MONTPELIER RE HOLDINGS LTD.
LONG-TERM INCENTIVE PLAN
PERFORMANCE SHARE AWARD AGREEMENT
This Award Agreement (the Award Agreement) is made and entered into as of January 1st, 2005between Montpelier Re Holdings Ltd. (the Company) and (the Participant).
The Company hereby grants to the Participant Performance Shares (the Award) on the terms andconditions as set forth in this Award Agreement and in the Montpelier Long-Term Incentive Plan (thePlan).
In accordance with this grant, and as a condition thereto, the Company and the Participantagree as follows:
SECTION 1 . Target Award; Performance Period; Date of Grant:
|Performance Shares (the Target Award)|
|January 1, 2005 through and ending on December 31,2007 (the Performance Period)|
Date of Grant:
|January 1, 2005|
SECTION 2 . Nature of Award. The Target Award represents the opportunity to receive a futurepayment equal to the fair market value of such number of shares of Company common stock, $0.001666par value per share (Shares), as are earned in accordance with Section 3 of this Award Agreementas more fully set forth in Section 4 of this Award Agreement.
SECTION 3 . Determination of Number of Shares Earned. The number of Performance Sharesearned as of the end of a Performance Period, if any, shall be determined as follows:
# of Shares = Payout Percentage x Target Award
The Payout Percentage shall be determined by the Committee in its sole discretion based on thePerformance Criteria and Harvest Scale set out in Appendix 1 hereto.
SECTION 4 . Payment of Performance Shares. The amount payable to a Participant under thisAward Agreement shall be equal to the fair market value (to be issued fully paid in considerationof the Particpants services to the Company)of a Share, as determined by the Committee by reference to the average of the daily closingprice of the Companys common shares on the New York Stock Exchange, as reported in the Wall StreetJournal, for each of the five consecutive trading days preceding and including, as the last day,December 31, 2007 multiplied by the number of Performance Shares earned with respect to thePerformance Period, as determined pursuant to Section 3 of this Award Agreement. Payment inrespect of an Award shall be made in cash, in Shares of equivalent value or in some combinationthereof, as determined by the Committee in its sole discretion. Subject to Section 6 of this AwardAgreement, payment shall be made as soon as reasonably practicable following the close of thePerformance Period and the Committees determination of the Payout Percentage.
SECTION 5 . Termination of Employment.
(a) Unless otherwise determined by the Committee at the time of termination, if theParticipants employment with the Company or one of its subsidiaries is terminated by the Companyor the subsidiary for any reason other than Cause (as defined in Section 8 of the Plan), death ordisability(as determined in accordance with Section 8 of the Plan), or is terminated by theParticipant on account of a Constructive Termination (as defined in Section 8 of the Plan) orRetirement (as defined below): (i) during the first year of the Performance Period, allPerformance Shares shall be forfeited; (ii) during the second year of the Performance Period, thedetermination of the Payout Percentage for the Performance Period will be made by the Committee atthe end of the Performance Period, and Performance Shares earned, if any, will be paid based on thePayout Percentage, prorated for the number of full months elapsed from and including the month inwhich the Performance Period began to and including the month in which the termination ofemployment occurs; and (iii) during the third year of the Performance Period, the determination ofthe Payout Percentage for the Performance Period will be made by the Committee at the end of thePerformance Period, and Performance Shares earned, if any, will be paid based on the PayoutPercentage without prorating.
For purposes of this Award Agreement, Retirement means a termination of the Participantsemployment or service constituting retirement under an approved retirement program of the Company(or such other plan as may be approved by the Committee).
(b) Unless otherwise determined by the Committee at the time of termination, if theParticipants employment is terminated by the Company or one of its subsidiaries for Cause or bythe Participant not on account of a Constructive Termination, Retirement, death or disability (asdetermined in accordance with Section 8 of the Plan) during the Performance Period, all PerformanceShares shall be forfeited.
(c) For purposes of the Plan and the Award Agreement, a transfer of employment from theCompany to any subsidiary of the Company or vice versa,or from one subsidiary to another, shall not be considered a termination of employment.
SECTION 6 . Change in Control. Notwithstanding the provisions of Section 5 above, if withintwenty four months following the occurrence of a Change in Control (as defined in the Plan), theemployment of the Participant with the Company or one of its subsidiaries is terminated by theCompany or the subsidiary for any reason other than for Cause, death or disability (as determinedin accordance with Section 8 of the Plan) or is terminated by the Participant on account of aConstructive Termination, upon such termination the Target Award shall be deemed to have beenearned with respect to the full Performance Period and payment with respect to the PerformanceShares shall be made to the Participant in cash as soon as reasonably practicable after suchtermination.
SECTION 7 . Tax Withholding. Pursuant to paragraph 17(c) of the Plan, the Committee shallhave the power and the right to deduct or withhold, or require the Participant to remit to theCompany, an amount sufficient to satisfy any federal, state, local or other taxes required byapplicable law to be withheld with respect to payment of the Award. The Committee may conditionthe payment hereunder upon the Participants satisfaction of such withholding obligations.
SECTION 8 . Rights As A Shareholder. The Participant shall have no rights as shareholderwith respect to any Shares underlying the Award until and unless the Participants name is enteredin the Companys Register of Members as the holder of such shares and a Share certificate is issuedto the Participant upon payment with respect to the Award, except that the Participant shall beentitled to receive dividend equivalents with respect to Shares underlying the Award.
SECTION 9 . Transferability. Pursuant to paragraph 14 of the Plan the Participant maydesignate a beneficiary or beneficiaries to receive any payment to which he or she may be entitledin respect of Awards under the Plan in the event of his or her death on a form to be provided bythe Committee; Except as provided herein, the Participant may not sell, transfer, pledge, assign orotherwise alienate or hypothecate the Performance Shares, other than by his or her last Will andTestament or by the laws of descent and distribution.
SECTION 10 . Ratification of Actions. By accepting the Award or other benefit under thePlan, the Participant and each person claiming under or through him or her shall be conclusivelydeemed to have indicated the Participants acceptance and ratification of, and consent to, anyaction taken under the Plan or the Award by the Company, the Board or the Committee. All decisionsor interpretations of the Company, the Board and the Committee upon any questions arising under thePlan and/or this Award Agreement shall be binding, conclusive and final on all parties. In theevent of any conflict between any provision of the
Plan and this Award Agreement, the terms andprovisions of the Plan shall control.
SECTION 11 . Notices. Any notice hereunder to the Company shall be addressed to its office,Mintflower Place, 8 Par-La-Ville Road, Hamilton HM08, Bermuda; Attention: Corporate Secretary, andany notice hereunder to the Participant shall be addressed to him or her at the address specifiedon the Award Agreement, subject to the right of either party to designate at any time hereafter inwriting some other address.
SECTION 12 . Definitions. Capitalized terms not otherwise defined herein shall have themeanings given them in the Plan.
SECTION 13 . Governing Law and Severability. This Award Agreement will be governed by andconstrued in accordance with the laws of Bermuda, without regard to conflicts of law provisions. Inthe event any provision of the Award Agreement shall be held illegal or invalid for any reason, theillegality or invalidity shall not affect the remaining parts of the Award Agreement, and the AwardAgreement shall be construed and enforced as if the illegal or invalid provision had not beenincluded.
SECTION 14 . No Rights to Continued Employment. This Award Agreement is not a contract ofemployment. Nothing in the Plan or in this Award Agreement shall interfere with or limit in anyway the right of the Company or any subsidiary to terminate the Participants employment at anytime, for any reason or no reason, or confer upon the Participant the right to continue in theemploy of the Company or a subsidiary.
SECTION 15 . Counterparts. This Award Agreement may be signed in any number of counterparts,each of which shall be an original, with the same effect as if the signatures thereto and heretowere upon the same instrument.
IN WITNESS WHEREOF, the undersigned have caused this Award Agreement to be duly executed as ofthe date first written above.
|MONTPELIER RE HOLDINGS LTD.