purchase in the open market or in private transactions.

5. Authority to Grant and Terms of Restricted Stock Awards.

(a) Issuance and Restrictions. The Committee is authorized to grant Restricted Stock
to Participants at such time or times as it shall determine. Restricted Stock shall be subject to
forfeiture and may not be sold, assigned, transferred, pledged or otherwise directly or indirectly
encumbered or disposed of until the lapse of the Restriction Period as set forth herein, other than
as may be approved by the Committee or upon the Participant’s death by will or by the laws of
descent and distribution or pursuant to a valid Beneficiary designation. A Participant’s rights
under the Plan may not be pledged, mortgaged, hypothecated or otherwise encumbered, and shall not
be subject to claims of the Participant’s creditors.

(b) Except to the extent restricted under an applicable Award Letter, a Participant granted
Restricted Stock shall have all of the rights of a shareholder, including the right to vote
Restricted Stock and the right to receive dividends thereon. Except as otherwise determined by the
Committee, dividends paid on Restricted Stock shall be paid at the dividend payment date in the
same form as such dividends are paid to holders of unrestricted Shares.

(c) Certificates for Restricted Stock. Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee shall determine. If certificates representing Restricted
Stock are issued, they shall be registered in the name of the Participant and shall bear an
appropriate legend referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, and the Company shall retain physical possession of the certificate until the
lapse of the Restriction Period as set forth herein.

(d) Lapse of Restrictions. Except as otherwise provided in an applicable Award Letter
issued to a Participant, the Restriction Period applicable to Restricted Stock granted pursuant to
the Plan shall lapse with respect to 20% of such Restricted Stock on each of the first five
anniversaries of the date of grant, subject to the Participant’s continued employment at such
times. Notwithstanding the foregoing, the Committee may accelerate the lapsing of the Restriction
Period applicable to any Restricted Stock, all Restricted Stock or any class of Restricted Stock at
any time and from time to time.

(e) Termination of Employment or Service. Except as otherwise determined by the
Committee, at the date of grant or thereafter:

(i) upon termination of a Participant’s employment or service due to death, Disability
or Retirement, the Restriction Period with respect to all of the Participant’s Restricted
Stock shall lapse;

(ii) upon termination of a Participant’s employment or service by the Company without
Cause or by such Participant for Good Reason, the Restriction Period shall lapse on any of
the Participant’s Restricted Stock with respect to which the Restriction Period would
otherwise lapse upon the next anniversary of the grant date. All of the Participant’s
Restricted Stock for which the Restriction Period has not lapsed after application of the
prior sentence shall be immediately forfeited; and

(iii) upon any other termination of a Participant’s employment or service, all
Restricted Stock and any accrued but unpaid dividends that are at that time subject to
restriction shall be immediately forfeited.

(f) Waiver of Forfeiture. The Committee may provide, by rule or regulation or in any
Award Letter, or may determine in any individual case, that restrictions or forfeiture conditions
relating to Restricted Stock will be waived in whole or in part in the event of terminations
resulting from specified causes or in other cases.

6. Authority to Grant and Terms of Option Awards and SARs.

(a) Grant of Options. The Committee is authorized to grant Options, which may be
NQSOs or ISOs, at such time or times as it shall determine. Unless otherwise determined by the
Committee on the date of grant, Options granted pursuant to the Plan will not be ISOs.

(b) Grant of SARs. The Committee is authorized to grant SARs at such time or times as
it shall determine and upon such terms and conditions as it may determine.

(c) Exercise Price. Unless otherwise determined by the Committee on the date of
grant, Options and SARs shall have an exercise price per Share equal to the Fair Market Value of a
Share on the grant date, provided that such per Share exercise price may not be less than
the Fair Market Value of a Share on the date the Option or SAR is granted.

(d) Option Term. Unless otherwise determined by the Committee on the date of grant,
the term of each Option or SAR shall expire on the tenth anniversary of the date of its grant;
provided that in no case shall the term of an Option or SAR exceed the tenth anniversary of
the date of its grant (or, with respect to an ISO, such shorter period as may be applicable under
section 422 of the Code).

(e) Vesting and Exercisability. Except as otherwise determined by the Committee on
the date of grant, and subject to the Participant’s continued employment with the Company on such
date, each Option and SAR awarded to a Participant under the Plan shall become vested and
exercisable in five approximately equal installments on each of the first five anniversaries of the
grant date. Notwithstanding the foregoing, the Committee may accelerate the vesting or
exercisability of any Option or SAR, all Options or SARs or any class of Options or SARs at any
time and from time to time.

(f) Dividend Equivalents. At or after the date of grant, the Committee shall
determine whether and to what extent a Participant granted Options and SARs shall be entitled to
receive Dividend Equivalents with respect to such Participant’s vested Options and SARs. Dividend
Equivalents shall be payable in cash or in unrestricted Shares having a Fair Market Value equal to
the amount of such dividends. To the extent provided by the Committee at or after the date of
grant, any Dividend Equivalents with respect to vested Options and SARs granted under the Plan
shall be distributed when accrued or on such other dates as the Committee shall determine, but not
later than March 15th of the year immediately following the year in which the Dividend
Equivalents accrue.

(g) Method of Exercise. The Committee shall establish procedures governing the
exercise of Options and SARs, which procedures shall generally require that prior written notice of
exercise be given and that the exercise price (together with any required withholding taxes or
other similar taxes, charges or fees) be paid in full in cash, cash equivalents or other
readily-available funds at the time of exercise. Notwithstanding the foregoing, on such terms as
the Committee may establish from time to time following a Public Offering (i) the Committee may
permit a Participant to tender any Shares such Participant has owned for at least six months (or
such other period as the Committee determines advisable for financial accounting or other reasons)
to satisfy all or a portion of the applicable exercise price or minimum required withholding taxes
and (ii) the Committee may authorize the Company to establish a broker-assisted exercise program.
In connection with any Option or SAR exercise, the Company may require the Participant to furnish
or execute such other documents as it shall reasonably deem necessary to (a) evidence such
exercise, (b) determine whether registration is then required under the U.S. federal securities
laws or other securities laws, (c) comply with or satisfy the requirements of the U.S. federal
securities laws and other applicable securities and other laws and (d) comply with the Bermuda
anti-money laundering laws, including any filings required thereunder.

(h) Termination of Employment. Except as otherwise determined by the Committee on the
date of grant:

(i) upon termination of a Participant’s employment or service for death, Disability or
Retirement, any unvested Options and SARs shall be forfeited and any vested Options and
SARs shall remain exercisable for one year from the date of termination;

(ii) upon termination of a Participant’s employment or service by the Company without
Cause or by such Participant for Good Reason, prior to a vesting date, all of the
Participant’s unvested Options and SARs that would vest upon the next vesting date shall
vest upon the date of such termination and any other unvested Options and SARs shall be
forfeited. Options and SARs that have become vested pursuant to the prior sentence and
Options and SARs that have previously become vested shall be exercisable for 90 days from
the date of such termination; and

(iii) upon termination of a Participant’s employment or service for Cause, all of the
Participant’s Options and SARs, vested or unvested, shall immediately be forfeited and
canceled;

(iv) upon termination of a Participant’s employment or service for any other reason,
any unvested Options and SARs shall be forfeited and any vested Options and SARs shall
remain exercisable for 90 days from the date of termination.

(i) Waiver of Forfeiture. The Committee may provide, by rule or regulation or in any
Award Letter, or may determine in any individual case, that forfeiture conditions relating to
Options or SARs will be waived in whole or in part in the event of terminations resulting from
specified causes or in other cases.

(j) ISOs. The terms of any ISO granted under the Plan shall comply in all respects
with the provisions of section 422 of the Code, including the requirement that the ISO shall be
granted within ten years from the earlier of the date of adoption or shareholder approval of the
Plan. ISOs may only be granted to employees of the Company or a Subsidiary.

(k) Nontransferable. Unless otherwise set forth by the Committee in an Award Letter,
Options and SARs shall not be transferable by a Participant except upon the Participant’s death by
will or the laws of descent and distribution or pursuant to a valid Beneficiary designation, and
shall be exercisable during the lifetime of a Participant only by such Participant or the
Participant’s guardian or legal representative. A Participant’s rights under the Plan may not be
pledged, mortgaged, hypothecated or otherwise encumbered, and shall not be subject to claims of the
Participant’s creditors.

(l) Section 409A of the Code. In the case of an Option or SAR held by a Participant
who the Committee reasonably believes is a “specified employee” (within the meaning of section 409A
of the Code), the Committee may delay the settlement or exercisability of such Option or SAR until
the first business day that is six months and one day after the date of such Participant’s
termination of employment (or, if earlier, upon death) if the Committee reasonably believes such
Option or SAR to be subject to section 409A(a)(2)(B) of the Code.

7. Change in Control.

(a) Acceleration of Vesting. Unless otherwise determined by the Committee on the date
of grant, in the event of a Change in Control:

(i) all Options and SARs that have not previously become vested and exercisable in
accordance with their terms shall become vested and exercisable immediately prior to such
Change in Control; and

(ii) the Restriction Period applicable to any Restricted Stock shall lapse upon such
Change in Control.

(b) Payment for Vested Options. Unless otherwise determined by the Committee, upon a
Change in Control, each Option that, by its terms becomes exercisable pursuant to Section 7(a),
together with any outstanding Options that have previously become vested and exercisable in
accordance with their terms, shall be canceled in exchange for a payment to each Option holder in
an amount equal to the excess, if any, of the Change in Control Price over the exercise price for
such Option, and all other Options shall be canceled for no consideration.

(c) Limitation on Benefits. Notwithstanding anything contained in the Plan or any
Award Letter to the contrary, to the extent that any of the payments and benefits provided for
under the Plan, an applicable Award Letter or any other agreement or arrangement between the
Company or any of its Subsidiaries and a Participant (collectively, the “Payments”) would
constitute a “parachute payment” within the meaning of section 280G of the Code, such Payments
shall be payable either (i) in full or (ii) as to such lesser amount which would
result in no portion of such Payments being subject to excise tax under Section 4999 of the Code,
whichever of the foregoing amounts, taking into account the applicable federal, state and local
income taxes and the excise tax imposed by Section 4999, results in the Participant’s receipt, on
an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of
such benefits may be taxable under Section 4999 of the Code.

8. General Provisions.

(a) Compliance with Legal and Trading Requirements. The Plan, the granting of Awards
thereunder, and the other obligations of the Company under the Plan and any Award Letter, shall be
subject to all applicable laws, rules and regulations, and to such approvals by any regulatory or
governmental agency, as may be required. The Company, in its discretion, may postpone the issuance
or delivery of Shares until completion of such stock exchange or market system listing or
registration or qualification of such Shares or other required action under any law, rule or
regulation as the Company may consider appropriate, and may require any Participant to make such
representations and furnish such information as it may consider appropriate in connection with the
issuance or delivery of Shares in compliance with applicable laws, rules and regulations. No
provisions of the Plan shall be interpreted or construed to obligate the Company to register any
Shares under the U.S. federal securities laws or other securities laws.

(b) No Right to Continued Employment or Service. Neither the Plan nor any action
taken thereunder shall be construed as giving any employee or director the right to be retained in
the employ or service of the Company or any of its Subsidiaries or Affiliates, nor shall it
interfere in any way with the right of the Company or any of its Subsidiaries or Affiliates to
terminate any employee’s, consultant’s or director’s employment or service at any time.

(c) Freedom of Action. Nothing in the Plan or any Award Letter evidencing an Award
shall be construed as limiting or preventing the Company or any Subsidiary from taking any action
that it deems appropriate or in its best interest (as determined in its sole and absolute
discretion) and no Participant (or person claiming through a Participant) shall have any right
relating to the diminishment in the value of any Award as a result of any such action.

(d) Taxes. The Committee may require, as a condition to any award hereunder, that the
Participant pay to the Company, in cash or other readily available funds, an amount sufficient to
cover any withholding and other taxes due in connection with any such award and to take such other
action as the Committee may deem advisable to enable the Company and Participants to satisfy
obligations for the payment of withholding taxes and other tax obligations relating to any Awards.
The Committee may authorize the Company to withhold or receive Shares or other property and to make
cash payments in respect thereof in satisfaction of such tax obligations.

(e) Changes to the Plan; Changes to Awards. The Board at any time may terminate or
suspend the Plan, and from time to time may amend or modify the Plan. No amendment, modification,
termination or suspension of the Plan shall in any manner adversely affect any Awards theretofore
granted under the Plan, without the consent of the Participant holding such Award. Shareholder
approval of any such amendment, modification, termination or suspension shall be obtained to the
extent mandated by applicable law, or if otherwise deemed appropriate by the Board. If the Board
so delegates, the Committee may amend or modify the Plan, except to the extent such amendment
involves increasing the maximum number of Shares available for issuance under the Plan. The
Committee may, to the extent consistent with the terms of any applicable Award Letter, waive any
conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, any Award theretofor granted or the associated Award Letter, prospectively or
retroactively; provided, that, any such waiver, amendment, alteration, suspension, discontinuance,
cancellation or termination that would materially and adversely affect the rights of any
Participant with respect to any Award theretofor granted shall not to that extent be effective
without the consent of the affected Participant; provided, further, that, without shareholder
approval, except as otherwise permitted under Section 4(b) of the Plan, (i) no amendment or
modification may reduce the Exercise Price of any Option or the Exercise Period of any SAR, (ii)
the Committee may not cancel any outstanding Option or SAR and replace it with a new Option or SAR,
another Award or cash and (iii) the Committee may not take any other action that is considered a
“repricing” for purposes of the shareholder approval rules of the applicable securities exchange or
inter-dealer quotation system on which the Shares are listed or quoted.

(f) No Rights to Grants; No Shareholder Rights. No Participant or employee shall have
any claim to be granted any Awards under the Plan, and there is no obligation for uniformity of
treatment of Participants and employees. No grant of an Award shall confer on any Participant any
of the rights of a shareholder of the Company unless and until Shares are duly issued or
transferred to the Participant in accordance with an Award Letter.

(g) Unfunded Status of Grants. The Plan is intended to constitute an “unfunded” plan
for incentive compensation. With respect to any payments not yet made in respect of any Award
granted under the Plan, nothing contained in the Plan or any Award Letter shall give any such
Participant any rights that are greater than those of a general creditor of the Company;
provided that the Committee may authorize the creation of trusts or make other arrangements
to meet the Company’s obligations under the Plan to deliver cash, Shares, or other property
pursuant to any grant hereunder, which trusts or other arrangements shall be consistent with the
“unfunded” status of the Plan unless the Committee otherwise determines with the consent of each
affected Participant.

(h) Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor its
submission to the shareholders of the Company for approval shall be construed as creating any
limitations on the power of the Board to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of options and other awards otherwise than
under the Plan, and such arrangements may be either applicable generally or only in specific cases.

(i) Not Compensation for Benefit Plans. No grant or payment under this Plan shall be
deemed salary or compensation for the purpose of computing benefits under any benefit plan or other
arrangement of the Company for the benefit of its employees or directors unless the Company shall
determine otherwise.

(j) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant
to the Plan. To the extent any Award is not evenly divisible by the periods over which the Award
vests or restrictions lapse, the installments that vest or for which restrictions lapse shall be as
equal as possible with any smaller installment vesting or lapsing first. If fractional Shares
would be delivered pursuant to any other transaction or event, the Committee shall determine
whether cash or other property shall be issued or paid in lieu of such fractional Shares or whether
such fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.

(k) Governing Law. Except as otherwise provided in an Award Letter, the validity,
construction, and effect of the Plan, any rules and regulations relating to the Plan, and any Award
Letter shall be determined in accordance with the laws of Bermuda.

(l) Effective Date; Plan Termination. The Plan shall become effective as of January
1, 2006 (the “Effective Date”). The Plan was amended and restated effective November 30,
2007, and was amended and restated effective March 3, 2010 and was amended and restated effective
December 22, 2010. The Plan shall terminate on the date which is ten (10) years after the
Effective Date, provided that such termination shall not affect any then-outstanding
Awards, which shall continue in accordance with their terms.

(m) Bye-laws. Notwithstanding any provision of the Plan, Shares issued pursuant to
the Plan shall be subject to the applicable provisions of the bye-laws of the Company. Neither the
Shares issued pursuant to this Plan nor any interest in them may be sold, assigned, pledged,
hypothecated, encumbered or in any other manner transferred or disposed of, in whole or in part,
except in compliance with the terms, conditions and restrictions as set forth in the bye-laws of
the Company.

(n) Titles and Headings. The titles and headings of the sections in the Plan are for
convenience of reference only. In the event of any conflict, the text of the Plan, rather than
such titles or headings, shall control.

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