Exhibit 10.2

XL GROUP PLC
DIRECTORS STOCK & OPTION PLAN

(AS AMENDED AND RESTATED AS OF APRIL 30, 2010)

                    1. PURPOSES

                    The purposes of the Directors Stock & Option Plan are to
advance the interests of XL Group plc and its Shareholders by providing a means
to attract, retain, and motivate Directors of the Company upon whose judgment,
initiative and efforts the continued success, growth and development of the
Company is dependent.

                    2. DEFINITIONS

                    For purposes of the Plan, the following terms shall be
defined as set forth below:

                    (a) “Board” means the Board of Directors of the Company.

 

 

 

(b) “Code” means the Internal Revenue Code of 1986, as amended from time to
time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations there under.

                    (c) “Company” means XL Group plc, an Irish company, or any
successor corporation.

                    (d) “Director” means a non-employee member of the Board.

                    (e) “Fair Market Value” means, with respect to Shares on any
day, the following:

 

 

 

(i) If the Shares are at the time listed or admitted to trading on any stock
exchange, then the Fair Market Value shall be the closing selling price per
share of Shares on the date in question on the stock exchange which is the
primary market for the Shares, as such price is officially quoted on such
exchange. If there is no reported sale of Shares on such exchange on such date,
then the Fair Market Value shall be the closing selling price on the exchange on
the last preceding date for which such quotation exists; and

 

 

 

(ii) If the Shares are not at the time listed or admitted to trading on any
stock exchange but are traded in the over-the-counter market, the Fair Market
Value shall be the closing selling price per share of Shares on the date in
question, as such price is reported by the National Association of Securities
Dealers through the NASDAQ National Market System or any successor system. If
there is no reported closing selling price for Shares on such date, then the
closing selling price on the last preceding date for which such quotation exists
shall be determinative of Fair Market Value.

                    (f) “Fiscal Year” means the calendar year.

                    (g) “Option” means a right, granted under Section 5 of the
Plan, to purchase Shares.

                    (h) “Participant” means a Director who has been granted an
Option, Restricted Stock Award,

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                    Restricted Stock Unit Award or who has elected to defer
compensation under the Plan.

                    (i) “Plan” means this Directors Stock & Option Plan.

                    (j) “Restricted Stock Award” means an award granted under
Section 5(g) of the Plan.

                    (k) “Restricted Stock Unit Award” means an award granted
under Section 5(h) of the Plan.

                    (l) “Shares” means ordinary shares of the Company.

                    3. ADMINISTRATION

                    The Plan shall be administered by the Board. Subject to the
express provisions of the Plan, the Board shall have full and exclusive
authority to interpret the Plan, to make all determinations with respect to
awards to be granted under the Plan, to prescribe, amend and rescind rules and
regulations relating to the Plan, and to make all other determinations necessary
or advisable in the implementation and administration of the Plan. The Board’s
interpretation and construction of the Plan shall be conclusive and binding on
all persons.

                    4. SHARES SUBJECT TO THE PLAN

                    (a) Subject to adjustment as provided in Section 5(j), the
total number of Shares reserved for issuance under the Plan shall be 794,702. If
any Shares subject to an Option, Restricted Stock Award or Restricted Stock Unit
Award hereunder are forfeited, cancelled or surrendered, any Shares counted
against the number of Shares reserved and available under the Plan with respect
to such Option, Restricted Stock Award or Restricted Stock Unit Award shall, to
the extent of any such forfeiture, cancellation or surrender, again be available
for issuance as such an award under the Plan.

                    (b) Any Shares issued hereunder may consist, in whole or in
part, of authorized and unissued Shares including Shares acquired by purchase in
the open market or in private transactions.

                    5. DIRECTOR’S AWARDS

                    (a) Initial Option Grant. Each Director who is first elected
to the Board subsequent to March 7, 2003 shall be granted an Option to purchase
5,000 Shares (or such other number of Shares, as determined from time to time by
the Board) on the date such Director is first elected to the Board and such
Option shall have an exercise price per Share equal to 100% of the Fair Market
Value per Share at the date of grant; provided, however, that such price shall
be at least equal to the par value of a Share.

                    (b) Annual Option Grants. On the date of each annual meeting
of Shareholders of the Company, beginning with the annual meeting for 2009, each
Director in office immediately following the annual meeting shall be granted an
Option to purchase such number of Shares as determined from time to time by the
Board, with an exercise price per Share equal to 100% of the Fair Market Value
per Share at the date of grant; provided, however, that such price per share
shall be at least equal to the par value of a Share.

                    (c) Exercisability. Each Option granted to a Director under
Section 5(a) or (b) of this Plan shall be fully exercisable on the date of grant
and shall expire on the tenth anniversary of the date of grant, and
exercisability of such an Option shall not be dependent upon the Director’s
continuing service on the Board.

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                    (d) Time And Method Of Exercise. The exercise price of an
Option shall be paid to the Company at the time of exercise in cash or through
delivery of Shares owned by the Director for more than six months having an
aggregate Fair Market Value on the date of exercise equal to the exercise price.

                    (e) Discretionary Options. Without limiting the operation of
Section 5(a) or (b) hereof, the Board may also make discretionary Option grants
to Directors hereunder. The Board may determine, in its discretion, the
Directors to whom any such Options are to be granted, the number of Shares to be
subject to each such Option and the other terms and conditions of such Options,
consistent with the terms of the Plan. The exercise price per share of any
Option shall not be less than 100% of the Fair Market Value of a Share on the
date of grant, and the term of an Option shall not be longer than ten years.

                    (f) No Option Re-pricing. Except as provided in Section 5(j)
hereof relating to certain anti-dilution adjustments, unless the approval of
Shareholders of the Company is obtained, Options issued under the Plan shall not
be amended to lower their exercise prices and they will not be exchanged for
other stock options with lower exercise prices.

                    (g) Restricted Stock Awards. The Board may grant Restricted
Stock Awards to Directors on such terms and conditions, consistent with the
provisions of this Plan, as determined by the Board. Restricted Stock Awards
shall be subject to restrictions on transferability, forfeiture conditions and
other restrictions, if any, as the Board may impose, which restrictions and
forfeiture conditions may lapse under such circumstances as the Board may
determine. A Director who is granted a Restricted Stock Award shall have all of
the rights of a Shareholder prior to vesting of the Restricted Stock Award,
including, without limitation, the right to vote the Restricted Stock and the
right to receive dividends thereon.

                    (h) Restricted Stock Unit Awards. The Board may grant
Restricted Stock Unit Awards to Directors on such terms and conditions,
consistent with the provisions of this Plan, as determined by the Board.
Restricted Stock Unit Awards will provide for the delivery of a number of Shares
equal to the number of Restricted Stock Units at the time and subject to the
terms and conditions set forth by the Board. Delivery of Shares pursuant to the
Restricted Stock Unit Awards will occur upon expiration of the deferral period
specified by the Board. In addition, Restricted Stock Unit Awards shall be
subject to such restrictions, including forfeiture conditions, as the Board may
impose.

                    (i) Transferability. The Options, Restricted Stock Awards
and Restricted Stock Unit Awards granted under the Plan may be assigned or
otherwise transferred only: (i) by will or the laws of descent and distribution;
(ii) by valid beneficiary designation taking effect at death made in accordance
with procedures established by the Board; or (iii) solely in the case of
Options, by the Director to members of his or her “immediate family”, to a trust
established for the exclusive benefit of solely one or more members of the
Director’s “immediate family” and/or the Director, or to a partnership or other
entity pursuant to which the only owners are one or more members of the
Director’s “immediate family” and/or the Director. Any Option held by the
transferee will continue to be subject to the same terms and conditions that
were applicable to the Option immediately prior to the transfer, except that the
Option will be transferable by the transferee only by will or the laws of
descent and distribution. For purposes hereof, “immediate family” means the
Director’s children, stepchildren, grandchildren, parents, stepparents,
grandparents, spouse, siblings (including half brothers and sisters), in-laws,
and relationships arising because of legal adoption.

                    (j) Adjustments. In the event that subsequent to the
Effective Date any alteration or re-organization whatsoever taking place in the
capital structure of the Company whether by way of capitalization

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of profits or reserves, capital distribution, rights issue, consolidation or
sub-division of Shares, the conversion of one class of share to another or
reduction of capital or otherwise, affects the Shares such that they are
increased or decreased or changed into or exchanged for a different number or
kind of Shares or other securities of the Company or of another corporation,
then in order to maintain the proportionate interest of the Directors and
preserve the value of the awards made hereunder (i) there shall automatically be
substituted for each Share subject to an unexercised Option, each Restricted
Stock Award, each Restricted Stock Unit Award, and each Share to be issued on a
formula basis under this Section 5 subsequent to such event, the number and kind
of Shares or other securities into which each outstanding Share shall be changed
or for which each such Share shall be exchanged, (ii) the exercise price of
outstanding Options shall be increased or decreased proportionately so that the
aggregate purchase price for the Shares subject to any unexercised Option shall
remain the same as immediately prior to such event, and (iii) the number and
kind of Shares available for issuance under the Plan shall be equitably adjusted
in order to take into account such transaction or other change. Notwithstanding
any provision hereof to the contrary, no adjustment may be made that reduces the
amount to be paid up per share to less than the par value of the share.

                    (k) Nonqualified Options. All Options granted under the Plan
shall be nonqualified options, not entitled to special tax treatment under
Section 422 of the Code.

                    6. DIRECTOR’S FEES

                    Notwithstanding any provision of this Plan to the contrary,
the provisions of Section 6(a) through (f) and Section 6(h) below will apply
only with respect to deferrals of annual retainer fees earned for service as a
Director prior to January 1, 2009. Deferrals under such provisions may not be
made with respect to annual retainer fees attributable to services performed
after December 31, 2008.

                    (a) Each Director may make an irrevocable election on or
before the December 31 immediately preceding the beginning of a Fiscal Year of
the Company, by written notice to the Company, to defer payment of all or a
designated portion (in increments of $5,000) of the cash compensation otherwise
payable as his or her annual retainer for service as a Director for the next
Fiscal Year. Notwithstanding the foregoing, a Director who first becomes
eligible to participate in the Plan may make an election under this Section 6(a)
within 30 days of first becoming eligible to participate in the Plan in respect
of annual retainer fees for services performed after the date of the election
under this Section 6(a).

                    (b) Deferrals of compensation hereunder shall continue until
the Director notifies the Company in writing, on or prior to the December 31
immediately preceding the commencement of any Fiscal Year, that he wishes his
compensation for such Fiscal Year and all succeeding periods to be paid in cash
on a current basis.

                    (c) All compensation which a Director elects to defer
pursuant to this Section 6 shall be credited in the form of units to a
bookkeeping account maintained by the Company in the name of the Director. Each
such unit shall represent the right to receive one Share at the time determined
pursuant to the terms of the Plan. In consideration for forgoing cash
compensation, the number of units so credited will be equal to the number of
Shares having an aggregate Fair Market Value (on the date the compensation would
otherwise have been paid) equal to 100% of the amount by which the Director’s
cash compensation was reduced pursuant to the deferral election. Notwithstanding
any other provision of this Plan, in the case of any deferral election made
prior to the date of approval of this Plan by the affirmative votes of the
holders of a majority of voting securities of the Company, the crediting of
Share units to the Director’s bookkeeping account shall be contingent on such

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Shareholder approval. If such Shareholder approval is not obtained within one
year from the Effective Date of this Plan, compensation deferred pursuant to a
prior election hereunder will be paid to the Director in cash at the end of such
year.

                    (d) As of each date on which a cash dividend is paid on
Shares, there shall be credited to each account that number of units (including
fractional units) determined by (i): multiplying the amount of such dividend
(per Share) by the number of units in such account; and (ii) dividing the total
so determined by the Fair Market Value of a Share on the date of payment of such
cash dividend. The additions to a Director’s account pursuant to this Section
6(d) shall continue until the Director’s account is fully paid.

                    (e) The account of a Director shall be distributed (in the
form of one Share for each Share unit) either (x) in a lump sum at the time of
the Director’s “separation from service” (within the meaning of Treas. Reg.
Section 1.409A-1(h)) with the Company or (y) in up to five annual installments
commencing at the time of the Director’s “separation from service” with the
Company, as elected by the Director. Each Director’s distribution election must
be made in writing within 30 days after the Director first becomes eligible to
participate in the Plan; provided, however, that, solely in the case of
deferrals of compensation that were earned and vested on December 31, 2004
(together with amounts credited thereon under Section 6(d)), a Director may make
a new distribution election with respect to the entire portion of such deferrals
so long as such election is made at least one year in advance of the Director’s
termination of service on the Board. In the case of an account distributed in
installments, the amount of Shares distributed in each installment shall be
equal to the number of Share units in the Director’s account subject to such
installment distribution at the time of the distribution divided by the number
of installments remaining to be paid. In the event a Director does not make an
affirmative distribution election in accordance with this Section 6(e), the
account of the Director shall be distributed in a lump sum at the time of the
Director’s “separation from service.”

                    (f) The right of a Director to amounts described under this
Section 6 (including Shares) shall not be subject to assignment or other
disposition by him or her other than by will or the laws of descent and
distribution. In the event that, notwithstanding this provision, a Director
makes a prohibited disposition, the Company may disregard the same and discharge
its obligation hereunder by making payment or delivery as though no such
disposition had been made.

                    (g) Each Director may make an election in writing on or
prior to each December 31 to receive the Director’s annual retainer fees payable
in the following Fiscal Year in the form of Shares instead of cash. Any Shares
elected shall be payable at the time cash retainer fees are otherwise payable,
and the number of Shares distributed shall be equal to the amount of the annual
retainer fee otherwise payable on such payment date divided by the Fair Market
Value of a Share on such date. Notwithstanding the foregoing, a Director who
first becomes eligible to participate in the Plan may make an election under
this Section 6(g) within 30 days of first becoming eligible to participate in
the Plan in respect of annual retainer fees for services performed after the
date of the election under this Section 6(g).

                    (h) In the event that any dividend in Shares,
recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
such change, affects the Shares such that they are increased or decreased or
changed into or exchanged for a different number or kind of Shares, other
securities of the Company or of another corporation or other consideration, then
in order to maintain the proportionate interest of the Directors and preserve
the value of the Directors’ Share units, there shall automatically be
substituted for each Share unit a new unit representing the number and kind of
Shares, other securities or other consideration into which each outstanding
Share shall be changed. The

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substituted units shall be subject to the same terms and conditions as the
original Share units.

                    7. GENERAL PROVISIONS

                    (a) Compliance With Legal And Trading Requirements. The Plan
shall be subject to all applicable laws, rules and regulations, including, but
not limited to, U.S. federal and state laws, rules and regulations, and to such
approvals by any regulatory or governmental agency as may be required. The
Company, in its discretion, may postpone the issuance or delivery of Shares
under the Plan until completion of such stock exchange or market system listing
or registration or qualification of such Shares or other required action under
any U.S. state or federal law, rule or regulation or under laws, rules or
regulations of other jurisdictions as the Company may consider appropriate, and
may require any Participant to make such representations and furnish such
information as it may consider appropriate in connection with the issuance or
delivery of Shares in compliance with applicable laws, rules and regulations. No
provisions of the Plan shall be interpreted or construed to obligate the Company
to register any Shares under U.S. federal or state law or under the laws of
other jurisdictions.

                    (b) No Right To Continued Service. Neither the Plan nor any
action taken there under shall be construed as giving any Director the right to
be retained in the service of the Company or any of its subsidiaries or
affiliates, nor shall it interfere in any way with the right of the Company or
any of its subsidiaries or affiliates to terminate any Director’s service at any
time.

                    (c) Taxes. The Company is authorized to withhold from any
Shares delivered under this Plan or on exercise of an Option any amounts of
withholding and other taxes due in connection therewith, and to take such other
action as the Company may deem advisable to enable the Company and a Participant
to satisfy obligations for the payment of any withholding taxes and other tax
obligations relating thereto. This authority shall include authority to withhold
or receive Shares or other property and to make cash payments in respect thereof
in satisfaction of a Participant’s tax obligations.

                    (d) Amendment. The Board may amend, alter, suspend,
discontinue, or terminate the Plan without the consent of Shareholders of the
Company or Participants, except that any such amendment, alteration, suspension,
discontinuation, or termination shall be subject to the approval of the
Company’s Shareholders if such Shareholder approval is required by any U.S.
federal law or regulation or the rules of any stock exchange or automated
quotation system on which the Shares may then be listed or quoted; provided,
however, that, without the consent of an affected Participant, no amendment,
alteration, suspension, discontinuation, or termination of the Plan may impair
the rights or, in any other manner, adversely affect the rights of such
Participant under any award theretofore granted to him or her or compensation
previously deferred by him or her hereunder.

                    (e) Unfunded Status Of Awards. The Plan is intended to
constitute an “unfunded” plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant pursuant to a Restricted
Stock Unit Award or a deferral election, nothing contained in the Plan shall
give any such Participant any rights that are greater than those of a general
unsecured creditor of the Company; provided, however, that the Company may
authorize the creation of trusts or make other arrangements to meet the
Company’s obligations under the Plan to deliver cash, Shares, or other property
pursuant to any award, which trusts or other arrangements shall be consistent
with the “unfunded” status of the Plan unless the Company otherwise determines
with the consent of each affected Participant.

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                    (f) Non-Exclusivity Of The Plan. Neither the adoption of the
Plan by the Board nor its submission to the Shareholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other compensation arrangements as it may deem desirable,
including, without limitation, the granting of options on Shares and other
awards otherwise than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.

                    (g) No Fractional Shares. No fractional Shares shall be
issued or delivered pursuant to the Plan. Cash shall be paid in lieu of such
fractional Shares.

                    (h) Governing Law. The validity, construction, and effect of
the Plan shall be determined in accordance with the laws of the State of New
York, without giving effect to principles of conflict of laws thereof.

                    (i) Effective Date; Plan Termination. The Plan as amended
and restated became effective as of January 1, 2009 (the “Effective Date”),
subject to approval by the Shareholders of the Company. The Plan shall terminate
as to future awards on June 1, 2014 or, if earlier, at such time as no Shares
remain available for issuance pursuant to Section 4, and the Company has no
further obligations with respect to any award granted or compensation deferred
under the Plan.

                    (j) Titles And Headings. The titles and headings of the
Sections in the Plan are for convenience of reference only. In the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.

                    (k) Section 409A. It is intended that deferrals of
compensation that were earned and vested on December 31, 2004 (and amounts
credited thereon under Section 6(d) of the Plan) (the “Grandfathered Plan
Benefits”) will satisfy the grandfather provisions applicable under Section 409A
of the Code so that such Grandfathered Plan Benefits will not be subject to
Section 409A of the Code. No amendment to this Plan made after October 3, 2004
will apply to the Grandfathered Plan Benefits unless the amendment specifically
provides that it applies to them. As it applies to benefits that are not
Grandfathered Plan Benefits, it is intended that the Plan, Options and other
awards granted and amounts deferred hereunder will comply with Section 409A of
the Code (and any regulations and guidelines issued there under) to the extent
subject thereto, and the Plan and such Options, awards and deferral provisions
shall be interpreted on a basis consistent with such intent. Without limiting
the generality of the foregoing, no adjustment shall be made pursuant to Section
5(j) above that would cause any Option to be treated as deferred compensation
pursuant to Section 409A of the Code. The Plan and any Award Agreements issued
there under may be amended in any respect deemed by the Board or the Committee
to be necessary in order to preserve compliance with Section 409A of the Code.
No action or failure to act, pursuant to this Section 7(k) shall subject the
Company to any claim, liability, or expense, and the Company shall not have any
obligation to indemnify or otherwise protect any Director from the obligation to
pay any taxes pursuant to Section 409A of the Code.

                    (l) Section 457A. Notwithstanding any provision of this Plan
to the contrary, in the case of any Director subject to United States income
tax, any amount deferred under Section 6 of the Plan, and any amount deferred
under a restricted stock unit granted under the Plan, which in any such case
constitutes “nonqualified deferred compensation” for purposes of Section 457A of
the Code and is subject to Section 457A of the Code, shall be distributed to the
Director no later than December 31, 2017.

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