AXIS CAPITAL HOLDINGS LTD
EX-10.1
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>a04-11675_3ex10d1.htm
<DESCRIPTION>EX-10.1
<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
10.1</font></b></p>

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

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">ADOPTED 12/09/04</font></p>

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><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;">2005 DIRECTORS ANNUAL COMPENSATION PROGRAM</font></u></p>

<p style="margin:0in 0in .0001pt;"><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 2005 Directors Annual Compensation
Program (the &#147;Program&#148;) to compensate the directors of the Company for their service
to the Board of Directors (the &#147;Board&#148;) and its committees.&#160; The terms of the Program 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 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 &#147;Participant&#148; in the Program from and after January 1, 2005.&#160; 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.</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>Cash Compensation</u>.&#160; Each Participant shall be entitled to a cash
amount determined annually by the Compensation Committee of the Board (the &#147;Committee&#148;)
based on the number of Board and committee meetings expected to be held during
the fiscal year, the number of committees on which the Participant serves and
whether the Participant serves as a chairman of a committee.&#160; 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.&#160; Any common shares issued to Participants
pursuant to such election will be issued under the 2003 Directors Long-Term
Equity Compensation Plan (the &#147;Directors Plan&#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;">3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Equity Compensation</u>.&#160; Each Participant shall be entitled to an
annual grant of 8,000 stock options and an annual award of $20,000 of
restricted stock under the Directors Plan.&#160;
The options shall be issued at the fair market value of the common
shares of the Company on the first business day after January 1 of each year
(the &#147;Fair Market Value&#148;) and the number of shares of restricted stock awarded shall
be determined using the Fair Market Value.&#160;
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.</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; The options
granted to Participants shall vest in three equal installments on the first,
second and third anniversary of the date of grant.&#160; The restricted stock awarded to Participants shall
vest six months after the date of grant.</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;
Participants shall receive a lump sum cash payment of cash compensation
for any fiscal year prior to January 31 of the fiscal year or, if later, within
60 days after becoming a Participant.</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>Deferral</u>.&#160;
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.&#160; Options granted to
participants may not be deferred.</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-ka.htm',USER='slusarr',CD='Dec 15 15:29 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;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>Interpretation of Program</u>.&#160; The Committee shall have the authority to
administer the Program, to conclusively make all determinations under the Program
and to interpret the Program.&#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;">8.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Governing Law</u>.&#160;
The Program 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;">9.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Successors</u>.&#160;
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.</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 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&#146;s existing
awards under the Program.</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;">1</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='1',FILE='C:\JMS\slusarr\04-11675-3\task254450\11675-3-ka.htm',USER='slusarr',CD='Dec 15 15:29 2004' -->


</body>

</html>

</TEXT>
</DOCUMENT>
