Exhibit 10.2


RESTRICTED STOCK UNIT AGREEMENT 
(for U.S. Taxpayers Based in the Bermuda)


                    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)(iv) below) and shall vest as set forth in
paragraph (e)(iii) below in the event of termination of the Grantee’s
employment by the Company not for Cause. The portion of the Award, if any, that
is not vested immediately following termination of the Grantee’s employment
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, and the 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 physical,
mental or emotional incapacity resulting from injury, sickness or disease; provided,
however, that with respect to any Grantee 


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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)
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.



                         (iv)
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. 


                    (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. 


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                    (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 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. 


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                    (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. 

 



                    (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” 


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(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
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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