Document:

Exhibit 10.2

 

ARCH CAPITAL GROUP LTD.

Restricted Share Agreement

 

THIS AGREEMENT, dated as of May 5, 2010,
between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and
           (the “Employee”).

 

WHEREAS, the Employee has been granted the following
award under the Company’s 2007 Long Term Incentive and Share Award Plan (the “Plan”);

 

NOW, THEREFORE, in consideration of the premises and
mutual covenants contained herein, the parties hereto agree as follows.

 

1.                                      Award of Shares.  Pursuant
to the provisions of the Plan, the terms of which are incorporated herein by
reference, the Employee is hereby awarded
           Restricted Shares
(the “Award”), subject to the terms and conditions herein set forth.  Capitalized terms used herein and not defined
shall have the meanings set forth in the Plan. 
In the event of any conflict between this Agreement and the Plan, the
Plan shall control.

 

2.                                      Terms and
Conditions.  It is understood and agreed that the
Award of Restricted Shares evidenced hereby is subject to the following terms
and conditions:

 

(a)                                 Vesting of
Award.  Subject to Section 2(b) below
and the other terms and conditions of this Agreement, this Award shall become
vested in three equal annual installments on the first, second and third
anniversaries of the date hereof.  Unless
otherwise provided by the Company, all dividends and other amounts receivable
in connection with any adjustments to the Shares under Section 4(c) of
the Plan shall be subject to the vesting schedule in this Section 2(a).

 

(b)                                 Termination of
Service; Forfeiture of Unvested Shares.

 

(i)                           In the event
the Employee ceases to be an employee of the Company prior to the date the
Restricted Shares otherwise become vested due to his or her death or Permanent
Disability (as defined in the Company’s Incentive Compensation Plan on the date
hereof), the Restricted Shares shall become immediately vested in full upon
such termination of employment.

 

(ii)                        In the event of
termination of employment (other than by the Company for Cause, as such term is
defined in the Company’s Incentive Compensation Plan on the date hereof) after
the attainment of Retirement Age (as defined in the Company’s Incentive
Compensation Plan on the date hereof), the Restricted Shares shall continue to
vest on the schedule set forth in Section 2(a) above so long as the
Employee does not engage in any activity in competition with any activity of
the Company or any of its Subsidiaries other than serving on the board of
directors (or similar governing body) of another company or as a consultant for
no more than 26 weeks per calendar year (“Competitive Activity”).  In the event the Employee engages in a
Competitive Activity, any unvested

 

 

Restricted Shares shall be
forfeited by the Employee and become the property of the Company.

 

(iii)                     In the event
the Employee ceases to be an employee of the Company after a Change in Control
(as defined below) due to termination (A) by the Company not for Cause or (B) by
the Employee for Good Reason (as defined in the Employment Agreement, dated as
of
              ,
between the Employee and
          ), in either case,
on or before the second anniversary of the occurrence of the Change in Control,
the Restricted Shares, to the extent not already vested, shall become
immediately vested in full upon such termination of employment.

 

(iv)                    If the Employee
ceases to be an Employee of the Company for any other reason prior to the date
the Restricted Shares become vested, the Award shall be forfeited by the
Employee and become the property of the Company; provided that, in the event of
a Redundancy (as defined below), the Committee, in its sole discretion, may, in
accordance with its authority under the Plan, determine that the Restricted
Shares, to the extent not vested, shall become vested upon such termination of
employment.

 

(v)                       For purposes of
this Agreement, service with any of the Company’s Subsidiaries (as defined in
the Plan) shall be considered to be service with the Company.

 

(vi)                    “Change in
Control” shall mean:

 

(A)             any person
(within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
Voting Securities representing 50% or more of the total voting power or value
of all the then outstanding Voting Securities; or

 

(B)             the individuals
who, as of the date hereof, constitute the Board of Directors of the Company
(the “Board”) together with those who become directors subsequent to such date
and whose recommendation, election or nomination for election to the Board was
approved by a vote of at least a majority of the directors then still in office
who either were directors as of such date or whose recommendation, election or
nomination for election was previously so approved, cease for any reason to
constitute a majority of the members of the Board; or

 

2

 

(C)             the
consummation of a merger, consolidation, recapitalization, liquidation, sale or
disposition by the Company of all or substantially all of the Company’s assets,
or reorganization of the Company, other than any such transaction which would (x) result
in more than 50% of the total voting power and value represented by the voting
securities of the surviving entity outstanding immediately after such
transaction being beneficially owned by the former shareholders of the Company
and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or
(B) of this paragraph.

 

“Permitted Persons” means (A) the Company; (B) any Related
Party; or (C) any group (as defined in Rule 13b-3 under the Exchange
Act) comprised of any or all of the foregoing.

 

“Related Party” means (A) a majority-owned subsidiary of the
Company; (B) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any majority-owned subsidiary of the
Company; or (C) any entity, 50% or more of the voting power of which is
owned directly or indirectly by the shareholders of the Company in
substantially the same proportion as their ownership of Voting Securities
immediately prior to the transaction.

 

“Voting Security” means any security of the Company which carries the
right to vote generally in the election of directors.

 

(vii)             “Redundancy”
shall mean termination of employment by the Company due to its need to reduce
the size of its workforce, including due to closure of a business or a
particular workplace or change in business process.  Whether a termination
of employment is due to a “redundancy” shall be determined by the Committee in
its sole and absolute discretion, such determination being final and binding on
all parties hereto and all persons claiming through, in the name of or on
behalf of such parties.

 

(c)                                  Certificates.  Each
certificate issued in respect of Restricted Shares awarded hereunder shall be
deposited with the Company, or its designee, together with, if requested by the
Company, a stock power executed in blank by the Employee, and shall bear a legend
disclosing the restrictions on transferability imposed on such Restricted

 

3

 

Shares by this Agreement (the “Restrictive Legend”).  Upon the vesting of Restricted Shares
pursuant to Section 2 hereof and the satisfaction of any withholding tax
liability pursuant to Section 5 hereof, such vested Shares, not bearing
the Restrictive Legend, shall be delivered to the Employee.

 

(d)                                 Rights of a
Stockholder.  Prior to the time a Restricted Share is
fully vested hereunder, the Employee shall have no right to transfer, pledge,
hypothecate or otherwise encumber such Restricted Share.  During such period, the Employee shall have
all other rights of a stockholder, including, but not limited to, the right to
vote and to receive dividends (subject to Section 2(a) hereof) at the
time paid on such Restricted Shares.

 

(e)                                  No Right to
Continued Employment.  This Award
shall not confer upon the Employee any right with respect to continuance of
employment by the Company nor shall this Award interfere with the right of the
Company to terminate the Employee’s employment at any time.

 

3.                                      Transfer of
Shares.  The Shares delivered
hereunder, or any interest therein, may be sold, assigned, pledged,
hypothecated, encumbered, or transferred or disposed of in any other manner, in
whole or in part, only in compliance with the terms, conditions and
restrictions as set forth in the governing instruments of the Company,
applicable United States federal and state securities laws or any other applicable
laws or regulations and the terms and conditions hereof.

 

4.                                      Expenses of
Issuance of Shares.  The
issuance of stock certificates hereunder shall be without charge to the
Employee.  The Company shall pay any
issuance, stamp or documentary taxes (other than transfer taxes) or charges
imposed by any governmental body, agency or official (other than income taxes)
or by reason of the issuance of Shares.

 

5.                                      Withholding.  No later than the date of vesting of (or the
date of an election by the Employee under Section 83(b) of the Code
with respect to) the Award granted hereunder, the Employee shall pay to the
Company or make arrangements satisfactory to the Committee regarding payment of
any federal, state or local taxes of any kind required by law to be withheld at
such time with respect to such Award and the Company shall, to the extent
permitted or required by law, have the right to deduct from any payment of any
kind otherwise due to the Employee, federal, state and local taxes of any kind
required by law to be withheld at such time.

 

6.                                      References.  References
herein to rights and obligations of the Employee shall apply, where
appropriate, to the Employee’s legal representative or estate without regard to
whether specific reference to such legal representative or estate is contained
in a particular provision of this Agreement.

 

7.                                      Notices.  Any
notice required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been given when delivered personally

 

4

 

or by courier, or sent by certified or registered
mail, postage prepaid, return receipt requested, duly addressed to the party
concerned at the address indicated below or to such changed address as such
party may subsequently by similar process give notice of:

 

If to the Company:

 

Arch
Capital Group Ltd.

Wessex House, 4th Floor

45 Reid Street

Hamilton HM 12 Bermuda 

Attn.: Secretary

 

If to the Employee:

 

To
the last address delivered to the Company by the 

Employee in the manner set forth herein.

 

8.                                      Governing Law.  This
Agreement shall be governed by and construed in accordance with the laws of New
York, without giving effect to principles of conflict of laws.

 

9.                                      Entire
Agreement.  This
Agreement and the Plan constitute the entire agreement among the parties
relating to the subject matter hereof, and any previous agreement or
understanding among the parties with respect thereto is superseded by this
Agreement and the Plan.

 

10.                               Counterparts.  This
Agreement may be executed in two counterparts, each of which shall constitute
one and the same instrument.

 

5

 

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

 

	
   

  	
  ARCH
  CAPITAL GROUP LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Dawna Ferguson

  
	
   

  	
   

  	
  Name:
  Dawna Ferguson

  
	
   

  	
   

  	
  Title:
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

6Exhibit 10.3

 

ARCH CAPITAL GROUP LTD.

Restricted Share Agreement

 

THIS AGREEMENT, dated as of May 5, 2010,
between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and
              
(the “Director”).

 

WHEREAS, the following terms reflect the Company’s
2007 Long Term Incentive and Share Award Plan (the “Plan”);

 

NOW, THEREFORE, in consideration of the premises and
mutual covenants contained herein, the parties hereto agree as follows.

 

1.                                       Award of Shares.  Pursuant
to the provisions of the Plan, the terms of which are incorporated herein by
reference, the Director is hereby awarded 799 Restricted Shares (the “Award”),
subject to the terms and conditions herein set forth.  Capitalized terms used herein and not defined
shall have the meanings set forth in the Plan. 
In the event of any conflict between this Agreement and the Plan, the
Plan shall control.

 

2.                                       Terms and
Conditions.  It is understood and agreed that the
Award of Restricted Shares evidenced hereby is subject to the following terms
and conditions:

 

(a)                                  Vesting of
Award.  Subject to Section 2(b) below
and the other terms and conditions of this Agreement, this Award shall become
vested on May 4, 2011.  Unless
otherwise provided by the Company, all dividends and other amounts receivable
in connection with any adjustments to the Shares under Section 4(c) of
the Plan shall be subject to the vesting schedule in this Section 2(a).  Notwithstanding the foregoing, if a Change in
Control occurs and the Director ceases to be a director of the Company for any
reason, then the Restricted Shares shall become immediately vested in full upon
such termination of service.

 

“Change in Control” shall
mean:

 

(A)                              any person
(within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
Voting Securities representing 50% or more of the total voting power or value
of all the then outstanding Voting Securities; or

 

(B)                                the individuals
who, as of the date hereof, constitute the Board of Directors of the Company
(the “Board”) together with those who become directors subsequent to such date
and whose recommendation, election or nomination for election to the Board was
approved by a vote of at least a majority of the directors then still in office
who either were directors as of such date or whose recommendation,

 

 

election
or nomination for election was previously so approved, cease for any reason to
constitute a majority of the members of the Board; or

 

(C)                                the
consummation of a merger, consolidation, recapitalization, liquidation, sale or
disposition by the Company of all or substantially all of the Company’s assets,
or reorganization of the Company, other than any such transaction which would (x) result
in more than 50% of the total voting power and value represented by the voting
securities of the surviving entity outstanding immediately after such
transaction being beneficially owned by the former shareholders of the Company
and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or
(B) of this paragraph.

 

“Permitted
Persons” means (A) the Company; (B) any Related Party; or (C) any
group (as defined in Rule 13b-3 under the Exchange Act) comprised of any
or all of the foregoing.

 

“Related
Party” means (A) a majority-owned subsidiary of the Company; (B) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any majority-owned subsidiary of the Company; or (C) any
entity, 50% or more of the voting power of which is owned directly or
indirectly by the shareholders of the Company in substantially the same
proportion as their ownership of Voting Securities immediately prior to the transaction.

 

“Voting
Security” means any security of the Company which carries the right to vote
generally in the election of directors.

 

(b)                                 Termination of
Service; Forfeiture of Unvested Shares.  Except as otherwise set forth in
Section 2(a) above, in the event the Director ceases to be a director
of the Company prior to the date the Restricted Shares otherwise become vested
due to his or her death or Permanent Disability (as defined in the Company’s
Incentive Compensation Plan), the Restricted Shares shall become immediately
vested in full upon such termination of service.  If the Director ceases to be a director of
the Company for any other reason prior to the date the Restricted Shares become
vested, the Award shall be forfeited by the Director and become the property of
the Company.

 

(c)                                  Certificates.  Each
certificate issued in respect of Restricted Shares awarded hereunder shall be
deposited with the Company, or its designee, together with, if requested by the
Company, a stock power executed in blank by the Director, and shall bear a
legend disclosing the restrictions on transferability imposed on such
Restricted 

 

2

 

Shares by this Agreement (the “Restrictive Legend”).  Upon the vesting of Restricted Shares pursuant
to Section 2(a) hereof and the satisfaction of any withholding tax
liability pursuant to Section 5 hereof, the certificates evidencing such
vested Shares, not bearing the Restrictive Legend, shall be delivered to the
Director.

 

(d)                                 Rights of a
Stockholder.  Prior to the time a Restricted Share is
fully vested hereunder, the Director shall have no right to transfer, pledge,
hypothecate or otherwise encumber such Restricted Shares.  During such period, the Director shall have
all other rights of a stockholder, including, but not limited to, the right to
vote and to receive dividends (subject to Section 2(a) hereof) at the
time paid on such Restricted Shares.

 

(e)                                  No Right to
Continued Services.  This Award
shall not confer upon the Director any right with respect to continuance of
services with the Company nor shall this Award interfere with the right of the
Company to terminate the Director’s services at any time.

 

3.                                       Transfer of
Shares.  The Shares delivered
hereunder, or any interest therein, may be sold, assigned, pledged,
hypothecated, encumbered, or transferred or disposed of in any other manner, in
whole or in part, only in compliance with the terms, conditions and
restrictions as set forth in the governing instruments of the Company,
applicable United States federal and state securities laws or any other
applicable laws or regulations and the terms and conditions hereof.

 

4.                                       Expenses of
Issuance of Shares.  The
issuance of stock certificates hereunder shall be without charge to the
Director.  The Company shall pay, and
indemnify the Director from and against any issuance, stamp or documentary
taxes (other than transfer taxes) or charges imposed by any governmental body,
agency or official (other than income taxes) or by reason of the issuance of Shares.

 

5.                                       Withholding.  No later than the date of vesting of (or the
date of an election by the Director under Section 83(b) of the Code
with respect to) the Award granted hereunder, the Director shall make
arrangements satisfactory to the Committee regarding payment of any federal,
state or local taxes of any kind required by law to be withheld at such time
with respect to such Award and the Company shall, to the extent permitted or
required by law, have the right to deduct from any payment of any kind otherwise
due to the Director, federal, state and local taxes of any kind required by law
to be withheld at such time.

 

6.                                       References.  References
herein to rights and obligations of the Director shall apply, where
appropriate, to the Director’s legal representative or estate without regard to
whether specific reference to such legal representative or estate is contained
in a particular provision of this Agreement.

 

7.                                       Notices.  Any
notice required or permitted to be given under this Agreement shall be in writing
and shall be deemed to have been given when delivered personally or by courier,
or sent by certified or registered mail, postage prepaid, return receipt
requested, duly addressed to the party concerned at the address indicated below
or to such changed address as such party may subsequently by similar process
give notice of:

 

3

 

If to the Company:

 

Arch
Capital Group Ltd.

Wessex House

45
Reid Street

Hamilton HM 12, Bermuda 

Attn.:  Secretary

 

If to the Director:

 

To
the last address delivered to the Company by the 

Director in the manner set forth herein.

 

8.                                       Governing Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to principles of conflict of laws.

 

9.                                       Entire
Agreement.  This
Agreement and the Plan constitute the entire agreement among the parties
relating to the subject matter hereof, and any previous agreement or
understanding among the parties with respect thereto is superseded by this
Agreement and the Plan.

 

10.                                 Counterparts.  This
Agreement may be executed in two counterparts, each of which shall constitute
one and the same instrument.

 

4

 

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

 

	
   

  	
  ARCH
  CAPITAL GROUP LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Dawna Ferguson

  
	
   

  	
   

  	
  Dawna
  Ferguson

  
	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Director
  Name]

  

 

5

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