Exhibit
10.1


axis
specialty limited


96 pitts bay road


pembroke, bermuda hm08


July 5,
2007


Mr. John Gressier


96 Pitts Bay Road


Pembroke, Bermuda HM08


Dear John:


We are delighted that you
have decided to join Axis
Specialty Limited, a Bermuda Company (the “Company”) and wholly owned
subsidiary of axis Capital
Holdings Limited, a Bermuda Company (the “Parent”). We thought it would
be useful to lay out the terms and conditions of our agreement in this letter
agreement (this “Agreement”). This Agreement is dated as of July 5,
2007.


1.                                      Employment.


The Company hereby agrees
to employ you in the position of Chairman of AXIS Insurance or in such other
position as is mutually agreeable to you and the Company. You will report to
the Chief Operating Officer of the Parent. You will be expected to devote your
full business time and energy, attention, skills and ability to the performance
of your duties and responsibilities to the company on an exclusive basis,
including service to subsidiaries and affiliates of the Company as requested by
the Board of Directors of the Parent (the “Board”), and shall faithfully
and diligently endeavor to promote the business and best interests of the Company
and its subsidiaries and affiliates. Anything herein to the contrary
notwithstanding, nothing shall preclude you from (i) serving on the boards of
directors of a reasonable number of other corporations or the boards of a
reasonable number of trade associations and/or charitable organizations, (ii)
engaging in charitable, community and other business affairs and (iii) managing
your personal investments and affairs; provided such activities do not, in the
reasonable judgment of the Company, adversely impact your ability to properly
perform your responsibilities and duties hereunder.


2.                                      Compensation
and benefits.


(a)    During
your employment with the Company, your annual base salary shall be $800,000
(the base salary as may be increased from time to time “Base Salary”)
and shall be paid pursuant to the Company’s customary payroll practices. The
Base Salary will be reviewed annually and may be increased in the sole
discretion of the Company.


(b)    In
addition to the Base Salary, in each fiscal year of the Company during your
employment with the Company, you will have the opportunity to earn an annual
cash bonus (“Annual Bonus”) if the Company achieves certain performance
objectives and subject to your individual performance (each of which will be
determined by the Company for each such fiscal













year). The Annual Bonus
for each period will be paid only if you are actively employed with the Company
on the date on which bonuses are disbursed to similarly situated senior
executives.


(c)    During
your employment with the Company, you will be entitled to participate generally
in the benefit plans made available to senior executives of the Company to
include a bi-annual Executive Physical Program, in accordance with the terms of
those plans.


(d)    During
your employment with the Company, you will be entitled to 25 working days of
paid vacation per calendar year.


(e)    During
your employment with the Company, the Company will reimburse you for all
reasonable business expenses incurred by you in the course of performing your
duties under this Agreement which are consistent with the Company’s policies in
effect from time to time with respect to travel, entertainment and other
business expenses, subject to the Company’s requirements with respect to reporting
and documentation of expenses.


(f)    During
your employment with the Company and while you are on assignment in Bermuda,
you will be entitled to a monthly housing allowance of $15,000.


(g)    During
your employment with the Company and while you are on assignment in Bermuda,
you will be paid by the Company an automobile allowance of $900 per month; provided,
however, that the Company shall have no other obligations to you relating to
any of your automobile(s), including, but not limited to, the costs to insure
or garage any of your automobile(s).


(h)    During
your employment with the Company, and subject to the Company’s prior review and
approval, you will be reimbursed by the Company for the initiation fees (not to
exceed USD $10,000) and annual membership fees of one private club; provided,
however, that the Company shall have no other obligations to you relating to
any other costs of your membership in that private club.


(i)    During
your employment with the Company, the Company will reimburse you for reasonable
costs incurred for preparation of annual tax returns and associated tax
planning, not to exceed US$5,000 per year.


(j)    During
your employment with the Company and while you are on assignment in Bermuda,
you will be entitled to reimbursement of payment of airfare for up to four
round trip business-class, non-business trips per year for you and your
immediate family members between Bermuda and the United Kingdom.


3.                                      Term
of Employment


(a)    The
employment period shall commence on February 14, 2007 and shall terminate on
the day preceding the third anniversary thereof; provided, however, that
the term of employment shall automatically be extended for successive one-year
periods unless either party shall give at least six (6) months’ prior written
notice of non-renewal. Notwithstanding the foregoing, your employment hereunder
will be terminated upon the earliest to occur of the following events:



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  (i)

  	
  Death.  Your employment shall automatically
  terminate upon your death.

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  Disability.  The Company shall be entitled to terminate
  your employment if, as a result of your incapacity due to physical or mental
  illness or injury, you shall have been unable to perform your duties
  hereunder for a period of 181 days in any twelve-month period.

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  Cause.  The Company may terminate your employment
  for Cause which, for purposes of this Agreement, shall mean (A) any act or
  omission which constitutes a material and substantial breach by you of the
  terms of this Agreement that adversely impacts the business or reputation of
  the Company, (B) the conviction of a felony or commission of any act which
  would rise to the level of a felony, (C) the conviction or commission of a
  lesser crime or offense that adversely impacts or potentially could impact upon
  the business or reputation of the Company, its Parent, and/or affiliates and
  subsidiaries in a material way, (D) your willful violation of specific lawful
  directives of the Company, (E) commission of a dishonest or wrongful act
  involving fraud, misrepresentation, or moral turpitude causing damage or
  potential damage to the Company, its Parent and/or affiliates and
  subsidiaries, (F) the willful failure to perform a substantial part of your
  duties, (G) breach of fiduciary duty.

  
	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
  Without Cause.  The Company may terminate your employment at
  any time without Cause; provided, however, that the Company provides
  you with notice of its intent to terminate at at least 30 days in advance of
  the date of termination. Termination without Cause shall include the
  Company’s non-renewal of a successive one-year period of your employment with
  the Company as provided for in this Section 3(a).

  
	
   

  	
   

  	
   

  
	
   

  	
  (v)

  	
  Voluntary Resignation.  You may voluntarily terminate your
  employment hereunder; provided, however, that you provide the Company
  with notice of your intent to terminate at least six (6) months in advance of
  the date of termination. Voluntary Resignation shall include your non-renewal
  of a successive one-year period of your employment with the Company as provided
  for in this Section 3(a).

  



 


(b)    In
the event that your employment with the Company shall terminate pursuant to
Sections 3(a)(i), (ii), (iii), or (v), the Company’s sole obligation under the
Agreement shall be to (i) pay to you any accrued and unpaid Base Salary through
the date of termination of employment, and an amount equal to such reasonable
and necessary unreimbursed business expenses incurred by you on behalf of
Company on or prior to the date of termination of employment and (ii) afford
you all the employee benefits to which you may be entitled under, and in
accordance with the terms of, all employee benefit plans in which you
participate.


(c)    In
the event that your employment with the Company terminates in accordance with
the provisions of Section 3(a)(iii) — for Cause, or 3(a)(iv) — Without Cause or
3(a)(v) — Voluntary Resignation hereof, you shall be entitled to continuation
of your Base Salary and employment benefits for a period of six (6) months
immediately following the date of such


 



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termination provided,
however, that you comply with your obligations under Sections 3(e), (including,
without limitation, the release and waiver provision), 4, 5, 6 and 7 hereof.


(d)           In the event
that your employment with the Company terminates in accordance with the
provisions of Section 3(a)(iv) — Without Cause hereof, you shall be entitled to
vesting for all equity awards, including any restricted shares in accordance
with their terms; provided, however, that you comply with your obligations
under Section 3(e), (including, without limitation, the release and waiver
provision), 4, 5, 6 and 7 hereof.


(e)           In the event
that either party gives notice of the non-renewal of a successive one-year
period of your employment with the Company as provided for in Section 3(a)
hereof, or you voluntarily terminate your employment hereunder and you provide
notice thereof, during the period (or any portion thereof) commencing on the
date of such notice and ending on the date of termination (the “Notice
Period”), the Company may, in its absolute discretion, (i) require you to
perform only such duties as it may allocate to you, (ii) require you not to
perform any of your duties, (iii) require you not to have any contact with
customers or clients of the Company nor any contact (other than purely social
contact) with such employees of the Company as the Company shall determine,
(iv) exclude you from any premises of the Company and/or (v) require you to
resign from all directorships and other offices that you hold in connection with
your employment with the Company (including any directorships with subsidiaries
or other affiliates of the Company) effective as of any date during the Notice
Period. If the Company elects to take any such action, such election shall not
constitute a breach by the Company of this Agreement and you shall not have any
claim against the Company in connection therewith so long as, during the Notice
Period, the Company continues to pay to you your accrued and unpaid Base
Salary, afford you all the employee benefits to which you may be entitled
under, and in accordance with the terms of, all employee benefit plans in which
you participate and otherwise comply with the terms of this Agreement.


(f)            Upon
termination of your employment with the Company for any reason, you agree (i)
to resign from all directorships and other offices that you hold in connection
with your employment with the Company (including any directorships with
subsidiaries or other affiliates of the Company) and (ii) to execute a general
release and waiver in a form of which to be agreed by the parties to this
Agreement, waiving all claims you may have against the Company, its affiliates
(including Parent) and their respective successors, assigns, employees,
officers, directors, consultants, partners and shareholders; provided, however,
that the requirement to execute a general release and waiver shall not apply to
a voluntary resignation pursuant to Section 3(a)(v) of this Agreement.


(g)           If within the
first twelve months following a Change of Control, (i) the nature or scope of
your position, authority or duties are materially changed, (ii) your
compensation is not paid or is reduced, there is a material adverse change in
your employee benefits or the Company otherwise materially breaches this Agreement
or (iii) you are required by the Company to relocate to a place more than 50
miles from your current place of employment then, if you provide the Company
with written notice of your intent to terminate your employment as a result of
such event, providing the specific reasons therefor, and the Company does not
make the necessary corrections within thirty days of receipt of your written
notice, you may terminate your employment within the ten days following the
expiration of such thirty day notice period and continue to receive your Base
Salary and employee benefits for a period of twelve (12) months 



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immediately following the
date of such termination, the Annual Bonus that you would have been entitled to
during such twelve (12) months assuming all performance targets had been
exceeded; provided, however, that you comply with your obligations under
Section 3(e), 4, 5, 6 and 7 hereof. For purposes of this Agreement, the term “Change
in Control” will be deemed to have occurred as of the first day any of the
following events occurs:


(i)                                        Any
person or entity is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the U.S. Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of the Parent representing 50% or more of the
combined voting power of the Parent’s then outstanding voting securities
entitled to vote generally in the election of directors (the “Outstanding
Parent Voting Securities”); provided, however, that for purposes of
this Section 3(f) (i), the following acquisitions shall not constitute a Change
in Control: (A) any acquisition directly from the Parent, (B) any acquisition
by the Parent, (C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Parent or any affiliate of the Parent or
(D) any acquisition by any entity pursuant to a transaction which complies with
clauses (A), (B) and (C) of Section 3(f) (iii) hereof;


(ii)                                    Individuals
who, as of the date of this Agreement, constitute the Board (hereinafter
referred to as the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Parent’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered a member of the Incumbent Board, excluding any individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
person or entity other than the Board;


(iii)                                Consummation
of a reorganization, merger, share exchange, amalgamation, recapitalization,
consolidation or similar transaction by and among the Parent and another person
or entity, including, for this purpose, a transaction as a result of which
another person or entity owns the Parent or all or substantially all of the
Parent’s assets, either directly or through one or more subsidiaries (a “Business
Combination”), in each case, unless, following such Business Combination,
(A) all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Parent Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors (or
equivalent management personnel) of the entity resulting from such Business
Combination or that, as a result of such Business Combination, owns the Parent
or all or substantially all of the Parent’s assets, either 



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directly or through one or more subsidiaries, in substantially the same
proportions as their ownership of the Outstanding Parent Voting Securities
immediately prior to such Business Combination; (B) no person or entity
(excluding any entity resulting from such Business Combination, or that, as a
result of such Business Combination, owns the Parent or all or substantially
all of the Parent’s assets, either directly or through one or more
subsidiaries, or any employee benefit plan (or related trust) of the foregoing)
beneficially owns, directly or indirectly, 50% or more of the then outstanding
shares of common stock or the combined voting power of the then outstanding
shares of common stock or the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors (or
equivalent management personnel) of the entity resulting from such Business
Combination or that, as a result of such Business Combination, owns the Parent
or all or substantially all of the Parent’s assets, either directly or through
one or more subsidiaries, except to the extent that such ownership existed with
respect to the Parent prior to the Business Combination; and (C) at least a
majority of the members of the board of directors (or equivalent management
personnel) of the entity resulting from such Business Combination or that, as a
result of such Business Combination, owns the Parent or all or substantially
all of the Parent’s assets, either directly or through one or more subsidiaries,
were members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, pursuant to which such Business
Combination is effected or approved; or


(iv)                                  Approval
by the shareholders of the Parent of a complete liquidation or dissolution of
the Parent or the sale or other disposition of all or substantially all of the
Parent’s assets.


4.             Assignment of Intellectual Property
Rights


(a)           Assignment.  You hereby assign all of your rights, title
and interest to and in all Intellectual Property Rights (as defined below)
conceived, developed, invented, made by you or otherwise owned by you and
directly or indirectly relating to the Business (defined in Section 7(a)) and
you agree and acknowledge that, on the date hereof, such rights to and in such
Intellectual Property Rights shall become the sole property of, and belong to,
the Company.


(b)           Intellectual
Property Rights.  For the purposes of
this Agreement, the term “Intellectual Property Right” shall mean all
proprietary and other rights in and to: (i) trademarks, service marks, brand
names, certification marks, trade dress, assumed names, trade names and other
indications of origin; (ii) patents, inventors’ certificates and invention
disclosures; (iii) trade secrets and other confidential or non-public business
information, including ideas, formulae, compositions, inventions, discoveries
and improvements, know-how, manufacturing and production processes and
techniques, and research and development information (whether patentable or
not); drawings, specifications, designs, plans, proposals and technical data;
and financial, marketing and business data, pricing and cost information,
business and marketing plans and customer and supplier lists and information;
(iv) writings and other works of authorship, whether copyrightable or not,
including computer programs, data bases and documentation therefor, and all
copyrights to any of the foregoing; (v) mask works; (vi) rights,



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title and interest in
know-how, technical information, processes, practices and systems, whether or
not protectable by patent, copyright or trade secret law; (vii) moral rights;
(viii) rights to limit the use or disclosure of confidential information by any
person; (ix) any similar tangible or intangible intellectual property or
proprietary rights, information and technology; (x) or authority and any
renewals or extensions thereof, (xi) the goodwill associated with each of the
foregoing and (xii) any claims or causes of action arising out of or related to
any infringement or misappropriation of any of the foregoing; in each case in
any jurisdiction.


5.                                     Non-Disclosure


(a)           In view of the fact that your work
for the Company will bring you into close contact with many confidential
affairs of the Company not readily available to the public, as well as plans
for future developments, you agree during your employment with the Company and
thereafter:


(i)                                   to
keep secret and retain in the strictest confidence all proprietary or
confidential matters or trade secrets of the Company or any of its subsidiaries
and affiliates (which information will be deemed confidential notwithstanding
any prior unauthorized disclosures), including, but not limited to, data,
know-how, formulae, practices, processes, methodologies, designs, sketches,
photographs, plans, drawings, specifications, samples, reports, member or
customer lists, price lists, business strategies or arrangements, studies,
findings, inventions, ideas, software, source code, business plans and other
technical, business or financial information relating to the Company’s
business, whether existing on the date hereof or hereafter (such material
collectively, “Restricted Material”), and not to disclose such
Restricted Material except with the Company’s permission to such third parties
as may be necessary in the furtherance of the Company’s interests and in the
discharge of your duties; and


(ii)                               to
deliver promptly to the Company upon the termination of your employment or at any
other time as the Company may so request, all documents (and all copies
thereof), in whatever form, containing Restricted Material, and all property
associated therewith, which you may then possess or have under your control; provided,
however, that Restricted Material shall not be subject to the confidentiality
restrictions of this Section 5 where you can show that such information is, at
the time of disclosure, generally known to the public.


(b)           In the event that you are requested
or required (by oral questions, interrogatories, requests for information or
documents, subpoena or similar process) to disclose any Restricted Material,
you agree to provide the Company with prompt notice of such request(s) so that
the Company may seek an appropriate protective order or other appropriate
remedy and/or waive your compliance with the provisions of this Agreement. In
the event that such protective order or other remedy is not obtained, or that
the Company grants a waiver hereunder, you may furnish that portion (and only
that portion) of the Restricted Material which you are legally compelled to



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disclose and will
exercise your reasonable best efforts to obtain reliable assurance that
confidential treatment will be accorded any Restricted Material so furnished.


(c)           Nothing in this Section 5 shall be
construed as granting or implying any right to you under any patent or
unpatented intellectual property right of the Company, or your right to use any
invention covered thereby.


6.                                     Non-Solicitation


Except with prior
written permission of the Company, you shall not, directly or indirectly
(individually or on behalf of other persons), during your employment with the
Company or any of its affiliates and for a period of six (6) months following
the termination of your employment with the Company for any reason, hire, offer
to hire, entice away or in any manner persuade or attempt to persuade any
officer, employee or agent of the Parent or any of its affiliates (including
the Company and any subsidiary) or any then current or prospective customer,
client or broker of the Parent or any of its affiliates (including the Company
and any subsidiary), to discontinue his or her relationship with the Parent or
any of its affiliates (including the Company and any subsidiary) or to otherwise
do business with any competing business of Parent or any of its affiliates
(including the Company and any subsidiary).


7.            Non-Competition


(a)           Except with prior written permission
of the Company, you shall not, during your employment with the Company or any
of its affiliates, and for the six (6) month period following the termination
of your employment, for any reason directly or indirectly (individually or on
behalf of other persons): (i) enter the employ of, or render services to, as a
senior executive or in a managerial capacity, any person, firm or corporation
engaged in the insurance or reinsurance business or any other business in which
the Company is, or has announced an intention to become, engaged in at any time
during your employment with the Company and in each case within any State in
the United States or jurisdiction outside of the United States in which Parent
or any of its affiliates (including the Company and any subsidiary) does
business (hereinafter collectively referred to as the “Business”); (ii) engage
in such Business on your own account; or (iii) become involved in any such
Business, directly or indirectly, as an owner, partner, shareholder, member,
director, officer, principal or consultant; provided, however, that
nothing contained in this Section 7 shall be deemed to prohibit you from
acquiring, solely as a passive investment, no more than 5% of the total
outstanding securities of any publicly-held corporation.


(b)           The provisions of this Section 7
shall not apply following your termination of employment should the Company
default in any of its post-termination obligations as provided for in this
Agreement.


8.                                     Enforcement


(a)           The parties hereto hereby declare
that it is impossible to measure in money the damages that will accrue to the
Company by reason of your failure to perform any of your obligations under
Sections 4, 5, 6 and 7. Accordingly, if the Company institutes any action or
proceeding to enforce the provisions hereof, to the extent permitted by
applicable law, you hereby waive the claim or defense that the Company has an
adequate remedy at law, and you shall not urge in any such action or proceeding
the defense that any such remedy exists at law.



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The foregoing rights
shall be in addition to any other rights and remedies available to the Company
under law or in equity.


(b)           If any of the covenants contained in
Sections 4, 5, 6 and 7 or any part thereof, is construed to be invalid or
unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full effect, without regard to the invalid
portions(s). In addition, if any of the covenants contained in Sections 4, 5, 6
and 7 hereof, or any part thereof, is held by any person or entity with
jurisdiction over the matter to be invalid or unenforceable because of duration
of such provision or the geographical area covered thereby, the parties agree
that such person or entity shall have the power to reduce the duration and/or
geographical area of such provision and, in its reduced form, said provisions
shall then be enforceable.


(c)           It is understood and agreed that no
failure or delay by the Company in exercising any right, power or privilege
contained in Sections 4, 5, 6 and 7 shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege contained in
Sections 4, 5, 6 and 7.


9.                                     Dispute
Resolution


In the event of
any dispute or difference between you and the Company with respect to either
the enforcement or interpretation of this Agreement, both you and the Company
agree to resolve any such dispute or difference by the terms and conditions set
forth in the Company’s Dispute Resolution Guidelines. By executing this
Agreement, you acknowledge receiving and reviewing Company’s Dispute Resolution
Guidelines.


10.                              Miscellaneous


(a)           Any notice or other communication
required or permitted under this Agreement shall be effective only if it is in
writing and shall be deemed to be given when delivered personally or three days
after it is mailed by registered or certified mail, postage prepaid, return
receipt requested or one day after it is sent by a  reputable overnight courier service and, in
each case, addressed to the relevant party at the address provided for such
party on the first page hereof, or to such other address as any party hereto
may designate by notice to the other in accordance with the foregoing.


(b)           This Agreement constitutes the entire
agreement among you and the Company with respect to your employment by the
Company, and supersedes and is in full substitution for any and all prior
understandings or agreements with respect to your employment.


(c)           This Agreement may be amended only by
an instrument in writing signed by the parties hereto, and any provision hereof
may be waived only by an instrument in writing signed by the party against whom
or which enforcement of such waiver is sought.


(d)           This Agreement and all rights and
obligations hereunder, including, without limitation, matters of construction,
validity and performance, shall be governed by and construed and interpreted in
accordance with the laws of Bermuda without regard to principles of conflict of
laws.



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(e)           In the event of any contest or
dispute between you and the Company with respect to this Agreement, each of the
parties shall be responsible for their respective legal fees and expenses in
accordance with the Company’s Dispute Resolution Guidelines.


(f)            This Agreement shall inure for the
benefit of and be an obligation of the Company’s assigns and successors; provided,
however, that you may not assign your duties and obligations hereunder to any
other party.


(g)           The headings in this Agreement are
inserted for convenience of reference only and shall not be a part of or
control or affect the meaning of any provision hereof.


If the terms of
this Agreement meet with your approval, please sign and return one copy to the
Company.


	
  

  	
  Sincerely,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AXIS SPECIALTY LIMITED.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN CHARMAN

  
	
   

  	
   

  	
  Name:

  	
  John Charman

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
					



 


 


Accepted and Agreed

as of the date first set forth above:


	
  /s/ John Gressier

  	
   

  	
   

  



 



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