Exhibit 10.3


 


AXIS
CAPITAL HOLDINGS LIMITED


 


LONG-TERM
EQUITY COMPENSATION PLAN


 


 


Restricted
Stock Agreement


 


 


You (the “Participant”)
have been granted a restricted stock award (the “Award”) of ordinary shares,
par value $0.0125 per share (“Share”), of AXIS Capital Holdings Limited, a
Bermuda company (the “Company”), pursuant to the AXIS Capital Holdings Limited 2003
Long-Term Equity Compensation Plan (the “Plan”).  The date of grant of the Award (the “Award
Date”) and the number of Shares subject to the Award (the “Award Shares”) are
as set forth in your restricted stock account maintained on the Smith Barney
Benefit Access website or such other website as may be designated by the
Committee (“Benefit Access”).


 


By your acceptance
of the grant of the Award on Benefit Access, you agree that the Award is
granted under and governed by the terms and conditions of the Plan and this Restricted
Stock Agreement (the “Agreement”).


 


This Agreement
amends and supercedes in its entirety the restricted stock option agreements
with respect to restricted stock awarded to the Participant on January 2,
2004 and January 13, 2005.  This
Agreement is effective on December 31, 2005.


 


1.             GRANT OF
RESTRICTED STOCK.


 


(a)           Award.  On the terms and conditions set forth in this Agreement, the
Company hereby grants to the Participant on the Award Date the Award Shares.


 


(b)           Plan and
Defined Terms. The Award is granted pursuant to
the Plan, a copy of which the Participant acknowledges having received.  The terms and provisions of the Plan are
incorporated into this Agreement by this reference.  All capitalized terms that are used in this
Agreement and not otherwise defined herein shall have the meanings ascribed to
them in the Plan.


 


2.             ISSUANCE OF
SHARES.


 


Subject
to Section 4, the Shares subject to the Award will be issued to the
Participant and generally shall have the rights and privileges of a shareholder
of the Company as to such Shares.


 


3.             PERIOD OF
RESTRICTION.


 


The Shares subject
to the Award shall be restricted during the period (the “Period of Restriction”)
commencing on the Award Date and expiring on the first to occur of:


 





















 


(a)           The date three years after the
Award Date;


 


(b)           The Participant’s death or
permanent Disability; or


 


(c)           A Change in Control.


 


4.             RESTRICTIONS, VOTING RIGHTS AND DIVIDENDS.


 


(a)           Restrictions. 
During the Period of Restriction, the following restrictions shall
apply: (i) the Shares subject to the Award may not be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated and (ii) the stock
certificates, if any, representing the Shares subject to the Award shall be
deposited with the Company or as the Committee may otherwise direct and the
Participant shall not be entitled to delivery of a stock certificate.


 


(b)           Voting Rights.  Participant shall be entitled to exercise
full voting rights with respect to the Shares during the Period of Restriction.


 


(c)           Dividends. 
Dividends may be paid to Participant with respect to the Shares during
the Period of Restriction as determined from time to time by the
Committee.  Any Dividends paid with
respect to the Shares during the Period of Restriction will be held by the
Company, or a depository appointed by the Committee, for the Participant’s
account, and interest may be paid on the amount of cash dividends held at a
rate and subject to such terms as may be determined by the Committee.  All cash or share dividends so held, and any
interest so paid, shall initially be subject to forfeiture as set forth in subsection 4(a) but
shall become non-forfeitable and payable at upon the expiration or termination
of the Period of Restriction.


 


(d)           Leaves of
Absence.  For any purpose under this Agreement,
employment shall be deemed to continue while the Participant is on a bona fide
leave of absence, if such leave was approved by the Company in writing and if
continued crediting of employment for such purpose is expressly required by the
terms of such leave or by applicable law (as determined by the Company).


 


5.             RESTRICTIONS ON
TRANSFER.


 


(a)           Transfer
Restrictions.  Regardless of whether the offering and sale
of Shares under the Plan have been registered under the U.S. Securities Act of
1933, as amended (the “Securities Act”) or otherwise, the Company, in its sole
discretion, may impose restrictions upon the sale, pledge or other transfer of
such Shares (including the placement of appropriate legends on stock
certificates or the imposition of stop-transfer instructions) if, in the
judgment of the Company, such restrictions are necessary or desirable in order
to achieve compliance with the Company’s Bye-Laws, the Securities Act, the U.S.
Securities Exchange Act of 1934, as amended, the securities laws of any country
or state or any other applicable law, rule or regulation.


 


(b)           Legends. 
All certificates evidencing Shares issued under this Agreement shall
bear such restrictive legends as are required or deemed advisable by the
Company under the provisions of any applicable law, rule or regulation.  If, in the opinion of the Company and its


 


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counsel, any legend placed on a stock
certificate representing Shares issued under this Agreement is no longer
required, the holder of such certificate shall be entitled to exchange such
certificate for a certificate representing the same number of Shares but
without such legend.


 


6.             MISCELLANEOUS
PROVISIONS.


 


(a)           Bye-Laws. 
All Shares acquired pursuant to this Agreement shall be subject to any
applicable restrictions contained in the Company’s Bye-Laws.


 


(b)           No Retention
Rights.  Nothing in this Agreement or in the Plan
shall confer upon the Participant any right to continue employment for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Company or any Affiliate employing or retaining the
Participant or of the Participant, which rights are hereby expressly reserved
by each, to terminate his or her employment at any time and for any reason,
with or without Cause.


 


(c)           Notice. 
Any notice required by the terms of this Agreement shall be given in
writing and shall be deemed effective upon delivery by hand, upon delivery by
reputable express courier or, if the recipient is located in the United States,
upon deposit with the United States Postal Service, by registered or certified
mail, with postage and fees prepaid. 
Notice shall be addressed to the Company at its principal executive
office and to the Participant at the address that he or she most recently
provided in writing to the Company.


 


(d)           Choice of Law. 
This Agreement shall be governed by, and construed in accordance with,
the laws of Bermuda.


 


(e)           Counterparts. 
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.


 


(f)            Modification or
Amendment.  This Agreement may only be modified or
amended by written agreement executed by the parties hereto; provided, that the
adjustments permitted pursuant to Section 4.2 of the Plan may be made
without such written agreement.


 


(g)           Severability. 
In the event any provision of this Agreement shall be held illegal or
invalid for any reason, the illegality or invalidity shall not affect the
remaining provisions of this Agreement, and this Agreement shall be construed
and enforced as if such illegal or invalid provision had not been included.


 


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AXIS
CAPITAL HOLDINGS LIMITED


LONG-TERM
EQUITY COMPENSATION PLAN


 


Nonqualified
Stock Option Agreement


 


You (the “Optionee”)
have been granted an option (the “Option”) to purchase ordinary shares, par
value $0.0125 per share (“Share”), of AXIS Capital Holdings Limited, a Bermuda
company (the “Company”), pursuant to the AXIS Capital Holdings Limited 2003
Long-Term Equity Compensation Plan (the “Plan”).  The date of grant of the Option (the “Grant
Date”), the number of Shares subject to the Option (the “Option Shares”), the
exercise price of the Option (the “Grant Price”) and the expiration date of the
Option (the “Expiration Date”) are set forth in your stock option account
maintained on the Smith Barney Benefit Access website or such other website as
may be designated by the Committee (“Benefit Access”).


 


By your
acceptance of the grant of the Option on Benefit Access, you agree that the
Option is granted under and governed by the terms and conditions of the Plan
and this Stock Option Agreement (the “Agreement”).


 


This Agreement
amends and supercedes in its entirety the nonqualified stock option agreements
with respect to options granted to the Optionee on January 2, 2004 and January 13,
2005.  This Agreement is effective on December 31,
2005.


 


SECTION 1.        GRANT OF
OPTION.


 


(a)  Option.  On the terms and conditions set forth in this
Agreement, the Company grants to the Optionee on the Grant Date the Option to
purchase at the Grant Price the Option Shares. 
The Option is intended to be a Nonqualified Stock Option.


 


(b)  Plan
and Defined Terms.  The Option is
granted pursuant to the Plan, a copy of which the Optionee acknowledges having
received.  The terms and provisions of
the Plan are incorporated into this Agreement by this reference.  All capitalized terms that are used in this
Agreement and not otherwise defined herein shall have the meanings ascribed to
them in the Plan.


 


SECTION 2.        RIGHT TO EXERCISE.


 


The Optionee
may exercise all or part of the Option at any time before its expiration to the
extent that the Option is vested.  The
Option vests in three equal installments on the first, second and third
anniversary of the Grant Date: provided, that all installments shall vest, if
earlier, on June 30, 2006.  In
addition, the Option shall become 100% vested upon Optionee’s


 


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death or permanent Disability
and upon a Change of Control.  The
exercise procedures set forth in Section 6.6 of the Plan shall govern the
exercise of the Option.


 


SECTION 3.        ISSUANCE OF
SHARES.


 


Subject to Section 5,
after the Option has been exercised and payment for the full amount of the
Exercise Price has been received, the Shares as to which the Option has been
exercised will be issued to the Optionee.


 


SECTION 4.        TERM AND
EXPIRATION.


 


(a)  Basic Term.  Subject to earlier termination pursuant to
the terms hereof, the Option shall expire on the Expiration Date, which date is
10 years after the Grant Date.


 


(b)  Expiration.  The Option shall expire immediately upon the
earliest of the following occasions:


 


(i)         The Expiration Date as set forth
in subsection 4(a); or


 


(ii)        September 30, 2006.


 


(c)  Personal Representative.  If the Optionee dies
before the expiration of the Option, all or part of this Option may be
exercised prior to expiration by the personal representative of the Optionee or
by any person who has acquired the Option directly from the Optionee by will,
bequest or inheritance, but only to the extent that the Option was vested at
the time of death.


 


(d)  Leaves of Absence.  For any purpose
under this Agreement, employment shall be deemed to continue while the Optionee
is on a bona fide leave of absence, if such leave was approved by the Company
in writing and if continued crediting of employment for such purpose is
expressly required by the terms of such leave or by applicable law (as
determined by the Company).


 


SECTION 5.        LEGALITY OF
INITIAL ISSUANCE.


 


No Shares
shall be issued upon the exercise of this Option unless and until the Company
has determined that:


 


(a)  The
delivery of such Shares would not violate the provisions of any applicable law,
rule or regulation or the Company’s Bye-Laws; and


 


(b)  All
applicable tax withholding obligations have been satisfied (or arrangements to
satisfy such obligations have been made).


 


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SECTION 6.        RESTRICTIONS ON
TRANSFER.


 


(a)  Transfer Restrictions.  Regardless of
whether the offering and sale of Shares under the Plan have been registered
under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or
otherwise, the Company, in its sole discretion, may impose restrictions upon
the sale, pledge or other transfer of such Shares (including the placement of
appropriate legends on stock certificates or the imposition of stop-transfer
instructions) if, in the judgment of the Company, such restrictions are
necessary or desirable in order to achieve compliance with the Company’s
Bye-Laws, the Securities Act, the U.S. Securities Exchange Act of 1934, as
amended, the securities laws of any country or state or any other applicable
law, rule or regulation.


 


(b)  Legends.  All certificates evidencing Shares purchased
under this Agreement shall bear such restrictive legends as are required or
deemed advisable by the Company under the provisions of any applicable law, rule or
regulation.  If, in the opinion of the
Company and its counsel, any legend placed on a stock certificate representing
Shares sold under this Agreement is no longer required, the holder of such
certificate shall be entitled to exchange such certificate for a certificate
representing the same number of Shares but without such legend.


 


SECTION 7.        MISCELLANEOUS
PROVISIONS.


 


(a)  Rights as a Shareholder.  Neither the Optionee
nor the Optionee’s representative shall have any rights as a shareholder with
respect to any Shares subject to the Option until the Option has been exercised
and Shares have been issued to the Optionee or representative, as the case may
be.


 


(b)  Bye-Laws.  All Shares acquired pursuant to the Option
shall be subject to any applicable restrictions contained in the Company’s
Bye-Laws.


 


(c)  No Retention Rights.  Nothing in this
Agreement or in the Plan shall confer upon the Optionee any right to continue
employment for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Company or any Affiliate employing or
retaining the Optionee or of the Optionee, which rights are hereby expressly
reserved by each, to terminate his or her employment at any time and for any
reason, with or without Cause.


 


(d)  Notice.  Any notice required by the terms of this
Agreement shall be given in writing and shall be deemed effective upon delivery
by hand, upon delivery by reputable express courier or, if the recipient is
located in the United States, upon deposit with the United States Postal
Service, by registered or certified mail, with postage and fees prepaid.  Notice shall be addressed to the Company at
its principal executive office and to the Optionee at the address that he or
she most recently provided in writing to the Company.


 


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(e)  Choice of Law.  This Agreement shall
be governed by, and construed in accordance with, the laws of Bermuda.


 


(f)  Counterparts.  This Agreement may
be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.


 


(g)  Modification or Amendment.  This Agreement may
only be modified or amended by written agreement executed by the parties
hereto; provided, that the adjustments permitted pursuant to Section 4.2
of the Plan may be made without such written agreement.


 


(h)  Severability.  In the event any
provision of this Agreement shall be held illegal or invalid for any reason,
the illegality or invalidity shall not affect the remaining provisions of this
Agreement, and this Agreement shall be construed and enforced as if such
illegal or invalid provision had not been included.


 


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