Exhibit 10.17
ARCH CAPITAL GROUP LTD.
Restricted Share Agreement
THIS AGREEMENT, dated as of January 1, 2002, between Arch Capital Group
Ltd. (the "Company"), a Bermuda company, and Xxxxxxxxxxx Xxxxxxxx (the
"Employee").
WHEREAS, the Employee has been granted the following award in connection
with his retention as an employee and as compensation for services to be
rendered; and the following terms reflect the Company's Long Term Incentive Plan
For New Employees (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
106,383 Restricted Shares (the "Award"), subject to the terms and conditions
herein set forth. Capitalized terms used herein and not defined shall have the
meanings set forth in the Plan. In the event of any conflict between this
Agreement and the Plan, the Plan shall control.
2. Terms and Conditions. It is understood and agreed that the Award of
Restricted Shares evidenced hereby is subject to the following terms and
conditions:
(a) Vesting of Award. Subject to Section 2(b) below and the other
terms and conditions of this Agreement, this Award shall become vested on
December 31, 2002. Unless otherwise provided by the Company, all dividends
and other amounts receivable in connection with any adjustments to the
Shares under Section 4(c) of the Plan shall be subject to the vesting
schedule in this Section 2(a).
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(b) Termination of Service; Forfeiture of Unvested Shares. Except as
otherwise set forth in Section 2(a) above, in the event the Employee ceases
to be an employee of the Company prior to the date the Restricted Shares
otherwise become vested (i) due to his death or Permanent Disability (as
defined in the Employment Agreement, among the Employee, the Company and
Arch Capital Group (U.S.) Inc., dated as of December 20, 2001 (the
"Employment Agreement")), or (ii) due to termination (A) by the Company not
for Cause (as defined in the Employment Agreement) or (B) by the Employee
for Good Reason (as defined in the Employment Agreement), the Restricted
Shares subject to the Award shall become vested in full at the time of such
termination of service; provided, however, that in the case of a
termination by the Company not for Cause or by the Employee for Good
Reason, the Restricted Shares subject to the Award shall not be
transferable prior to December 31, 2002, except that a number of Shares
having a fair market value equal to the amount of any income and employment
taxes imposed upon vesting of the Restricted Shares shall be transferable
upon such termination solely for the purpose of funding any such income and
employment taxes. For purposes of the preceding sentence, income and
employment taxes shall be computed at the highest marginal rates in the
jurisdictions in which the Employee is subject to tax at the time of
vesting. If the Employee ceases to be an Employee of the Company for any
other reason prior to the date the Restricted Shares become vested, the
Award shall be forfeited by the Employee and become the property of the
Company. For purposes of this Agreement, service with any of the Company's
Subsidiaries (as defined in the Plan) shall be considered to be service
with the Company.
(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 release of all restrictions
imposed hereunder and the satisfaction of any withholding tax liability
pursuant to Section 5 hereof, the certificates evidencing the vested
Shares, not bearing the Restrictive Legend, shall be delivered to the
Employee.
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(d) Rights of a Stockholder. Prior to the time a Restricted Share is
fully vested hereunder and otherwise as provided in Section 2(b) above, the
Employee shall have no right to transfer, pledge, hypothecate or otherwise
encumber such Restricted Share. During such period, the Employee shall have
all other rights of a stockholder, including, but not limited to, the right
to vote and to receive dividends (subject to Section 2(a) hereof) at the
time paid on such Restricted Shares.
(e) No Right to Continued Employment. This Award shall not confer upon
the Employee any right with respect to continuance of employment by the
Company nor shall this Award interfere with the right of the Company to
terminate the Employee's employment at any time.
3. Transfer of Shares. The Shares delivered hereunder, or any interest
therein, may be sold, assigned, pledged, hypothecated, encumbered, or
transferred or disposed of in any other manner, in whole or in part, only in
compliance with the terms, conditions and restrictions as set forth in the
governing instruments of the Company, applicable United States federal and state
securities laws or any other applicable laws or regulations and the terms and
conditions hereof.
4. Expenses of Issuance of Shares. The issuance of stock certificates
hereunder shall be without charge to the Employee. The Company shall pay, 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. No later than the date of vesting of (or the date of an
election by the Employee under Section 83(b) of the Code with respect to) the
Award granted hereunder, the Employee shall pay to the Company or make
arrangements satisfactory to the Committee regarding payment of any federal,
state or local taxes of any kind required by law to be withheld at such time
with respect to such Award and the Company shall, to the extent permitted or
required by law, have the right to deduct from any payment of any kind otherwise
due to the Employee, federal, state and local taxes of any kind required by law
to be withheld at such time.
6. References. References herein to rights and obligations of the Employee
shall apply, where appropriate, to the Employee's legal representative or estate
without regard to whether specific reference to such legal representative or
estate is contained in a particular provision of this Agreement.
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7. Notices. All notices required or permitted to be given under this
agreement will be in writing and will be deemed to have been given when
delivered personally to the recipient, two (2) business days after the date when
sent to the recipient by reputable express courier service (charges prepaid) or
four (4) business days after the date when mailed to the recipient by certified
or registered mail, return receipt requested and postage prepaid. Such notices,
demands and other communications will be sent to the party concerned at the
addresses set forth below:
If to the Company:
Arch Capital Group Ltd.
Executive Offices:
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn.: Secretary
If to the Employee:
To the last address of the Employee on record with
the Company or to such other address or to the
attention of such other person as the recipient party
has specified by prior written notice to the sending
party.
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York, without giving effect to principles of
conflict of laws.
9. Entire Agreement. This Agreement, the Employment Agreement (as defined
above) and the Plan 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 and the Plan.
10. Counterparts. This Agreement may be executed in two counterparts, each
of which shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
ARCH CAPITAL GROUP LTD.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: /s/ Xxxxx X. Xxxxxxxx
Title: Senior Vice President, General
Counsel and Secretary
/s/ Xxxxxxxxxxx Xxxxxxxx
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Xxxxxxxxxxx Xxxxxxxx
