Document:

Exhibit 10.4

XL Group plc 2009 Cash Long-Term Program

(Amended and Restated as of April 30, 2010)

	
  

 	
  

 
	
 Section 1.

 	
 Purposes of the Plan

 

                    The
purpose of the 2009 Cash Long-Term Program is to advance the interests of XL
Group plc and its shareholders by creating a transitional long-term incentive
compensation vehicle for calendar year 2009 that is designed to be aligned with
the delivery of underwriting results. The Plan is intended to foster a culture
of performance, teamwork, accountability and retention for individuals who are
selected to participate in the Plan in accordance with these guidelines. The
Plan is designed to pay out in cash in annual installments over three years, as
set forth below. There are no deferral provisions with respect to the Award
Amounts.

	
  

 	
  

 
	
 Section 2.

 	
 Definitions

 

                    “Award
Amount” means the amount of a Participant’s award under the Plan that is determined
based on the Participant’s Face Value Award and the 2009 Combined Ratio, as set
forth in Section 5 below, subject to the other Plan terms set forth
herein.

                    “Board”
means the Board of Directors of the Company, or in the case of determinations
hereunder pertaining to the Chief Executive Officer of the Company, the
independent directors of the Board.

                    “Cause”
shall mean (i) Participant’s conviction of a felony involving moral turpitude,
dishonesty or laws to which the Company or its Subsidiaries are subject in
connection with the conduct of its or their business; (ii) Participant’s
willful misconduct that is materially injurious to the financial condition of
the Company or a Subsidiary; (iii) the Participant’s willful refusal to obey
any lawful policy or requirement duly adopted by the Company or a Subsidiary,
(iv) Participant’s willful violation of the policies or Code of Conduct of the
Company or a Subsidiary, (v) Participant’s willful violation of the
underwriting guidelines applicable to the Participant or the underwriting
authority of the Participant, or (vi) as defined in an employment agreement
between the Participant, the Company and/or Subsidiary.

                    “Code”
means the United States Internal Revenue Code of 1986, as amended.

                    “2009
Combined Ratio” means the combined ratio of the Company and its Subsidiaries
for the 2009 calendar year as reported by the Company, with the following
adjustments determined as of the end of calendar year 2009: (i) net prior
year development will be limited to $150 million in aggregate impact (favorable
or adverse); and (ii) the impact of the restructuring charges contemplated
in the Company’s 2009 planning process will be excluded.

                    “Committee”
means the Compensation Committee of the Board, or any successor Committee
approved by the Board.

                    “Company”
means XL Group plc.

                    “Disability”
means permanent and total disability as determined under the Company’s
long-term disability plan covering the Participant.

                    “Face
Value Award” is the amount of an award granted under this Plan (expressed in
US$) that the Participant would earn for a 2009 Combined Ratio of 99.5%. 

                    “Maximum
Award” is the maximum Award Amount for any Participant, which shall be 175% of
the Participant’s Face Value Award.

                    “Minimum
Award” is the minimum Award Amount for any Participant, which shall be 75% of
the Participant’s Face Value Award; provided, however, that
payments under any Award Amount shall be made only to the extent vested in
accordance with the provisions of the Plan.

                    “Named
Executive” shall mean the Chief Executive Officer of the Company and any senior
executive of the Company whose compensation was disclosed in the last preceding
proxy statement pursuant to the federal securities laws and regulations of the
United States.

                    “Participant”
shall be as defined in Section 3.

                    
“Plan” means the XL Group plc 2009 Cash Long-Term Program (2009 LTP).

                    “Subsidiary”
means any corporation at least fifty percent (50%) percent of the outstanding
voting stock of which is owned by the Company.

	
  

 	
  

 
	
 Section 3.

 	
 Eligibility

 

                    Employees
of the Company and its Subsidiaries are eligible to participate in the Plan.
Except as otherwise set forth in Section 4.F. below, the Committee (or the
Board with respect to a Named Executive) shall have the authority to select
which of such employees shall participate in the Plan, and each of those so
selected shall become a Participant.

	
  

 	
  

 
	
 Section 4.

 	
 Administration

 

                    A. Committee. The Plan shall be
administered by the Committee. Subject to Section 4.F. below, the Committee
shall have full discretionary power, consistent with the Compensation Committee
Charter, to: 

	
  

 	
  

 	
  

 
	
 (i)

 	
  

 	
 interpret
 the Plan;

 
	
  

 	
  

 	
  

 
	
 (ii)

 	
  

 	
 determine
 those employees of the Company and its Subsidiaries who are eligible to
 participate in the Plan (except with respect to Named Executives, in which
 case the Board shall make such determination);

 
	
  

 	
  

 	
  

 
	
 (iii)

 	
  

 	
 approve the
 determination of the 2009 Combined Ratio and the adjustments thereto (except
 with respect to Named Executives, in which case the Board shall have such
 approval authority);

 

2

	
  

 	
  

 	
  

 
	
 (iv)

 	
  

 	
 establish
 the Face Value Award for each Participant (except with respect to Named
 Executives, in which case the Board shall make such determination); and

 
	
  

 	
  

 	
  

 
	
 (v)

 	
  

 	
 adopt such
 rules, regulations, and guidelines for administering the Plan as the
 Committee may deem necessary or proper.

 

                    B.
Adjustment to Payments. The Committee (or the Board in the case of a
Named Executive) will have the discretion to adjust the payout result in the
event of a catastrophic event (or a series of such events) above the normal
budgeted catastrophe load, based on the quality of the Company’s underwriting
results compared to industry results. The Company retains the right to withhold
any payment amounts determined hereunder from any Participant who materially
violates the policies or Code of Conduct of the Company or its Subsidiaries or
who materially violates the underwriting guidelines applicable to the
Participant or the underwriting authority of the Participant. 

                    C.
Third-party Advisors. The Committee may employ attorneys, consultants, accountants,
and other persons. The Board, Committee, the Company, and its officers shall be
entitled to rely upon the advice or opinion of such persons.

                    D.
Binding Effect of Committee Actions. All actions taken and all
interpretations and determinations made by the Committee, the Board or the
Chief Executive Officer of the Company (the “CEO”) shall be final and binding
upon the Participants, the Company, and all other interested persons. No member
of the Committee or the Board or the CEO shall be personally liable for any
action, determination, or interpretation made in good faith with respect to the
Plan. All members of the Committee and the Board and the CEO shall be protected
and indemnified by the Company, to the fullest extent permitted by applicable
law and the Company’s by-laws, in respect of any such action, determination, or
interpretation of the Plan.

                    E.
Foreign Jurisdictions. The Committee shall have the discretion to modify
or amend the Plan, or adopt additional terms and or conditions, as may be
deemed necessary or advisable in order to comply with the local laws and
regulations of any jurisdiction.

                    F.
CEO Authority For Non-Executives. Notwithstanding any provision of this
Plan to the contrary, solely in the case of Participants who are not executive
officers of the Company (within the meaning of Rule 3b-7 under the Securities
Exchange Act of 1934, as amended), (i) the CEO shall have the authority to
determine which of such nonexecutive officer employees will be Participants in
the Plan, (ii) the Committee shall establish the maximum aggregate amount of
the Face Value Awards for all such Participants, and (iii) the CEO will have
the authority to establish, consistent with the terms hereof, the Face Value
Awards for each such Participant.

	
  

 	
  

 
	
 Section 5.

 	
 Determination of Awards

 

                    A.
Face Value Award Determinations. Except as otherwise set forth in
Section 4.F. above, the Committee (or in the case of any Named Executive, the
Board) shall

3

establish the
Face Value Award level for each Participant and, in connection therewith, the
recommendations of the CEO shall be obtained and taken into account.

                    B.
Award Amount Payment. The Award Amount for each Participant shall be the
Participant’s Face Value Award, adjusted upward or downward, as set forth in
Appendix A hereto, based on the 2009 Combined Ratio. The Award Amount
shall not be greater than the Maximum Award nor less than the Minimum Award. So
long as the Participant remains continuously employed by the Company or a
Subsidiary through the applicable payment date and has not given notice of
termination of employment prior to the applicable payment date, (i) one
third of the resulting Award Amount will be paid to the Participant on or after
January 1, 2010 and on or prior to March 15, 2010, and (ii) an
additional one third of such Award Amount shall be paid to the Participant on
or after January 1, 2011 and on or prior to March 15, 2011. The
remaining one third of the Award Amount shall be subject to further adjustment
as described in Section 5.C below, and the resulting remaining adjusted amount,
if any, shall be paid to the Participant on or after January 1, 2012 and
on or prior to March 15, 2012, so long as the Participant remains
continuously employed by the Company or a Subsidiary through the payment date
and has not given notice of termination of employment prior to the payment
date. For the avoidance of doubt, the third installment of the Award Amount, as
adjusted and determined pursuant to Section 5.C below, cannot be less than zero
(i.e., prior installment payments of the Award Amount will not be
subject to claw-back) and it is subject to the cumulative maximum and minimum
set forth in Appendix A. 

                    C.
Year Three Award Amount Payment. After the end of calendar year 2011 the
adjusted Award Amount payable during calendar year 2012 shall be determined by
recalculating the 2009 Combined Ratio to take into account subsequent reserve
development (based on the methodology below) through calendar years 2010 and
2011, and the third Award Amount installment will be scaled up or down to
reflect the revised calculation, applied on a cumulative basis. The 2009
Combined Ratio, as previously computed as of December 31, 2009, will be
adjusted for this purpose as follows: (i) 50% of the 2009 accident year
net prior year development and 50% of the 2010 accident year net prior year
development (as reported on a cumulative basis through year end 2011) will be
determined; (ii) that reserve development will be divided by the 2009
calendar year net earned premium and the resulting ratio will then be added or
subtracted to/from the 2009 Combined Ratio to derive an adjusted 2009 Combined Ratio;
and (iii) the adjusted 2009 Combined Ratio will be measured against the
performance grid attached as Appendix A hereto, and the amount payable in 2012
will be adjusted to reflect the aggregate revised payout. 

                    D.
Cash Payments and No Deferral. All payments under this Plan will be made
in cash, and there will be no right of further deferral with respect to any
payments under the Plan. 

	
  

 	
  

 
	
 Section 6.

 	
 Termination of Employment

 

                    A.
Payment Upon Death or Disability. In the event of a Participant’s termination
of employment due to his or her death or Disability, the Participant (or
his/her estate) shall receive payment, if any, with respect an award as
approved by the Committee (or the Board

4

with respect
to Named Executives), and any such payment shall be made within sixty (60) days
after the Participant’s termination of employment.

                    B.
Payment Upon Retirement. In the event of a Participant’s termination of
employment due to retirement, the Committee reserves the right to make any or
no payment to the Participant in light of all relevant facts and circumstances.
The Participant shall have no right to a payment. In the event a payment is
made, such payment shall be made within sixty (60) days following the Participant’s
termination of employment due to retirement.

                    C.
Termination by the Company or its Subsidiary Without Cause. In the event
the Participant’s employment is terminated by the Company or its Subsidiary not
for Cause (including, in the case of a Participant who has an employment
agreement with the Company or a Subsidiary, a termination by the Participant
that is deemed to be a termination by the Company or its Subsidiary without
Cause under the provisions of Section 8(d)(iv) of the employment agreement
or a termination by the Participant for Good Reason under Section 8(d)(iii) of
the employment agreement), the Participant will receive an amount as follows:
(i) if such termination of employment occurs during calendar year 2009, the
amount paid to the Participant will be the lesser of the Face Value Award or
the Award Amount computed based on the 2009 Combined Ratio, and such amount
shall be paid to the Participant on or after January 1, 2010 and on or
prior to March 15, 2010; (ii) if such termination of employment
occurs during calendar year 2010, the amount paid to the Participant will be
the lesser of the Face Value Award or the Award Amount computed based on the
2009 Combined Ratio, reduced by any amount previously paid to the Participant
in respect of the award, and such amount shall be paid to the Participant on or
after January 1, 2011 and on or prior to March 15, 2011; and (iii) if
such termination of employment occurs after calendar year 2010 and before the
payment date for the third installment of the Award Amount, the amount paid to
the Participant will be the lesser of the Face Value Award or the Award Amount
computed based on the 2009 Combined Ratio (as adjusted as provided in Section
5.C. above), reduced by any amount previously paid to the Participant in respect
of the award, and such amount, if any, shall be paid to the Participant on or
after January 1, 2012 and on or prior to March 15, 2012. 

                    D.
Voluntary Termination of Employment by Participant. In the event of a Participant’s
voluntary termination of employment (not including, in the case of a
Participant who has an employment agreement with the Company or its Subsidiary,
a termination by the Participant that is deemed to be a termination by the Company
or its Subsidiary without Cause under the provisions of Section 8(d)(iv)
of the employment agreement or a termination by the Participant for Good Reason
under Section 8(d)(iii) of the employment agreement) or the Participant’s
giving of notice of termination of employment, the Participant shall not be
entitled to any further payment under the Plan and shall have no rights or interests
in the Plan.

                    E.
Termination by the Company or its Subsidiary for Cause. In the event the
Participant’s employment is terminated by the Company or its Subsidiary for
Cause or notice of such termination has been given to the Participant, the
Participant shall not be entitled to any further payment under the Plan and
shall have no rights or interests in the Plan.

5

	
  

 	
  

 
	
 Section 7.

 	
 General Provisions

 

                    A.
No Right to Employment or Participation. No Participant or other person
shall have any claim or right to be retained in the employment of the Company
or a Subsidiary by reason of the Plan or to any award made as part of the Plan
nor will the Plan be construed as having created an employment contract for any
term.

                    B.
Not Compensation Under Other Plans. An award made under this Plan shall
not be considered “compensation” under any qualified or non-qualified,
registered or non-registered employee benefit plan, program or arrangement of
the Company or any Subsidiary and shall not have any effect on the level of
benefits provided to or received by a Participant or his/her estate or designated
beneficiary, as part of any employee benefit plan of the Company or its
Subsidiaries.

                    C.
Plan Expenses. The expenses of the Plan and its administration shall be
borne by the Company.

                    D.
Plan Not Funded. The Plan shall be unfunded and the Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any award made under the Plan.

                    E.
Other Long-Term Incentive Arrangements. This Plan is not intended to be
the sole and exclusive long term incentive program of the Company in which
Participants may be entitled to participate in the ordinary course.

                    F.
Reports. The appropriate officers of the Company shall cause to be filed
any reports, returns, or other information regarding the Plan, as may be
required by any applicable statute, rule, or regulation.

                    G.
Withholding. The Company may deduct from any payment to a Participant
under this Plan any Federal, state, or local withholding or other tax or charge
which the Company is then required to deduct under applicable law with respect
thereto.

                    H.
No Transfers. No award or rights under this Plan may be transferred or assigned
by a Participant other than by will or by the laws of descent and distribution.

                    I.
Governing Law. The validity, construction, and effect of the Plan, and
any actions relating to the Plan, shall be determined in accordance with the
laws of the state of New York and applicable federal law, without regard to the
conflict of laws provisions of any state or country.

                    J.
Section 409A. It is intended that the Plan will comply with Section 409A
of the Code and any regulations and guidelines issued thereunder, and the Plan
shall be interpreted on a basis consistent with such intent. The Plan may be
amended in any respect deemed necessary (including retroactively) by the Board
in order to preserve compliance with Section 409A of the Code. It is intended
that amounts payable under this Plan will not be considered to be deferred
compensation for purposes of Section 409A of the Code by virtue of Treas. Reg.
Section 1.409A-1(b)(4). However, if any amount payable hereunder is considered
to be deferred compensation for such purposes, notwithstanding any provision to
the contrary in this Plan, if a Participant is deemed on the date of his or her
“separation from service” (within 

6

the meaning of Treas. Reg. Section 1.409A-1(h))
to be a “specified employee” (within the meaning of
Treas. Reg. Section 1.409A-1(i)), then with regard to any payment that is
required to be delayed pursuant to Section 409A(a)(2)(B) of the Code (after
taking into account the applicable provisions of Treas. Reg. Section
1.409A-1(b)(4)), the portion, if any, of such payment so required to be delayed
shall not be made prior to the earlier of (i) the expiration of the six
(6)-month period measured from the date of his “separation from service” or
(ii) the date of his or her death (the “Delay Period”). Upon the expiration of
the Delay Period, all payments delayed pursuant to this Section 7.J shall be
paid to the Participant in a lump sum. No action or failure to act, pursuant to
this Section 7.J shall subject the Company to any claim, liability, or expense,
and the Company shall not have any obligation to indemnify or otherwise protect
any Participant from the obligation to pay any tax, interest or penalty
pursuant to Section 409A of the Code.

	
  

 	
  

 
	
 Section 8.

 	
 Amendment / Termination of the Plan

 

                    The
Board may, from time to time, amend the Plan in any respect, or may discontinue
or terminate the Plan at any time; provided, however, that no
amendment, discontinuance or termination of the Plan shall, without the consent
of the affected Participant, have a material adverse effect on any Plan award
which has been approved by the Committee (or the Board with respect to Named
Executives) or the CEO with respect to nonexecutive officer Participants.

7

APPENDIX A

	
  

 	
  

 	
  

 	
  

 
	
 2009 Combined Ratio*: 

 	
  

 	
 Payout Percentage: 

 
	

 

 	
  

 	

 

 
	
 93 (or lower)

 	
  

 	
 175.0

 	
 %

 
	
 94

 	
  

 	
 162.5

 	
 %

 
	
 95

 	
  

 	
 150.0

 	
 %

 
	
 96

 	
  

 	
 137.5

 	
 %

 
	
 97

 	
  

 	
 125.0

 	
 %

 
	
 98

 	
  

 	
 115.0

 	
 %

 
	
 99

 	
  

 	
 105.0

 	
 %

 
	
 99.5

 	
  

 	
 100.0

 	
 %

 
	
 100

 	
  

 	
 95.0

 	
 %

 
	
 101

 	
  

 	
 85.0

 	
 %

 
	
 102 (or higher)

 	
  

 	
 75.0

 	
 %

 

* In the case of a 2009 Combined
Ratio which includes a fraction, the associated payout percentage will be
interpolated from this table, rounded to the nearest tenth of one percent
(0.1%).Exhibit 10.5 

NONSTATUTORY STOCK OPTION AGREEMENT

                    THIS
AGREEMENT, by and between XL Group plc, an Irish company (the “Company”), and
You (the “Employee”), is effective as of ________, 201_. 

WITNESSETH:

                    WHEREAS,
the Board of Directors of the Company believes 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 has granted on
__________ 201__ (the “Grant Date”) to the Employee the right and option to
purchase all or any part of the aggregate number of Ordinary Shares of the
Company (the “Shares”) set forth below, to be issued or transferred as provided
in the Program at the option price per share set forth below. This option shall
not be treated as an incentive stock option as defined in Section 422 of
the Code.

                    Option
to purchase Shares, for $______ per share.

                    One-third
of such option shall vest and become exercisable on each of the first three
anniversaries of Grant Date; provided, however, that (i) the
option shall be immediately vested and exercisable in full (A) in the
event of a Change of Control (as defined in the Program), or (B) upon
termination of the Employee’s employment due to his or her death or Permanent
Disability (as defined below); (ii) the option shall continue to vest and
become exercisable on the according to the schedule set forth above following
termination of employment of the Employee due to his or her Retirement (as
defined below); and (iii) upon termination of the Employee’s employment by the
Company not for Cause (as defined below), the option will vest and become
exercisable at the time of such termination of employment with respect to the
number of Ordinary Shares, if any, that would have vested in accordance with
the schedule set forth above if the Employee’s employment had continued for an
additional twelve (12) months. 

                    For
purposes hereof, “Permanent Disability” means those circumstances under which
the Employee 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 respon-

-2-

sibilities 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 Employee 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. For
purposes hereof, “Retirement” shall mean the termination of employment by the
Employee if (i) such termination of employment occurs after (x) the Employee
has reached age 55, and (y) the sum of the Employee’s age and full years of
continuous service with the Company equals or exceeds 65, and (ii) a determination
has been made the Committee, in its sole discretion, that it is appropriate
under the circumstances (taking into account, without limitation, the intention
of the Employee with respect to future employment) for this option to become
vested at the time of such termination of employment and be exercisable for the
full term of the option as provided below. The portion of the option, if any,
that is not exercisable immediately following termination of the Employee’s
employment shall be immediately forfeited.

          For
purposes hereof, “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; (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; or (D) the Employee’s
sustained failure to perform the essential duties of his or her role after
receipt of notice. 

                    b.
To the extent the option herein granted becomes exercisable, it 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 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:

-3-

                    (i)
The tenth anniversary of the Agreement;

                    (ii)
The third anniversary of the death or Permanent 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 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 outside a Post-Change Period;

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

                    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
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. The option herein granted may be assigned or otherwise
transferred only in the following circumstances: (i) by will or the laws of
descent and distribution; (ii) by valid 

-4-

beneficiary
designation taking effect at death made in accordance with procedures
established by the Committee; or (iii) by the Employee to members of his or her
“immediate family”, to a trust established for the exclusive benefit of solely
one or more members of the Employee’s “immediate family” and/or the Employee,
or to a partnership, limited liability company or other entity pursuant to
which the only owners are one or more members of the Employee’s “immediate family”
and/or the Employee. 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 Employee’s children, stepchildren,
grandchildren, parents, stepparents, grandparents, spouse, siblings (including
half brothers and sisters), in-laws, and relationships arising because of legal
adoption.

                    h.
The Employee shall comply with the Company’s stock ownership guidelines as in
effect from time to time.

                    i.
Notwithstanding any term of this option to the contrary, the Company reserves
the right to cancel this option or require the return of Shares received under
this option (or the cash value of the Shares, as determined by the Board in its
sole discretion) to the extent provided hereunder, and in accordance with, the
Company’s Clawback Policy as in effect from time to time, such Policy which is
incorporated into this Agreement by reference. As a condition to the grant of
this option, the Employee 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.

                    j.
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:

 
	
  

 	
  

 
	
  

 	
 By Post:

 
	
  

 	
  

 
	
  

 	
 XL Group plc

 
	
  

 	
 1 Hatch Street Upper

 
	
  

 	
 Dublin 2

 
	
  

 	
 Ireland

 
	
  

 	
  

 
	
  

 	
 Attn.: General Counsel

 

-5-

                    If
to the Employee:

	
  

 	
  

 
	
  

 	
 At the Employee’s
 most recent address shown on the Company’s corporate records, or at any other
 address which the Employee
 may specify in a notice delivered to the Company in the manner set forth
 herein.

 

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

                    l.
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.

                    m.
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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