MONTPELIER RE HOLDINGS
LTD.
PERFORMANCE SHARE AND RESTRICTED
SHARE UNIT
AWARD AGREEMENT
This Award
Agreement (the “Award Agreement”) is made and entered
into as of January 1st, 2006 between Montpelier Re Holdings Ltd.
(the “Company”) and
(the “Participant”).
The Company hereby
grants to the Participant Performance Shares and Restricted Share
Units (the “Award”) on the terms and conditions as set
forth in this Award Agreement and in the Montpelier Long-Term
Incentive Plan (the “Plan”).
In accordance with
this grant, and as a condition thereto, the Company and the
Participant agree as follows:
SECTION 1.
Performance Share Target Award; Performance Period; Date of
Grant:
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Performance Shares (the
“Target Award”)
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January 1,
2006 through and ending on December 31, 2008 (the
“Performance Period”)
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January 1,
2006
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SECTION 2.
Nature of Award. The Target Award represents the opportunity
to receive a future payment equal to the fair market value of such
number of shares of Company common shares, $0.001666 par value per
share (“Shares”), as are earned in accordance with
Section 3 of this Award Agreement as more fully set forth in
Section 4 of this Award Agreement.
SECTION 3.
Determination of Number of Shares Earned. The number of
Performance Shares earned 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 the Performance Criteria
and Harvest Scale set out in Appendix 1 hereto
SECTION 4.
Payment of Performance Shares. The amount payable to a
Participant in settlement of the Performance Shares shall be equal
to the fair market value (to be issued fully paid in consideration
of the Participant’s services to the Company) of a Share, as
determined by the Committee by reference to the average of the
daily closing price of the Company’s common shares on the New
York Stock Exchange, as reported in the Wall Street Journal, 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 the Performance Period,
as determined pursuant to Section 3 of this Award Agreement.
Payment in respect of an Award shall be made in cash, in Shares of
equivalent value or in some combination thereof, as determined by
the Committee in its sole discretion. Subject to Section 6 of
this Award Agreement, payment shall be made as soon as reasonably
practicable following the close of the Performance Period and the
Committee’s determination of the Payout
Percentage.
SECTION 5.
Restricted Share Unit Award; Vesting; Date of Grant
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Restricted Share Units (the
“RSU Award”)
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December 31, 2006 through and ending on
December 31, 2008
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January 1,
2006
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SECTION 6.
Nature of Award. The RSU Award represents the opportunity to
receive shares of Company common shares, $[0.001666] par value per
share (“RSU Shares”), as are earned in accordance with
Section 7 of this Award Agreement.
SECTION 7.
Vesting. Subject to the Participant remaining employed at
the applicable Vesting Date, as hereinafter defined, the RSU Award
shall vest over the vesting period described in Section 5 above in
three equal tranches of Restricted Share Units (each a
“Tranche”) at midnight on December 31
st 2006, December 31 st 2007 and December 31
st 2008, respectively (each a “Vesting
Date”). Shares shall be issued by the Company to the
Participant in satisfaction of
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the RSU Award
as soon as reasonably practicable following the end of the vesting
period described in Section 5 above.
SECTION 9.
Termination of Employment
(a) Unless
otherwise determined by the Committee at the time of termination,
if the Participant’s employment with the Company or one of
its subsidiaries is terminated by the Company or the subsidiary for
any reason other than Cause (as defined in Section 8 of the
Plan), death or disability(as determined in accordance with Section
8 of the Plan), or is terminated by the Participant on account of a
Constructive Termination (as defined in Section 8 of the Plan)
or Retirement (as defined below): (i) during the first year of
the Performance Period, all Performance Shares shall be forfeited;
(ii) during the second year of the Performance Period, the
determination of the Payout Percentage for the Performance Period
will be made by the Co
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