Max Capital Group Ltd. 8-k (events Or Changes Between Quarterly Reports) 2009-02-23

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549

FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): February 17, 2009

Max Capital Group Ltd. (Exact Nam e of Re gistran t as S pe cifie d in its C h arte r)

Bermuda

000-33047

98-0584464

(State or O the r Ju risdiction of In corporation )

(C om m ission File Nu m be r)

(IRS Em ploye r Ide n tification No.)

Max House, 2 Front Street, Hamilton, Bermuda

HM 11

(Addre ss of Principal Exe cu tive O ffice s)

(Zip C ode )

Registrant’s telephone number, including area code (441) 295-8800 Not Applicable Form e r n am e or form e r addre ss, if ch an ge d since last re port

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: ®

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

®

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

®

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

®

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 5.02.

Departure of Directors or Principal Officers; Election of Directors; Appointment of Officers; Compensatory Arrangements for Certain Officers.

(e) On February 17, 2009 the Registrant granted Mr. W. Marston Becker (i) 33,333 restricted common shares (the “Restricted Shares”) and (ii) options exercisable into 108,333 common shares (the “Options”). Restrictions on 50 percent of the Restricted Shares will lapse on January 1, 2010 and the remaining 50 percent will lapse on January 1, 2011, in each case subject to the attainment of specified performance criteria as set forth in the form of restricted stock award agreement attached hereto as Exhibit 10.1. Fifty percent of the Options will vest on January 1, 2010 and the remaining 50 percent will vest on January 1, 2011, in each case subject to the attainment of specified performance criteria as set forth in the form of option award agreement attached hereto as Exhibit 10.2. The foregoing summary description is qualified in its entirety by the text of the form agreements, as applicable. Item 7.01

Regulation FD Disclosure

Beginning on February 24, 2009, executives of the Registrant will present to various investors the information about the Registrant described in the slides attached to this report as Exhibit 99.1. The slides set forth in Exhibit 99.1 are incorporated herein by reference. The information in Item 7.01 of this report is being furnished, not filed, pursuant to Regulation FD. Accordingly, the information in Item 7.01 of this report will not be incorporated by reference into any registration statement filed by the Registrant under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in this report is not intended to, and does not, constitute a determination or admission by the Registrant that the information in this report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Registrant or any of its affiliates. Safe Harbor for Forward-Looking Statements Some of the statements in Exhibit 99.1 contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend that the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 apply to these forward-looking statements. Forward-looking statements are not statements of historical fact but rather reflect our current expectations, estimates and predictions about future results and events. These statements may use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “predict,” “project” and similar expressions as they relate to us or our management. When we make forward-looking statements, we are basing them on management’s beliefs and assumptions, using information currently available to us. These forward-looking statements are subject to risks, uncertainties and assumptions. Factors that could cause such forward-looking statements not to be realized (which are described in more detail included or incorporated by reference herein and in other documents filed by us with the SEC) include, but are not limited to: • • • • • • • • • •

claims development; cyclical trends, general economic conditions and conditions specific to the reinsurance and insurance markets in which we operate; pricing competition; rating agency policies and practices; catastrophic events; the amount of underwriting capacity from time to time in the market; material fluctuations in interest rates; unexpected volatility associated with our investments; tax and regulatory changes and conditions; and loss of key executives.

Other factors, such as changes in U.S. and global equity and debt markets resulting from general economic conditions, market disruptions and significant interest rate fluctuations, foreign exchange rate fluctuations and changes in credit spreads, may adversely impact our investments or impede our access to, or increase the cost of, financing our operations and other factors described in our most recent Annual Report on Form 10-K filed with the SEC, as may be amended in subsequent Quarterly Reports on Form 10-Q. We caution that the foregoing list of important factors is not intended to be, and is not, exhaustive. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. If one or more risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statements in Exhibit 99.1 reflect our current view with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. All subsequent written and oral forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety by this paragraph. Item 9.01 (d) Exhibits

Financial Statements and Exhibits.

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De scription

10.1 10.2 99.1

Form of Restricted Stock Award Agreement. Form of Option Award Agreement. Slides from presentation by management.

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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. Max Capital Group Ltd. (Registrant) Date: February 23, 2009

/s/ Peter A. Minton Name: Peter A. Minton Title: Executive Vice President and Chief Operating Officer

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Exhibit Index Exh ibit No.

De scription

10.1 10.2 99.1

Form of Restricted Stock Award Agreement. Form of Option Award Agreement. Slides from presentation by management. Exhibit 10.1 FORM OF RESTRICTED STOCK AWARD AGREEMENT

This Restricted Stock Award Agreement (the “Agreement”) is made, effective as of the 17th day of February, 2009 (the “Grant Date”), by and between Max Capital Group Ltd. (the “Company”) and W. Marston Becker (the “Grantee”). RECITALS: WHEREAS, the Company has adopted the Max Capital Group Ltd. 2008 Stock Incentive Plan (the “Plan”) pursuant to which awards of restricted common shares of the Company (“Common Shares”) may be granted; and WHEREAS, the Committee has determined that it is in the best interests of the Company and its shareholders to grant the award of restricted Common Shares provided for herein (the “Restricted Stock Award”) to the Grantee in recognition of the Grantee’s services to the Company, such grant to be subject to the terms set forth herein. NOW, THEREFORE, in consideration for the mutual covenants hereinafter set forth, the parties hereto agree as follows: 1.

Grant of Restricted Stock Award. Pursuant to Section 9 of the Plan, the Company hereby issues to the Grantee on the Grant Date a Restricted Stock Award consisting of, in the aggregate, 33,333 Common Shares in the capital of the Company (hereinafter called the “Restricted Stock”).

2.

Incorporation by Reference. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan. The Committee shall have the authority to interpret and construe the Plan and this Agreement and to make any and all determinations thereunder, and its decision shall be binding and conclusive upon the Grantee and his legal representative in respect of any questions arising under the Plan or this Agreement. Restrictions. Except as provided in the Plan or this Agreement, the restrictions on the Restricted Stock are that they will be forfeited by the Grantee and all of the Grantee’s rights to such shares shall immediately terminate without any payment or consideration by the Company, in the event of any sale, assignment, transfer, hypothecation, pledge or other alienation of such Restricted Stock made or attempted, whether voluntary or involuntary, and if involuntary whether by process of law in any civil or criminal suit, action or proceeding, whether in the nature of an insolvency or bankruptcy proceeding or otherwise, without the written consent of the Board.

3.

1

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4.

Vesting. (a) The restrictions described in Section 3 of this Agreement will lapse with respect to 50% of the Restricted Stock on January 1, 2010; provided, that, the book value of the underlying Common Shares on December 31, 2009 is at least 12.5% greater than the book value of such Common Shares on December 31, 2008 (the book value of Common Shares on December 31, 2008 calculated by dividing Total Shareholders’ Equity by Common Shares Issued and Outstanding shall be referred to herein as “Baseline 1,” and the amount which is 12.5% greater than Baseline 1 shall be referred to herein as “Baseline 2”); provided, further that, the Grantee is employed by the Company on the relevant vesting date (“Tranche 1”). (b)

(c)

(d)

The restrictions described in Section 3 of this Agreement will lapse with respect to 50% of the Restricted Stock on January 1, 2011, provided, that, the book value of the underlying Common Shares on December 31, 2010 is at least 12.5% greater than Baseline 2 (such amount, “Baseline 3” and such Restricted Stock, “Tranche 2”); provided, further that, the Grantee is employed by the Company on the relevant vesting date. If Tranche 1 does not vest on January 1, 2010, but Baseline 3 is at least 25% greater than Baseline 1, then Tranche 1 and Tranche 2 shall vest as of January 1, 2011; provided, that, the Grantee is employed by the Company on the relevant vesting date. For the avoidance of doubt, if any tranche of Restricted Stock is unvested as of January 1, 2011, such tranche shall automatically be forfeited by the Grantee without any payment or consideration by the Company. Notwithstanding the foregoing, if on or prior to January 1, 2011, the Grantee’s employment with the Company is terminated: (i) by the Company without Cause (as defined in the Employment Agreement between the Company and W. Marston Becker effective November 13, 2006, as may be amended from time to time (the “Employment Agreement”)), (ii) by the Grantee for Good Reason (as defined in the Employment Agreement), (iii) upon the Grantee’s death or on account of Disability (as defined in the Employment Agreement), or (iv) following a Change in Control (as defined in the Employment Agreement), the restrictions described in Section 3 of this Agreement shall lapse and all Restricted Stock shall automatically become vested and immediately nonforfeitable in full. Change in Control. Upon the occurrence of a Change in Control (as defined in the Plan), all Restricted Stock shall automatically become vested and immediately nonforfeitable in full.

For purposes of this Agreement, Total Shareholders’ Equity and Common Shares Issued and Outstanding shall be as set forth in the consolidated balance sheet of the Company’s audited consolidated financial statements for the applicable year ended December 31. 2

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5.

6.

7.

8. 9.

Tax Withholding. In the event that the Company determines that tax withholding is required with respect to the Grantee, the Grantee shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Grantee pursuant to the Plan, the amount of any required withholding taxes in respect of the Restricted Stock Award and to take such other action as the Committee deems necessary to satisfy all obligations for the payment of such withholding and taxes. The Committee may permit the Grantee to satisfy the withholding liability: (a) in cash, (b) by having the Company withhold from the number of Common Shares otherwise issuable or deliverable pursuant to the settlement of the Restricted Stock Award a number of shares with a Fair Market Value equal to the minimum withholding obligation, (c) by delivering Common Shares owned by the Grantee that are Mature Shares, or (d) by a combination of any such methods. For purposes hereof, Common Shares shall be valued at Fair Market Value. Rights as Shareholder; Dividends. The Grantee shall be the record owner of the Restricted Shares unless and until such Common Shares are sold or otherwise disposed of, and as record owner shall be entitled to all rights of a shareholder of the Company, including, without limitation, voting rights, if any, with respect to the Restricted Shares and the right to receive dividends, if any, while the Restricted Shares are held in custody. Compliance with Laws and Regulations. The issuance and transfer of Common Shares shall be subject to compliance by the Company and the Grantee with all applicable requirements of securities laws and with all applicable requirements of any stock exchange on which the Company’s Common Shares may be listed at the time of such issuance or transfer. No Right to Continued Employment. Nothing in this Agreement shall be deemed by implication or otherwise to impose any limitation on any right of the Company or any of its Subsidiaries to terminate the Grantee’s employment at any time. Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be delivered by registered or certified first class mail, return receipt requested, telecopier, courier service or personal delivery: If to the Company: Max Capital Group Ltd. Max House 2 Front Street Hamilton HM 11 Bermuda If to the Grantee, at the Grantee’s last known address on file with the Company. All such notices, demands and other communications shall be deemed to have been duly given when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial courier service; five (5) business days after being deposited in the mail, postage prepaid, if mailed; and when receipt is mechanically acknowledged, if telecopied. 3

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10. 11.

12. 13.

14. 15. 16. 17. 18. 19.

Bound by Plan. By signing this Agreement, the Grantee acknowledges that he has received a copy of the Plan and has had an opportunity to review the Plan and agrees to be bound by all of the terms and provisions of the Plan. Beneficiary. The Grantee may file with the Committee a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Grantee, the executor or administrator of the Grantee’s estate shall be deemed to be the Grantee’s beneficiary. Successors. The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, and on the Grantee and the beneficiaries, executors and administrators, heirs and successors of the Grantee. Amendment of Restricted Stock Award. Subject to Section 14 of this Agreement, the Committee at any time and from time to time may amend the terms of this Restricted Stock Award; provided, however, the Grantee’s rights under this Restricted Stock Award shall not be materially and adversely affected by any such amendment without the Grantee’s consent. Adjustments. This Restricted Stock Award is subject to adjustment pursuant to Section 12 of the Plan. Governing Law; Modification. This Agreement shall be governed by the laws of the state of New York without regard to the conflict of law principles. The Agreement may not be modified except in writing signed by both parties. Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Grantee or the Company to the Committee for review. The resolution of such a dispute by the Committee shall be binding on the Company and the Grantee. Severability. Every provision of this Agreement is intended to be severable and any illegal or invalid term shall not affect the validity or legality of the remaining terms. Headings. The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation of construction, and shall not constitute a part of this Agreement. Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be deemed an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 4

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[SIGNATURE PAGE FOLLOWS] 5

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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the date set forth below. MAX CAPITAL GROUP LTD. By: Name: Title: Date: GRANTEE By: Name: W. Marston Becker Date: 6 Exhibit 10.2 FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT THIS AGREEMENT, made this 17th day of February, 2009 (the “Grant Date”), by and between Max Capital Group Ltd. (the “Company”) and W. Marston Becker (the “Optionee”). W I T N E S S E T H: WHEREAS, pursuant to the Max Capital Group Ltd. 2008 Stock Incentive Plan, as amended (the “Plan”), the Company desires to afford the Optionee the opportunity to acquire, or enlarge, his ownership of the Company’s common shares, $1.00 par value per share (“Common Shares”), so that he may have a direct proprietary interest in the Company’s success. NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the parties hereto hereby agree as follows: 1. Grant of Option. Subject to the terms and conditions set forth herein and in the Plan, the Company hereby grants to the Optionee, during the period commencing on the date of this Agreement and ending on the close of business on the day of the tenth anniversary of the date hereof (the “Termination Date”), the right and option (the right to purchase any one Common Share hereunder being an “Option”) to purchase from the Company, at a price of $18.25 per share (the “Option Price”), an aggregate of 108,333 Common Shares (the “Option Shares”). 2. Limitation on Exercise of Option. Subject to the terms and conditions set forth herein and the Plan: (a) Optionee will become vested in 50% of the Options on January 1, 2010; provided, that, the book value of the underlying Common Shares on December 31, 2009 is at least 12.5% greater than the book value of such Common Shares on December 31, 2008 (the book value of Common Shares on December 31, 2008 calculated by dividing Total Shareholders’ Equity by Common Shares Issued and Outstanding shall be referred to herein as “Baseline 1,” and the amount which is 12.5% greater than Baseline 1 shall be referred to herein as “Baseline 2”); provided, further that, the Optionee is employed by the Company on the relevant vesting date (“Tranche 1 Options”). (b) Optionee will become vested in 50% of the Options on January 1, 2011; provided, that, the book value of the underlying Common Shares on December 31, 2010 is at least 12.5% greater than Baseline 2 (such amount, “Baseline 3” and such Options, “Tranche 2 Options”), provided, further that, the Optionee is employed by the Company on the relevant vesting date. If Tranche 1 Options do not vest on January 1, 2010, but Baseline 3 is at least 25% greater than Baseline 1, then Tranche 1 Options and Tranche 2 Options shall become vested as of 1

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January 1, 2011; provided, that, the Optionee is employed by the Company on the relevant vesting date. For the avoidance of doubt, if any tranche of Options is unvested as of January 1, 2011, such tranche shall automatically terminate and cease to be exercisable and shall not be considered outstanding for any purpose. Notwithstanding the foregoing, if on or prior to January 1, 2011, the Optionee’s employment with the Company is terminated: (i) by the Company without Cause (as defined in the Employment Agreement between the Company and W. Marston Becker effective November 13, 2006, as may be amended from time to time (the “Employment Agreement”)); (ii) by the Optionee for Good Reason (as defined in the Employment Agreement); or (iii) following a Change in Control (as defined in the Employment Agreement), the unvested portion of the Options that are still outstanding shall automatically vest and become exercisable. For purposes of this Agreement, Total Shareholder’s Equity and Common Shares Issued and Outstanding shall be as set forth in the consolidated balance sheet of the Company’s audited consolidated financial statements for the applicable year ended December 31. 3. Termination of Employment. Any Options held by the Optionee upon termination of employment shall remain exercisable as follows, subject to the conditions set forth in Section 4 hereof: (a) Except as provided in Section 2 hereof, upon Optionee’s termination of employment for any reason, all unvested Options shall terminate and cease to be exercisable. (b) If the Optionee’s termination of employment is due to death or Disability (as defined in the Employment Agreement), all unvested Options shall automatically terminate and cease to be exercisable and, to the extent vested, all vested Options shall be exercisable by the Optionee or any prior transferee of the Option or by the Optionee’s designated beneficiary, or, if none, the person(s) to whom such Optionee’s rights under the Option are transferred by will or the laws of descent and distribution for one (1) year following such termination of employment (but in no event beyond the Termination Date), and shall thereafter terminate; and (c) If the Optionee’s termination of employment is for any other reason, all unvested Options shall terminate and cease to be exercisable on the date of termination; and all vested Options, shall be exercisable for a period of 90 days following such termination of employment (but in no event beyond the Termination Date), and shall thereafter terminate. An Optionee’s status as an employee shall not be considered terminated in the case of a leave of absence agreed to in writing by the Company (including, but not limited to, military and sick leave); provided, that, such leave is for a period of not more than 90 days or re-employment upon expiration of such leave is guaranteed by contract or statute. 4. Method of Exercising Option. (a) Payment of Option Price. Options, to the extent vested, may be exercised, in whole or in part, by giving written notice of exercise to the Company specifying the number of Common Shares to be purchased. Such notice shall be accompanied by the payment in full of the Option Price. Such payment shall be made: (i) in cash, (ii) by surrender of Common Shares 2

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owned by the holder of the Option that are Mature Shares (as defined in the Plan), (iii) by means of a broker-assisted “cashless exercise,” (iv) by a “net exercise” method whereby the Company withholds from the delivery of Common Shares for which the Option was exercised that number of Common Shares having a Fair Market Value equal to the aggregate Option Price for the Common Shares for which the Option was exercised, or (v) by a combination of any such methods. (b) Tax Withholding. At the time of exercise, the Optionee shall pay to the Company such amount as the Company deems necessary to satisfy its obligation, if any, to withhold federal, state or local income or other taxes incurred by reason of the exercise of Options granted hereunder. Such payment shall be made: (i) in cash, (ii) by having the Company withhold from the delivery of Common Shares for which the Option was exercised that number of Common Shares having a Fair Market Value equal to the minimum withholding obligation, (iii) by delivering Common Shares owned by the holder of the Option that are Mature Shares, or (iv) by a combination of any such methods. For purposes hereof, Common Shares shall be valued at Fair Market Value. 5. Issuance of Shares. Except as otherwise provided in the Plan, as promptly as practical after receipt of such written notification of exercise and full payment of the Option Price and any required income tax withholding, the Company shall issue or transfer to the Optionee the number of Option Shares with respect to which Options have been so exercised (less shares withheld for payment of the Option Price and/or in satisfaction of tax withholding obligations, if any), and shall deliver to the Optionee a certificate or certificates therefor, registered in the Optionee’s name. 6. Company; Optionee. (a) The term “Company” as used in this Agreement with reference to employment shall include the Company and its Subsidiaries, as appropriate. (b) Whenever the word “Optionee” is used in any provision of this Agreement under circumstances where the provision should logically be construed to apply to the beneficiaries, the executors, the administrators, or the person or persons to whom the Options may be transferred by will or by the laws of descent and distribution, the word “Optionee” shall be deemed to include such person or persons. 7. Non-Transferability. The Options are not transferable by the Optionee otherwise than to a designated beneficiary upon death or by will or the laws of descent and distribution, and are exercisable during the Optionee’s lifetime only by him (or his legal representative in the event of incapacity). No assignment or transfer of the Options, or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except to a designated beneficiary, upon death, by will or the laws of descent and distribution), shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the Options shall terminate and become of no further effect. 8. Change in Control. Upon the occurrence of a Change in Control, all outstanding Options shall automatically become vested and immediately exercisable in full. 3

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9. Rights as Shareholder. The Optionee or a transferee of the Options shall have no rights as shareholder with respect to any Option Shares until he shall have become the holder of record of such shares, and no adjustment shall be made for dividends or distributions or other rights in respect of such Option Shares for which the date on which shareholders of record are determined for purposes of paying cash dividends on Common Shares is prior to the date upon which he shall become the holder of record thereof. 10. Adjustments. The Options granted hereunder are subject to adjustment pursuant to Section 12 of the Plan. 11. Compliance with Law. Notwithstanding any of the provisions hereof, the Optionee hereby agrees that he will not exercise the Options, and that the Company will not be obligated to issue or transfer any shares to the Optionee hereunder, if the exercise hereof or the issuance or transfer of such shares shall constitute a violation by the Optionee or the Company of any provisions of any law or regulation of any governmental authority. Any determination in this connection by the Committee shall be final, binding and conclusive. The Company shall in no event be obliged to register any securities pursuant to the Securities Act of 1933 (as now in effect or as hereafter amended) or to take any other affirmative action in order to cause the exercise of the Options or the issuance or transfer of shares pursuant thereto to comply with any law or regulation of any governmental authority. 12. Notice. Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party for whom it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided, that, unless and until some other address be so designated, all notices or communications by the Optionee to the Company shall be mailed or delivered to the Company at its principal executive office, and all notices or communications by the Company to the Optionee may be given to the Optionee personally or may be mailed to him at his address as recorded in the records of the Company. 13. Non-Qualified Stock Options. The Options granted hereunder are not intended to be incentive stock options within the meaning of Section 422 of the Code. 14. Binding Effect. Subject to Section 7 hereof, this Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto. 15. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of New York without regard to its conflict of law principles. 16. Plan. The terms and provisions of the Plan are incorporated herein by reference, and the Optionee hereby acknowledges receiving a copy of the Plan. In the event of a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this Agreement, the Plan shall govern and control. All capitalized terms not defined herein shall have the meaning ascribed to them as set forth in the Plan. 4

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17. Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Optionee or the Company to the Committee for review. The resolution of such a dispute by the Committee shall be binding on the Company and the Optionee. 18. No Right to Continued Employment. Nothing in this Agreement shall be deemed by implication or otherwise to impose any limitation on any right of the Company to terminate the Optionee’s employment. 19. Section 409A Limitation. The Company shall have no liability to the Optionee or any other person if an Option is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and the terms of such Option do not satisfy the additional conditions applicable to nonqualified deferred compensation under Section 409A of the Code. 20. Severability. Every provision of this Agreement is intended to be severable and any illegal or invalid term shall not affect the validity or legality of the remaining terms. 21. Headings. The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation of construction, and shall not constitute a part of this Agreement. 22. Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be deemed an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. [SIGNATURE PAGE FOLLOWS] 5

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth below. MAX CAPITAL GROUP LTD. By: Name: Title: Date By: Name: W. Marston Becker Date: 6

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