Exhibit 10.1


 


ADOPTED: 12/08/05


 


2006 DIRECTORS
ANNUAL COMPENSATION PROGRAM


 


AXIS Capital Holdings
Limited (the “Company”) has established the 2006 Directors Annual Compensation
Program (the “Program”) to compensate the directors of the Company for their service
to the Board of Directors (the “Board”) and its committees.  The terms of the Program are as set forth
herein.


 


1.             Eligibility.  Any member of the Board who is not an
employee of the Company or any of its subsidiaries shall be entitled to the
compensation specified herein and shall be a “Participant” in the Program from
and after January 1, 2006 or, if later, the date on which such person
becomes a member of the Board and is otherwise eligible to participate in the
Program.  Members of the Board who become
Participants after January 1 of any year shall be entitled to a pro rated
portion of any cash compensation and shall not be entitled to any equity
compensation (or cash compensation in lieu thereof) until January 1 of the
next year.


 


2.             Cash
Compensation.  Each Participant shall
be entitled to a cash amount determined annually by the Compensation Committee
of the Board (the “Committee”) consisting of an annual retainer and a meeting
fee based on the number of Board and committee meetings held during the fiscal
year, the number of presentations by the Company at which members of the Board
are requested to attend, the number of committees on which the Participant
serves and whether the Participant serves as a chairman of a committee or as
the lead independent director. 
Participants may elect to receive common shares of the Company in lieu
of the cash compensation that would otherwise be payable to them by notifying
the Company of such election prior to January 1 of the year for which the
election will be effective.  Any common
shares issued to Participants pursuant to such election will be issued under
the 2003 Directors Long-Term Equity Compensation Plan or any similar plan
subsequently adopted by the Board (the “Directors Plan”).


 


3.             Equity
Compensation.  Each Participant shall
be entitled to an annual award of $35,000 of restricted stock under the
Directors Plan.  The number of shares of
restricted stock awarded shall be determined using the fair market value of the
common shares of the Company on the tenth business day after January 1 of
each year.  Subject to the prior approval
of the Compensation Committee, Participants may elect to receive cash
compensation in lieu of the equity compensation that would otherwise be payable
to them by notifying the Company of such election prior to January 1 of
the year for which the election will be effective.  All awards of restricted stock shall be made
effective as of the tenth business day after January 1 of each year.


 


4.             Vesting.  The restricted stock awarded to Participants shall
vest six months after the date of grant.


 


5.             Payment.  Participants shall receive a lump sum cash
payment of the annual retainer for any fiscal year prior to January 31 of
that fiscal year (or, in the case of any person who becomes a Participant after
January 31 of a fiscal year, as soon as practicable after the date on
which such person becomes a participant, pro rated as provided in paragraph 1) and
a lump sum cash payment of the meeting fees for any fiscal year prior to January 31
of the next fiscal year or, if earlier, within 60 days after retiring or
resigning from the Board.


 





















 


6.             Deferral.  Participants may elect to defer any cash
compensation and any common shares or restricted stock received under the
Program pursuant to the 2003 Directors Deferred Compensation Plan or any
similar plan subsequently adopted by the Board. 
To the extent applicable, all deferrals shall be made in accordance with
section 409A of the U.S. Internal Revenue Code of 1986, as amended, and
applicable guidance issued thereunder.


 


7.             Interpretation
of Program.  The Committee shall have
the authority to administer the Program, to conclusively make all
determinations under the Program and to interpret the Program.  Any such determinations or interpretations made
by the Committee shall be binding on all persons.


 


8.             Governing
Law.  The Program shall be governed
by the laws of Bermuda.


 


9.             Successors.  All obligations of the Company under the Program
shall be binding on any successor to the Company, whether the existence of such
successor is the result of a direct or indirect merger, consolidation, purchase
of all or substantially all of the business and/or assets of the Company or
otherwise.


 


10.           Amendment
and Termination.  This Program may be
amended or terminated at any time by the Board; provided, that no amendment
shall be given effect to the extent that it would have the effect of reducing a
Participant’s existing awards under the Program.


 


2