Document:

Exhibit 10.6

                                 XL CAPITAL LTD
                        INCENTIVE STOCK OPTION AGREEMENT

               THIS AGREEMENT,  made and entered into as of the date of the ____
day of  __________,  200_,  by and  between  XL Capital  Ltd,  a Cayman  Islands
corporation (the "Company"), and ______________ (the "Employee");

                                   WITNESSETH:

               WHEREAS,  the Board of Directors of the Company is of the opinion
that the  interest of the Company  will be advanced by granting an  incentive to
employees and by encouraging and enabling them to acquire stock ownership in the
Company  and  assuring a close  identity  of their  interests  with those of the
Company; and

               WHEREAS,  pursuant  to the  provisions  of the  1991  Performance
Incentive  Program (the "Program") of the Company,  the Committee (as defined in
the Program) has  authorized  and  directed the  execution  and delivery of this
Agreement in the name of and on behalf of the Company;

               NOW THEREFORE, the parties hereto agree as follows:

               a.  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,  the Company
hereby  grants on the date set forth above to the  Employee the right and option
to purchase all or any part of the aggregate number of shares set forth below of
Ordinary  Shares of the Company,  to be issued or transferred as provided in the
Program at the option price per share set forth  below.  This option is intended
to be an incentive stock option as defined in Section 422 of the Code.  However,
the option will qualify as an incentive stock option only to the extent that the
aggregate  fair  market  value  (determined  on the date of grant) of the shares
(together with shares under other incentive stock options granted by the Company
to the Employee) for which the incentive stock options first become  exercisable
in any calendar  year does not exceed  US$100,000.  Should the fair market value
exceed US$100,000, the options to the extent of such excess shall be regarded as
Nonstatutory Stock Options.

               Option to purchase  ______________  shares, for _____________ per
share.

               One-fourth  of such options shall become  exercisable  on each of
the first four anniversaries of the date of grant;  PROVIDED,  HOWEVER, that the
option shall be immediately  exercisable in full (i) in the event of a Change of
Control,  (ii) upon  termination of the Employee's  employment due to his or her
death,  Disability or  Retirement,  or (iii) upon  termination of the Employee's
employment by the Company by reason of the Employee's  Redundancy.
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                                     - 2 -

"Redundancy" shall mean termination of employment by the Company due to its need
to reduce the size of its workforce, including due to closure of a business or a
particular  workplace or change in business  process.  Whether a termination  of
employment  is due to  "Redundancy"  shall be  determined  in good  faith by the
Committee in its sole and absolute  discretion,  such determination  being final
and binding on all parties hereto and all persons claiming through,  in the name
of or on behalf of such parties.  The portion of the option, if any, that is not
exercisable immediately following termination of the Employee's employment shall
be immediately forfeited.

               b. The option herein granted may be exercised in whole or in part
by  the  Employee  giving  notice  of  exercise  to  the  Program  administrator
designated  from time to time by the  Company  stating the number of shares with
respect to which the option is being exercised. Such notice shall be in the form
prescribed by the Company from time to time.  Such  exercise  shall be effective
upon (1) receipt of such  written  notice by the Program  administrator  and (2)
payment in full of the option price.

               c. The  Employee  agrees (1) not to disclose  any trade or secret
data or any other  confidential  information  acquired during  employment by the
Company  or a  subsidiary  of  the  Company,  during  employment  or  after  the
termination  of  employment  or  retirement,  (2) to abide by all the  terms and
conditions of the Program and such other terms and  conditions as may be imposed
by the  Committee,  and (3) not to interfere  with the  employment  of any other
employee of the Company or a subsidiary of the Company.  d. The options  granted
under this  Agreement  shall  expire upon the first of the  following  events to
occur:

     (i)       The tenth anniversary of the Agreement;

     (ii)      The third anniversary of the death or Disability of the Employee;

     (iii)     Unless otherwise provided in an Employment  Agreement between the
               Employee and the Company, the third anniversary of termination of
               the Employee's employment by the Company not for Cause (including
               termination of the Employee's employment by the Company by reason
               of the Employee's Redundancy) within two years following a Change
               of Control (the "Post-Change Period");

     (iv)      Ninety days following termination of the Employee's employment by
               the  Company  not  for  Cause   (including   termination  of  the
               Employee's  employment by the Company by reason of the Employee's
               Redundancy) outside a Post-Change Period;
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                                     - 3 -

     (v)       The last date of  employment  of the  Employee if  employment  is
               terminated by the Company for Cause; or

     (vi)      Thirty days after the last date of  employment of the Employee if
               employment terminates other than due to the Employee's Retirement
               and other than as set forth in (ii),  (iii),  (iv) or (v) of this
               paragraph  d.  For  the  avoidance  of  doubt,  if an  Employee's
               employment  terminates  due to  the  Employee's  Retirement,  the
               option shall remain  exercisable  until the tenth  anniversary of
               this Agreement.

"Cause" shall mean:

               (A)  conviction  of the  Employee  of a  felony  involving  moral
turpitude or dishonesty;

               (B) the  Employee,  in  carrying  out his or her  duties  for the
Company,  has been  guilty  of (1)  gross  neglect  or (2)  willful  misconduct;
PROVIDED,  HOWEVER,  that any act or  failure to act by the  Employee  shall not
constitute  Cause for this purpose if such act or failure to act was  committed,
or omitted, by the Employee in good faith and in a manner reasonably believed to
be in the overall best interests of the Company.  The  determination  of whether
the Employee 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;
or

               (C)  the  Employee'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.

               e. The Employee  acknowledges  that when the Employee is required
to  recognize  income for any tax  purposes as the result of the  exercise of an
option to purchase shares  pursuant to this  Agreement,  that such income may be
subjected to the withholding of tax by the Company. The Employee agrees that the
Company may either withhold an appropriate  amount from any  compensation or any
other  payment  of any kind then  payable  or which may  become  payable  to the
Employee,  or the Company may require the Employee to make a cash payment to the
Company  equal to the  amount of  withholding  required  in the  opinion  of the
Company.  In the event the Employee  does not make such payment when  requested,
the Company may refuse to issue or cause to be  delivered  any shares under this
Agreement  entered into pursuant to the Program until such payment has been made
or
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                                     - 4 -

arrangements  for such payment  satisfactory  to the Company have been made.  In
addition,  such  withholding  tax  obligations  may be satisfied by  withholding
Shares upon exercise of the option;  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.

               f. The  Employee  shall  have no  rights  as a  shareholder  with
respect  to any  Ordinary  Shares  subject to this  option  prior to the date of
exercise of the option by such Employee.

               g. This option may not be assigned or  otherwise  transferred  in
any manner  other than by will or the laws of descent and  distribution,  and it
may be exercised during the lifetime of the Employee only by the Employee.

               h. This Agreement  shall be binding upon and inure to the benefit
of the Company and the Employee and their respective heirs,  representatives and
successors.

               i. The  Employee,  by execution of this  Agreement,  acknowledges
receipt of the option granted on the date shown above,  as well as a copy of the
Program and the Program Prospectus.

               IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed  this
Agreement, all as of the date of grant set forth above.

ATTEST:                                              XL CAPITAL LTD

_______________________                              By:________________________
WITNESS:

_______________________                              ___________________________
                                                     [Name of Employee]Exhibit 10.7

                           RESTRICTED STOCK AGREEMENT

               AGREEMENT,  made and entered into as of _________  ___,  200__ by
and between XL Capital Ltd, a Cayman Islands corporation ("XL"), and <<Grantee>>
(the "Grantee").

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

               WHEREAS,  XL 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  Shares (as defined) under the Company's 1991
Performance Incentive Program;

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

               (a)   GRANT OF RESTRICTED SHARES.

               XL hereby  grants to the  Grantee,  for a cash  consideration  of
US$0.01 per Share, an award (the "Award") of <<NoOfShares>>  Ordinary Shares, US
$0.01 par value per share,  of XL ("Shares"),  subject to the  restrictions  set
forth  below (the  "Restricted  Shares").  The Award is granted  pursuant to the
terms of the Company's 1991 Performance Incentive Program, which is incorporated
by reference herein.

               (b)  ISSUANCE OF RESTRICTED SHARES.

               A stock  certificate  representing the Restricted  Shares granted
and issued to the Grantee under the Award shall be issued in the Grantee's  name
upon the Grantee's  delivery to XL of the par value for such Shares in such form
as XL may require.
<PAGE>
                                     - 2 -

               The  stock  certificate  shall be held in  custody  by XL for the
Grantee's account.

               (c)  RESTRICTED PERIOD.

               The  Restricted  Period  means  the  period of time from the date
hereof until the Award vests, during which period the restrictions  imposed upon
the Award by paragraph (d) below shall apply.  The Award will vest in four equal
annual  installments,  beginning  on the first  anniversary  of the date hereof;
PROVIDED,  HOWEVER,  that the Award shall vest in full upon an Early Termination
(as defined in paragraph (e) below).

               (d)  RIGHTS AND RESTRICTIONS.

               The Grantee shall  generally  have the rights and privileges of a
shareholder  as to  the  Restricted  Shares,  including  the  right  to  receive
dividends  and the  right to vote  such  Restricted  Shares,  EXCEPT  THAT,  the
following  restrictions  shall apply:  (i) the Grantee  shall not be entitled to
delivery of a stock  certificate  representing  the Restricted  Shares until the
expiration or Early  Termination  of the Restricted  Period;  (ii) no Restricted
Share may be sold,  transferred,  assigned,  pledged,  or otherwise  encumbered,
tendered or exchanged, or disposed of before the expiration or Early Termination
of the Restricted  Period; and (iii) the Restricted Shares shall be forfeited to
XL and  redeemed  by it for  US$0.01  per Share and all rights of the Grantee to
such Restricted Shares shall terminate without further obligation on the part of
XL unless the Grantee has continuously remained an employee of the Company until
the expiration date of the Restricted Period or its Early Termination.

               In the case of a tender or exchange  offer that is  applicable to
any outstanding  Restricted  Shares with respect to which  restrictions have not
lapsed,  the Board of Directors of XL, and not the Grantee,  shall have the sole
right to determine  and to instruct  the Company as to whether  such  Restricted
Shares are to be tendered or exchanged.
<PAGE>
                                     - 3 -

               (e)  EARLY TERMINATION.

                  The  restrictions  contained  in  paragraph  (d) above and the
Restricted Period shall terminate  immediately  ("Early  Termination")  upon the
happening of any of the following events:

               (i) DEATH OF GRANTEE.  In the event the Grantee dies while in the
          employment of the Company.

               (ii)  TERMINATION OF EMPLOYMENT  DUE TO DISABILITY.  In the event
          the Grantee's employment with the Company is terminated by the Company
          by  reason  of  the  Grantee's  Disability.   "Disability"  means  the
          inability  of the  Grantee,  as a result of accident or  sickness,  to
          perform the duties pertaining to his occupation or employment with the
          Company as determined by the Company.

               (iii)  TERMINATION OF EMPLOYMENT DUE TO RETIREMENT.  In the event
          the Grantee's  employment with the Company is terminated due to his or
          her Retirement.

               (iv)  TERMINATION OF EMPLOYMENT  DUE TO REDUNDANCY.  In the event
          the Grantee's employment with the Company is terminated by the Company
          by  reason  of  the  Grantee's  Redundancy.  "Redundancy"  shall  mean
          termination of employment by the Company due to its need to reduce the
          size of its  workforce,  including  due to closure of a business  or a
          particular  workplace  or  change  in  business  process.   Whether  a
          termination of employment is due to  "Redundancy"  shall be determined
          in good faith by the  Committee in its sole and  absolute  discretion,
          such
<PAGE>
                                     - 4 -

          determination  being final and  binding on all parties  hereto and all
          persons claiming through, in the name of or on behalf of such parties.

               (v) CHANGE OF CONTROL.  In the event there is a Change of Control
          of the Company.

               (f)  LAPSE OF RESTRICTIONS; DELIVERY OF CERTIFICATE.

               Upon  the  expiration  of the  Restricted  Period,  or its  Early
Termination,  the restrictions  applicable to the Restricted Shares shall lapse.
As  promptly  as  administratively  feasible  thereafter,  XL shall  deliver  to
Grantee,  or if Grantee is deceased,  to Grantee's  personal  representative,  a
stock certificate for such Shares free of all such  restrictions.

               (g)  STATUS OF SHARES.

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

               (h)  ADJUSTMENTS FOR RECAPITALIZATIONS, ETC.

               In the  event of any  change  in the  number  or nature of Shares
outstanding  prior to the lapse of  restrictions  with respect to the Award,  by
reason of stock dividends, split-ups, recapitalizations, combinations, exchanges
of shares or the like,  the  number  of  Shares  subject  to the Award  shall be
adjusted  accordingly by the Board of Directors of XL so as to avoid dilution or
other material adverse effect to the Grantee's rights hereunder.

               (i)  OBLIGATIONS AS TO CAPITAL.

               XL  agrees  that it will at all  times  maintain  authorized  and
unissued share capital  sufficient to fulfill all of its obligations  under this
Agreement.
<PAGE>
                                     - 5 -

               (j)  WITHHOLDING.

               The Grantee agrees to make appropriate  arrangements  with XL for
satisfaction  of any applicable  income tax  withholding  requirements or social
security or similar  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)  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.

               (l)  NOTICE.

               Any  notice  or  communication  to  be  given  to XL  under  this
Agreement  shall be in  writing  and shall be deemed  to have  been  given  when
delivered  personally or sent by certified or registered mail,  postage prepaid,
duly addressed to XL Capital Ltd, XL House, One Bermudiana Road, Hamilton HM 08,
Bermuda.

               (m)  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.
<PAGE>
                                     - 6 -

                  IN WITNESS  WHEREOF,  the parties hereto have duly caused this
Agreement to be executed and delivered on the date first above written.

                                             XL Capital Ltd

                                             By: ______________________________

                                             ________________________________
                                             <<Grantee>>

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