Exhibit 10.1

June 30, 2005

Mr. Phil Kruse
Executive Vice President – Life & Annuity
Max Re Ltd.
Max Re House
2 Front Street
Hamilton HM 11
Bermuda

Dear Phil:

Per your request, effective July 1, 2005, you will retire and your employment at
Max Re Capital Ltd. and Max Re Ltd. (collectively, the “Company”) will
terminate. The Company may from time to time ask you to attend industry
conferences or business meetings during the next eighteen months, for which your
reasonable travel expenses will be reimbursed. It is mutually agreed that any
attendance of such conferences by you will not alter the arrangements set forth
herein. As of the beginning of your retirement, you will no longer have
authority to bind the Company and will not represent to third parties that you
have such authority or that you are an agent of the Company.

Salary and Benefits. Your current salary of $360,000 per annum will continue
through December 31, 2006 and your housing allowance of $10,000 per month will
continue through September 30, 2005. Max Re Ltd. will continue to pay your
medical, disability and life insurance benefits as they currently exist through
The Colonial Group (or any other carrier that the Company may use in offering
such benefits to its employees) until December 31, 2006. In addition, to the
extent that the Company continues to arrange access for employees to financial
planning services of The Ayco Company, L.P. (“Ayco”) and to the extent permitted
by Ayco, you shall be permitted to access such services at the Company’s
negotiated rate through December 31, 2006; provided, however, that you will be
responsible for all fees incurred by you for such services and you shall arrange
for Ayco to bill you directly for such services. It is mutually agreed that,
beginning July 1, 2005, you will not be entitled to any other benefits. In
addition, Max Re Ltd. will reimburse your reasonable expenses for relocation
from Bermuda to Colorado, up to a maximum amount of $20,000.

In the event that you find other employment prior to December 31, 2006, you
agree that (i) the Company will cease to pay your salary on the date of
commencement of your new employment, (ii) Max Re Ltd. shall cease to pay the
medical, disability and life insurance benefit amounts and (iii) you shall cease
to have access to the Company’s negotiated rates with Ayco.

In the event that the Company institutes a Company-wide retirement benefits
program on or before December 31, 2006, you will be entitled to participate in
such program, subject to the terms, conditions and limitations of such program.

Deferred Compensation Account. It is mutually agreed that amounts in your
deferred compensation account are 100% vested and are payable to you, along with
any outstanding company matching.

Vesting and Exercisability of Awards. Warrants and options that have been
granted to you and that would otherwise vest before February 1, 2007 in
accordance with the vesting schedules set forth in the applicable agreements
granting such awards shall continue to vest pursuant to such agreements until
February 1, 2007. You agree that all warrants and options that do not vest on or
before February 1, 2007 shall terminate and be forfeited. The vested warrants
and options will remain exercisable until February 1, 2007. Notwithstanding any
provision in the warrant or option agreements to the contrary, it is mutually
agreed that any and all of your warrants and options not exercised on or before
February 1, 2007 shall expire and be forfeited. Further, it is mutually agreed
that the “Reload” provisions of each of the option agreements between you and
Max Re Capital Ltd. will terminate and cease to have effect as of July 1, 2005.

The restricted shares that were granted to you pursuant to the Restricted Stock
Award Agreements dated January 31, 2003, January 30, 2004 and February 7, 2005
will continue to vest on a pro rata basis until February 1, 2007. Any unvested
restricted shares as of February 2, 2007 will be terminated and forfeited.

A summary of your awards and vesting is attached as Schedule B for reference.

It is mutually agreed that, to the extent necessary to give effect to the
forgoing, those sections of each of the applicable award agreements governing
vesting and exercisability upon termination shall be superceded and replaced by
the vesting and exercisability terms of this letter agreement. It is further
agreed that all other provisions of the award agreements shall remain in full
force and effect in accordance with their respective terms.

No Severance. You agree that in consideration of structuring the termination and
the related payments and vesting set forth herein in accordance with your
preferences that no further payments, compensation or severance arrangements
shall be due to you from the Company or its affiliates upon your termination. It
is mutually agreed that the terms of this letter agreement supercede and replace
any and all prior employment agreements between you and the Company and/or its
affiliates.

No Compete. You agree that in consideration of structuring the termination and
the related payments and vesting set forth herein in accordance with your
preferences that, until January 1, 2007, you will not seek employment with a
competitor without first obtaining the written permission of the Company. In the
event such permission is granted and you become employed, the salary and vesting
set forth herein shall cease as of the date of commencement of your new
employment. Further, until January 1, 2007, you will not anywhere within the
geographical areas in which the Company or any subsidiary is conducting their
business operations or providing services as of July 1, 2005, pursue any Company
or subsidiary project known to you and which the Company or any subsidiary is
actively pursuing, developing or attempting to develop as of July 1, 2005 (or
within six (6) months prior to such date) while the Company is (or is
contemplating actively) pursuing such project directly or indirectly, alone, in
association with or as a shareholder, principal, agent, partner, officer,
director, employee or consultant of any other organization. Until January 1,
2007, you will not solicit any officer, employee or consultant of any of the
Company or any subsidiary to leave the employ of any of the Company or any
subsidiary.

Trading Policy. It is mutually agreed that you will not trade in Max Re Capital
Ltd. securities prior to August 4, 2005. It is further agreed that after
August 4, 2005, you will no longer be restricted to trading only during the
so-called “Trading Windows”; provided that you will remain subject to all
prohibitions against insider trading.

Confidential Information. On or before June 30, 2005, you will deliver to the
Company all data, lists, information, memoranda, documents and all other
property belonging to the Company or containing Confidential Information,
including, among other things, that which relates to services performed by you
for the Company or any affiliate, or was created or obtained by you while
performing services for the Company or any affiliate or by virtue of your
relationship with the Company or any affiliate, except that you shall have no
obligation to deliver to the Company your rolodex, calendars and any documents
containing your personal contacts or information. You shall not, without the
express prior written consent of the Company, disclose or divulge to any other
person or entity, or use or modify for use, directly or indirectly, in any way,
for any person or entity, any of the Company’s, any affiliate’s or any of their
respective client’s Confidential Information at any time. For purposes herein,
“Confidential Information” shall mean any valuable, competitively sensitive data
and information related to the Company’s, any affiliate’s or any of their
respective client’s business including, without limitation Trade Secrets that
are not generally known by or readily available to such party’s competitors
other than as a result of an improper disclosure directly or indirectly by you.
“Trade Secrets” shall mean information or data of the Company, any affiliates or
any of their respective clients including, but not limited to, technical or
non-technical data, financial information, programs, devices, methods,
techniques, drawings, processes, financial plans, product plans, or lists of
actual or potential customers or suppliers, that: (A) derive economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from their disclosure or use; and (B) are the subject of efforts that are
reasonable under the circumstances to maintain their secrecy.

Non-Disparage. You acknowledge and agree that you will not defame or publicly
criticize the services, business, integrity, veracity or personal or
professional reputation of the Company or its officers, directors, partners,
employees, affiliates or agents thereof in either a professional or personal
manner, except that the foregoing shall not limit normal competitive activities.

Release. In consideration of such payments and vesting, you, for yourself, your
heirs, executors, administrators, successors and assigns, agree to fully release
and discharge the Company, its officers, directors, employees, agents, insurers,
subsidiaries, parents, affiliates, successors or assigns from any and all
actions, causes of action, claims (including with respect to any deferred
compensation), obligations, costs, losses, liabilities, damages and demands of
whatsoever character, whether or not known, suspected or claimed, which you
have, through the date of this letter, against the Company or its affiliates
arising out of or in any way related to your employment or termination of your
employment. You understand that this release waives claims and rights you may
have under certain statutes, laws and regulations, if applicable, of any
jurisdiction (including, but not limited to, Bermuda) that in any way relates to
your employment or termination of employment and any and all amendments to any
of same.

* * *

Please confirm your agreement with the foregoing by signing and returning to the
undersigned the duplicate copy of this letter enclosed herewith.

Very truly yours,

MAX RE CAPITAL LTD.

     

Peter A. Minton

Accepted and Agreed as of the date

first written above:

     

Phillip Kruse