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                                                                    EXHIBIT 10.1


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


                                  INTRODUCTION

        Delphi Financial Group, Inc. (the "Company") adopted the Delphi
Financial Group, Inc. Employee Nonqualified Stock Option Plan effective November
6, 1987, and amended and restated such plan effective January 1, 1994. Because,
under the terms of such plan, options could only be granted thereunder within a
period of ten years from when the plan was originally approved by the Company's
stockholders, the plan was, effective as of March 20, 1997 (subject to the
approval of the stockholders of the Company), further amended and restated to
readopt such plan, as well as to consolidate prior plan amendments and
adjustments, including, among other things, the adjustment to the number of
shares available for issuance thereunder that resulted from the twenty percent
(20%) stock dividend distributed by the Company on September 30, 1996, and to
effect certain further amendments. Such plan, as so amended and restated, and as
further amended on May 9, 2000 and February 7, 2001 (subject to the approval of
the stockholders of the Company) to increase the aggregate number of shares as
to which options may be granted thereunder, is as follows:

        1.      PURPOSE

                This Second Amended and Restated Employee Stock Option Plan (the
"Plan") is intended to be an incentive for employees of Delphi Financial Group,
Inc. (the "Company") or any of its subsidiary corporations (the "Subsidiaries")
as that term is defined in Section 424(f) of the Internal Revenue Code of 1986,
as amended from time to time (the "Code"), and other Optionees (as herein
defined) to share in future appreciation in the value of the stock of the
Company, and to encourage stock ownership by such individuals in the Company, so
that such individuals may acquire or increase a proprietary interest in the
success of the Company and its Subsidiaries, and so that they may be encouraged
to continue to provide services to the Company and its Subsidiaries. The Plan
provides for the issuance of nonqualified and incentive stock options within the
meaning of Section 422 of the Code (each, an "Option").

        2.     ADMINISTRATION

               The Plan shall be administered by a committee appointed by the
Board of Directors of the Company (the "Committee"). The Committee shall consist
of not less than two members of the Company's Board of Directors. The Board of
Directors may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by the
Board of Directors. The Committee shall select one of its members as Chairman
and shall hold meetings at such times and places as it may determine. A majority
of the members of the

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Committee then constituting the entire Committee shall constitute a quorum. Acts
by a majority of the Committee at a meeting at which a quorum is present, or
acts reduced to or approved in writing by a majority of the members of the
Committee, shall be valid acts of the Committee. The Committee shall from time
to time in its discretion determine the individuals who shall be granted Options
and the number of Shares (as hereinafter defined) to be subject thereto.

        3.     ELIGIBILITY

               The persons who shall be eligible to receive Options (the
"Optionees") shall be the key employees (including officers whether or not they
are directors) of the Company or its Subsidiaries and other individuals who, in
the Committee's judgment, can make substantial contributions to the Company's
long-term profitability and value. An Optionee may be granted Options on more
than one occasion.

        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 3,400,000. The aggregate number of Shares as to which
Options may be granted to any person in any one calendar year shall not exceed
500,000. The limitations established by the two immediately preceding sentences
shall be subject to adjustment as provided in Article 5(l) 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

               When the Committee grants Options to an Optionee, a Notice of
Grant of Stock Option (an "Option Notice") shall be given to such Optionee,
which notice shall comply with and be subject to the following terms and
conditions:

               (a)  NUMBER OF SHARES.  Each Option Notice shall state the number
of Shares to which the Options pertain.

               (b)  INCENTIVE STOCK OPTIONS. The Option Notice for an Option
that is intended to qualify as an incentive stock option under Section 422 of
the Code shall state that the Option is intended to so qualify, and shall
contain such provisions as may be necessary for such Option to so qualify.

               (c)  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


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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.

               (d)  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.

               (e)  TERM, TRANSFERABILITY AND EXERCISABILITY OF OPTIONS.

                      (i)  Each Option Notice shall state the date on which the
Option shall expire (the "Expiration Date"), which shall not be later than ten
years following the date on which the Option is granted. Options are not
transferable by an Optionee other than by will or the laws of descent and
distribution, except that in the case of nonqualified stock options, if provided
in the applicable Option Notice (at the time of grant or as amended 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 such a 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. Subject to Article 5(j) hereof,
Options may be exercised by an Optionee only for so long as such person is
employed by the Company or a Subsidiary except as otherwise provided in Articles
5(f) through (i) of the Plan.

                      (ii)  The Option Notice may, but need not, provide that
the Option shall become exercisable in installments rather than being
exercisable immediately in full. In such case, the Committee shall determine (A)
the amount and terms of such installments, which need not be equal, (B) the
timing of such installments, which need not be annual or consecutive, and (C)
whether such installments shall be cumulative. The Committee at any time may
provide, in the case of an Option which is to become exercisable in
installments, for the acceleration of the times at which the Option may become
exercisable. The Committee's determination shall be specified in the Option
Notice.

                      (iii)  Upon or in connection with a Change of Ownership,
each Optionee shall have the right, immediately prior to such Change of
Ownership, to exercise his or her Option without regard to any installment
provisions as to exercisability contained in such Optionee's Option Notice.

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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.

                      (iv)  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.

               (f)  TERMINATION OF EMPLOYMENT EXCEPT BY DEATH, DISABILITY OR
DISCHARGE FOR CAUSE. Unless otherwise specified in an Option Notice, in the
event that the employment of an Optionee by the Company or its Subsidiaries
shall terminate for any reason other than death, disability, or discharge for
cause, Options may be exercised only within three (3) months after such
termination of employment or such longer period as may be established by the
Committee at the time of grant or thereafter, but only to the extent such Option
was exercisable on the last day of employment, and in no event may an Option be
exercised after its Expiration Date. Any portion of the Option which was not
exercisable on such last day shall expire immediately. Whether authorized leave
or absence or absence for military or governmental service shall constitute
termination of employment for the purposes of the Plan shall be determined by
the Committee, which determination shall be final and conclusive.

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               (g)  DEATH OR DISABILITY OF OPTIONEE. Unless otherwise specified
in an Option Notice, in the event an Optionee shall die or become disabled while
in the employ of the Company or a Subsidiary, 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 on the last
day of employment, 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.

               (h)  DISCHARGE FOR CAUSE. If an Optionee is discharged for cause,
all unexercised Options shall terminate as of the date of his discharge. Whether
an Optionee is discharged for cause for purposes of the Plan shall be determined
by the Committee, which determination shall be final and conclusive.

               (i)  RETIREMENT. Notwithstanding the provisions of Article 5(f)
hereof, the Committee may, at the time of grant of an Option or thereafter,
permit the Optionee to exercise Options (but only to the extent the Option was
exercisable on the last date of employment) up to one (1) year following the
Optionee's retirement under the Company's or its Subsidiary's, as applicable,
retirement policy or such longer period as may be established by the Committee
at the time of grant or thereafter; provided that in no event may an Option be
exercised after its Expiration Date.

               (j)  NON-EMPLOYEE OPTIONEES. Neither the last sentence of Article
5(e)(i) nor any of Articles 5(f) through 5(i) hereof shall apply with respect to
Options having been granted to an Optionee who is not an employee of the Company
or its Subsidiaries (a "Non-Employee Optionee"). In the case of any such
Options, the Option Notice shall set forth the applicable limitations on the
exercisability thereof, and the effect on such exercisability of death,
disability and any other events provided for therein, at the time of grant or
thereafter.

               (k)  RIGHT OF COMPANY. In the case of a termination of an
Optionee's employment by reason of death, disability, retirement or discharge
other than for cause (or, in the case of a Non-Employee Optionee, to the extent
provided in the Option Notice at the time of grant or thereafter) the Company
may, but is not obligated to, purchase unexercised Options held by such Optionee
and pay such person the amount of cash equal to (i) the aggregate Fair Market
Value of Shares underlying such Option (to the extent that such Options would
have been exercisable by the Optionee upon termination of employment) as of the
date of termination of employment (or, in the case of a Non-Employee Optionee,
the date provided in the Option Notice at the time of grant or thereafter), less
(ii) the aggregate Option Price for such Shares.


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

                      (i)  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.

                      (ii)  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.

                      (iii)  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.

                      (iv)  Adjustments pursuant to Article 5(l)(ii) hereof
shall be made by the Committee, whose determination as to which shall be final,
binding and conclusive.

                      (v)  Except as hereinbefore expressly provided in this
Article 5(l), 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.

                      (vi)  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.

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               (m) 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 for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights, except as provided in Article 5(l)
hereof.

               (n) 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.

               (o) 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.

               (p) OTHER PROVISIONS. The Option Notice shall contain such other
provisions, including, without limitation, restrictions upon exercise of the
Option or the transfer of the Shares received upon an exercise, as the Committee
shall deem advisable.

        6.     TERM OF PLAN

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

        7.     PROFESSIONAL ASSISTANCE; GOOD FAITH ACTIONS

               (a) The Committee may employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Company and the
officers and directors of the Company shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee shall be final and
binding upon all Optionees, the Company and all other interested persons. No
member of the Committee shall be personally liable for any action, determination
or interpretation made with respect to the Plan or the Options and all members
of the Committee shall be fully protected by the Company in respect to any such
action, determination or interpretation.

               (b) In addition to such other rights of indemnification as they
may have as directors or as members of the Committee, the members of the
Committee shall be indemnified by the

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Company against the reasonable expenses, including attorneys' fees actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan or any Option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding except in
relation to matters to which it shall be adjudged in such action, suit or
proceeding that such Committee member is liable for negligence or misconduct in
the performance of his duties; provided that within 60 days after institution of
any such action, suit or proceeding the Committee member shall in writing offer
the Company the opportunity, at its own expense, to handle and defend the same.

        8.     AMENDMENT OF THE PLAN

               The Board of Directors of the Company or the Committee 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.

        9.     APPLICATION OF FUNDS

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

        10.    NO OBLIGATION TO EXERCISE OPTION

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

        11.    APPROVAL OF STOCKHOLDERS

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

        12.    NO EFFECT ON EMPLOYMENT

               The grant of an Option pursuant to the Plan shall not be
construed to imply or to constitute evidence of any agreement, express or
implied, on the part of the Company or any Subsidiary to employ or continue to
employ any individual or which relates in any way to the responsibilities,
duties or authority of any employee or individual.


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        13.    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 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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