Document:

<Page>
                                                                    Exhibit 10.7

                             ARCH CAPITAL GROUP LTD.

                           RESTRICTED SHARE AGREEMENT

      THIS AGREEMENT, dated as of January 30, 2001, between Arch Capital Group
Ltd. (the "Company"), a Bermuda company, and Robert Clements (the "Executive").

      WHEREAS, the Executive has been granted the following award in connection
with his retention as Chairman of the Board of Directors and as compensation for
services to be rendered; and the following terms reflect the Company's 1999 Long
Term Incentive and Share Award Plan (the "Plan");

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

      1. AWARD OF SHARES. Pursuant to the provisions of the Plan, the terms of
which are incorporated herein by reference, the Executive is hereby awarded
20,000 Restricted Shares (the "Award"), subject to the terms and conditions
herein set forth. Capitalized terms used herein and not defined shall have the
meanings set forth in the Plan.

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

            (a) VESTING OF AWARD. Subject to the other terms and conditions of
      this Agreement, this Award shall become vested in accordance with the
      following schedule:

                                                The Following Number
                                                of Restricted Shares
                                                Shall Vest on
            On This Date                        Each Respective Date
            ------------                        ---------------------
              1/30/02                                  5,000
              1/30/03                                  5,000
              1/30/04                                  5,000
              1/30/05                                  5,000

      ; provided that all such shares shall immediately become vested (i) to the
      extent provided in Section 2(b) hereof and (ii) upon a Change in Control.

            "Change in Control" means any of the following occurring after the
      date hereof:

                  a. any person (within the meaning of the Securities Exchange
            Act of 1934, as amended (the "Exchange Act")), other than a
            Permitted Person or an Initial Investor, is or becomes the
            "beneficial owner" (as defined in Rule 13d-3 under the Exchange
            Act), directly or indirectly, of Voting Securities representing 35%
            or more of the total voting power of all the then outstanding Voting
            Securities; or

                  b. any Initial Investor is or becomes the "beneficial owner"
            (as defined in Rule 13d-3 under the Exchange Act), directly or
            indirectly, of Voting Securities representing 50% or more of the
            total voting power of all the then outstanding Voting Securities; or

<Page>

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

                  d. the consummation of a merger, consolidation,
            recapitalization, liquidation, sale or disposition by the Company of
            all or substantially all of the Company's assets, or reorganization
            of the Company, other than any such transaction which would (x)
            result in at least 60% of the total voting power represented by the
            voting securities of the surviving entity or, in the case of an
            asset sale, the successor entity, outstanding immediately after such
            transaction being beneficially owned, directly or indirectly, by the
            stockholders of the Company immediately preceding the transaction
            and (y) not otherwise be deemed a Change in Control under
            subparagraphs a, b, c or e of this Section 2(a); or

                  e. the Board adopts a resolution to the effect that, for
            purposes hereof, a Change in Control has occurred.

                        (i) "Initial Investors" means (A) The Trident
                        Partnership, L.P.; (B) Marsh & McLennan Risk Capital
                        Holdings, Ltd.; or (C) any majority-owned subsidiary or
                        parent (or equivalent in the case of a non-corporate
                        entity) of the foregoing.

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

                        (iii) "Related Party" means (A) a majority-owned
                        subsidiary of the Company; (B) a trustee or other
                        fiduciary holding securities under an employee benefit
                        plan of the Company or any majority-owned subsidiary of
                        the Company; or (C) a corporation owned directly or
                        indirectly by the stockholders of the Company in
                        substantially the same proportion as their ownership of
                        Voting Securities.

                        (iv) "Voting Security" means any security of the Company
                        which carries the right to vote generally in the
                        election of directors.

            (b) TERMINATION OF SERVICE; FORFEITURE OF UNVESTED SHARES. In the
      event the Executive's services as Chairman of the Board of Directors of
      the Company cease (i) due to death or Disability (as defined in the
      Retention and Change in Control Agreement, dated as of May 5, 2000,
      between the Company and the Executive (the "Retention Agreement")), or
      (ii) due to (A) termination by the Company without Cause (as defined in
      the Retention Agreement) or (B) Constructive Termination (as defined in
      the Retention Agreement), the Restricted Shares subject to the Award, to
      the extent not already vested in full, shall become immediately and fully
      vested at the time of such termination of service. If the Executive's
      services with the Company cease for any other reason, the portion of the
      Award which is not then vested shall be forfeited by the Executive and
      become the property of the Company.

                                       2
<Page>

            (c) CERTIFICATES. Each certificate issued in respect of Restricted
      Shares awarded hereunder shall be deposited with the Company, or its
      designee, together with, if requested by the Company, a stock power
      executed in blank by the Executive, and shall bear a legend disclosing the
      restrictions on transferability imposed on such Restricted Shares by this
      Agreement (the "Restrictive Legend"). Upon the vesting of Restricted
      Shares pursuant to Section 2(a) or 2(b) hereof and the satisfaction of any
      withholding tax liability pursuant to Section 5 hereof, the certificates
      evidencing such vested Shares, not bearing the Restrictive Legend, shall
      be delivered to the Executive.

            (d) RIGHTS OF A STOCKHOLDER. Prior to the time a Restricted Share is
      fully vested hereunder, the Executive shall have no right to transfer,
      pledge, hypothecate or otherwise encumber such Restricted Share. During
      such period, the Executive shall have all other rights of a stockholder,
      including, but not limited to, the right to vote and to receive dividends
      at the time paid on such Restricted Shares.

            (e) NO RIGHT TO CONTINUED SERVICES. This Award shall not confer upon
      the Executive any right with respect to continuance of services with the
      Company nor shall this Award interfere with the right of the Company to
      terminate the Executive's services at any time.

      3. TRANSFER OF SHARES. The Shares delivered hereunder, or any interest
therein, may be sold, assigned, pledged, hypothecated, encumbered, or
transferred or disposed of in any other manner, in whole or in part, only in
compliance with the terms, conditions and restrictions as set forth in the
governing instruments of the Company, applicable United States federal and state
securities laws or any other applicable laws or regulations and the terms and
conditions hereof. Each certificate for Shares delivered hereunder, unless at
the time of issuance such Shares are registered under the Securities Act of
1933, as amended, shall bear the following legend or such other legend as the
Company deems appropriate:

      "The securities evidenced hereby have not been registered under the
      Securities Act of 1933, as amended (the 'Act'), and may not be offered,
      sold or otherwise transferred except (i) in compliance with the provisions
      of any applicable state securities or 'Blue Sky' laws and (ii) (A)
      pursuant to an effective registration under the Act, (B) in compliance
      with Rule 144 under the Act, (C) inside the United States to a Qualified
      Institutional Buyer in compliance with Rule 144A under the Act, (D)
      outside the United States in compliance with Rule 904 of Regulation S
      under the Act or (E) inside the United States to an institutional
      'accredited investor' as defined in Rule 501(a)(1), (2), (3) or (7) under
      the Act in a transaction which, in the opinion of counsel reasonably
      satisfactory to the Company, qualifies as an exempt transaction under the
      Act and the rules and regulations promulgated thereunder."

Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend or such other legend deemed appropriate by the
Company shall also bear such legend unless, in the opinion of counsel for the
Company, the securities represented thereby need no longer be subject to the
restriction contained herein. The provisions of this Section 3 shall be binding
upon all subsequent holders of certificates bearing the above legend.

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

                                       3
<Page>

      5. WITHHOLDING. The Executive agrees to make appropriate arrangements with
the Company for satisfaction of any applicable tax withholding requirements, or
similar requirements, arising out of this Agreement.

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

      7. SETTLEMENT OF DISPUTES. Any dispute between the parties arising from or
relating to the terms of this Agreement shall be resolved by arbitration held in
the State of Connecticut in accordance with the rules of the American
Arbitration Association. All costs associated with any arbitration, including
all legal expenses, for both parties shall be borne by the Company.

      8. NO MITIGATION. To the extent that the vesting of any portion of the
Award is accelerated upon a Change in Control or upon a termination of service
as provided herein, neither the Shares delivered hereunder nor any interest
therein, shall be reduced by any compensation received by the Executive in
connection with any other employment.

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

      If to the Company:

            Arch Capital Group Ltd.
            EXECUTIVE OFFICES:
            20 Horseneck Lane
            Greenwich, CT 06830
            Attn.: Secretary

      If to the Executive:

            Robert Clements
            104 Wallacks Point Drive
            Stamford, CT 06902

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

      11. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties relating to the subject matter hereof, and any previous
agreement or understanding among the parties with respect thereto is superseded
by this Agreement.

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

                                       4
<Page>

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

                                       ARCH CAPITAL GROUP LTD.

                                       By: /s/ Peter A. Appel
                                           -------------------------------------
                                           Peter A. Appel
                                           President and Chief Executive Officer

                                       /s/ Robert Clements
                                       -----------------------------------------
                                       Robert Clements

                                       5
<Page>

                             ARCH CAPITAL GROUP LTD.

                           RESTRICTED SHARE AGREEMENT

      THIS AGREEMENT, dated on October 23, 2001, between Arch Capital Group Ltd.
(the "Company"), a Bermuda company, and Robert Clements (the "Executive").

      WHEREAS, the Executive has been granted the following award as
compensation for services to be rendered;

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

      1. AWARD OF SHARES. The Executive is hereby awarded 1,668,157 shares of
restricted common stock of the Company (the "Award"), subject to the terms and
conditions herein set forth. This Award shall be rescinded if it is not approved
by shareholders prior to the first anniversary hereof.

      2. TERMS AND CONDITIONS. It is understood and agreed that the Award
evidenced hereby is subject to the following additional terms and conditions:

      (a) VESTING OF AWARD. Subject to Section 2(b) below and the other terms
and conditions of this Agreement, this Award shall become vested in five equal
annual installments, beginning on the first anniversary of the date hereof.
Notwithstanding the foregoing, if the service of the Executive as Chairman of
the Board of the Company is terminated by the Company or is not continued by the
Company for any reason, or the Executive's service terminates due to his death
or Permanent Disability, then the Award shall become immediately vested in full
upon such termination of service. "Permanent Disability" means those
circumstances where the Executive is unable to continue to perform the usual
customary duties of his assigned job for a period of six (6) months in any
twelve (12) month period because of physical, mental or emotional incapacity
resulting from injury, sickness or disease. Any questions as to the existence of
a Permanent Disability shall be determined by a qualified, independent physician
selected by the Company and approved by the Executive (which approval shall not
be unreasonably withheld). The determination of any such physician shall be
final and conclusive for all purposes of this Agreement.

      (b) TERMINATION OF SERVICE; FORFEITURE OF UNVESTED SHARES. Except as
otherwise set forth in Section 2(a) above, in the event the Executive terminates
his service with the Company (other than due to his death or Permanent
Disability or the failure of the Company to continue his service) prior to the
date of vesting of an installment of the Award, the unvested installments shall
be forfeited by the Executive and become the property of the Company. For
purposes of this Agreement, service with any of the Company's wholly owned
subsidiaries shall be considered to be service with the Company.

<Page>
                                      -2-

      (c) CERTIFICATES. Each certificate issued in respect of an Award made
hereunder shall be dated the date hereof and deposited with the Company, or its
designee, together with, if requested by the Company, a stock power executed in
blank by the Executive, and shall bear a legend disclosing the restrictions on
transferability imposed on such Award by this Agreement (the "Restrictive
Legend"). Upon the vesting of the Award pursuant to Section 2(a) hereof, the
certificates evidencing such vested Shares, not bearing the Restrictive Legend,
shall be delivered to the Executive.

      (d) RIGHTS OF A STOCKHOLDER. Prior to the time an Award is fully vested
hereunder, except as set forth in Section 2(e) below, the Executive shall have
no right to transfer, pledge, hypothecate or otherwise encumber such Award.
Beginning on the date hereof and during such period, the Executive shall have
all other rights of a stockholder, including, but not limited to, the right to
vote and to receive dividends at the time paid on such Award.

      (e) TRANSFERABILITY. Except as set forth below, prior to vesting this
Award shall not be transferable by the Executive except by will or the laws of
descent and distribution. Notwithstanding the foregoing, if the Board of
Directors provides its consent (which consent shall not be unreasonably
withheld), the Award (or any part thereof) may be transferred by the Executive
to members of his or her "immediate family" or to a trust or other entity
established for the exclusive benefit of solely one or more members of the
Executive's "immediate family" or the Executive. Any Award held by the
transferee will continue to be subject to the same terms and conditions that
were applicable to the Award immediately prior to the transfer, except that the
Award will be transferable by the transferee only by will or the laws of descent
and distribution. For purposes hereof, "immediate family" means the Executive's
children, stepchildren, grandchildren, great grandchildren, parents,
stepparents, grandparents, spouse, siblings (including half brothers and
sisters), in-laws, and relationships arising because of legal adoption.

      3. NONCOMPETITION. The Executive acknowledges that during his service with
the Company, he will become familiar with trade secrets and other confidential
information concerning the Company and that his services will be of special,
unique and extraordinary value to the Company. In addition, the Executive hereby
agrees that, in the event his service with the Company is terminated by the
Company prior to the fifth anniversary of the date hereof, during the period
ending on the later of the fifth anniversary of the date hereof or one year
following the date of his termination by the Company, he will not, without the
Company's written consent, directly or indirectly manage, participate in, or
render services for any business competing with the businesses of the Company or
its subsidiaries as such businesses exist or are in process as of the date of
termination, within any geographical area in which the Company or its
subsidiaries engage in such businesses.

      4. ENFORCEMENT. If, at the enforcement of Section 3, a court holds that
the duration, scope or area restrictions stated herein are unreasonable under
circumstances then existing, the parties agree that the maximum duration, scope
or area reasonable

<Page>
                                      -3-

under such circumstances will be substituted for the stated duration, scope or
area and that the court will be permitted to revise the restrictions contained
in Section 3 to cover the maximum duration, scope and area permitted by law.

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

      6. ANTIDILUTION. In the event that the Board of Directors of the Company
shall determine that any dividend in shares, recapitalization, share split,
reverse split, reorganization, merger, consolidation, spin-off, combination,
repurchase, or share exchange, or other similar corporate transaction or event,
affects the Company common stock such that an adjustment is appropriate in order
to prevent dilution or enlargement of the rights of the Executive hereunder,
then the Board of Directors of the Company shall make such equitable changes or
adjustments as are appropriate and adjust any or all of the number and kind of
shares, other securities or other consideration issued or issuable in respect of
this Award.

      7. EXPENSES OF ISSUANCE OF SHARES. The issuance of stock certificates
hereunder shall be without charge to the Executive. The Company shall pay, and
indemnify the Executive from and against any issuance, stamp or documentary
taxes (other than transfer taxes) or charges imposed by any governmental body,
agency or official (other than income taxes) or by reason of the issuance of
shares hereunder.

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

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

      If to the Company:

      Arch Capital Group Ltd.
      EXECUTIVE OFFICES:
      20 Horseneck Lane
      Greenwich, CT 06830
      Attn.: Secretary

<Page>
                                      -4-

      If to the Executive: To the last address given to the Company by the
              Executive in the manner set forth in this Section 9.

      10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of Bermuda, without giving effect to principles of
conflict of laws.

      11. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties relating to the subject matter hereof, and any previous
agreement or understanding among the parties with respect thereto is superseded
by this Agreement.

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

<Page>
                                      -5-

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

                                       ARCH CAPITAL GROUP LTD.

                                       By: /s/ Peter A. Appel
                                           -------------------------------------

                                       /s/ Robert Clements
                                       -----------------------------------------
                                       Robert Clements<Page>
                                                                    Exhibit 10.8

                             ARCH CAPITAL GROUP LTD.

                           RESTRICTED SHARE AGREEMENT

      THIS AGREEMENT, dated as of January 30, 2001, between Arch Capital Group
Ltd. (the "Company"), a Bermuda company, and Peter A. Appel (the "Employee").

      WHEREAS, the Employee has been granted the following award in connection
with his retention as President and Chief Executive Officer and as compensation
for services to be rendered; and the following terms reflect the Company's 1999
Long Term Incentive and Share Award Plan (the "Plan");

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

      1. AWARD OF SHARES. Pursuant to the provisions of the Plan, the terms of
which are incorporated herein by reference, the Employee is hereby awarded
50,000 Restricted Shares (the "Award"), subject to the terms and conditions
herein set forth. Capitalized terms used herein and not defined shall have the
meanings set forth in the Plan.

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

            (a) VESTING OF AWARD. Subject to the other terms and conditions of
      this Agreement, this Award shall become vested in accordance with the
      following schedule:

                                                The Following Number
                                                of Restricted Shares
                                                Shall Vest on
            On This Date                        Each Respective Date
            ------------                        ---------------------
              1/30/02                                  12,500
              1/30/03                                  12,500
              1/30/04                                  12,500
              1/30/05                                  12,500

      ; provided that all such shares shall immediately become vested (i) to the
      extent provided in Section 2(b) hereof and (ii) upon a Change in Control.

            "Change in Control" means any of the following occurring after the
      date hereof:

                  a. any person (within the meaning of the Securities Exchange
            Act of 1934, as amended (the "Exchange Act")), other than a
            Permitted Person or an Initial Investor, is or becomes the
            "beneficial owner" (as defined in Rule 13d-3 under the Exchange
            Act), directly or indirectly, of Voting Securities representing 35%
            or more of the total voting power of all the then outstanding Voting
            Securities; or

                  b. any Initial Investor is or becomes the "beneficial owner"
            (as defined in Rule 13d-3 under the Exchange Act), directly or
            indirectly, of Voting Securities representing 50% percent or more of
            the total voting power of all the then outstanding Voting
            Securities; or

<Page>

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

                  d. the consummation of a merger, consolidation,
            recapitalization, liquidation, sale or disposition by the Company of
            all or substantially all of the Company's assets, or reorganization
            of the Company, other than any such transaction which would (x)
            result in at least 60% of the total voting power represented by the
            voting securities of the surviving entity or, in the case of an
            asset sale, the successor entity, outstanding immediately after such
            transaction being beneficially owned, directly or indirectly, by the
            stockholders of the Company immediately preceding the transaction
            and (y) not otherwise be deemed a Change in Control under
            subparagraphs a, b, c or e of this Section 2(a); or

                  e. the Board adopts a resolution to the effect that, for
            purposes hereof, a Change in Control has occurred.

                        (i) "Initial Investors" means (A) The Trident
                        Partnership, L.P.; (B) Marsh & McLennan Risk Capital
                        Holdings, Ltd.; or (C) any majority-owned subsidiary or
                        parent (or equivalent in the case of a non-corporate
                        entity) of the foregoing.

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

                        (iii) "Related Party" means (A) a majority-owned
                        subsidiary of the Company; (B) a trustee or other
                        fiduciary holding securities under an employee benefit
                        plan of the Company or any majority-owned subsidiary of
                        the Company; or (C) a corporation owned directly or
                        indirectly by the stockholders of the Company in
                        substantially the same proportion as their ownership of
                        Voting Securities.

                        (iv) "Voting Security" means any security of the Company
                        which carries the right to vote generally in the
                        election of directors.

            (b) TERMINATION OF SERVICE; FORFEITURE OF UNVESTED SHARES. In the
      event the Employee ceases to be an employee of the Company (i) due to
      retirement after attainment of age 65, (ii) due to death or disability, as
      determined under the Company's long-term disability plan, or (iii) due to
      (A) termination by the Company without Cause (as defined below) or (B)
      Constructive Termination (as defined below), the Restricted Shares subject
      to the Award, to the extent not already vested in full, shall become
      immediately and fully vested at the time of such termination of service.
      If the Employee ceases to be an employee of the Company for any other
      reason, the portion of the Award which is not then vested shall be
      forfeited by the Employee and become the property of the Company. For
      purposes of this Agreement, service with any of the Company's wholly owned
      subsidiaries shall be considered to be service with the Company.
      Termination of the Employee's employment by the Company or any of its
      subsidiaries for "Cause" shall mean termination by reason of the
      Employee's willful engagement in conduct which involves

                                       2
<Page>

      dishonesty or moral turpitude in connection with his employment and which
      is demonstrably and materially injurious to the financial condition or
      reputation of the Company. An act or omission shall be deemed "willful"
      only if done, or omitted to be done, in bad faith and without reasonable
      belief that it was in the best interest of the Company. Notwithstanding
      the foregoing, the Employee shall not be deemed to have been terminated
      for Cause unless and until there shall have been delivered to the Employee
      a written notice of termination from the compensation committee of the
      Board after reasonable notice to the Employee and an opportunity for him,
      together with his counsel, to be heard before such committee. Termination
      of employment by the Employee due to "Constructive Termination" shall mean
      termination by the Employee subsequent to any of the following: (a) the
      assignment of duties and responsibilities inconsistent in any material and
      adverse respect with the Employee's position or a significant diminution
      in his duties or responsibilities; provided, however, that Constructive
      Termination shall not be deemed to occur upon a change in duties or
      responsibilities that is solely and directly a result of the Company no
      longer being a publicly traded entity, and does not involve any other
      event set forth in this definition; (b) reduction in the Employee's base
      salary or bonus opportunity; (c) the requirement that the Employee work at
      a location outside of Fairfield County, Connecticut, or Westchester
      County, New York; (d) the failure to provide the Employee with benefits
      and incentive compensation opportunities at least as favorable, in the
      aggregate, as the benefits and incentive compensation opportunities
      available to the Employee immediately prior to a Change in Control; or (e)
      the failure to secure the agreement of any successor corporation or other
      entity to the Company to fully assume the Company's obligations under the
      arrangements described herein. The Employee shall exercise his right to
      terminate employment due to Constructive Termination by giving the Company
      a written notice of termination specifying in reasonable detail the
      circumstances constituting such Constructive Termination. In that event,
      the Employment's employment shall terminate on the last day of the month
      in which such notice is given unless an earlier date is specified in
      writing by the Executive. A termination of employment by the Employee
      shall be due to Constructive Termination if one of the occurrences
      specified in clauses (a) through (e) of this subsection shall have
      occurred, notwithstanding that the Employee may have other reasons for
      terminating employment, including employment by another employer which the
      Executive desires to accept.

            (c) CERTIFICATES. Each certificate issued in respect of Restricted
      Shares awarded hereunder shall be deposited with the Company, or its
      designee, together with, if requested by the Company, a stock power
      executed in blank by the Employee, and shall bear a legend disclosing the
      restrictions on transferability imposed on such Restricted Shares by this
      Agreement (the "Restrictive Legend"). Upon the vesting of Restricted
      Shares pursuant to Section 2(a) or 2(b) hereof and the satisfaction of any
      withholding tax liability pursuant to Section 5 hereof, the certificates
      evidencing such vested Shares, not bearing the Restrictive Legend, shall
      be delivered to the Employee.

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

            (e) NO RIGHT TO CONTINUED EMPLOYMENT. This Award shall not confer
      upon the Employee any right with respect to continuance of employment by
      the Company nor shall this Award interfere with the right of the Company
      to terminate the Employee's employment at any time.

                                       3
<Page>

      3. TRANSFER OF SHARES. The Shares delivered hereunder, or any interest
therein, may be sold, assigned, pledged, hypothecated, encumbered, or
transferred or disposed of in any other manner, in whole or in part, only in
compliance with the terms, conditions and restrictions as set forth in the
governing instruments of the Company, applicable United States federal and state
securities laws or any other applicable laws or regulations and the terms and
conditions hereof. Each certificate for Shares delivered hereunder, unless at
the time of issuance such Shares are registered under the Securities Act of
1933, as amended, shall bear the following legend or such other legend as the
Company deems appropriate:

      "The securities evidenced hereby have not been registered under the
      Securities Act of 1933, as amended (the 'Act'), and may not be offered,
      sold or otherwise transferred except (i) in compliance with the provisions
      of any applicable state securities or 'Blue Sky' laws and (ii) (A)
      pursuant to an effective registration under the Act, (B) in compliance
      with Rule 144 under the Act, (C) inside the United States to a Qualified
      Institutional Buyer in compliance with Rule 144A under the Act, (D)
      outside the United States in compliance with Rule 904 of Regulation S
      under the Act or (E) inside the United States to an institutional
      'accredited investor' as defined in Rule 501(a)(1), (2), (3) or (7) under
      the Act in a transaction which, in the opinion of counsel reasonably
      satisfactory to the Company, qualifies as an exempt transaction under the
      Act and the rules and regulations promulgated thereunder."

Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend or such other legend deemed appropriate by the
Company shall also bear such legend unless, in the opinion of counsel for the
Company, the securities represented thereby need no longer be subject to the
restriction contained herein. The provisions of this Section 3 shall be binding
upon all subsequent holders of certificates bearing the above legend.

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

      5. WITHHOLDING. The Employee agrees to make appropriate arrangements with
the Company for satisfaction of any applicable tax withholding requirements, or
similar requirements, arising out of this Agreement.

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

      7. SETTLEMENT OF DISPUTES. Any dispute between the parties arising from or
relating to the terms of this Agreement shall be resolved by arbitration held in
the State of Connecticut in accordance with the rules of the American
Arbitration Association. All costs associated with any arbitration, including
all legal expenses, for both parties shall be borne by the Company.

      8. NO MITIGATION. To the extent that the vesting of any portion of the
Award is accelerated upon a Change in Control or upon a termination of service
as provided herein, neither the Shares delivered hereunder nor any interest
therein, shall be reduced by any compensation received by the Employee in
connection with any other employment.

                                       4
<Page>

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

      If to the Company:

            Arch Capital Group Ltd.
            EXECUTIVE OFFICES:
            20 Horseneck Lane
            Greenwich, CT 06830
            Attn.: Secretary

      If to the Employee:

            Peter A. Appel
            2 Lounsbery Road
            Bedford Corners, NY 10549

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

      11. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties relating to the subject matter hereof, and any previous
agreement or understanding among the parties with respect thereto is superseded
by this Agreement.

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

                                       5
<Page>

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

                                        ARCH CAPITAL GROUP LTD.

                                        By: /s/ Robert Clements
                                            -----------------------------------
                                            Robert Clements
                                            Chairman

                                         /s/ Peter A. Appel
                                         ---------------------------------------
                                         Peter A. Appel

                                    6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}]]