Exhibit 10.5
QUANTA CAPITAL HOLDINGS LTD.
FORM OF PERFORMANCE-BASED SHARE UNIT AGREEMENT
FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, Quanta Capital Holdings Ltd. (the "Company"), a
Bermuda company,
hereby grants to ___________, an employee of [a subsidiary of] the
Company on
the date hereof (the "Holder"), the right to receive common shares,
$0.01 par
value per share, of the Company ("Shares"), at a future date upon
the following
terms:
WHEREAS, the Holder has been granted the following award (the
"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 2003 Long
Term Incentive Plan (the "Plan");
NOW, THEREFORE, in consideration of the premises and mutual
covenants
contained herein, the parties hereto agree as follows.
(a) Grant. The Holder is hereby granted ____________
performance-based
share units (the "Performance Shares") pursuant to the Plan, the
terms of which
are incorporated herein by reference. The Performance Shares are
granted as of
____________ (the "Date of Grant") and such grant is subject to the
terms and
conditions herein and the terms and conditions of the applicable
provisions of
the Plan, including Sections 5(e) and 5(f) of the Plan.
(b) Status of Shares. The Shares shall upon issue under this
agreement
rank equally in all respects with the other Shares.
(c) No Rights as a Shareholder. The Holder shall not, by virtue
hereof, be entitled to any rights of a shareholder in the Company,
either at law
or in equity until the Restrictions lapse and the Shares are issued
as provided
herein.
(d) Lapse of Restrictions. On ____________, except as may otherwise
be
provided herein and subject to the terms and conditions set forth
in the Plan,
the Restrictions on transfer set forth in Paragraph (g) shall
lapse, the Award
shall vest and a number of Shares will be issued as provided in the
table below
provided that the Company achieves the average return on equity
over the three
year period ending ____________provided in the table below, as
calculated in
accordance with GAAP:
Average Return on Equity
Number of Shares to be Issued
------------------------
-----------------------------
Less than 12%
0
12% or more and less than 20%
50% of the number of Performance Shares granted
20% or more and less than 25%
100% of the number of Performance Shares granted
25% or more and less than 30%
200% of the number of Performance Shares granted
30% or more
300% of the number of Performance Shares granted
(e) Delivery of Shares. Promptly after ____________, the number of
Shares, as determined under Paragraph (e) above, that must be
delivered,
provided that the Holder shall have complied with his or her tax
obligations
under Paragraph (l) hereof, will be delivered by the Company to the
Holder or
the Holder's personal representative in the form of a share
certificate
representing a number of Shares equal to the number of Performance
Shares vested
during the Performance Period, provided that the Committee may, in
its
discretion, require (i) revisions to the performance measures under
Paragraph
(e) hereof on the occurrence of a significant event as provided in
Section
5(f)(iii) of the Plan; or (ii) that some or all of the vested
Shares be retained
by the Company, and that the Holder receive a cash payment in lieu
of the
delivery of such retained unrestricted Shares. The Shares may be
delivered or
any lawful consideration.
1
The Company shall not be required to issue fractional Shares
under this agreement. If any fractional interest in a Share would
be deliverable
upon lapse of the Restrictions in whole or in part but for the
provisions of
this paragraph, the Company, in lieu of delivering any such
fractional share
therefor, shall pay a cash adjustment therefor in an amount equal
to their Fair
Market Value (or if any Shares are not publicly traded, an amount
equal to the
book value per share at the end of the most recent fiscal quarter)
multiplied by
the fraction of the fractional share which would otherwise have
been issued
hereunder. Anything to the contrary herein notwithstanding, the
Company shall
not be obligated to issue any Shares hereunder if the issuance of
such Shares
would violate the provision of any applicable law, in which event
the Company
shall, as soon as practicable, take whatever action it reasonably
can so that
such Shares may be issued without resulting in such violations of
law. For
purposes hereof, Fair Market Value shall mean the mean between the
high and low
selling prices per Share on the immediately preceding date (or, if
the Shares
were not traded on that day, the next preceding day that the Shares
were traded)
on the principal exchange on which the Shares are traded, as such
prices are
officially quoted on such exchange.
(f) Adjustments for Recapitalization and Dividends. In the event
that,
prior to ____________, any dividend in Shares, recapitalization,
Share split,
reverse split, reorganization, merger, consolidation, spin-off,
combination,
repurchase, or share exchange, or other suc
