Document:

Exhibit 10.6
	 

	 
		 
	 

	 
		FORM OF GREENLIGHT CAPITAL RE,
		LTD.
	 

	 
		2004 STOCK INCENTIVE PLAN
	 

	 
		RESTRICTED STOCK AWARD
		AGREEMENT
	 

	 
		This Restricted Stock Award Agreement (the
		“Agreement”), made as of the
		                           
		(the “Grant
		Date”) by and between
		Greenlight Capital Re, Ltd., a company incorporated under the laws of the
		Cayman Islands (the “Company”), and
		              
		(the “Grantee”), evidences the grant by the Company of a stock
		award of restricted Shares (the “Award”)
		to the Grantee on such date and the Grantee’s acceptance of the Award in
		accordance with the provisions of the Amended and Restated 2004 Stock Incentive
		Plan (the “Plan”).
		Any capitalized terms not defined herein shall have the meaning ascribed to
		them as set forth in the Plan.
	 

	 
		The Company and the Grantee agree as
		follows:
	 

	 
		1. Basis and Payment for
		Award. This Award is made under the Plan pursuant to Section 7 thereof
		for services to be rendered to the Company by the Grantee. Upon the Grant Date,
		the Grantee shall pay the Company $
		           by check which is
		equal to the par value of the Shares.
	 

	 
		2. Stock Awarded.
	 

	 
		(a) The Company hereby awards to the
		Grantee, in the aggregate,
		            
		Shares, subject to the restrictions and conditions set forth in the Plan and in
		this Agreement (“Restricted
		Stock”).
	 

	 
		(b) Each certificate issued in respect of
		the Restricted Stock shall be registered in the Grantee’s name and
		deposited by him with the Company and shall bear the following (or a similar)
		legend:
	 

	 
		“THE TRANSFERABILITY OF THIS
		CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND
		CONDITIONS (INCLUDING FORFEITURE) CONTAINED IN THE RESTRICTED STOCK AWARD
		AGREEMENT DATED AS OF
		                    ,
		ENTERED INTO BETWEEN THE REGISTERED OWNER AND GREENLIGHT CAPITAL RE,
		LTD.”
	 

	 
		At the expiration of the restrictions
		applied to the Restricted Stock pursuant to Section 2(d) of this Agreement, the
		Company shall redeliver to the Grantee (or his legal representative,
		beneficiary or heir) share certificates for the Shares deposited with it
		without any legend except as otherwise provided by the Plan, this Agreement,
		the Shareholders’ Agreement dated as of August 11, 2004 by and among the
		Company and each of the signatories thereto (the “Shareholders’
		Agreement”) or as otherwise
		required by applicable law. The Grantee shall have the right to receive
		dividends on and to vote the Restricted Stock while it is held in custody
		except as otherwise provided by the Plan. Notwithstanding the foregoing, the
		Company shall retain custody of all dividends made or declared with respect to
		the Restricted Stock and such retained distributions shall be subject to the
		same restrictions on terms and conditions as are
	 

	 	 
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		applicable to the Restricted Stock. No
		interest shall be paid on any dividends retained by the Company.
	 

	 
		(c) As a condition of the grant, the Grantee
		shall be required to sign the Shareholders’ Agreement.
	 

	 
		(d) Except as provided in the Plan or this
		Agreement, the restrictions on the Restricted Stock are that the Shares will be
		mandatorily repurchased for par value and cancelled by the Company and all of
		the Grantee’s rights to such Shares shall immediately terminate, in the
		event of any sale, assignment, transfer, hypothecation, pledge or other
		alienation of such Restricted Stock made or attempted, whether voluntary or
		involuntary, and if involuntary whether by process of law in any civil or
		criminal suit, action or proceeding, whether in the nature of an insolvency or
		bankruptcy proceeding or otherwise, without the written consent of the
		Committee, excluding the Grantee if he so serves on the Committee.
	 

	 
		3. Vesting. The restrictions
		described in Section 2 of this Agreement will lapse with respect to 100% of the
		Restricted Stock upon the third anniversary; provided,
		that, the Grantee is still in Continuous Service with the
		Company on such vesting date. Except as otherwise specifically provided herein,
		if the Grantee’s service terminates for any reason at any time prior to
		the vesting date, the unvested Restricted Stock shall automatically be
		repurchased for par value and cancelled by the Company upon such termination of
		Continuous Service.
	 

	 
		4. Compliance with Laws and
		Regulations. The issuance and transfer of Shares shall be subject to
		compliance by the Company and the Grantee with the Memorandum and Articles of
		Association of the Company, all applicable requirements of securities and other
		applicable laws and with all applicable requirements of any stock exchange on
		which the Shares may be listed at the time of such issuance or transfer. The
		Grantee understands that the Company is under no obligation to register or
		qualify the Shares with the U.S. Securities and Exchange Commission
		(“SEC”), any state securities commission or any
		stock exchange to effect such compliance.
	 

	 
		5. Company; Grantee.
	 

	 
		(a) The term “Company” as
		used in this Agreement with reference to Continuous Service shall include the
		Company and its Affiliates, as appropriate.
	 

	 
		(b) Whenever the word
		“Grantee” is used in any provision of this Agreement under
		circumstances where the provision should logically be construed to apply to the
		successors, beneficiaries, the executors, the administrators, or the person or
		persons to whom the Restricted Stock may be transferred by will or by the laws
		of descent or distribution, the word “Grantee”
		shall be deemed to include such person or persons.
	 

	 	 
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		6. Tax Withholding.
	 

	 
		(a) To the extent required by law, the
		Grantee agrees that, subject to clause 6(b) below, no later than the date as of
		which the restrictions on the Restricted Stock shall lapse with respect to all
		or any of the Restricted Stock covered by this Agreement, the Grantee shall pay
		to the Company (in cash or to the extent permitted by the Committee, Shares
		held by the Grantee whose Fair Market Value is equal to the amount of the
		Grantee’s tax withholding liability) any federal, state or local taxes of
		any kind required by law to be withheld, if any, with respect to the Restricted
		Stock for which the restrictions shall lapse. The Company or its Affiliates
		shall, to the extent permitted by law, have the right to deduct from any
		payment of any kind otherwise due to the Grantee any federal, state or local
		taxes of any kind required by law to be withheld with respect to the Shares of
		Restricted Stock.
	 

	 
		(b) If the Grantee properly elects, within
		thirty (30) days of the Grant Date, to include in gross income for federal
		income tax purposes an amount equal to the Fair Market Value as of the Grant
		Date of the Restricted Stock granted hereunder pursuant to Section 83(b) of the
		Internal Revenue Code of 1986, as amended, to the extent required by law, the
		Grantee shall pay to the Company, or make other arrangements satisfactory to
		the Committee to pay to the Company in the year of such grant, any federal,
		state or local taxes required to be withheld with respect to such Shares. If
		the Grantee fails to make such payments, the Company or its Affiliates shall,
		to the extent permitted by law, have the right to deduct from any payment of
		any kind otherwise due to the Grantee any federal, state or local taxes of any
		kind required by law to be withheld with respect to such Shares.
	 

	 
		7. Amendment of Award. Subject
		to Section 15 of this Agreement, the Board at any time, and from time to time,
		may amend the terms of this Award; provided,
		however, that the Grantee’s rights under this Award shall
		not be impaired by any such amendment unless (i) the Company requests the
		Grantee’s consent and (ii) the Grantee consents in writing.
	 

	 
		8. No Impairment of Rights.
		Subject to Section 15 of this Agreement, suspension or termination of the Plan
		shall not impair any rights and obligations under this Award while the Plan is
		in effect except with the Grantee’s written consent.
	 

	 
		9. Representations and Warranties of
		Grantee. The Grantee represents and warrants to the Company
		that:
	 

	 
		(a) Agrees to Terms of the Plan. The Grantee has received a copy of the Plan and has
		read and understands the terms of the Plan and this Agreement, and agrees to be
		bound by their terms and conditions. The Grantee acknowledges that there may be
		adverse tax consequences upon the vesting of Restricted Stock or disposition of
		the Shares once vested, and that the Grantee should consult a tax advisor prior
		to such time.
	 

	 
		(b) Purchase for Own Account for Investment. The Grantee is receiving the Shares for the
		Grantee’s own account for investment purposes only and not with a view to,
		or for sale in connection with, a distribution of the Shares within the meaning
		of the Securities Act of 1933, as amended (the “Securities Act”). The Grantee has no present intention of selling
		or otherwise
	 

	 	 
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		disposing of all or any portion of the
		Shares and no one other than the Grantee has any beneficial ownership of any of
		the Shares.
	 

	 
		(c) Access to Information. The Grantee has had access to all information
		regarding the Company and its present and prospective business, assets,
		liabilities and financial condition that the Grantee reasonably considers
		important in making the decision to purchase the Shares, and the Grantee has
		had ample opportunity to ask questions of the Company’s representatives
		concerning such matters and this investment.
	 

	 
		(d) Understanding of Risks. The Grantee is fully aware of: (i) the highly
		speculative nature of the investment in the Shares; (ii) the financial hazards
		involved; (iii) the restrictions on transferability of the Shares
		(e.g., that the Grantee may not be able to sell or dispose
		of the Shares or use them as collateral for loans); and (iv) the tax
		consequences of investment in the Shares. The Grantee is capable of evaluating
		the merits and risks of this investment, has the ability to protect the
		Grantee’s own interests in this transaction and is financially capable of
		bearing a total loss of this investment.
	 

	 
		(e) No General Solicitation. At no time was the Grantee presented with or solicited
		by any publicly issued or circulated newspaper, mail, radio, television or
		other form of general advertising or solicitation in connection with the offer,
		sale and purchase of the Shares.
	 

	 
		(f) Cooperation. The
		Grantee agrees to sign such additional documentation as may reasonably be
		required from time to time by the Company.
	 

	 
		(g) Residence. The
		Grantee represents that the address indicated under his name on the signature
		page of this Agreement is his principal residence.
	 

	 
		(h) Accredited Investor. The Grantee represents that he is an “Accredited
		Investor” within the meaning of Rule 501(a) of Regulation D, as
		promulgated under Section 5 of the Securities Act.
	 

	 
		10. Compliance with Securities
		Laws. The Grantee understands and acknowledges that the Shares have not
		been registered with the SEC under the Securities Act and that, notwithstanding
		any other provision of the Agreement to the contrary, the vesting and holding
		of the Shares is expressly conditioned upon compliance with the Securities Act
		and all applicable securities laws. The Grantee agrees to cooperate with the
		Company to ensure compliance with such laws.
	 

	 
		11. Restricted
		Securities.
	 

	 
		(a) No Transfer Unless Registered or Exempt. The Grantee understands that the Grantee may not
		transfer any Shares unless such Shares are registered under the Securities Act
		or qualified under applicable securities laws or unless, in the opinion of U.S.
		counsel to the Company, exemptions from such registration and qualification
		requirements are also available. The Grantee understands that only the Company
		may file a registration statement with the SEC and that the Company is under no
		obligation to do so with respect to the Shares. The Grantee has also been
		advised that exemptions from registration and qualification may not be
		available or
	 

	 	 
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		may not permit the Grantee to transfer all
		or any of the Shares in the amounts or at the times proposed by the
		Grantee.
	 

	 
		(b) SEC Rule 144. In
		addition, the Grantee has been advised that SEC Rule 144 promulgated under the
		Securities Act, which permits certain limited sales of unregistered securities,
		is not presently available with respect to the Shares and, in any event,
		requires that the Shares be held for a minimum of one (1) year, and in certain
		cases two (2) years, after they have been purchased and paid for (within the
		meaning of Rule 144). The Grantee understands that Rule 144 may indefinitely
		restrict transfer of the Shares so long as the Grantee remains an
		“affiliate” of the Company or if “current public
		information” about the Company (as defined in Rule 144) is not publicly
		available.
	 

	 
		(c) SEC Rule 701. If
		the Shares are issued pursuant to SEC Rule 701 promulgated under the Securities
		Act, the Shares may become freely tradeable by non-affiliates (under limited
		conditions regarding the method of sale) ninety (90) days after the first sale
		of Shares to the general public pursuant to a registration statement filed with
		and declared effective by the SEC, subject to the lengthier market standoff
		agreement contained in Section 13 of this Agreement or any agreement entered
		into by the Grantee. Affiliates must comply with the provisions (in addition to
		the holding period requirements) of Rule 144.
	 

	 
		12. Restrictions on Transfers.
	 

	 
		(a)
		Disposition of Shares. The Grantee
		hereby agrees that the Grantee shall make no disposition of the Shares (other
		than as permitted by this Agreement) unless and until:
	 

	 
			
				
				   
				

			 	
				
				  1.
				

			 	
				
				  The Grantee shall have notified the
				  Company of the proposed disposition and provided a written summary of the terms
				  and conditions of the proposed disposition;
				

			 

 

	 
			
				
				   
				

			 	
				
				  2.
				

			 	
				
				  The Grantee shall have complied with
				  all requirements of this Agreement, the Shareholders’ Agreement, the
				  Memorandum and Articles of Association of the Company and the Plan applicable
				  to the disposition of the Shares;
				

			 

 

	 
			
				
				   
				

			 	
				
				  3.
				

			 	
				
				  The Grantee shall have provided the
				  Company with written assurances, in form and substance satisfactory to U.S.
				  counsel for the Company, that (i) the proposed disposition does not require
				  registration of the Shares under the Securities Act or (ii) all appropriate
				  actions necessary for compliance with the registration requirements of the
				  Securities Act or of any exemption from registration available under the
				  Securities Act (including Rule 144) have been taken; and
				

			 

 

	 
			
				
				   
				

			 	
				
				  4.
				

			 	
				
				  The Grantee shall have provided the
				  Company with written assurances, in form and substance satisfactory to the
				  Company, that the proposed disposition will not result in the contravention of
				  any transfer restrictions applicable to the Shares pursuant to the provisions
				  of the securities laws referred to herein.
				

			 

 

	 	 
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		(b) Restriction on Transfer. The Grantee shall not transfer, assign, grant a lien
		or security interest in, pledge, hypothecate, encumber or otherwise dispose of
		any of the Shares, except as permitted by this Agreement, the Plan, the
		Memorandum and Articles of Association of the Company and the
		Shareholders’ Agreement.
	 

	 
		(c) Transferee Obligations. Each person to whom the Shares are transferred by
		means of one of the permitted transfers specified in this Agreement must, as a
		condition precedent to the validity of such transfer, acknowledge in writing to
		the Company that such person is bound by the provisions of this Agreement and
		the Plan and that the transferred Shares are subject to (i) the market
		stand-off provisions of Section 13 hereof and (ii) the Drag-Along Rights set
		forth in Section 3 of the Shareholders’ Agreement, to the same extent such
		Shares would be so subject if retained by the Grantee.
	 

	 
		(d) Compliance with Cayman Islands Regulatory
		Requirements. So long as Greenlight
		Reinsurance Ltd. is a holder of a Category B Insurance License or any other
		insurance license granted under the provisions of the Insurance Law or any
		other insurance license granted under the provisions of the Insurance Law (2004
		Revision) of the Cayman Islands, the Grantee shall not without the prior
		consent of the Cayman Islands Monetary Authority, transfer or dispose of in any
		manner the legal or beneficial interest in such number of Shares that would
		constitute a transfer or disposal of more than 5% of the beneficial interest in
		the issued share capital of Greenlight Reinsurance Ltd.
	 

	 
		13. Market Standoff Agreement.
		In the case of the initial underwritten public offering by the Company of the
		Shares, if the officers and directors of the Company agree not to effect any
		disposition of any equity security of the Company or of any security
		convertible into or exchangeable or exercisable for any equity security of the
		Company (in each case, other than as part of such underwritten public
		offering), the Grantee agrees to the same during the 180-day period (or such
		longer period as may be reasonably requested by the underwriter of such
		offering) beginning on the effective date of such registration statement
		(except as a part of such registration); provided,
		that, the Grantee has received written notice of such
		registration prior to such effective date; provided,
		however, that any waiver of the foregoing restriction by the
		Company or the Company’s underwriters shall apply to all persons subject
		to such restrictions pro rata based on the number of Shares owned.
	 

	 
		14. Restrictive Legends and
		Stop-Transfer Orders.
	 

	 
		(a) Legends. The
		Grantee understands and agrees that the Company will place the legends set
		forth below or similar legends on any stock certificate(s) evidencing the
		Shares, together with any other legends that may be required by state, U.S.
		Federal or foreign securities laws, the Company’s Certificate of
		Incorporation or Bylaws, any other agreement between the Grantee and the
		Company or any agreement between the Grantee and any third party:
	 

	 
		“THE SECURITIES EVIDENCED BY THIS
		CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
		1933, AS AMENDED OR THE SECURITIES LAWS OF CERTAIN STATES, AND MAY
		NOT
	 

	 	 
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		BE SOLD, TRANSFERRED, ASSIGNED OR
		HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
		OR SUCH LAWS COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE
		144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE COMPANY AT ITS OPTION
		RECEIVES AN OPINION OF COUNSEL OF THE HOLDER OF THESE SECURITIES REASONABLY
		SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
		HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
		REQUIREMENTS OF SUCH ACT AND SUCH LAWS AND UNLESS, WHERE APPLICABLE, THE PRIOR
		APPROVAL OF THE CAYMAN ISLANDS MONETARY AUTHORITY HAS BEEN
		OBTAINED.
	 

	 
		IN ADDITION, THE SECURITIES EVIDENCED
		BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFER RESTRICTIONS IN THE
		COMPANY’S MEMORANDUM AND ARTICLES OF ASSOCIATION, AND PURSUANT TO A
		SHAREHOLDERS’ AGREEMENT DATED AS OF AUGUST 11, 2004 AMONG THE COMPANY AND
		CERTAIN OF THE COMPANY’S SHAREHOLDERS. A COPY OF SUCH ARTICLES OF
		ASSOCIATION AND SHAREHOLDERS’ AGREEMENT WILL BE FURNISHED WITHOUT CHARGE
		BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST. THE SECURITIES ARE
		ALSO SUBJECT TO CERTAIN RESTRICTIONS IN THE RESTRICTED STOCK AWARD AGREEMENT
		DATED AS OF SEPTEMBER 20, 2004 ENTERED INTO BETWEEN THE REGISTERED OWNER AND
		THE COMPANY. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
		FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
		TIME.”
	 

	 
		(b) Stop-Transfer Instructions. The Grantee agrees that, to ensure compliance with the
		restrictions imposed by this Agreement, the Company may issue appropriate
		“stop-transfer” instructions to its transfer agent, if any, and if
		the Company transfers its own securities, it may make appropriate notations to
		the same effect in its own records.
	 

	 
		(c) Refusal to Transfer. The Company will not be required (i) to register any
		transfer of Shares on its register of members any Shares that have been sold or
		otherwise transferred in violation of any of the provisions of this Agreement
		or (ii) to treat as owner of such Shares, or to accord the right to vote or pay
		dividends to any purchaser or other transferee to whom such Shares have been so
		transferred.
	 

	 	 
	7

	 
 

	 
		15. Adjustment Upon Changes in
		Capitalization. Awards may be adjusted as provided in the Plan,
		including, without limitation, Section 11 of the Plan. The Grantee, by his
		execution and entry into this Agreement, irrevocably and unconditionally
		consents and agrees to any such adjustments as may be made at any time
		hereafter and hereby undertakes to vote in favor of any such adjustments
		required to be approved by the members of the Company.
	 

	 
		16. Incorporation of Plan by
		Reference. The Award is granted pursuant to the terms of the Plan, the
		terms of which are incorporated herein by reference, and the Award shall in all
		respects be interpreted in accordance with the Plan. The Committee shall
		interpret and construe the Plan and this Agreement, and its interpretations and
		determinations shall be conclusive and binding on the parties hereto and any
		other person claiming an interest hereunder, with respect to any issue arising
		hereunder or thereunder. In the event of a conflict or inconsistency between
		the terms and provisions of the Plan and the provisions of this Agreement, the
		Plan shall govern and control.
	 

	 
		17. Governing Law;
		Modification. The validity, construction, interpretation and effect of
		this Agreement shall exclusively be governed by, and determined in accordance
		with, the laws of the Cayman Islands.
	 

	 
		[SIGNATURE PAGE FOLLOWS]
	 

	 	 
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		IN WITNESS WHEREOF, the parties hereto have
		signed this Agreement as of the date first above written.
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  GREENLIGHT CAPITAL RE,
				  LTD.
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   By: 
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name:
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Title:
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	 	 	 	 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Grantee
				

			 
	 	 	 	 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Address
				

			 
	 	 	 	 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 	 
	9Exhibit 10.7
	 

	 
		

	 

	 
		GREENLIGHT CAPITAL RE, LTD.
	 

	 
		AMENDED AND RESTATED
	 

	 
		2004 STOCK INCENTIVE PLAN
	 

	 
		

	 

	 
		FORM OF STOCK OPTION AGREEMENT
	 

	 
		

	 

	 
		This Stock Option Agreement (the “Agreement”) is
		made and entered into as of the date of grant set forth below (the
		“Date of Grant”) by and between Greenlight Capital Re,
		Ltd. (the “Company”), and the participant named below
		(“Participant”). Capitalized terms not defined herein
		shall have the meaning ascribed to them in the Company’s Amended and
		Restated 2004 Stock Incentive Plan (the “Plan”).
	 

	 	
			 
				Participant: 
			 

		  	

			 
				 
			 

		  
	
			 
				Address:
			 

		  	

			 
				 
			 

		  
	
			 
				 
			 

		  	

			 
				 
			 

		  
	
			 
				Total Option Shares:
			 

		  	

			 
				 
			 

		  
	
			 
				Exercise Price Per Share:
			 

		  	

			 
				 
			 

		  
	
			 
				Date of Grant:
			 

		  	

			 
				 
			 

		  
	
			 
				Expiration Date:
			 

		  	

			 
				 
			 

		  

	 
		

	 

	 
		1.
	 

	 
		Grant of
		Option.  The Company hereby grants to Participant an
		option (this “Option”) to purchase the total number of
		Shares set forth above as Total Option Shares (“Option
		Shares”) at the Exercise Price Per Share set forth above
		(the “Exercise Price”), subject to all of the terms and
		conditions of this Agreement and the Plan.
	 

	 
		2.
	 

	 
		Exercise Period.
	 

	 
		2.1
	 

	 
		Provided Participant continues to provide Continuous Service to the
		Company or any Affiliate, the Option will become vested and exercisable with
		respect to 33 1/3% of the Option Shares subject thereto on each of the
		next three anniversaries of the Date of Grant until the Option is 100% vested.
		 Except as provided in this Agreement, any unvested portion of the Option
		will not be exercisable on or after Participant’s termination of
		Continuous Service (“Termination Date”) and shall
		immediately terminate on such Termination Date.
	 

	 
		2.2
	 

	 
		The Option shall expire on the Expiration Date set forth above or earlier
		as provided in Section 2.1 or 3 of this Agreement or, if applicable, pursuant
		to Section 11 of the Plan.
	 

	 
		3.
	 

	 
		Termination.
	 

	 
		3.1
	 

	 
		If Participant’s Continuous Service is terminated for Cause, the
		Option, whether or not vested, shall terminate and cease to be exercisable.
	 

	 
		
 

	 

	 
		1
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		3.2
	 

	 
		If Participant’s Continuous Service terminates due to his death or
		Disability, any unvested portion of the Option shall terminate and cease to be
		exercisable and any vested portion of the Option shall remain exercisable for
		one-year following such death or Disability, but not beyond the Expiration
		Date.
	 

	 
		3.3
	 

	 
		If Participant’s Continuous Service terminates for any reason other
		than those set forth in Sections 3.1 and 3.2 hereof, the unvested portion of
		the Option shall automatically terminate and cease to be exercisable and the
		vested portion of the Option shall remain exercisable by Participant for ninety
		(90) days after the Termination Date, but in any event no later than the
		Expiration Date.
	 

	 
		3.4
	 

	 
		Nothing in the Plan or this Agreement shall confer on Participant any
		right to continue in the employ of, or other relationship with, the Company or
		any Affiliate, or limit in any way the right of the Company or any Affiliate to
		terminate Participant’s Continuous Service, with or without Cause.
	 

	 
		4.
	 

	 
		Manner of Exercise.
	 

	 
		4.1
	 

	 
		To exercise this Option, Participant (or in the case of exercise after
		Participant’s death or incapacity, Participant’s executor,
		administrator, heir or legatee, as the case may be) must deliver to the Company
		an executed stock option exercise agreement in the form as may be approved by
		the Committee from time to time (the “Exercise
		Agreement”), which shall set forth, inter alia, (i)
		Participant’s election to exercise the Option, (ii) the number of Option
		Shares being purchased, (iii) any restrictions imposed on the Option Shares,
		(iv) any representations, warranties and agreements regarding
		Participant’s investment intent and access to information as may be
		required by the Company to comply with applicable securities laws and (v)
		whether the Shares shall be certificated or held in book-form.  If someone
		other than Participant exercises the Option, then such person must submit
		documentation reasonably acceptable to the Company verifying that such person
		has the legal right to exercise the Option.  The Option may not be
		exercised unless all necessary regulatory approvals have been obtained and such
		exercise is in compliance with all applicable securities laws and all
		regulatory and other applicable laws of the Cayman Islands, as they are in
		effect on the date of exercise.  The Exercise Agreement shall be
		accompanied by full payment of the Exercise Price for the Option Shares being
		purchased in cash or by cashiers’ check, or where permitted by law:
	 

	 
		(a)
	 

	 
		provided that the shareholders of the Company have approved by ordinary
		resolution at a general meeting either the Plan which contemplates the manner
		of repurchase set out herein or the manner of repurchase of Shares contemplated
		hereby, and to the extent permitted by, and in compliance with, all applicable
		laws and the Company’s Memorandum and Articles of Association, by delivery
		to the Company of Shares having an aggregate Fair Market Value equal to the
		Exercise Price to be satisfied by their delivery which have been held by
		Participant for at least six (6) months;
	 

	 
		(b)
	 

	 
		provided that an Initial Public Offering has occurred, through a
		“same day sale” commitment from Participant and a broker-dealer that
		is a member of the National Association of Securities Dealers (an
		“NASD Dealer”) whereby
	 

	 
		
 

	 

	 
		2
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		Participant irrevocably elects to exercise the Option and to sell a
		portion of the Option Shares so purchased sufficient to pay for the total
		Exercise Price and whereby the NASD Dealer irrevocably commits to forward the
		total Exercise Price directly to the Company; or
	 

	 
		(c)
	 

	 
		by any combination of the foregoing.
	 

	 
		4.2
	 

	 
		At the time of exercise, Participant shall pay to the Company such amount
		as the Company deems necessary to satisfy its obligation to withhold any
		applicable income or other taxes incurred by reason of the exercise of the
		Option granted hereunder.  Participant may satisfy any such tax
		withholding obligation relating to the exercise or acquisition of the Option
		Shares by any of the following means (in addition to the Company’s right
		to withhold or to direct the withholding from any compensation paid to
		Participant by the Company or by an Affiliate) or by a combination of such
		means:  (i) tendering a cash payment; (ii) authorizing the Company to
		withhold Shares from the Shares otherwise issuable to the Participant as a
		result of the exercise or acquisition of Option Shares hereunder (and payment
		therefor); provided, however, that no Shares are withheld with a
		value exceeding the minimum amount of tax required to be withheld by law; or
		(iii) provided that the shareholders of the Company have approved by ordinary
		resolution at a general meeting either the Plan which contemplates the manner
		of repurchase set out herein or the manner of repurchase of Shares contemplated
		hereby, and to the extent permitted by, and in compliance with, all applicable
		laws and the Company’s Memorandum and Articles of Association, delivering
		to the Company or to an Affiliate, owned and unencumbered Shares not acquired
		from the Company with a Fair Market Value equal to the amount of tax liability
		to be satisfied by their delivery.
	 

	 
		5.
	 

	 
		Issuance of
		Shares.  Except as otherwise provided in the Plan or
		this Agreement, as promptly as practicable after receipt of such written
		notification of exercise, full payment of the Exercise Price, receipt of all
		regulatory consents, as appropriate, and any required income tax withholding,
		the Company shall issue or transfer to Participant the number of Shares with
		respect to which Options have been so exercised (less Shares withheld in
		satisfaction of tax withholding obligations, if any), and shall deliver to
		Participant a certificate or certificates therefor, registered in
		Participant’s name (unless Participant elects to have the Company hold the
		Shares in book-form).
	 

	 
		6.
	 

	 
		Compliance with Securities
		Law.  Participant understands and acknowledges that
		the Option Shares have not been registered with the U.S. Securities and
		Exchange Commission (the “SEC”) under the Securities
		Act of 1933, as amended (the “Securities Act”) and
		that, notwithstanding any other provision of the Agreement to the contrary, the
		vesting and holding of the Option Shares is expressly conditioned upon
		compliance with the Securities Act and any other applicable securities laws.
		 Participant agrees to cooperate with the Company to ensure compliance
		with such laws.  In addition, Participant has been advised that SEC Rule
		144 promulgated under the Securities Act, which permits certain limited sales
		of unregistered securities, is not presently available with respect to the
		Option Shares and, in any event, requires that the Option Shares be held for a
		minimum of one (1) year, and in certain cases two (2) years, after they have
		been purchased and paid for (within the meaning of Rule 144).
		 Participant understands that Rule 144 may indefinitely restrict transfer
		of the Option Shares so long as the Participant remains an
		“affiliate” of the Company or if “current public
		information” about the
	 

	 
		
 

	 

	 
		3
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		Company (as defined in Rule 144) is not publicly available.  If the
		Option Shares are issued pursuant to SEC Rule 701 promulgated under the
		Securities Act, the Option Shares may become freely tradable by non-affiliates
		(under limited conditions regarding the method of sale) ninety (90) days after
		the first sale of Option Shares to the general public pursuant to a
		registration statement filed with and declared effective by the SEC.
		 Affiliates must comply with the provisions (in addition to the holding
		period requirements) of Rule 144.  Participant represents that he is an
		“Accredited Investor” within the meaning of Rule 501(a) of Regulation
		D, as promulgated under Section 5 of the Securities Act.
	 

	 
		7.
	 

	 
		Restrictive Legends and Stop-Transfer Orders.

	 

	 
		7.1
	 

	 
		Participant understands and agrees that the Company will place the
		legends set forth below or similar legends on any stock certificate(s)
		evidencing the Option Shares, together with any other legends that may be
		required by any applicable securities laws, the Company’s Certificate of
		Incorporation or Memorandum and Articles of Association, any other agreement
		between Participant and the Company or any agreement between Participant and
		any third party:
	 

	 
		THE SECURITIES EVIDENCED BY THIS
		CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
		1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED
		UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING
		SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE
		SECURITIES ACT OF 1933, AS AMENDED, OR THE COMPANY AT ITS OPTION RECEIVES AN
		OPINION OF COUNSEL OF THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO
		THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
		EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT
		AND UNLESS, WHERE APPLICABLE, HAS RECEIVED THE PRIOR APPROVAL OF THE CAYMAN
		ISLANDS MONETARY AUTHORITY.
	 

	 
		IN ADDITION, THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE
		SUBJECT TO CERTAIN TRANSFER RESTRICTIONS IN THE COMPANY’S ARTICLES OF
		ASSOCIATION AND PURSUANT TO A SHAREHOLDERS’ AGREEMENT DATED AS OF AUGUST
		11, 2004 AMONG THE COMPANY AND CERTAIN OF THE COMPANY’S SHAREHOLDERS.
		 THE SECURITIES ARE ALSO SUBJECT TO CERTAIN RESTRICTIONS, INCLUDING A
		REPURCHASE RIGHT FOR THE BENEFIT OF GREENLIGHT CAPITAL RE, LTD., IN THE
		
	 

	 
		
 

	 

	 
		4
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		GREENLIGHT CAPITAL RE, LTD.
		AMENDED AND RESTATED 2004 STOCK INCENTIVE PLAN.  A COPY OF SUCH ARTICLES
		OF ASSOCIATION AND SHAREHOLDERS’ AGREEMENT AND STOCK INCENTIVE PLAN WILL
		BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN
		REQUEST.
	 

	 
		OWNERSHIP OF OPTIONS BY UNITED STATES PERSONS (AS DEFINED IN
		SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED) MAY
		SUBJECT SUCH PERSONS TO SIGNIFICANT ADVERSE UNITED STATES FEDERAL INCOME TAX
		CONSEQUENCES, INCLUDING ADVERSE CONSEQUENCES ARISING UNDER THE UNITED STATES
		PASSIVE FOREIGN INVESTMENT COMPANY RULES.  UNITED STATES PERSONS THAT OWN
		OPTIONS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE UNITED
		STATES FEDERAL INCOME TAX CONSEQUENCES ASSOCIATED WITH OWNERSHIP OF THE
		OPTIONS.
	 

	 
		7.2
	 

	 
		Participant agrees that, to ensure compliance with the restrictions
		imposed by this Agreement, the Company may issue appropriate
		“stop-transfer” instructions to its transfer agent, if any, and if
		the Company transfers its own securities, it may make appropriate notations to
		the same effect in its own records.
	 

	 
		7.3
	 

	 
		The Company will not be required (i) to approve nor record the transfer
		on its books of any Option Shares that have been sold or otherwise transferred
		in violation of any of the provisions of this Agreement or (ii) to treat
		as owner of such Option Shares, or to accord the right to vote or pay dividends
		to, any purchaser or other transferee to whom such Shares have been purportedly
		transferred.
	 

	 
		8.
	 

	 
		Company; Participant.
		 
	 

	 
		8.1
	 

	 
		The term “Company” as used in this Agreement with
		reference to Continuous Service shall include the Company and its Affiliates,
		if any, as appropriate.
	 

	 
		8.2
	 

	 
		Whenever the word “Participant” is used in any
		provision of this Agreement under circumstances where the provision should
		logically be construed to apply to the beneficiaries, the executors, the
		administrators, or the person or persons to whom the Option may be transferred
		by will or by the laws of descent and distribution, the word
		“Participant” shall be deemed to include such person or persons.
	 

	 
		9.
	 

	 
		Non-Transferability.  The
		Option is not transferable by Participant otherwise than to a designated
		beneficiary upon death or by will or the laws of descent and distribution, and
		is exercisable during Participant’s lifetime only by him.  No
		assignment or transfer of the Option,
	 

	 
		
 

	 

	 
		5
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		or of the rights represented thereby, whether voluntary or involuntary,
		by operation of law or otherwise (except to a designated beneficiary, upon
		death, by will or the laws of descent and distribution), shall vest in the
		assignee or transferee any interest or right herein whatsoever, but immediately
		upon such assignment or transfer the Option shall terminate and become of no
		further effect.
	 

	 
		10.
	 

	 
		Rights as
		Shareholder.  Participant or a transferee of the
		Option shall have no rights as shareholder with respect to any Option Shares
		until he shall have become the holder of record of such shares, and no
		adjustment shall be made for dividends or distributions or other rights in
		respect of Option Shares for which the record date is prior to the date upon
		which he shall become the holder of record thereof.  
	 

	 
		11..
	 

	 
		Adjustments.  The Option
		may be adjusted or terminated in any manner as contemplated by the Plan.
	 

	 
		12.
	 

	 
		General
		Compliance.  Notwithstanding any of the provisions
		hereof, Participant hereby agrees that he will not exercise the Option, and
		that the Company will not be obligated to issue or transfer any Shares to
		Participant hereunder, if the exercise hereof or the issuance or transfer of
		such Option Shares shall constitute a violation by Participant or the Company
		of any provisions of any law or regulation of any governmental authority or a
		violation of the terms and conditions of the Company’s Memorandum and
		Articles of Association or Shareholders’ Agreement (as defined below).
		 Any determination in this connection by the Committee shall be final,
		binding and conclusive.  The Company shall in no event be obliged to
		register any securities pursuant to the Securities Act (as now in effect or as
		hereafter amended) or to take any other affirmative action in order to cause
		the exercise of the Option or the issuance or transfer of Shares pursuant
		thereto to comply with any law or regulation of any governmental authority.
	 

	 
		13.
	 

	 
		Notice.  Every notice or
		other communication relating to this Agreement shall be in writing, and shall
		be mailed to or delivered to the party for whom it is intended at such address
		as may from time to time be designated by it in a notice mailed or delivered to
		the other party as herein provided; provided, that, unless and until some other
		address be so designated, all notices or communications by Participant to the
		Company shall be mailed or delivered to the Company at its principal executive
		office, and all notices or communications by the Company to Participant may be
		given to Participant personally or may be mailed to him at his address as
		recorded in the records of the Company.
	 

	 
		14.
	 

	 
		Binding
		Effect.  Subject to Section 9 hereof, this Agreement
		shall be binding upon the heirs, executors, administrators and successors of
		the parties hereto.
	 

	 
		15.
	 

	 
		Governing
		Law.  This Agreement shall be governed by and
		construed in accordance with the laws of the Cayman Islands.
	 

	 
		16.
	 

	 
		Plan.  The terms
		and provisions of the Plan including, without limitation, Section 14 thereof,
		are incorporated herein by reference, and Participant hereby acknowledges
		receiving a copy of the Plan.  In the event of a conflict or inconsistency
		between the discretionary terms and provisions of the Plan and the provisions
		of this Agreement, the Plan shall govern and control.
	 

	 
		
 

	 

	 
		6
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		17.
	 

	 
		Tax Consequences.
		 Set forth below is a brief summary as of the Date of Grant of some of the
		U.S. Federal tax consequences of the grant, vesting and exercise of the Option
		and disposition of the Option Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
		AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PARTICIPANT SHOULD
		CONSULT A TAX ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.
		 This Agreement is not given in the form of a covered opinion, within the
		meaning of Circular 230 issued by the U.S. Secretary of the Treasury.
		 Thus, we are required to inform you that you cannot rely upon any tax
		advice contained in this Agreement for the purpose of avoiding U.S. Federal tax
		penalties.  In addition, any tax advice contained in this Agreement may
		not be used to promote, market or recommend a transaction to another party.
	 

	 
		17.1
	 

	 
		The grant and vesting of the Option should not result in any U.S. Federal
		income tax liability.
	 

	 
		17.2
	 

	 
		There may be a regular U.S. Federal income tax liability upon the
		exercise of the Option. Participant may be treated as having received
		compensation income (taxable at ordinary income tax rates) equal to the excess,
		if any, of the Fair Market Value of the Option Shares on the date of exercise
		over the Exercise Price. If Participant is a current or former employee of the
		Company, the Company may be required to withhold from Participant’s
		compensation or collect from Participant and pay to the applicable taxing
		authorities an amount equal to a percentage of this compensation income at the
		time of exercise.
	 

	 
		17.3
	 

	 
		If the Shares delivered upon exercise of the Option are held for more
		than twelve (12) months, any gain realized on disposition of the Share should
		be treated as long term capital gain.
	 

	 
		18.
	 

	 
		Nonqualified
		Stock Option.  The Option granted hereunder is not
		intended to be an incentive stock option within the meaning of Section 422 of
		the Code.
	 

	 
		19.
	 

	 
		Successors and
		Assigns.  The Company may assign any of its rights
		under this Agreement.  This Agreement shall be binding upon and inure to
		the benefit of the successors and assigns of the Company. Subject to the
		restrictions on transfer set forth herein, this Agreement shall be binding upon
		Participant and Participant’s heirs, executors, administrators, legal
		representatives, successors and assigns.
	 

	 
		20.
	 

	 
		Market Standoff
		Agreement.  In the case of an Initial Public Offering,
		if the underwriters require that any officers and directors of the Company
		agree not to effect any disposition of any equity security of the Company or of
		any security convertible into or exchangeable or exercisable for any equity
		security of the Company (in each case, other than as part of such underwritten
		public offering), Participant agrees to the same during the 180-day period (or
		such longer period as may be reasonably requested by the underwriter of such
		offering) beginning on the effective date of such registration statement
		(except as a part of such registration).
	 

	 
		21.
	 

	 
		Shareholders
		Agreement.  Upon the exercise of the Option, the
		Company shall only be required to issue the Option Shares if Participant signs
		an instrument of accession pursuant to which Participant will become bound by
		the terms and conditions of the Company’s
	 

	 
		
 

	 

	 
		7
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		Shareholders Agreement, dated as of August 11, 2004, as it may be amended
		from time to time (the “Shareholders’ Agreement”).

	 

	 
		[signature page next]
	 

	 
		
 

	 

	 
		8
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
		by  its duly authorized representative and Participant has executed this
		Agreement, effective as of the Date of Grant.
	 

	 		
	
			 
				 
			 

		  	
			 
				 
			 

		  
	 	 
	
			 
				GREENLIGHT CAPITAL RE, LTD.
			 

		  	
			 
				PARTICIPANT
			 

		  
	
			 
				By:  ______________________________
			 

		  	
			 
				____________________________________
			 

			 
				(Signature)
			 

		  
	
			 
				 
			 

		  	
			 
				 
			 

		  
	 	 
	
			 
				____________________________________
			 

			 
				(Please print name)
			 

		  	
			 
				____________________________________
			 

			 
				(Please print name)
			 

		  
	
			 
				 
			 

		  	
			 
				 
			 

		  
	 	 
	
			 
				____________________________________
			 

			 
				(Please print title)
			 

		  	
			 
				 
			 

		  

	 
		

	 

	 
		

	 

	 
		
 

	 

	 
		9

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