Exhibit 10.3


 


AXIS CAPITAL HOLDINGS LIMITED


 






 


2003 DIRECTORS DEFERRED COMPENSATION PLAN


 


 


As Amended and Restated Effective January 1, 2005


 

















 


ARTICLE I.

PURPOSE AND EFFECTIVE DATE


 


The
purpose of the AXIS Capital Holdings Limited 2003 Directors Deferred
Compensation Plan (“Plan”) is to aid AXIS Capital Holdings Limited, a company
organized and existing under Bermuda law (the “Company”), and its subsidiaries
in retaining and attracting well-qualified persons for service as Non-Employee
Directors by providing such persons with the opportunity to elect to defer
receipt of all or a portion of their compensation.  The Plan first became effective January 1,
2003.  


 


Effective
March 14, 2003, the AXIS Directors Deferred Compensation Plan, as amended (the “Specialty
Directors Plan”), was merged into the Plan, and the Company agreed to assume
all of the benefit obligations of AXIS Specialty Limited with respect to the
Specialty Directors Plan.  Fees earned
and deferred under the Specialty Directors Plan shall be treated as having been
deferred pursuant to the terms of this Plan. 



 


The
Plan is hereby amended and restated effective January 1, 2005 (except to the
extent a special effective date is included) to comply with the requirements of
Section 409A of the United States Internal Revenue Code.  


 


ARTICLE II.

DEFINITIONS


 


For
the purposes of the Plan, when capitalized, the following terms shall have the
meanings set forth below:  


 


“Beneficiary”
means the person, persons or entity designated by the Participant pursuant to
Article VIII to receive any benefits payable under the Plan. 


 


“Board”
means the Board of Directors of the Company. 



 


“Common
Stock” means the common stock of the Company, par value U.S. $0.10 per share,
or if the Company is not the ultimate parent, the common stock of such ultimate
parent of the Company.  


 


“Company”
means AXIS Capital Holdings Limited and any successor thereto.  


 


“Deferral
Account” means the bookkeeping account maintained on the books of the Board for
each Participant pursuant to Article VI. 



 


“Deferred
Amount” means the amount of Fees the Participant elects to defer for the
applicable Plan Year.  


 


“Determination
Date” means the date the Participant ceases to serve as a Non-Employee
Director.


 

















 


“Fair
Market Value” means, as of a particular date, if publicly traded the closing
price of the Common Stock on the last day traded on the principal securities
exchange or market on which the Common Stock is traded.  Until the Common Stock is publicly traded,
fair market value shall be based on an appraisal by a qualified independent
appraiser if the Valuation Date is within 12 months of the date as of which
fair market value is being determined hereunder. 


 


“Fees”
means the cash and/or stock compensation payable to a Participant by reason of
service as a Non-Employee Director either (i) as a retainer (without regard to
attendance at meetings) or (ii) on a per meeting basis.


 


“Non-Employee
Director” means any director on the Board or the board of directors of a
subsidiary of the Company who is not an employee of the Company or any of its
subsidiaries.


 


“Participant”
means any Non-Employee Director who elects to participate by filing a
Participation Agreement as provided in Article IV.  


 


“Participation
Agreement” means an agreement in such form as the Board may prescribe filed by
a Participant in accordance with Article IV.


 


“Phantom
Share Unit” means a notional determinate quantity used as a standard for
measuring a Participant’s potential benefit under the Plan pursuant to Section
6.02.


 


“Plan
Year” means a twelve-month period beginning January 1 and ending the following
December 31.


 


“Valuation
Date” means, with respect to the form of payment described in Section
7.01(b)(ii), the Determination Date and the first and second anniversaries of
the Determination Date.


 


ARTICLE III.

ADMINISTRATION


 


3.01.                       Authority
of the Board.


 


(a)                                  The Plan
shall be administered by the Board, which shall have the authority to adopt
rules and regulations for carrying out the Plan and shall interpret and
implement the Plan.  The Board shall have
discretion to delegate to an officer of the Company or other person approved by
the Board such duties as it may determine. 
All rules, interpretations and decisions of the Board or its delegee
respecting the Plan shall be conclusive and binding on the Company,
Participants, and Beneficiaries.


 


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(b)                                 No member of
the Board shall be liable for any act or action hereunder, whether of omission
or commission, by any other member or employee or by any agent to whom duties
in connection with the administration of this Plan have been delegated or for
anything done or omitted to be done in connection with this Plan. 


 


(c)                                  The Company
shall, to the fullest extent permitted by law, indemnify each officer or
employee of the Company (including the heirs, executors, administrators and
other personal representatives of such person) and each member of the Board
against expenses (including attorneys’ fees), judgments, fines, amounts paid in
settlement, actually and reasonably incurred by such person in connection with
any threatened, pending or actual suit, action or proceeding (whether civil,
criminal, administrative or investigative in nature or otherwise) in which such
person may be involved because he or she is or was serving the Plan in any
capacity.


 


(d)                                 The Company
shall pay any expense incurred by the Company or the Board related to the
administration of the Plan.


 


3.02.                      Claim
Procedure.


 


If
a Participant or Beneficiary makes a written request alleging a right to
receive payments under the Plan or alleging a right to receive an adjustment in
benefits being paid under the Plan, such actions shall be treated as a claim
for benefits.  All claims for benefits
under the Plan shall be sent to the Board. 
If the Board determines that any claimant is not entitled to receive all
or any part of the benefits claimed, the Board shall notify the claimant in
writing of such determination and the reasons therefor.  Such notice shall be sent within 90 days of
the claim unless the Board determines that additional time, not exceeding 90
days, is needed and so notifies the Participant.  The Board’s determination regarding claims
for benefits shall be final and binding on Participants and Beneficiaries.  


 


ARTICLE IV.

PARTICIPATION


 


4.01.                      Participation.


 


Participation
in the Plan shall be limited to Non-Employee Directors who elect to participate
in the Plan by filing a Participation Agreement with the Board.  A Participation Agreement must be filed prior
to the beginning of the Plan Year for which it is effective; provided, however
that in the first year in which an individual becomes eligible to participate
in the Plan, including the first Plan Year of the Plan, the newly eligible
Participant may make an election to defer compensation for services to be
performed subsequent to such election within 30 days after the date the
individual becomes eligible to participate. 


 


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4.02.                      Contents
of Participation Agreement.


 


Subject
to Article VII, each Participation Agreement shall set forth: 


 


(a)                                  whether the
Participant receives Fees in 


 


(i)                                     cash, 


 


(ii)                                  Common
Stock, or 


 


(iii)                               a
combination of (i) and (ii); 


 


(b)                                 the Deferred
Amount, expressed as 


 


(i)                                     (A)                              a dollar amount,
and/or


 


(B)                                a number of
shares of Common Stock, or 


 


(ii)                                  a percentage
of Fees (if Fees are payable in both cash and Common Stock, the Participant
shall specify a separate percentage of cash and Common Stock to be deferred);
and 


 


(c)                                  the form in
which payments are to be made, which may be a lump sum or in three (3) annual
installments.


 


4.03.                      Modification
or Revocation of Election by Participant.


 


Elections
made pursuant to a Participation Agreement shall remain in effect for the next
Plan Year and for subsequent Plan Years unless and until revoked or
amended.  Any such revocation or
amendment will apply only to Fees earned in the Plan Year beginning after the
date of the revocation or amendment. 
Except as provided under Section 4.01, under no circumstances may a
Participant’s Participation Agreement be made, modified, or revoked
retroactively.  A Participant’s election
as to the form of distribution of amounts deferred is irrevocable and may be
changed on a prospective basis only with regard to amounts deferred in Plan
Years subsequent to the date of the new election. 


 


ARTICLE V.

DEFERRED COMPENSATION


 


5.01.                      Crediting
of Deferral Accounts.


 


The
Board shall credit the Deferred Amount of a Participant, with respect to each
Plan Year of participation in the Plan, to the Participant’s Deferral Account
when such Deferred Amount would otherwise have been paid to the
Participant.  Fees deferred in lieu of
cash compensation shall be credited to the Participant’s


 


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Deferral
Account in cash.  Fees deferred in lieu
of stock compensation shall be credited to the Participant’s Deferral Account
in Phantom Share Units pursuant to Section 6.02.  


 


5.02.                      Vesting
of Deferral Account.


 


A
Participant shall be 100% vested in his/her Deferral Account at all times. 


 


ARTICLE VI.

MAINTENANCE AND INVESTMENT OF ACCOUNTS


 


6.01.                      Maintenance
of Accounts.


 


A
separate Deferral Account shall be maintained for each Participant. In
addition, various subaccounts may be maintained for a Participant as necessary
to reflect separate Participation Agreements, cash deferrals, and Phantom Share
Units. A Participant’s Deferral Account shall be utilized solely as a device
for the measurement and determination of the amounts to be paid to the Participant
pursuant to the Plan, and shall not constitute or be treated as a trust fund of
any kind.  The balance of a Participant’s
Deferral Account shall be adjusted to reflect changes in the value of the
deemed investments thereof, adjustments, credits and debits pursuant to Section
6.02, and distributions pursuant to Article VII.  


 


6.02.                      Deferrals.


 


(a)                                  Stock
Deferrals.


 


(i)                                    Participants
who defer Fees otherwise payable in shares of Common Stock shall have credited
to their Deferral Accounts a number of Phantom Stock Units equal to the number
of shares of Common Stock deferred.  


 


(ii)                                 In the event
a cash dividend is declared on the Common Stock, the portion of the Participant’s
Deferral Account denominated in Phantom Share Units shall be credited with additional
Phantom Share Units (or portions thereof) equal to the number of Phantom Share
Units in the Participant’s Deferral Account as of the record date (prior to
January 1, 2007, the dividend date) multiplied by a fraction, the numerator of
which is the amount of the cash dividend per share of Common Stock, and the
denominator of which is the Fair Market Value of one share of Common Stock on
the record date (prior to January 1, 2007, the dividend declaration date). 


 


(iii)                              In the event
of any change in capitalization of the Company, including, but not limited to,
a stock split, stock dividend, merger, recapitalization, share exchange,
amalgamation, consolidation,


 


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reorganization
(whether or not such reorganization comes within the definition of such term in
Section 368 of the Internal Revenue Code of 1986, as amended), separation
(including a spin-off or other distribution of stock or property of the
Company), any partial or complete liquidation of the Company, or any other
change in the structure or capitalization of the Company affecting the Common
Stock, such that an adjustment is determined by the Board to be appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, the Board may make appropriate
adjustments to the number of Phantom Share Units in a Participant’s Deferral
Account and/or the kind or class of shares deliverable under the Plan.  The determination of the Board as to such
adjustments, if any, to be made shall be conclusive and binding on all
Participants and Beneficiaries.


 


(b)                                 Cash
Deferrals.


 


Fees otherwise payable in
cash that are deferred during a Plan Year and credited to a Participant’s
Deferral Account pursuant to Section 5.01 shall begin accruing interest as of
the date such amounts are credited. 
Interest shall be credited at the LIBOR rate for the Plan Year.  The LIBOR rate in effect for a particular
Plan Year shall be the rate of interest that is 1.00% (or 100 basis points) in
excess of the 12-month London Interbank Offered Rate (LIBOR) for deposits of
U.S. dollars, as quoted in The Wall Street Journal effective for the first
business day of the calendar year (expressed as a decimal).  Interest credited on such amounts shall be
compounded on an annual basis. 


 


6.03.                      Statement
of Accounts.


 


The
Board shall submit to each Participant annual statements of his/her Deferral
Account in such form as the Board prescribes, setting forth the Participant’s
Deferral Account balance as of the end of the most recent Plan Year. 


 


ARTICLE VII.

BENEFITS


 


7.01.                      Time,
Form, and Medium of Payment.


 


(a)                                  Except as
provided in Section 7.02, a Participant’s benefits under the Plan shall not be
distributed prior to the date he/she ceases service as a Non-Employee
Director.   Notwithstanding any provision
of this Plan to the contrary, while the stock of the Company (or, to the extent
determined in accordance with United States Internal Revenue Code Section 409A,
an affiliate that must be treated as the Company) is publicly traded,


 


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distributions
to a “specified employee” (if, under Section 409A, the individual could be
deemed to be a specified employee) shall not be made until six months following
the specified employee’s separation from service.


 


(b)                                 Form of
Payment.


 


(i)                                     If the
Participant has elected pursuant to one or more Participation Agreements to
receive payment of all or a portion of his/her Deferral Account in a lump sum,
the Participant’s benefits shall be valued as of the Determination Date and
paid by the Company to him/her (or to his/her Beneficiary if the Participant is
deceased) on the first day of the month that is at least 30 days after the
Participant ceases service as a Non-Employee Director.    


 


(ii)                                  If the
Participant has elected pursuant to one or more Participation Agreements to
receive payment of all or a portion of his/her Deferral Account in
installments, the Company shall make three (3) annual payments from the portion
of the Participant’s Deferral Account subject to the election.  The first installment shall be paid on the
first day of the month that is at least 30 days after the Participant ceases
service as a Non-Employee Director, with subsequent installments paid on the
anniversary of such date.  Effective
January 1, 2007, in the event of the Participant’s death prior to receipt of
all installments payments, remaining amounts shall be paid to the Participant’s
Beneficiary in a lump sum on the first day of the month that is at least 30
days following the Participant’s death.


 


(iii)                               The first
installment payment shall be equal to 1/3 of the
value of the portion of the Participant’s Deferral Account subject to the
election, determined as of the first Valuation Date.  Subsequent installments shall be equal to the
value of the portion of the Participant’s Deferral Account subject to the
election, determined as of the applicable Valuation Date and  multiplied by a fraction, the numerator of
which is one (1) and the denominator of which is the number of remaining
installments (including the installment being paid). The portion of the
Participant’s Deferral Account not distributed shall be credited through the
subsequent installment date for dividends for the Phantom Share Unit portion
and interest for the cash portion pursuant to Section 6.02.


 


(c)                                  Medium of
Payment.


 


Payment
shall be made to the Participant in the form elected by the Participant in
accordance with Section 4.02. The portion of the Participant’s Deferral Account
denominated in Phantom Share Units shall


 


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be
paid in shares of Common Stock. One (1) share of Common Stock shall be paid for
each whole Phantom Share Unit contained therein, and any fractional Phantom
Share Units shall be paid in cash. The portion of the Participant’s Deferral
Account denominated in cash shall be paid in cash.  


 


7.02.                      Withholding
of Taxes.


 


Notwithstanding
any other provision of the Plan, the Company shall withhold from payments made
hereunder any amounts required to be so withheld by any applicable law,
regulation, or tax treaty.  


 


ARTICLE VIII.

BENEFICIARY DESIGNATION


 


8.01.                      Beneficiary
Designation.


 


Each
Participant shall have the right, at any time, to designate any person, persons
or entity as his Beneficiary or Beneficiaries. 
A Beneficiary designation shall be made, and may be amended, by the
Participant by filing a written designation with the Board, on such form and in
accordance with such procedures as the Board shall establish from time to time.



 


8.02.                      No
Beneficiary Designation.


 


If
a Participant fails to designate a Beneficiary as provided above, or if all
designated Beneficiaries predecease the Participant, then the Participant’s
Beneficiary shall be deemed to be the Participant’s estate.


 


ARTICLE IX.

AMENDMENT, SUSPENSION, AND TERMINATION OF PLAN


 


The
Board may at any time amend, suspend, or terminate the Plan in whole or in
part, provided, however, that no such amendment, suspension, or termination
shall adversely affect the rights of any Participant or Beneficiary under the
Plan unless consented to in writing by such Participant or, in the event the
Participant is deceased, the Beneficiary. 
Notwithstanding the foregoing, effective January 1, 2005, the Plan may
not be terminated except within 12 months of a change in control as
specifically allowed under United States Internal Revenue Code Section 409A or
in other circumstances specifically allowed under Section 409A.  However, the Plan may otherwise be amended or
further contributions suspended in accordance with Section 409A.


 


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ARTICLE X.

MISCELLANEOUS


 


10.01.                Unfunded Plan.


 


The
Plan is intended to be an unfunded plan benefiting persons who are not
employees of the Company or any of its subsidiaries.  The Plan is not subject to the Employee
Retirement Income Security Act of 1974, as amended.  All payments pursuant to the Plan shall be
made from the general funds of the Company and no special or separate fund
shall be established or other segregation of assets made to assure
payment.  No Participant or other person
shall have under any circumstances any interest in any particular property or
assets of the Company as a result of participating in the Plan.  Notwithstanding the foregoing, the Company
may (but shall not be obligated to) create one or more grantor trusts, the
assets of which are subject to the claims of the Company’s creditors, to assist
it in accumulating funds to pay its obligations under the Plan.


 


10.02.                Nonassignability.


 


Except
as specifically set forth in the Plan with respect to the designation of
Beneficiaries, neither a Participant nor any other person shall have any right
to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise
encumber, transfer, hypothecate or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof, which are, and all
rights to which are, expressly declared to be unassignable and
non-transferable.  No part of the amounts
payable shall, prior to actual payment, be subject to seizure or sequestration
for the payment of any debts, judgments, alimony or separate maintenance owed
by a Participant or any other person, nor be transferable by operation of law
in the event of a Participant’s or any other person’s bankruptcy or insolvency.


 


10.03.                Validity and
Severability.


 


The
invalidity or unenforceability of any provision of the Plan shall not affect
the validity or enforceability of any other provision of the Plan, which shall
remain in full force and effect, and any prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.


 


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10.04.                Governing Law.


 


The
validity, interpretation, construction and performance of the Plan shall in all
respects be governed by and construed under the laws of the Islands of Bermuda,
without reference to principles of conflict of law.   The Plan shall be administered in accordance
with Section 409A of the United States Internal Revenue Code.


 


10.05.                Status of
Participants.


 


The
Plan does not constitute a contract of employment or impose on the Participant
or the Company or any of its subsidiaries any obligation for the Participant to
remain a Non-Employee Director.


 


10.06.                Underlying
Incentive Plans and Programs.


 


Nothing
in the Plan shall prevent the Company or its subsidiaries from modifying,
amending or terminating any plan, policy or program pursuant to which Fees are
paid to Non-Employee Directors.


 


10.07.                Successors.


 


The
Company shall require any successor (whether direct or indirect, by purchase,
merger, share exchange, reorganization, recapitalization, amalgamation,
consolidation, or otherwise) to all or substantially all of its business or
assets to expressly assume and agree to perform under the Plan in the same
manner and to the same extent that it would be required to perform if no such
succession had taken place.  As used in the
Plan, the term “Company” shall mean any successor that expressly assumes and
agrees to perform the Plan, which otherwise becomes bound by all the terms and
provisions of the Plan by operation of law, or any other entity which expressly
assumes the obligations under, and agrees to administer, the Plan, as
determined by the Committee in its sole discretion.


 


IN WITNESS WHEREOF, this
amended and restated Plan is hereby adopted, effective as specifically provided
herein, on this 7th day of September, 2007.


 


	
   

  	
   

  	
  AXIS CAPITAL HOLDINGS LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  John R. Charman

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  Richard T. Gieryn, Jr. 

  	
   

  	
   

  	
   

  
	
  Its:

  	
  Secretary

  	
   

  	
   

  	
   

  



 


 


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