AXIS CAPITAL HOLDINGS LTD
EX-10.3
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>a04-11675_3ex10d3.htm
<DESCRIPTION>EX-10.3
<TEXT>
<html>

<head>





</head>

<body lang="EN-US">

<div style="font-family:Times New Roman;">

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit
10.3</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">2004
ANNUAL INCENTIVE PLAN</font></u></p>

<p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="left" style="margin:0in 0in 12.0pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AXIS Capital Holdings
Limited (the &#147;Company&#148;) has established the 2004 Annual Incentive Plan (the &#147;Plan&#148;)
to enable eligible employees of the Company and its subsidiaries to share in
the success of the Company.&#160; The terms of
the Plan are as set forth herein.</font></p>

<p style="margin:0in 0in 12.0pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Eligibility</u>.&#160;
Any person who is employed by the Company or one of its subsidiaries and
who is a Grade 13 or above shall be entitled to an annual allocation from the
Bonus Pool (as defined in Section 2) and shall be a &#147;Participant&#148; in the Plan
from and after January 1, 2004.</font></p>

<p style="margin:0in 0in 12.0pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Bonus Pool</u>.&#160;
The &#147;Bonus Pool&#148; shall be an amount determined by the Compensation
Committee of the Board of Directors (the &#147;Committee&#148;) based on the Company&#146;s
gross written premiums and/or net income for each fiscal year and goals
established by the Company&#146;s management and approved by the Committee for each
fiscal year.</font></p>

<p style="margin:0in 0in 12.0pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Allocations</u>.&#160;
The Bonus Pool shall be allocated to the Participants by the Committee
based upon recommendations made by the Chief Executive Officer and President.&#160; A Participant&#146;s interest in the Bonus Pool shall
be referred to herein as the Participant&#146;s &#147;Allocation&#148;.</font></p>

<p style="margin:0in 0in 12.0pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u><font size="2" style="font-size:10.0pt;">Vesting</font></u><font size="2" style="font-size:10.0pt;">.&#160; Each
Participant shall have a fully vested right in his or her Allocation as of December
31 of the fiscal year for which the Bonus Pool and Allocation has been
determined, except as set forth in this Section 4.&#160; If a Participant&#146;s employment with the
Company and its subsidiaries terminates prior to December 31 for any reason, or
if a Participant terminates his or her employment prior to the date of payment,
or if the Company terminates a Participant's employment for cause prior to the
date of payment, he or she shall cease to be a Participant as of his or her termination
date, his or her Allocation shall be forfeited as of his or her termination
date and the Participant shall have no rights to payments under the Plan,
except to the extent of any contractual obligation to any Participant that the
Company or any of its subsidiaries may have.</font></p>

<p style="margin:0in 0in 12.0pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Payment</u>.&#160;
Any Participant who becomes vested in his or her Allocation shall
receive a lump sum cash payment of the value of his or her Allocation as soon
as practicable after December 31 of the fiscal year for which the Bonus Pool
and Allocation has been determined.&#160; In
the event of the Participant&#146;s death, any payments hereunder shall be made to the
Participant&#146;s estate.&#160; Any payments
hereunder shall be subject to such withholdings as may be required by
applicable law.</font></p>

<p style="margin:0in 0in 12.0pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Interpretation of Plan</u>.&#160; The Committee shall have the authority to
administer the Plan, to conclusively make all determinations under the Plan and
to interpret the Plan.&#160; Any such
determinations or interpretations made by the Committee shall be binding on all
persons.</font></p>

<p style="margin:0in 0in 12.0pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Governing Law</u>.&#160;
The Plan shall be governed by the laws of Bermuda.</font></p>

<p style="margin:0in 0in 12.0pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>No Guarantee of Continued Employment</u>.&#160; Nothing in the Plan shall interfere with or
limit in any way the right of the Company or any of its subsidiaries to
terminate any employee&#146;s employment at any time, nor shall it confer upon any
Participant any right to continue in the employ of the Company or any of its
subsidiaries.&#160; For purposes of the Plan,
temporary absence from employment because of illness, vacation, approved leaves
of absence </font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

</div>
<!-- SEQ.=1,FOLIO='',FILE='C:\JMS\slusarr\04-11675-3\task254450\11675-3-kg.htm',USER='slusarr',CD='Dec 15 15:32 2004' -->


<br clear="all" style="page-break-before:always;">


<div>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">and transfers of employment among the Company and its subsidiaries
shall not be considered to terminate an employee&#146;s employment.</font></p>

<p style="margin:0in 0in 12.0pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Successors</u>.&#160;
All obligations of the Company under the Plan 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.</font></p>

<p style="margin:0in 0in 12.0pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Amendment and Termination</u>.&#160; This Plan may be amended or terminated at any
time by the Committee; provided, that no amendment shall be given effect to the
extent that it would have the effect of reducing a Participant&#146;s then current
Allocation.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>

<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

</div>
<!-- SEQ.=1,FOLIO='2',FILE='C:\JMS\slusarr\04-11675-3\task254450\11675-3-kg.htm',USER='slusarr',CD='Dec 15 15:32 2004' -->


</body>

</html>

</TEXT>
</DOCUMENT>
