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                                                                    EXHIBIT 10.2


                          DELPHI FINANCIAL GROUP, INC.
                AMENDED AND RESTATED DIRECTORS STOCK OPTION PLAN

                                  INTRODUCTION

        Delphi Financial Group, Inc. (the "Company") adopted the Delphi
Financial Group, Inc. 1994 Directors Stock Option Plan effective April 12, 1994.
Effective as of March 20, 1997, the Company amended and restated such plan
(subject to the approval of the stockholders of the Company) to incorporate
provisions whereby the eligible members of its Board of Directors may receive
stock options in lieu of their annual cash retainers, to increase the number of
shares subject to nonqualified stock options available for issuance under such
plan, and to effect certain further amendments. Such plan, as so amended and
restated, and as further amended effective May 14, 1997, April 1, 1998 and
February 7, 2001 (subject to the approval of the stockholders of the Company),
is as follows:

        1.     PURPOSE

               This Amended and Restated Directors Stock Option Plan (the
"Plan") is intended to increase the proprietary interest in Delphi Financial
Group, Inc. (the "Company") of outside directors of the Company, i.e., directors
who are not officers or employees of the Company or its subsidiaries, whose
continued services are important to the continued success of the Company,
thereby providing them with additional incentive to continue to serve as
directors. The Plan provides for the issuance of nonqualified stock options
("Options"). The Plan shall be effective upon its approval by the stockholders
of the Company (as provided in Section 10 below).

        2.     ADMINISTRATION

               The Plan shall be substantially self-executing. To the extent,
however, that any administrative determinations regarding the Plan are required
to be made, they shall be made pursuant to the affirmative vote of a majority of
the members of a committee consisting of the members of the Company's Board of
Directors (the "Committee"). All ministerial matters relating to the Plan shall
be performed by or at the direction of the Committee.

        3.     ELIGIBILITY

               The persons who shall receive Options (the "Optionees") shall be
members of the Company's Board of Directors who are not officers or employees of
the Company or any of its subsidiaries ("Subsidiaries"), as that term is defined
by Section 424(f) of the Internal Revenue Code of 1986, as amended from time to
time (the "Code"). Persons eligible to be Optionees are sometimes referred to
herein as "Outside Directors."


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        4.     STOCK

               The stock subject to the Options shall be shares (the "Shares")
of the Company's authorized but unissued or reacquired Class A common stock, par
value $.01 per share). The aggregate number of Shares as to which Options may be
granted shall not exceed 207,490. The limitation established by the preceding
sentence shall be subject to adjustment as provided in Section 5(B)(ix) of the
Plan. In the event that any outstanding Option under the Plan for any reason
expires, terminates or is cancelled, the Shares allocable to the unexercised
portion of such Option will again be subject to Options thereafter awarded under
the Plan.

        5.     TERMS AND CONDITIONS OF OPTIONS

               A.  Options shall automatically be granted under the Plan as
follows:

                      (i)  On the day immediately following the date on which
the Plan is approved by the stockholders of the Company (as provided in Section
10 below), and thereafter on the first business day immediately following each
date on which the Company holds its annual meeting of stockholders (commencing
with the 1997 meeting), each Outside Director then in office will automatically
be awarded as of such date Options exercisable for a number of Shares determined
pursuant to the following formula: Number of Option Shares = 2,000 (with such
amount to be automatically proportionately adjusted to reflect the cumulative
effect of all events of the type referred to in Section 5(B)(ix) hereof having
occurred prior to such date) multiplied by [1 + (.125 multiplied by the number
of years of continuous years of service of such Outside Director to that point,
including any portion of a year of service, which shall be treated as a full
year)].

                      (ii)  Each Outside Director shall, on the first business
day following each date on which such director is elected, re-elected or
appointed, as applicable, to the Company's Board of Directors (the "Election
Date"), commencing with the elections to occur at the 1997 annual meeting of
stockholders, be awarded Options in lieu of the cash amount (the "Retainer
Amount") that such director would be entitled to receive for serving as such in
the period from the Election Date up to the date of the Company's next following
annual meeting of stockholders, exclusive of meeting fees, fees for serving on
any committee of the Board, or fees associated with any other services provided
to the Company or its Subsidiaries. Such Options will be exercisable for the
nearest number of whole Shares determined pursuant to the following formula:
Number of Option Shares = (Retainer Amount multiplied by 3), divided by (Fair
Market Value, as that term is defined in Section 5(B)(ii) hereof, as of the
award date). Notwithstanding the foregoing, Options will not be awarded pursuant
to this Section 5(A)(ii) if the Outside Director files with the Secretary of the
Company, on or prior to the commencement of the calendar year in which the
applicable Election Date is to occur, a written election not to receive Options
in lieu of the Retainer Amount (other than the Election Date on which such
director is first elected or appointed, in which case such election may be made
at any time prior to such Election Date).

               B. Promptly after each award pursuant to Section 5(A), a Notice
of Award of Stock Option (an "Option Notice") shall be given to each Optionee,
which notice shall comply with and be subject to the following terms and
conditions:



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                      (i)  NUMBER OF SHARES.  Each Option Notice shall state the
number of Shares to which it pertains.

                      (ii)  OPTION PRICE.  Each Option Notice shall state the
Option price per Share, which shall be 100% of the Fair Market Value of a Share
on the date of the grant of the Option (the "Option Price"). For purposes
hereof, "Fair Market Value" shall be the closing price on the applicable date of
a Share, as reported on the New York Stock Exchange (the "NYSE"), or, if the
Shares are not then listed for trading on the NYSE, the closing price of the
Shares as reported on another recognized securities exchange or on the NASDAQ
National Market System if the Shares shall then be listed on such exchange or
system. If the Shares did not trade on the award date on the NYSE or such other
applicable exchange or system, the Fair Market Value for purposes hereof shall
be the reported closing price on the last business day on which the Shares were
traded preceding the award date.

                      (iii)  OPTION PRICE.  The Option Notice may provide that
the Optionee may make payment of the Option Price in cash, Shares or such other
consideration as may be specified therein or as may be acceptable to the
Committee, or any combination thereof, in an amount or having an aggregate
value, as the case may be, equal to the total Option Price. Such payment shall
be made upon exercise of the Option.

                      (iv)  TERM, TRANSFERABILITY AND EXERCISABILITY OF OPTIONS.
                             (a)  Each Option Notice shall state the date on
which the Option shall expire (the "Expiration Date"), which shall be ten years
from the date on which the Option is awarded. Options are not assignable or
transferable by an Optionee other than by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations order as defined by
the Code or by Title I of the Employee Retirement Income Security Act, or the
rules thereunder. Notwithstanding the foregoing, if provided in the applicable
Option Notice (at the time of grant or at any time thereafter), an Option
granted hereunder may be transferred for no consideration by the Optionee to
members of his or her immediate family, to a trust or trusts established for the
exclusive benefit only of one or more members of his or her immediate family or
to a partnership in which his or her immediate family members are the only
partners. 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 Optionee's children, stepchildren, grandchildren,
parents, stepparents, grandparents, spouse, siblings (including half brothers
and sisters), in-laws, and relationships arising because of legal adoption.

                             (b)   Options granted pursuant to Section 5(A)(i)
hereof shall become exercisable in five equal annual installments of twenty
percent (20%) per year. Options granted pursuant to Section 5(A)(ii) hereof
shall become exercisable in four substantially equal installments (without
taking into account any fractional share) on the dates which follow the date of
the grant by 90, 180, 270 and 360 days, respectively. Once Options with respect
to Shares become exercisable as aforesaid, they may be exercised in whole or in
part from time to time through the applicable Expiration Date, subject to the
terms and conditions hereof. Upon or in connection with a Change of


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Ownership, each Optionee shall have the right, immediately prior to such Change
of Ownership, to exercise his or her Options without regard to the foregoing
installment provisions as to exercisability. For purposes of this Plan, a
"Change of Ownership" shall be deemed to have occurred (1) if individuals who,
as of the effective date of this Plan, constitute the Board of Directors of the
Company (the "Board of Directors" generally and as of the date hereof the
"Incumbent Board") cease for any reason to constitute at least a majority of the
directors constituting the Board of Directors, provided that any person becoming
a director subsequent to the effective date of this Plan whose election, or
nomination for election by the Company's shareholders, was approved by a vote of
at least three-quarters (3/4) of the then directors who are members of the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is (A) in connection with the acquisition by a
third person, including a "group" as such term is used in Section 13(d)(3) of
the Securities and Exchange Act of 1934, as amended (the "1934 Act"), of
beneficial ownership, directly or indirectly, of 20% or more of the combined
voting securities ordinarily having the right to vote for the election of
directors of the Company (unless such acquisition of beneficial ownership was
approved by a majority of the Board of Directors who are members of the
Incumbent Board), or (B) in connection with an actual or threatened election
contest relating to the election of the directors of the Company, as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act) shall
be, for purposes of this Plan, considered as though such person were a member of
the Incumbent Board; or (2) if the stockholders of the Company approve a merger,
consolidation, recapitalization or reorganization of the Company, reverse split
of any class of voting securities of the Company, or an acquisition of
securities or assets by the Company, or the sale or disposition by the Company
of all or substantially all of the Company's assets, or if any such transaction
is consummated without stockholder approval, other than any such transaction in
which the holders of outstanding Company voting securities immediately prior to
the transaction receive, with respect to such Company voting securities, voting
securities of the surviving or transferee entity representing more than 60
percent of the total voting power outstanding immediately after such
transaction, with the voting power of each such continuing holder relative to
other such continuing holders not substantially altered in the transaction; or
(3) if the stockholders of the Company approve a plan of complete liquidation of
the Company.

                             (c)  At any time and from time to time when any
Option or portion thereof is exercisable, such Option or portion thereof may be
exercised in whole or in part, as applicable; provided, however, that the
Company shall not be required to issue fractional Shares.

                      (v)  TERMINATION OF SERVICE EXCEPT BY DEATH, DISABILITY,
RETIREMENT OR REMOVAL FOR CAUSE. In the event that the Optionee shall cease to
be an Outside Director for any reason other than death, disability, retirement
or removal for cause as further provided herein, Options granted pursuant to
Section 5(A)(i) hereof may be exercised only within three (3) months after such
termination of service or such longer period as may be established by the
Committee at the time of grant or thereafter. Sections 5(B)(vi) and 5(B)(viii)
hereof shall not be construed to limit the right of an Optionee (or, in the case
of the death of an Optionee, the persons referenced in the second sentence of
Section 5(B)(vi)) to exercise Options granted pursuant to Section 5(A)(ii)
hereof prior to their Expiration Date. Notwithstanding anything contained in
this Plan to the contrary, any Option that is not exercisable on the last day on
which an Optionee is an Outside Director shall expire immediately, and in no
event shall any Option be exercised after its Expiration Date.


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                      (vi)  DEATH OR DISABILITY OF OPTIONEE.  In the event an
Optionee shall die or become disabled while a director of the Company, Options
may be exercised at any time within one (1) year after the Optionee's death or
disability or such longer period as may be established by the Committee at the
time of grant or thereafter, but only to the extent that such Option was
exercisable by the Optionee on the last day on which the Optionee was an Outside
Director, and in no event may an Option be exercised after its Expiration Date.
During such one-year period, the Option may be exercised by the Optionee or a
representative, or in the case of death, by the executors or administrators of
the Optionee or by any person or persons who shall have acquired the Option
directly from the Optionee by bequest or inheritance. Whether an Optionee shall
have become disabled for the purposes of the Plan shall be determined by the
Committee, which determination shall be final and conclusive.

                      (vii)  REMOVAL FOR CAUSE.  If an Optionee is removed as a
director of the Company on account of any act of (a) fraud or intentional
misrepresentation or (b) embezzlement, misappropriation or conversion of assets
or opportunities of the Company, or any unauthorized disclosure of confidential
information or trade secrets of the Company, all unexercised Options shall
terminate as of the date of such Optionee's removal.

                      (viii)  RETIREMENT.  To the extent an Option was
exercisable on the last date of service as a director of the Company, such
Option may be exercised up to one (1) year following the Optionee's retirement
at or after age 75 or such longer period as may be established by the Committee
at the time of grant or thereafter, but in no event may an Option be exercised
after its Expiration Date.

                      (ix)  RECAPITALIZATION, REORGANIZATION, ETC., OF  COMPANY.

                             (a)  Subject to any required action by the
stockholders, the number of Shares covered by each outstanding Option, and the
price per Share so covered, shall automatically be proportionately adjusted for
any increase or decrease in the number of issued shares of Class A Common Stock
of the Company resulting from a subdivision or consolidation of Shares or the
payment of a stock dividend or any other increase or decrease in the number of
such shares effected without receipt of consideration by the Company.

                             (b)  If, pursuant to any reorganization,
recapitalization, sale or exchange of assets, consolidation or merger,
outstanding Class A Common Stock of the Company is or would be exchanged for
other securities of the Company or of another corporation which is a party to
such transaction, or for property, whether or not any such transaction gives
rise to a Change of Ownership, any Options under the Plan theretofore granted
shall apply to the securities or property into which the Class A Common Stock
covered thereby shall be so changed or for which such Class A Common Stock shall
be exchanged. In any of such events, the total number and class of Shares then
remaining available for issuance under the Plan (including Shares reserved for
outstanding Options and Shares available for future grant of Options under the
Plan) shall likewise be adjusted so that the Plan shall thereafter cover the
number and class of shares equivalent to the Shares covered by the Plan
immediately prior to such event.


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                             (c)  In the event of a change in the Class A Common
Stock of the Company as presently constituted, which is limited to a change of
all of its authorized shares with par value into the same number of shares with
a different par value or without par value, the shares resulting from any such
change shall be deemed to be the Class A Common Stock within the meaning of the
Plan.

                             (d)  Adjustments pursuant to Section 5(B)(ix)(b)
hereof shall be made by the Committee, whose determination as to which shall be
final, binding and conclusive.

                             (e)  Except as hereinbefore expressly provided in
this Section 5(B)(ix), an Optionee shall have no rights by reason of any
subdivision or consolidation of shares of stock of any class or the payment of
any stock dividend or any other increase or decrease in the number of shares of
stock of any class or by reason of any dissolution, liquidation, merger or
consolidation or spin-off of assets or stock of another corporation, and any
class, or securities convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Class A Common Stock subject to the Option.

                             (f)  The grant of an Option pursuant to the Plan
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, mergers, reorganizations or changes of its
capital or business structure, to merge or to consolidate, to dissolve or
liquidate or to sell or transfer all or any part of its business or assets.

                      (x)  RIGHTS AS A STOCKHOLDER.  No person shall have any
rights as a stockholder with respect to any Shares covered by an Option until
the date of the issuance of the Shares to such person. No adjustments shall be
made to outstanding Options for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights, except as
provided in Section 5(B)(ix) hereof.

                      (xi)  MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS.
Subject to the terms and conditions and within the limitations of the Plan, the
Committee may modify, extend or renew outstanding Options granted under the
Plan, or accept the surrender of outstanding Options (to the extent not
theretofore exercised). Notwithstanding the foregoing, however, no modification
of an Option shall, without the consent of the Optionee, alter or impair any
rights or obligations under any Option theretofore granted under the Plan.

                      (xii)  INVESTMENT PURPOSE.  Each Option under the Plan
shall be granted on the condition that the purchases of Shares hereunder shall
be for investment purposes and not with a view to resale or distribution, except
that in the event the Shares subject to such Option are registered under the
Securities Act of 1933, as amended (the "Act"), or in the event a resale of such
Shares without such registration would otherwise be permissible, such condition
shall be inoperative if, in the opinion of counsel for the Company, such
condition is not required under the Act, or any other applicable law, regulation
or rule of any governmental agency.


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                      (xiii)  OTHER PROVISIONS.  The Option Notice shall comply
with and be subject to the terms and conditions of the Plan, and shall contain
such other terms, conditions and provisions as the Committee shall deem
advisable.

        6.     TERM OF PLAN

               Options shall be granted pursuant to the Plan from time to time
within the period of ten years from the earlier of the date of adoption of the
Plan and the date on which the Plan is approved by the stockholders of the
Company.

        7.     AMENDMENT OF THE PLAN

               The Board of Directors may, insofar as permitted by law, from
time to time, with respect to any Shares not then subject to Options, suspend or
discontinue the Plan or revise or amend it in any respect whatsoever, subject to
the approval of the stockholders of the Company where such approval is required
by law or regulation or pursuant to the rules of the NYSE or, if the Shares are
not listed on the NYSE, the rules of any other exchange or market on which the
Shares may be traded.

        8.     APPLICATION OF FUNDS

               The proceeds received by the Company from the sale of shares
pursuant to Options will be used for general corporate purposes.

        9.     NO OBLIGATION TO EXERCISE OPTION

               The granting of an Option shall impose no obligation upon the
Optionee to exercise such Option.

        10.    APPROVAL OF STOCKHOLDERS

               This Plan shall be effective upon its approval by the
stockholders of the Company.

        11.    NO RIGHT TO NOMINATION

               Neither the Plan nor any action taken hereunder shall be
construed as giving any director any right to be nominated for reelection to the
Company's Board of Directors.

        12.    EFFECT OF PLAN UPON OTHER OPTIONS AND COMPENSATION PLANS

               The adoption of this Plan shall not affect any other compensation
or incentive plans in effect for the Company or any Subsidiary. Nothing in this
Plan shall be construed to limit the right of the Company or any Subsidiary to
(a) establish any other forms of incentives or compensation for


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employees or directors of or persons associated with the Company or any
Subsidiary, or (b) grant or assume options otherwise than under this Plan in
connection with any proper corporate purpose, including, but not by way of
limitation, the grant or assumption of options in connection with the
acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or association.



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