Exhibit 10.8.6
ARCH CAPITAL GROUP LTD.
RESTRICTED SHARE AGREEMENT
THIS AGREEMENT, dated as of January 18, 2002, between Arch Capital
Group Ltd. (the "Company"), a Bermuda company, and Xxxx X. Xxxxxxx (the
"Employee").
WHEREAS, the Employee has been granted the following award in
connection with his or her 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 (as amended, 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. 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 the fifth
anniversary of the date hereof. Unless otherwise provided by the Company, all
dividends and other amounts receivable in connection with any adjustments to the
Shares under Section 4(c) of the Plan shall be subject to the vesting schedule
in this Section 2(a). Notwithstanding the foregoing, if (i) a Change in Control
occurs and (ii) within two years following such Change in Control, the
employment of the Employee is terminated (w) by the Company not for Cause, (x)
for Permanent Disability (as defined in the Employment Agreement between the
Employee and the Company, dated as of January 18, 2002 (the "Employment
Agreement")), (y) by reason of the Employee's death, or (z) the Employee
terminates his or her employment with the Company for Good Reason (as defined in
the Employment Agreement), then the Restricted Shares shall become immediately
vested in full upon such termination of employment.
For purposes of this Agreement, a "Change in Control" shall be deemed
to occur if any "person" (within the meaning of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), other than a Permitted Person, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of Voting Securities representing more than 50% of
the total voting power of all then outstanding Voting Securities.
"Permitted Persons" means (A) the Company; (B) any Related Party; (C)
Xxxxxxx & Xxxxxxxx or any of its subsidiaries or investment funds managed or
controlled by
-2-
Xxxxxxx & Xxxxxxxx; (D) Xxxxxxx Xxxxxx or any of its subsidiaries
or any investment funds managed or controlled by Warburg Pincus or any of its
subsidiaries; or (E) any group (as defined in Rule 13b-3 under the Exchange Act)
comprised of any or all of the foregoing.
"Related Party" means (A) a majority-owned subsidiary of the Company;
(B) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any majority-owned subsidiary of the Company; or (C) any
entity, 50% or more of the voting power of which is owned directly or indirectly
by the stockholders of the Company in substantially the same proportion as their
ownership of Voting Securities immediately prior to the transaction.
"Voting Security" means any security of the Company which carries the
right to vote generally in the election of directors.
(b) TERMINATION OF SERVICE; FORFEITURE OF UNVESTED SHARES. Except as
otherwise set forth in Section 2(a) above, in the event the Employee ceases to
be an employee of the Company prior to the date the Restricted Shares otherwise
become vested (i) due to his or her death or Permanent Disability (as defined in
the Employment Agreement), or (ii) due to termination (A) by the Company not for
Cause (as defined in the Employment Agreement), (B) by the Employee for Good
Reason (as defined in the Employment Agreement), or (C) by reason of the
Company's provision of written notice not to extend the Employment Period under
Section 5.01 of the Employment Agreement, a pro rata number of Restricted Shares
subject to the Award shall become vested in full at the time of such termination
of service determined by multiplying the total number of Restricted Shares
subject to the Award by a fraction, the numerator of which is the number of
months or part of a month elapsed since the date hereof and the denominator of
which is 60; 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 the fifth anniversary of the
date hereof, 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. 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 vesting of Restricted Shares pursuant to Section
2(a) hereof and the satisfaction of any withholding tax liability
-3-
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 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.
7. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or by courier, or sent by certified or registered mail,
postage prepaid, return receipt
-4-
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:
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn.: Secretary
If to the Employee:
To the last address delivered to the Company by the Executive in the
manner set forth herein.
8. 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.
9. ENTIRE AGREEMENT. This Agreement and the Plan constitute the entire
agreement among the parties relating to the subject matter hereof, and any
previous agreement or understanding among the parties with respect thereto is
superseded by this Agreement and the Plan.
10. COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which shall constitute one and the same instrument.
-5-
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
ARCH CAPITAL GROUP LTD.
By: /s/ Xxxxx Xxxxxxxx
------------------------
/s/ Xxxx X. Xxxxxxx
---------------------------
Xxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President,
General Counsel & Secretary
