Document:

Exhibit
- 10.14

 

MONTPELIER
RE HOLDINGS, LTD.

2007 LONG-TERM INCENTIVE PLAN

 

1.          Purpose

 

The purpose of the Montpelier Re Holdings, Ltd. 2007
Long-Term Incentive Plan is to advance the interests of Montpelier Re Holdings,
Ltd. and its shareholders by providing to certain of the key employees,
non-employee directors and consultants of the Company and its subsidiaries
long-term incentive awards relating to the Shares. The Plan shall become
effective upon its adoption by the Board of the Company and the approval of its
shareholders. Defined terms used in the Plan shall have the meanings set forth
in paragraph 9.

 

2.          Administration

 

(a)  Committee.  The
Plan shall be administered by the Committee. No member of the Committee shall
be an employee of the Company or a subsidiary of the Company. Each Committee
member shall meet the appropriate independence requirements of the SEC, NYSE or
other share exchange as appropriate, BSX, and the BMA, and any other body with
enforceable jurisdiction.

 

(b)  Exclusive
Discretion.  The Committee shall have exclusive authority
to select the individuals to be granted Awards, to determine the type, size and
terms of the Awards and to prescribe the form of the instruments embodying
Awards. The Committee shall be authorized to interpret the Plan and the Awards
granted under the Plan, to establish, amend and rescind any rules and
regulations relating to the Plan and to make any other determinations which it
believes necessary or advisable for the administration of the Plan. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Award in the manner and to the extent the
Committee deems desirable to carry it into effect. Any decision of the
Committee in the administration of the Plan, as described herein, shall be
final and conclusive.

 

(c)  No
Liability.  The Committee may act only by a majority of
its members in office, except that the members thereof may authorize any one or
more of their number or any officer of the Company to execute and deliver
documents on behalf of the Committee. No member of the Committee shall be
liable for anything done or omitted to be done by him or her or by any other
member of the Committee in connection with the Plan, except for his or her own
willful misconduct or as expressly provided by statute.

 

3.          Eligibility
and Participation

 

(a)  Eligibility.  Only
those key employees, non-employee directors, and consultants of the Company or
a subsidiary thereof who are selected by the Committee shall be eligible to
receive Awards.

 

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

 

4.          Authorized
Shares

 

(a)  Maximum
Number of Shares Subject to Awards.  Subject to
adjustment as provided in paragraph 11 herein, the maximum number of
Shares that may be issued under the Plan shall be 6,200,000.

 

1

 

(b)  Rules for
Determining Shares Available for Issuance.  If,
pursuant to the terms of an Award, the number of Shares with respect to which
the Award relates may be increased upon the attainment of certain performance
objectives or upon the occurrence of such other event(s) as may be
specified by the Committee in an Award Agreement, the maximum number of Shares
with respect to which such Award potentially may relate shall count against the
maximum number of Shares which may be delivered under the Plan for so long as
such Award is outstanding prior to final settlement thereof. Upon settlement of
such Award, only the Shares delivered thereunder shall be considered “issued
under the Plan” for purposes of paragraph 4(a). Any Shares underlying a
forfeited Award or portion thereof shall again be considered available for
issuance under the Plan. Upon exercise of an SAR, the full number of Shares
underlying such Award shall reduce the Shares available for issuance under the
Plan.

 

(c)  Rights
with Respect to Shares.  The Committee may, but shall in
no event be required to, provide dividend equivalent rights with respect to
Awards, subject to such limitations and conditions as the Committee may
establish. Otherwise, a Participant to whom Awards are granted (and any person
succeeding to such Participant’s rights pursuant to the Plan) shall have no
rights as a shareholder with respect to any Shares to which such Awards relate
unless and until a Share certificate is issued to the Participant upon exercise
or vesting of an Award.

 

5.          Share
Appreciation Rights

 

(a)  SARs.  Subject
to the terms and provisions of the Plan, SARs may be granted to Participants in
such number, and upon such terms, and at any time and from time to time as
shall be determined by the Committee. A Share Appreciation Right entitles the
Participant to receive upon exercise of the Award a payment equal to the
product of (x) the excess, if any, of the Fair Market Value of a Share on
the date of grant over the Grant Price times (y) the number of Shares with
respect to which the SAR is exercised. The Grant Price of each SAR shall be not
less than the Fair Market Value per Share on the date of grant of the SAR
Award.

 

(b)  Award
Agreements.  Each SAR grant shall be evidenced by an Award
Agreement that shall specify the number of Shares to which the SAR relates, the
term of the SAR, the vesting conditions, and such other provisions as the
Committee shall determine.

 

(c)  Vesting.  SARs
shall be exercisable only if and to the extent they have vested. The vesting of
a SAR may be conditioned upon continued employment or service, as the case may
be, of a Participant, satisfaction of performance goals, or such other
conditions as the Committee may, in its sole discretion, determine.

 

(d)  Form of
Payment.  At the discretion of the Committee, the payment
of SARs upon exercise may be in cash, in Shares of equivalent value or in some
combination thereof.

 

(e)  Termination
of Employment.  Each SAR Award Agreement shall set forth
the extent to which the Participant shall have the right to exercise the SAR
following termination of the Participant’s employment or, if the Participant is
a non-employee director or consultant, service with the Company or any of its
subsidiaries. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with
Participants, need not be uniform among all SARs awarded under the Plan, and
may reflect distinctions based on the reasons for termination of employment or
service, as the case may be. In no way would an acceleration of any awarded but
unvested SARs occur due to a termination of employment or service for cause.

 

(f)  Non-transferability.  Except
as otherwise provided in a Participant’s Award Agreement, SARs shall not be
transferable by Participants otherwise than by will or the laws of descent and
distribution, and shall be exercisable during a Participant’s lifetime only by
such Participant. A beneficiary designation under paragraph 14 shall not
be a violation of this paragraph.

 

6.          Restricted
Share Units

 

(a)  RSUs.  Subject
to the terms and provisions of the Plan, RSUs may be granted to Participants in
such number, and upon such terms, and at any time and from time to time as
shall be determined by the Committee. Restricted Share Units entitle the
Participant to receive upon settlement of the Award a payment equal to the Fair
Market Value of a Share on the Valuation Date, times the number of RSUs being
settled.

 

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(b)  Award
Agreement.  Each grant of RSUs shall be evidenced by an
Award Agreement that shall specify the number of Shares to which the Award
relates, the period of restriction, the vesting conditions, the settlement date
and such other provisions as the Committee shall determine.

 

(c)  Vesting.  Subject
to the terms and provisions of the Plan, the Committee shall impose such vesting
conditions on any RSUs as it may deem advisable and as are set forth in the
Award Agreement including, without limitation, vesting conditions based upon
continued employment with or service as a non-employee director or consultant
of the Company or a subsidiary. The vesting period for RSUs with no
performance-based vesting characteristics must be at least three years (vesting
may occur ratably on each month, quarter or annual anniversary of the grant
date over such vesting period). The vesting period for RSUs with
performance-based vesting characteristics must be at least one year. The
Committee may grant a “de minimis” number of RSUs that do not comply with the
foregoing minimum vesting standards. For this purpose “de minimis” means that
the aggregate number of Shares delivered in respect of such RSUs together with
any Performance Shares and Share Awards (if applicable) not meeting such
requirements will not exceed ten percent (10%) of the total number of Shares
authorized under the Plan.

 

(d)  Payment.  Payment
of RSUs shall be made as soon as practicable following the Valuation Date. At
the discretion of the Committee, the payment upon settlement of RSUs may be in
cash, in Shares of equivalent value or in some combination thereof.

 

(e)  Termination
of Employment.  Each Award Agreement shall set forth the
extent to which the Participant shall or shall not have the right to receive a
payment with respect to his or her RSUs following termination of the
Participant’s employment or, if the Participant is a non-employee director or
consultant, service with the Company or any one of its subsidiaries. Such
provisions shall be determined in the sole discretion of the Committee, shall
be included in the Award Agreement entered into with each Participant, need not
be uniform among all RSUs granted under the Plan, and may reflect distinctions
based on the reasons for termination of employment or service, as the case may
be. In no way would an acceleration of any awarded but unvested RSUs occur due
to a termination of employment or service for cause.

 

(f)  Non-transferability.  Except
as otherwise provided in a Participant’s Award Agreement, RSUs may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. A beneficiary
designation under paragraph 14 shall not be a violation of this paragraph.

 

7.          Performance
Shares

 

(a)  Performance
Shares.  Subject to the terms and provisions of the Plan,
Performance Shares may be granted to Participants in such number, and upon such
terms, and at any time and from time to time as shall be determined by the
Committee. Performance Shares entitle the Participant to receive upon
settlement of the Award a payment equal to the Fair Market Value of a Share on
the Valuation Date, times the number of Performance Shares that are determined
by the Committee to have vested.

 

(b)  Award
Agreements.  Each grant of Performance Shares shall be
evidenced by an Award Agreement that shall specify the number of Shares to
which the Award relates, the applicable performance objectives upon which
vesting is conditioned, the settlement date and such other provisions as the
Committee shall determine.

 

(c)  Vesting.  Subject
to the terms and provisions of the Plan, the Committee shall impose such
vesting conditions on any Performance Shares as it may deem advisable and as
are set forth in the Award Agreement including, without limitation, vesting
conditions based upon achievement of performance goals (Company-wide, business
unit, individual or other) and continued employment with or service as a
non-employee director or consultant of the Company or a subsidiary. The vesting
period for Performance Shares with no performance-based vesting characteristics
must be at least three years (vesting may occur ratably on each month, quarter
or annual anniversary of the grant date over such vesting period). The vesting
period for Performance Shares with performance-based vesting characteristics
must be at least one year. The Committee may grant a “de minimis” number of
Performance Shares that do not comply with the foregoing minimum vesting
standards. For this purpose “de minimis” means the number described in
paragraph 6(c).

 

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(d)  Award
Period.  The Award Period in respect of any Award of
Performance Shares shall be such period as the Committee shall determine.
Unless otherwise determined by the Committee, all Award Periods shall commence
as of the beginning of the fiscal year of the Company in which such Award is
made. An Award Period may contain a number of performance periods, each of
which shall commence on or after the first day of the Award Period and shall
end no later than the last day of the Award Period. At the time each Award is
made, the Committee shall establish performance objectives to be attained
within the performance periods as the means of determining the number or
percentage of Performance Shares earned. The performance objectives shall be
selected by the Committee in its sole discretion and specified in the
Participant’s Award Agreement. The performance objectives may relate to the
Company, one or more of its subsidiaries, or one or more of its divisions,
units, partnerships, joint ventures or minority investments, product lines or
products and any combination of the foregoing, and may be applied on an
absolute basis and/or be relative to one or more peer group companies or
indices, or any combination thereof, all as the Committee shall determine.
Performance objectives may also be calculated without regard to extraordinary
items.

 

(e)  Payment.  Payment
of Performance Shares shall be made as soon as practicable following the
Valuation Date. At the discretion of the Committee, the payment upon settlement
of Performance Shares may be in cash, in Shares of equivalent value or in some
combination thereof.

 

(f)  Termination
of Employment.  Each Award Agreement shall set forth the
extent to which the Participant shall have the right to receive payment of
Performance Shares following termination of the Participant’s employment or, if
the Participant is a non-employee director or consultant, service with the
Company or any one of its subsidiaries. Such provisions shall be determined in
the sole discretion of the Committee, shall be included in the Award Agreement
entered into with Participants, need not be uniform among all Performance
Shares awarded under the Plan, and may reflect distinctions based on the
reasons for termination of employment or service, as the case may be. In no way
would an acceleration of any awarded but unvested Performance Shares occur due
to a termination of employment or service for cause.

 

(g)  Non-transferability.  Except
as otherwise provided in a Participant’s Award Agreement, Performance Shares
may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution. A
beneficiary designation under paragraph 14 shall not be a violation of
this paragraph.

 

8.          Share
Awards

 

(a)  Shares.  Subject
to the terms and provisions of the Plan, the Committee may grant Shares to
Participants in such number, and upon such terms, and at much times as shall be
determined by the Committee.

 

(b)  Award
Agreements.  Share Awards may, but need not, be governed
by an Award Agreement.

 

(c)  Vesting.  Unless
Share Awards are (i) made in settlement of compensation entitlements that
would otherwise be paid in cash, (ii) delivered upon achievement of
pre-established performance objectives relating to the financial or other
operations of the Company or a unit thereof, or (iii) delivered in
settlement of other Awards, Share Awards shall be subject to the minimum
vesting provisions set forth in paragraphs 6(c) and 7(c).

 

(d)  Termination
of Employment.  If Share Awards are subject to vesting,
the Award Agreement shall set forth the treatment of such Award upon
termination of the Participant’s employment or service. Such provisions shall
be determined in the sole discretion of the Committee, shall be included in the
Award Agreement entered into with Participants, need not be uniform among all
Share Awards awarded under the Plan, and may reflect distinctions based on the
reasons for termination of employment or service, as the case may be. In no way
would an acceleration of any awarded but unvested Share Awards occur due to a
termination of employment or service for cause.

 

(e)  Par Value.  Participants
receiving Share Awards shall be required to make payment of or otherwise
satisfy any requirement for par value of the Shares, as shall be required by
the Committee in its sole discretion. Upon delivery of a Share Award, the
Participant shall acquire all the rights of a Shareholder of the Company in
respect thereto, except as may be otherwise specified by the Committee in the
Award Agreement in its sole discretion.

 

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9.          Definitions

 

(a) “Award
Agreement” shall mean any written agreement or other instrument or
document evidencing any Award granted under the Plan which may, but need not,
be executed or acknowledged by a Participant.

 

(b) “Award
Period” shall have
the meaning specified in paragraph 7.

 

(c) “Awards” shall mean Performance Shares,
Restricted Stock Units, Stock Appreciation Rights and Share Awards.

 

(d) “beneficial
owner(s)” shall have
the meaning specified in paragraph 10.

 

(e) “Board” shall mean the Board of Directors of
the Company.

 

(f) “Cause” shall mean (i) willful gross
negligence or willful gross misconduct by the Participant in connection with
his or her employment with the Company or one of its subsidiaries which causes,
or is likely to cause, material loss or damage to the Company or (ii) conviction
of an offense (other than a road traffic offense or other non-material offense
not subject to a custodial sentence).

 

(g) “Change in
Control” shall have
the meaning specified in paragraph 10.

 

(h) “Committee” shall mean the Compensation and
Nominating Committee of the Board, or such other committee of the Board having
responsibility for executive compensation by whatever name.

 

(i) “Company” shall mean Montpelier Re Holdings,
Ltd.

 

(j) “Constructive
Termination” shall
mean a termination of a Participant’s employment with the Company or a
subsidiary at the initiative of the Participant that the Participant declares
by prior written notice delivered to the Secretary of the Company to be a
Constructive Termination by the Company or subsidiary and which follows (i) a
material decrease in his or her salary or bonus opportunity or (ii) a
material diminution in the authority, duties or responsibilities of his or her
position with the result that the Participant makes a determination in good
faith that he or she cannot continue to carry out his or her job in
substantially the same manner as it was intended to be carried out immediately
before such diminution. Notwithstanding anything herein to the contrary,
Constructive Termination shall not occur within the meaning of this paragraph
unless, within 120 days of the event constituting Constructive
Termination, the Participant has given to the Company or subsidiary, as the
case may be, a notice of intent to terminate employment due to a Constructive
Termination and the Company or subsidiary, as the case may be, has been given
an opportunity (and has failed) over a 30 day period to cure the
circumstances constituting Constructive Termination.

 

(k) “Continuing
Director” shall have
the meaning set forth in paragraph 10.

 

(l) “Disability” shall mean the inability of the
Participant to perform in all material respects his or her duties and
responsibilities to the Company, or any subsidiary of the Company, by reason of
a physical or mental disability or infirmity which inability is reasonably
expected to be permanent and has continued (i) for a period of six
consecutive months or (ii) such shorter period as the Committee may
determine in good faith. The disability determination shall be in the sole
discretion of the Committee and a Participant (or his or her representative)
shall furnish the Committee with medical evidence documenting the Participant’s
disability or infirmity which is reasonably satisfactory to the Committee.

 

(m) “Effective
Date” shall mean the
date the Plan becomes effective in accordance with paragraph 1.

 

(n) “Exchange
Act” shall mean the
U.S. Securities Exchange Act of 1934, as amended.

 

(o) “Fair
Market Value” shall
mean (i) for purposes of paragraph 9(p), the final sentence of
paragraph 5(a) and the reference to Grant Price in paragraph 18,
the closing price per Share on the New York Stock Exchange on the date in
question, or, if such date is not a trading day, on the next succeeding trading
day and (ii) for all other purposes under the Plan, the 5-day average of
the daily closing prices of the Shares on the New York Stock Exchange or such
other principal securities exchange on which the Shares are traded, as reported
in The Wall Street Journal, for the 5 consecutive trading days 

 

5

 

previous to and
including as the last day the relevant date or, if there is no such trading on
the relevant date, then on the last previous day on which the Shares were
traded.

 

(p) “Grant
Price” shall mean the
Fair Market Value per Share on the date of grant of an SAR.

 

(q) “group” shall have the meaning specified in
paragraph 10.

 

(r) “Participant” means an individual selected by the
Committee to receive an Award in accordance with paragraph 3.

 

(s) “Performance
Share” shall mean an
Award granted in accordance with paragraph 7.

 

(t) “person”
shall have the meaning specified in paragraph 10.

 

(u) “Plan” means this Montpelier Re Holdings,
Ltd. 2007 Long-Term Incentive Plan.

 

(v) “Restricted
Stock Unit” or “RSU”
shall mean an Award granted in accordance with paragraph 6.

 

(w) “Shares” shall mean common shares of the
Company having a par value of 1/6 cents per share.

 

(x) “Share
Award” shall mean an
Award granted in accordance with paragraph 8.

 

(y) “Stock
Appreciation Rights”
or “SARs” shall mean an Award
granted in accordance with paragraph 5.

 

(z) “Successor Entity” shall have the meaning set forth in
paragraph 10.

 

(aa) “Termination
Without Cause” shall
mean a termination of the Participant’s employment with the Company and any
subsidiary of the Company other than for death, Disability or for Cause.
Notwithstanding anything herein to the contrary, if the Participant’s
employment with the Company or one of its subsidiaries shall terminate due to a
Change in Control described in subparagraph 10(b)(iii), where the Participant
is employed by the purchaser, as described in such subparagraph, and such
purchaser formally assumes the Company’s obligations under this Plan or places
the Participant in a similar or like plan with no diminution of the value of
the awards outstanding at the time of the Change in Control, such termination
shall not be deemed to be a “Termination
Without Cause.”

 

(bb) “Valuation
Date” shall mean the
date determined by the Committee in its sole discretion following the vesting
date of an Award on which the Fair Market Value of the Shares vesting pursuant
to such Award shall be valued.

 

10.          Change
in Control

 

(a)  Effect of
Change in Control.  If within 24 months following the
occurrence of a Change in Control (as defined in subparagraph 10(b)) there is a
Termination Without Cause (as defined in paragraph 9(aa)) or a
Constructive Termination (as defined in paragraph 9(j)) of the employment
of a participant, then, except as otherwise specifically provided in a
Participant’s Award Agreement, and unless otherwise specifically prohibited
under applicable laws, or by the rules and regulations of any governing
governmental agencies or securities exchanges:

 

(i) any and all SARs granted hereunder shall
become immediately exercisable;

 

(ii) any period(s) of restriction imposed on
RSUs or Share Awards shall lapse; and

 

(iii) the target performance goals or payout
opportunities attainable under all outstanding Awards of Performance Shares
shall be deemed to have been fully attained for all then open performance
periods.

 

(b) For purposes of this Plan, a “Change in Control” within the meaning of subparagraph 10(a) shall occur if:

 

(i) any “person” or “group” (within the meaning
of Sections 12(d) and 14(d)(2) of the Exchange Act, other than
the Company or one of its subsidiaries, becomes the “beneficial owner” (within
the meaning of Rule 13d-3 under the Exchange Act) of thirty-five percent
(35%) or more of the Company’s then outstanding Shares; provided, however, that

 

6

 

if all or
substantially all of the individuals and entities who were the “beneficial
owners” of the Company’s outstanding Shares immediately prior to such
acquisition beneficially own, directly or indirectly, more than fifty percent
(50%) of the outstanding Shares of the “person” or “group” that acquired the
Company’s Shares (the “Successor Entity”) in substantially the same proportions
as their ownership immediately prior to such Successor Entity’s acquisition of
the Company’s then outstanding Shares, such acquisition shall not constitute a
Change in Control; provided, further, that for purposes of this subparagraph
10(b)(i), the following acquisitions (or changes in beneficial ownership
resulting from the following acquisitions) shall not constitute a Change in
Control: (A) any acquisition by the Company or (B) any acquisition by
an employee benefit plan (or related trust) sponsored or maintained by the
Company or any entity controlled by the Company;

 

(ii) the Continuing Directors, as defined in
subparagraph 10(c), cease for any reason to constitute a majority of the Board;
or

 

(iii) the business of the Company for which the
Participant’s services are principally performed is disposed of by the Company
pursuant to a sale or other disposition of all or substantially all of the
business or business related assets of the Company (including the sale or
disposition of shares of a subsidiary of the Company).

 

(c) For the purposes of this Plan, “Continuing Director” shall mean a member of the Board (i) who is not an employee
of the Company or its subsidiaries or a holder of, or an employee or an
affiliate of an entity or group that holds, thirty-five percent (35%) or more
of the Company’s Shares and (ii) who either was a member of the Board on January 1,
2007, or who subsequently became a director of the Company and whose election,
or nomination for election, by the Company’s shareholders was approved by a
vote of a majority of the Continuing Directors then on the Board (which term,
for purposes of this definition, shall mean the whole Board and not any
committee thereof). Any action, approval of which shall require the approval of
a majority of the Continuing Directors, may be authorized by one Continuing
Director, if he or she is the only Continuing Director on the Board, but no
such action may be taken if there are not Continuing Directors on the Board.

 

11.          Antidilution
and Other Adjustments

 

In the event of any change in the outstanding Shares
of the Company by reason of any Share split, Share dividend, recapitalization,
merger, consolidation, reorganization, combination or exchange of Shares or
other similar event, the Committee shall equitably adjust the maximum number of
Shares which may be issued under paragraph 4(a) of the Plan, the
number of Shares to which outstanding Awards relate, the Grant Price per Share
under any outstanding SAR, or any performance goal, in such manner as may be
necessary, in the Committee’s discretion, to avoid enhancement or diminution of
the benefits or potential benefits intended to be awarded to Participants
hereunder. The Committee’s determinations under this paragraph 11 shall be
conclusive and binding for all purposes of the Plan.

 

12.          Deferral
of Awards

 

Subject to the terms and conditions of the Montpelier
Re Holdings Ltd. Voluntary Deferred Compensation Plan (including, without
limitation, eligibility restrictions and the timely filing of deferral
elections) and such other restrictions and conditions as the Committee may
prescribe, a Participant may elect to defer receipt of payment that otherwise
would be made under an Award.

 

13.          Dispute
Resolution

 

(a)  Mediation.  If
a dispute arises out of or relates to this Plan or a Participant’s Award
Agreement or the breach thereof, and if the dispute cannot be settled through
negotiation, the parties agree first to try in good faith to settle the dispute
by mediation administered by the American Arbitration Association under its
National Rules for the Resolution of Employment Disputes, before resorting
to binding arbitration as provided for in subparagraph 13(b).

 

(b)  Arbitration.  If
a dispute arising out of or relating to this Plan or a Participant’s Award
Agreement cannot be settled amicably by the parties through negotiation or
mediation, such dispute shall be finally, exclusively and conclusively settled
by mandatory arbitration conducted expeditiously in accordance with the
American Arbitration Association rules, by a single independent arbitrator. If
the parties are unable to agree on the selection of an arbitrator, then either
the Participant or the Company may petition the American Arbitration
Association for the appointment of the arbitrator, which appointment shall 

 

7

 

be made within ten
(10) days of the petition therefor. Either party to the dispute may
institute such arbitration proceeding by giving written notice to the other
party. A hearing shall be held by the arbitrator in New York or Bermuda, as
agreed by the parties (or, failing such agreement, in Bermuda), within thirty
(30) days of his or her appointment. The decision of the arbitrator shall
be final and binding upon the parties and shall be rendered pursuant to a
written decision that contains a detailed recital of the arbitrator’s
reasoning. Judgment upon the award rendered may be entered in any court having
jurisdiction thereof.

 

14.          Designation
of Beneficiary by Participant

 

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

 

15.          Application
of Securities Laws

 

If applicable, the issuance or delivery of Shares
pursuant to the Plan shall be subject to, and shall comply with, any applicable
requirements of federal and state securities laws, rules and regulations
(including, without limitation, the provisions of the Securities Act of 1933,
the Exchange Act, and the rules and regulations promulgated thereunder),
any securities exchange upon which the Shares may be listed and any other law
or regulation applicable thereto. The Company shall not be obligated to issue
or deliver any Shares pursuant to the Plan if such issuance or delivery would,
in the opinion of the Committee, violate any such requirements. The foregoing
shall not, however, be deemed to require the Company to effect any registration
of Shares under any such law or regulation, although the Company may elect to
do so.

 

16.          Bermuda
Government Regulations

 

The Company shall not issue any Shares hereunder
unless and until all licenses, permissions and authorizations required to be
granted by the Government of Bermuda, or by any authority or agency thereof,
shall have been duly received.

 

17.          Miscellaneous
Provisions

 

(a)  No Rights
to Awards.  No employee or other person shall have any
claim or right to be granted an Award under the Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any individual any right to
be retained in the service or employ of the Company or any subsidiary. In the
event of a Participant’s termination of employment or service with the Company
or a subsidiary, the Participant shall not be entitled by way of compensation
for breach of his or her employment agreement to any remuneration for his or
her loss of rights under the Plan. Awards and amounts received thereunder shall
not be considered to be wages or compensation for purposes of the determination
of entitlements under any pension, severance or other arrangement of the
Company.

 

(b)  No
Assignment.  Except as otherwise specifically provided in
a Participant’s Award Agreement, and except as provided in paragraph 14, a
Participant’s rights and interest under the Plan may not be assigned or
transferred in whole or in part either directly or by operation of law or
otherwise (except in the event of a Participant’s death), including but not
limited to, execution, levy, garnishment, attachment, pledge, bankruptcy or in
any other manner and no such right or interest of any Participant in the Plan
shall be subject to any obligation or liability or such Participant.

 

(c)  Withholding.  The
Company and its subsidiaries shall have the right to deduct from any payment
made under the Plan any federal, state or local income or other taxes required
by law to be withheld with respect to such payment. It shall be a condition to
the obligation of the Company to make a payment upon exercise or settlement of
an Award, or other event in connection with which a tax withholding obligation
arises, that the Participant (or any beneficiary or person entitled to payment
hereunder) pay to the Company (either in cash or, if the Committee shall
permit, in Shares having a fair market value, determined in the Committee’s
discretion, at such time equal to the minimum amount required to be withheld),
upon its demand, such amount as may be required by the Company for the purpose
of satisfying any liability to withhold federal, state or local income or other
taxes. If the amount requested is not paid, the Company may refuse to make a
payment to such Participant.

 

8

 

(d)  Expenses.  The
expenses of the Plan shall be borne by the Company. However, if an Award is
made to an employee, non-employee director or consultant in the service of a
subsidiary and if such Award results in payment of cash to the Participant,
such subsidiary shall pay to the Company an amount equal to such cash payment.

 

(e)  Successors.  The
Plan, and all obligations of the Company under the Plan with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether
the existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the
business and/or assets of the Company.

 

(f)  No
Separate Fund.  The Plan shall be unfunded. The Company
shall not be required to establish any special or separate fund or to make any
other segregation of assets to assure the payment of any Award under the Plan.

 

(g)  Consent
to Authority of Committee.  By accepting any Award or
other benefit under the Plan, each Participant and each person claiming under
or through him or her shall be conclusively deemed to have indicated his or her
acceptance and ratification of, and consent to, any action taken under the Plan
by the Company, the Board or the Committee.

 

18.          Amendment

 

The Plan and any Award Agreement hereunder may be
amended at any time and from time to time by the Board, but no amendment that
is required to be approved by the shareholders of the Company by law, rule, or
regulation, including stock exchange listing rules, and no amendment that would
significantly expand the benefits intended to be made available to Participants
under outstanding Awards under the Plan shall be effective unless and until the
same is approved by the shareholders of the Company. No amendment of the Plan
or any Award Agreement shall adversely affect any right of any Participant with
respect to any Award previously granted without such Participant’s written
consent. Notwithstanding the foregoing, (i) except in connection with a
transaction described in paragraph 11, the terms of any SAR Award shall
not be amended to reduce the Grant Price thereof to an amount less than the
Fair Market Value on the date of grant of such Award and (ii) except in
the event of a Participant’s death, Disability, retirement or termination of
employment other than for Cause or a Change in Control, the terms of an RSU,
Performance Award or Share Award (if applicable) held by such Participant shall
not be amended to accelerate the vesting thereof. In any event, in no way would
an acceleration of any awarded but unvested awards, in whatever form, occur due
to a termination of employment or service for cause.

 

19.          Termination

 

This Plan shall terminate upon the earlier of (i) the
adoption of a resolution of the Board terminating the Plan, or (ii) four
years after the Effective Date hereof. No termination of the Plan shall alter
or impair any of the rights or obligations of any person, without his or her
consent, under any Award previously granted under the Plan.

 

20.          Governing
Law

 

The Plan shall be governed by and construed in
accordance with the laws of Bermuda, without regard to conflicts of laws
principles.

 

9Exhibit - 10.17

 

 

MONTPELIER
RE HOLDINGS LTD.

 

LONG-TERM
INCENTIVE PLAN

 

ANNUAL
BONUS AND RESTRICTED SHARE UNIT

AWARD AGREEMENT

 

          This Award Agreement (the “Award
Agreement”) is made and entered into as of
[        ] between Montpelier Re
Holdings Ltd. (the “Company”) and NAME (the “Participant”).

 

          The Company hereby grants to the
Participant an incentive award (the “Award”) on the terms and conditions as set
forth in this Award Agreement and in the Montpelier Long-Term Incentive Plan
(the “Plan”), as it may be amended from time to time.

 

          In accordance with this grant, and as
a condition thereto, the Company and the Participant agree as follows:

 

          SECTION 1.  Annual Bonus.  The Participant shall be eligible to receive
an annual cash bonus with respect to the [current] calendar year (the
“Performance Period”).  The actual annual
bonus payable shall be between [    ]% and
[      ]% of the Participant’s base salary as in
effect as of the last day of the Performance Period and shall be based on the
Company’s return on equity (“ROE”) for the Performance Period; provided, that
the amount of the annual bonus is subject to adjustment in the discretion of
the Company’s Chief Executive Officer or the Compensation & Nominating
Committee (the “Committee”) based upon the Participant’s performance during the
Performance Period.  Any annual bonus
earned in accordance with this Section 1 (the “Annual Bonus”) shall be
paid as soon as reasonably practicable following the end of the Performance
Period.

 

          SECTION 2.  Restricted Share Units.  As soon as reasonably practicable following
the Company’s announcement of its annual results for [the current calendar
year] (the “Announcement Date”), the Participant shall be eligible to receive that
number of Restricted Share Units (“RSUs”) equal to (i) 2 multiplied by (ii) the
Annual Bonus, divided by (iii) 24; provided, that such number shall be
adjusted by the Committee in accordance with Section 11 of the Plan upon
any of the events set forth therein.

 

          SECTION 3.  Nature of Award.  RSUs represent the opportunity to receive
shares of Company common shares, $0.001666 par value per share (“Shares”), as
are earned in accordance with Section 4 of this Award Agreement.

 

          SECTION 4.  Vesting.  Subject to the Participant remaining employed
at the Announcement Date, [    ] of the RSUs shall vest at
midnight as of [        ], and, subject
to the Participant remaining employed though the applicable vesting date, the
RSUs shall vest in [        ] equal
tranches at midnight as of [each of the first     
anniversaries of the first vesting date of the RSUs], respectively.Shares shall
be issued by the Company to the Participant in satisfaction of the Award as
soon as reasonably practicable following [the date on which the last tranche of
the Award vests].

 

 

          SECTION 5.  Termination of Employment

 

          (a) If
the Participant’s employment with the Company or one of its subsidiaries is
terminated at any time following the Announcement Date and prior to [the date
on which the last tranche of the award is scheduled to vest]:

 

                (i) for any reason other than termination by the
Company or subsidiary for Cause, then all RSUs unvested at the date of
termination shall be forfeited, and Shares with respect to any RSUs vested at
the date of termination shall be issued to the Participant by the Company as
soon as reasonably practicable following [the date on which the last tranche of
the award is scheduled to vest]; or

 

                (ii) by the Company or subsidiary for Cause,
then all RSUs whether vested or unvested at the date of termination shall be
forfeited.

 

          (b) For
purposes of the Plan and the Award Agreement, a transfer of employment from the
Company to any subsidiary of the Company or vice versa, or from one subsidiary
to another, shall not be considered a termination of employment.

 

          SECTION 6.  Change in Control.
Notwithstanding the provisions of Section 5 above, if within 24 months
following a Change in Control that occurs following the Announcement Date, the
employment of the Participant with the Company or one of its subsidiaries is
terminated prior to [the date on which the last tranche of the award is
scheduled to vest]:

 

          (a) (i) by
the Company or subsidiary without Cause, (ii) on account of death or
disability (as determined in accordance with Section 8 of the Plan), or (iii) by
the Participant on account of a Constructive Termination or retirement at age
60 or later, then upon such termination the RSUs shall be deemed to have vested
in full and Shares with respect to such vested RSUs shall be issued to the
Participant by the Company as soon as reasonably practicable after such
termination;

 

          (b) by
the Participant other than on account of a Constructive Termination or
retirement at age 60 or later, then all RSUs unvested at the date of
termination shall be forfeited, and Shares with respect to any RSUs vested at
the date of termination shall be issued to the Participant by the Company as
soon as reasonably practicable after such termination; or

 

          (c) by
the Company or subsidiary for Cause, then all RSUs whether vested or unvested
at the date of termination shall be forfeited.

 

          SECTION 7.  Tax Withholding.  Pursuant to Section 17(c) of the
Plan, the Committee shall have the power and the right to deduct or withhold,
or require the Participant to remit to the Company, an amount sufficient to
satisfy any federal, state, local or other taxes required by applicable law to
be withheld with respect to payment of the Award.  The Committee may condition the payment
hereunder upon the Participant’s satisfaction of such withholding obligations.

 

 

2

 

          SECTION 8.  Rights As A Shareholder.  The Participant shall have no rights as
shareholder with respect to any Shares underlying the Award until and unless
the Participant’s name is entered in the Company’s Register of Members as the
holder of such shares and a Share certificate is issued to the Participant upon
payment with respect to the Award.

 

          SECTION 9.  Dividend Equivalents.  To the extent dividends are paid on Shares
with respect to the Performance Period, the Participant shall be entitled to
receive, within 90 days following the Announcement Date, a cash payment
equivalent to the cash dividends that would have been paid during the
Performance Period on the number of Shares underlying the RSUs awarded pursuant
to Section 2 above; provided, that the Participant remains employed with
the Company or one of its subsidiaries at the date of such payment.  To the extent dividends are paid on Shares
with respect to the period commencing on January 1, [of the year following
the current year] and ending on [the date on which the last tranche of the
Award is scheduled to vest], the Participant shall be entitled to receive
within 90 days following the respective payment dates of such dividends
(subject to the Participant’s continued employment with the Company or one of
its subsidiaries at the relevant payment date), a cash payment equivalent to
the cash dividends paid on the number of Shares underlying the RSUs awarded
pursuant to Section 2 above on such payment date.  Any payments made pursuant to this Section 9
shall be in the form of ordinary compensation.

 

          SECTION 10.  Transferability.  Pursuant to Section 14 of the Plan, the
Participant may designate a beneficiary or beneficiaries to receive any payment
to which he or she may be entitled in respect of Awards under the Plan in the
event of his or her death on a form to be provided by the Committee.  Except as provided herein, the Participant
may not sell, transfer, pledge, assign or otherwise alienate or hypothecate the
RSUs, other than by his or her last Will and Testament or by the laws of descent
and distribution.

 

          SECTION 11.  Ratification of Actions.  By accepting the Award or other benefit under
the Plan, the Participant and each person claiming under or through him or her
shall be conclusively deemed to have indicated the Participant’s acceptance and
ratification of, and consent to, any action taken under the Plan or the Award
by the Company, the Board or the Committee. 
All decisions or interpretations of the Company, the Board and the
Committee upon any questions arising under the Plan and/or this Award Agreement
shall be binding, conclusive and final on all parties.  In the event of any conflict between any
provision of the Plan and this Award Agreement, the terms and provisions of the
Plan shall control.

 

          SECTION 12.  Notices.  Any notice hereunder to the Company shall be
addressed to its office, Montpelier House, 94 Pitts Bay Road, Hamilton HM08,
Bermuda; Attention: Corporate Secretary, and any notice hereunder to the
Participant shall be addressed to him or her at the address specified on the
Award Agreement, subject to the right of either party to designate at any time
hereafter in writing some other address.

 

          SECTION 13.  Definitions.  Capitalized terms not otherwise defined
herein shall have the meanings given them in the Plan.

 

 

3

 

          SECTION 14.  Governing Law and
Severability.  This Award
Agreement will be governed by and construed in accordance with the laws of
Bermuda, without regard to conflicts of law provisions.  In the event any provision of the Award
Agreement shall be held illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining parts of the Award Agreement, and the
Award Agreement shall be construed and enforced as if the illegal or invalid
provision had not been included.

 

          SECTION 15.  No Rights to Continued
Employment.  This Award
Agreement is not a contract of employment. 
Nothing in the Plan or in this Award Agreement shall interfere with or
limit in any way the right of the Company or any subsidiary to terminate the
Participant’s employment at any time, for any reason or no reason, or confer
upon the Participant the right to continue in the employ of the Company or a
subsidiary.

 

          SECTION 16.  Counterparts.
This Award Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.

 

 

4

 

          IN WITNESS WHEREOF, the undersigned
have caused this Award Agreement to be duly executed as of the date first
written above.

 

	
   

  	
  MONTPELIER RE HOLDINGS
  LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
			

 

 

	
   

  	
  PARTICIPANT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
			

 

 

5

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