Exhibit 10.1

RESTRICTED STOCK UNIT AGREEMENT

                    AGREEMENT, by and between XL Capital Ltd, a Cayman Islands
corporation (“the Company”), and You (the “Grantee”) is effective as of
_________________.

                    WHEREAS, the Grantee is an employee of the Company and/or
any of its subsidiaries (collectively called the “Company”); and

                    WHEREAS, the Company regards the Grantee as a valuable
employee of the Company and has determined it to be in the interest of the
Company to grant to the Grantee an award of Restricted Stock Units under the
Company’s 1991 Performance Incentive Program (the “Program”);

                    NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, and for other good and valuable consideration, the
Company and the Grantee agree as follows:

                    (a) Grant of Restricted Stock Units.

                         The Company has granted to the Grantee an award (the
“Award”) of ___________________ Restricted Stock Units (the “Restricted Stock
Units”) on _________________ (the “Grant Date”), subject and pursuant to all
terms and conditions stated in this Agreement and in the Program, which is
incorporated by reference into this Agreement and made a part hereof as though
herein fully set forth,. Any capitalized terms used herein and not defined shall
have the meanings given to those terms in the 1991 Performance Incentive
Program.

                    (b) Vesting.

                         The Award will vest in three equal annual installments,
beginning on the first anniversary of the Grant Date ; provided, however, that
the Award shall vest in full upon the Death of the Grantee, the Termination of
Employment Due to Permanent Disability, or at a Change of Control (as defined in
subparagraphs (e)(i), (e)(ii) and (e)(v) below) and shall vest as set forth in
subparagraph (e)(iii) and paragraph (e)(iv) below in the event of termination of
the Grantee’s employment at Retirement or by the Company not for Cause,
respectively. The portion of the Award, if any, that is not vested immediately
following termination of the Grantee’s employment (or that is not scheduled to
vest under subparagraph (e)(iii) below following Retirement) shall be
immediately forfeited.

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                    (c) Distribution of Stock.

                         At the time the Award vests in accordance with
paragraph (b) above, the Company shall distribute to the Grantee a number of
Ordinary Shares, US$0.01 par value per share, of the Company (the “Shares”)
equal to the number of Restricted Stock Units which vested; provided, however,
that, notwithstanding the foregoing, to the extent the Restricted Stock Units
become vested due to the Grantee’s Retirement, the Ordinary Shares corresponding
thereto will be distributed to the Grantee at the earliest of the following: (i)
at the times the Restricted Stock Units would have otherwise vested under the
regular vesting schedule set forth in paragraph (b) above, (ii) upon the death
of the Grantee, or (iii) upon a Change of Control, except that, if the
Restricted Stock Units are deferred compensation for purposes of Section 409A of
the Code, only if the event constituting a Change of Control also constitutes a
“change in control event” (as defined in Treas. Reg. Section 1.409A-3(i)(5))
with respect to the Company. Prior to the Company’s delivery of the Shares, the
Grantee shall pay to the Company an amount of cash equal to the par value for
each of such Shares delivered.

                    (d) Rights and Restrictions.

                         The Restricted Stock Units shall not be transferable
other than pursuant to will or the laws of descent and distribution. Prior to
vesting of the Restricted Stock Units and delivery of the Shares to the Grantee,
the Grantee shall not have any rights and privileges of a shareholder as to the
Shares subject to the Award. Specifically, the Grantee shall not, except as set
forth in paragraph (f) below, have the right to receive dividends or the right
to vote such Shares prior to vesting of the Award and delivery of the Shares.

                    (e) Special Termination Provisions.

                         (i) Death of Grantee. In the event the Grantee dies
while in the employment of the Company, the Award shall vest in full
immediately.

                         (ii) Termination of Employment Due to Permanent
Disability. In the event the Grantee’s employment with the Company is terminated
by the Company by reason of the Grantee’s Permanent Disability, the Award shall
vest in full immediately. For purposes hereof, “Permanent Disability” means
those circumstances under which the Grantee has been unable to perform his
duties and responsibilities with the Company for at least 60 continuous days
because of physical, mental or emotional incapacity resulting from injury,
sickness or disease, and will be unable to continue to perform his or her duties
and responsibilities for a total of six (6) months in any twelve (12) month
period because of

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physical, mental or emotional incapacity resulting from injury, sickness or
disease; provided, however, that with respect to any Grantee who has entered
into an employment agreement with the Company, term of which has not expired at
the time a determination concerning Permanent Disability is to be made,
Permanent Disability shall have the meaning attributed in such employment
agreement.

                         (iii) Termination of Employment Due to Retirement. In
the event the Grantee’s employment with the Company is terminated due to his or
her Retirement, the Award will continue to vest in accordance with the regular
vesting schedule set forth in paragraph (b) above as if the Grantee’s employment
had not terminated. For purposes hereof “Retirement” shall mean the termination
of employment by the Grantee if (i) such termination of employment occurs after
(x) the Grantee has reached age 55, and (y) the sum of the Grantee’s age and
full years of continuous service with the Company equals or exceeds 65, and (ii)
a determination has been made by the Committee, in its sole discretion, that it
is appropriate under the circumstances (taking into account, without limitation,
the intention of the Grantee with respect to future employment) for the
Restricted Stock Units to continue to vest as described above.

                         (iv) Involuntary Termination of Employment. In the
event the Grantee’s employment with the Company is terminated by the Company not
for Cause (as defined below), the Restricted Stock Units will vest immediately
with respect to the number of Shares, if any, that would have vested in
accordance with the regular vesting schedule set forth in paragraph (b) above as
if the Grantee’s employment had continued for an additional twelve (12) months.
Any remaining unvested portion of the Restricted Stock Units will be immediately
forfeited. “Cause” shall mean (i) conviction of the Grantee of a felony
involving moral turpitude or dishonesty; (ii) the Grantee, in carrying out his
or her duties for the Company, has been guilty of (A) gross neglect or (B)
willful misconduct; provided, however, that any act or failure to act by the
Grantee shall not constitute Cause for this purpose if such act or failure to
act was committed, or omitted, by the Grantee in good faith and in a manner
reasonably believed to be in the overall best interests of the Company;
(iii) the Grantee’s continued willful refusal to obey any appropriate policy or
requirement duly adopted by the Company and the continuance of such refusal
after receipt of notice; or (iv) Grantee’s sustained failure to perform the
essential duties of Grantee’s role after receipt of notice. The determination of
whether the Grantee acted in good faith and that he or she reasonably believed
his or her action to be in the Company’s overall best interest will be in the
reasonable judgment of the General Counsel of the Company or, if the General
Counsel shall have an actual or potential conflict of interest, the Committee.

                         (v) Change of Control. In the event there is a Change
of Control of the Company (as defined in the Program), the Award shall vest in
full immediately.

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                    (f) Dividend Equivalents.

                    As of each date on which a cash dividend is paid on Shares,
the number of Restricted Stock Units subject to this Award shall be increased by
that number of Restricted Stock Units (including fractional units) determined by
(i): multiplying the amount of such dividend (per Share) by the number of unpaid
Restricted Stock Units subject to this Award immediately before the payment of
the dividend; and (ii) dividing the total so determined by the Fair Market Value
of a Share on the date of payment of such cash dividend. Such additional
Restricted Stock Units shall have the same terms and conditions, including,
without limitation, vesting and distribution terms and conditions, as the
Restricted Stock Units in respect of which they were awarded.

                    (g) Status of Shares.

                         Upon issuance, the Shares shall rank equally in all
respects with the other outstanding Shares and shall be fully paid.

                    (h) Adjustments for Recapitalizations, Etc.

                         In the event of stock dividends, stock splits,
recapitalizations, mergers, consolidations, combinations, exchanges of shares,
spin-offs, liquidations, reclassifications or other similar changes in the
capitalization of the Company, the number of Shares subject to this Award shall
be proportionately adjusted by the Board on an equitable basis.

                    (i) Obligations as to Capital.

                         The Company agrees that it will at all times maintain
authorized and unissued share capital sufficient to fulfill all of its
obligations under this Agreement.

                    (j) Withholding.

                         The Grantee agrees to make appropriate arrangements
with the Company for satisfaction of any applicable income tax withholding
requirements or social security or similar withholding requirements arising out
of the Award. Such withholding tax obligations may be satisfied by withholding
Shares from this Award; provided that the amount of

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tax withholding to be satisfied by withholding Shares shall be limited to the
minimum amount of taxes, including employment taxes, required to be withheld
under applicable law.

                    (k) Transfer Restrictions.

                    Grantee shall comply with the Company’s stock ownership
guidelines as in effect from time to time.

                    (l) References.

                         References herein to rights and obligations of the
Grantee shall apply, where appropriate, to the estate or personal representative
of the Grantee without regard to whether specific reference to them is contained
in a particular provision of this Agreement.

                    (m) Notice.

                    Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or by courier, or sent by certified or registered mail,
postage prepaid, return receipt requested, duly addressed to the party concerned
at the address indicated below or to such changed address as such party may
subsequently by similar process give notice of:

 

 

 

If to the Company:

 

 

 

XL Capital Ltd

 

XL House

 

One Bermudiana Road

 

Hamilton HM08, Bermuda

 

 

 

Attn.: General Counsel

 

 

 

If to the Grantee:

 

 

 

At the Grantee’s most recent address shown on the Company’s corporate records,
or at any other address which the Grantee may specify in a notice delivered to
the Company in the manner set forth herein.

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                    (n) Section 409A.

                    It is intended that this Agreement will comply with Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”) and any
regulations and guidelines promulgated thereunder (collectively, “Section
409A”), to the extent the Agreement is subject thereto, and the Agreement shall
be interpreted on a basis consistent with such intent. If an amendment of the
Agreement is necessary in order for it to comply with Section 409A or Section
457A of the Code (and not result in tax or penalties under such Sections), the
Company may modify the Agreement in good faith in a manner that preserves the
original intent of the parties to the extent reasonably possible.
Notwithstanding any provision to the contrary in this Agreement, if Grantee is
deemed on the date of his or her “separation from service” (within the meaning
of Treas. Reg. Section 1.409A-1(h)) with the Company to be a “specified
employee” (within the meaning of Treas. Reg. Section 1.409A-1(i)), then with
regard to any payment that is considered deferred compensation under Section
409A payable on account of a “separation from service” that is required to be
delayed pursuant to Section 409A(a)(2)(B) of the Code (after taking into account
any applicable exceptions to such requirement), such payment shall be made on
the date that is the earlier of (i) the expiration of the six (6)-month period
measured from the date of Grantee’s “separation from service,” or (ii) the date
of Grantee’s death (the “Delay Period”). Upon the expiration of the Delay
Period, all payments delayed pursuant to this paragraph (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid to Grantee in a lump sum and any remaining payments due
under this Agreement shall be paid in accordance with the normal payment dates
specified for them herein. Notwithstanding any provision of this Agreement to
the contrary, for purposes of any provision of this Agreement providing for the
payment of any amounts upon or following a termination of employment that are
considered deferred compensation under Section 409A, references to Grantee’s
“termination of employment” (and corollary terms) with the Company shall be
construed to refer to Grantee’s “separation from service” (within the meaning of
Treas. Reg. Section 1.409A-1(h)) with the Company. Whenever payments under this
Agreement are to be made in installments, each such installment shall be deemed
to be a separate payment for purposes of Section 409A.

                    (o) Clawback Policy

          Notwithstanding any term of these Restricted Stock Units to the
contrary, the Company reserves the right to cancel these Restricted Stock Units
or require the return of Shares received under these Restricted Stock Units (or
the cash value of the Shares, as determined by the Board in its sole discretion)
to the extent provided under, and in accordance with, the Company’s Clawback
Policy as in effect from time to time, which Policy is incorporated into this
Agreement by reference. As a condition to the grant of these Restricted Stock
Units, the

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Grantee agrees that he or she will be subject to, and comply with the terms of,
the Company’s Clawback Policy as in effect from time to time as it applies to
any compensation, including equity awards, bonus and other incentive awards.

                    (p) Governing Law.

                         This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to the
principles of conflict of laws.

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