ANNUITY & LIFE RE HOLDINGS LTD
RESTRICTED STOCK PLAN
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<TYPE>EX-10.2
<SEQUENCE>5
<FILENAME>w60806ex10-2.txt
<DESCRIPTION>RESTRICTED STOCK PLAN
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                                                                    EXHIBIT 10.2


                      ANNUITY AND LIFE RE (HOLDINGS), LTD.

                              RESTRICTED STOCK PLAN

                          (Effective February 12, 2002)
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                                TABLE OF CONTENTS

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SECTION 1          Definitions...............................................       1

SECTION 2          Administration............................................       3

SECTION 3          Eligibility...............................................       3

SECTION 4          Common Shares.............................................       3

SECTION 5          Granting of Restricted Stock .............................       4

SECTION 6          Terms and Conditions of Restricted Stock..................       4

SECTION 7          Restricted Stock Agreements - Other Provisions............       5

SECTION 8          Capital Adjustments.......................................       6

SECTION 9          Amendment or Discontinuance of the Plan...................       6

SECTION 10         Miscellaneous.............................................       6

SECTION 11         Change in Control.........................................       7
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                      ANNUITY AND LIFE RE (HOLDINGS), LTD.

                              RESTRICTED STOCK PLAN

                  This ANNUITY AND LIFE RE (HOLDINGS), LTD. RESTRICTED STOCK
PLAN is intended to provide a means whereby Annuity and Life Re (Holdings), Ltd.
may, through the grant of Restricted Stock to Key Employees, attract and retain
such individuals and motivate them to exercise their best efforts on behalf of
the Company and of any Related Corporation.

SECTION 1 DEFINITIONS

                  As used in the Plan, the following words and terms shall have
the meanings hereinafter set forth unless the context clearly indicates
otherwise:

                  (a) BOARD. The term "Board" shall mean the Board of Directors
         of the Company.

                  (b) CODE. The term "Code" shall mean the Internal Revenue Code
         of 1986, as amended.

                  (c) COMMITTEE. The term "Committee" shall mean the Company's
         Compensation Committee which shall consist of not less than two (2)
         directors of the Company who shall be appointed by, and shall serve at
         the pleasure of, the Board. Each member of such Committee, while
         serving as such, shall be deemed to be acting in his or her capacity as
         a director of the Company. It is intended that each member of the
         Committee shall be a Rule 16b-3 Non-Employee Director. Notwithstanding
         the foregoing, if the Committee does not consist solely of two (2) or
         more Rule 16b-3 Non-Employee Directors, the full Board shall serve as
         the Committee if it is intended that Restricted Stock satisfy the
         advance approval requirements of 17 CFR Section 240.16b-3.

                  (d) COMMON SHARES. The term "Common Shares" shall mean the
         common shares of the Company, par value $1.00 per share.

                  (e) COMPANY. The term "Company" shall mean Annuity and Life Re
         (Holdings), Ltd., a Bermuda corporation.

                  (f) FAIR MARKET VALUE. The term "Fair Market Value" shall mean
         the fair market value of Common Shares and shall be the quoted closing
         price of such Common Shares on the New York Stock Exchange (or on any
         other securities exchange on which the Common Shares subsequently
         trade) on the date as of which Fair Market Value is determined.

                  (g) GRANTEE. The term "Grantee" shall mean a Key Employee to
         whom Restricted Stock has been granted.
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                  (h) KEY EMPLOYEE. The term "Key Employee" shall mean an
         officer or any other key employee of the Company or of a Related
         Corporation.

                  (i) PLAN. The term "Plan" shall mean the Annuity and Life Re
         (Holdings), Ltd. Restricted Stock Plan, as set forth herein and as
         amended from time to time.

                  (j) RELATED CORPORATION. The term "Related Corporation" shall
         mean either a corporate subsidiary of the Company, as defined in
         section 424(f) of the Code, or the corporate parent of the Company, as
         defined in section 424(e) of the Code.

                  (k) RESTRICTED STOCK. The term "Restricted Stock" shall mean
         Common Shares granted to a recipient at no cost, subject to whatever
         restrictions are determined by the Committee.

                  (l) RESTRICTED STOCK AGREEMENT. The term "Restricted Stock
         Agreement" shall mean a written document evidencing a grant of
         Restricted Stock, as described in Section 7 hereof.

                  (m) RULE 16b-3 NON-EMPLOYEE DIRECTOR. The term "Rule 16b-3
         Non-Employee Director" shall mean a director who:

                           (1) Is not currently an officer (as defined in 17
                  CFR Section 240.16a-1(f)) of, or otherwise currently employed
                  by, the Company or a parent or subsidiary of the Company
                  within the meaning of 17 CFR Section 240.16b-3(b)(3);

                           (2) Does not receive compensation, either directly or
                  indirectly, from the Company or a parent or subsidiary of the
                  Company (within the meaning of 17 CFR Section 240.16b-3(b)(3))
                  for services rendered as a consultant or in any other capacity
                  other than as a director, except for an amount that does not
                  exceed the dollar amount for which disclosure would be
                  required under 17 CFR Section 229.404(a);

                           (3) Does not possess an interest in any other
                  transaction for which disclosure would be required pursuant to
                  17 CFR Section 229.404(a); and

                           (4) Is not engaged in a business relationship for
                  which disclosure would be required pursuant to 17
                  CFR Section 229.404(b).

         SECTION 2 ADMINISTRATION

                  The Plan shall be administered by the Committee. The Committee
shall have full authority, subject to the terms of the Plan, to select the Key
Employees to be granted Restricted Stock under the Plan, to grant Restricted
Stock on behalf of the Company, and to set the restrictions and other terms to
which such Restricted Stock is subject.

                  The Committee may correct any defect, supply any omission, and
reconcile any inconsistency in this Plan and in any Restricted Stock Agreement
hereunder in the manner and to


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the extent it shall deem desirable. The Committee also shall have the authority
to establish such rules and regulations, not inconsistent with the provisions of
the Plan, for the proper administration of the Plan, and to amend, modify, or
rescind any such rules and regulations, and to make such determinations and
interpretations under, or in connection with, the Plan, as it deems necessary or
advisable. All such rules, regulations, determinations, and interpretations
shall be binding and conclusive upon the Company, its shareholders, and all
employees, officers and directors, upon their respective legal representatives,
beneficiaries, successors, and assigns, and upon all other persons claiming
under or through any of them.

                  No member of the Board or the Committee shall be liable for
any action or determination made with respect to the Plan or any Restricted
Stock Agreement hereunder, except to the extent that by law such liability may
not be so limited.

         SECTION 3 ELIGIBILITY

                  Key Employees shall be eligible to receive Restricted Stock
under the Plan. More than one grant of Restricted Stock may be made to a Key
Employee under the Plan.

         SECTION 4 COMMON SHARES

                  Restricted Stock may be granted under the Plan with respect to
a maximum of 1,200,000 Common Shares. No single Key Employee may be granted more
than 250,000 Common Shares under this Plan. The maximum number of Common Shares
available under the Plan and that may be granted to any single Key Employee
shall be subject to adjustment as provided in Section 8 hereof. Shares issuable
under the Plan may be authorized but unissued shares or reacquired shares, and
the Company may purchase shares required for this purpose, from time to time, if
it deems such purchase to be advisable.

                  If any Restricted Stock granted under the Plan is forfeited
for any reason whatever, the forfeited Common Shares shall continue to be
available for granting as Restricted Stock under the Plan as fully as if such
Common Shares had never been granted as Restricted Stock.

         SECTION 5 GRANTING OF RESTRICTED STOCK

                  From time to time until the expiration or earlier suspension
or discontinuance of the Plan, the Committee may, on behalf of the Company,
grant to Key Employees under the Plan such Restricted Stock as it determines is
warranted. The granting of Restricted Stock under the Plan shall not be deemed
either to entitle the Key Employee to, or to disqualify the Key Employee from,
any participation in any other grant of Restricted Stock under the Plan. In
making any determination as to whether a Key Employee shall be granted
Restricted Stock and as to the number of Common Shares to be covered by such
grant, the Committee shall take into account the duties of the Key Employee, his
or her present and potential contributions to the success of the Company or a
Related Corporation, and such other factors as the Committee shall deem relevant
in accomplishing the purposes of the Plan.


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         SECTION 6 TERMS AND CONDITIONS OF RESTRICTED STOCK

                  Restricted Stock granted pursuant to the Plan shall include
expressly or by reference the following terms and conditions, as well as such
other provisions not inconsistent with the provisions of this Plan as the
Committee shall deem desirable:

                  (a) GRANT. Restricted Stock may be granted to a Key Employee,
         as determined by the Committee.

                  (b) RIGHTS AS A STOCKHOLDER. Unless the Committee determines
         otherwise, a Key Employee who receives Restricted Stock shall have the
         rights of a stockholder with respect to the Restricted Stock, including
         voting and dividend rights, subject to the restrictions described in
         subsection (c) below and any other conditions imposed by the Committee
         at the time of grant. Unless the Committee determines otherwise,
         certificates evidencing Common Shares of Restricted Stock shall remain
         in the possession of the Company until such Common Shares are free of
         all restrictions under the Plan.

                  (c) RESTRICTIONS. Except as otherwise specifically provided by
         the Plan or in a Restricted Stock Agreement, Restricted Stock may not
         be sold, assigned, transferred, pledged, or otherwise encumbered or
         disposed of otherwise than by will or by the laws of descent and
         distribution, and, if the Grantee ceases to be an employee of the
         Company and its Related Corporations for any reason, must be forfeited
         to the Company. These restrictions shall lapse at such time or times,
         and on such conditions, as the Committee may specify in the Restricted
         Stock Agreement. Upon the lapse of all restrictions, the Common Shares
         shall cease to be Restricted Stock for purposes of the Plan. The
         Committee may at any time accelerate the time at which the restrictions
         on all or any part of the Common Shares will lapse.

                  (d) NOTICE OF TAX ELECTION. Any Grantee making an election
         under section 83(b) of the Code for the immediate recognition of income
         attributable to a grant of Restricted Stock must provide a copy thereof
         to the Company within 10 days of the filing of such election with the
         Internal Revenue Service.

                  (e) TERMINATION OF EMPLOYMENT OR SERVICE. Except as otherwise
         determined by the Committee, all Restricted Stock held by the Grantee
         at the time of termination of the Grantee's employment or service with
         the Company and all Related Corporations for any reason must be
         transferred to the Company (and, in the event the certificates
         representing such Restricted Stock are held by the Company, such
         Restricted Stock shall be so transferred without any further action by
         the Grantee), in accordance with subsection (c) above.

                  (f) LISTING AND REGISTRATION OF SHARES. Each grant of
         Restricted Stock shall be subject to the requirement that if at any
         time the Committee shall determine, in its discretion, that the
         listing, registration, or qualification of the Common Shares covered
         thereby upon any securities exchange or under any applicable law, or
         the consent or approval of any governmental regulatory body, is
         necessary or desirable as a condition of,


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         or in connection with, the granting of such Restricted Stock, or that
         action by the Company or by the Grantee should be taken in order to
         obtain an exemption from any such requirement, no such Restricted Stock
         may be granted, in whole or in part, unless and until such listing,
         registration, qualification, consent, approval, or action shall have
         been effected, obtained, or taken under conditions acceptable to the
         Committee.

                  (g) WITHHOLDING AND USE OF SHARES TO SATISFY TAX OBLIGATIONS.
         The obligation of the Company to deliver Common Shares pursuant to any
         grant of Restricted Stock shall be subject to applicable tax
         withholding requirements. The Committee, in its discretion (and subject
         to such withholding rules ("Withholding Rules") as shall be adopted by
         the Committee), may permit the Grantee to satisfy the minimum required
         withholding tax, in whole or in part, by electing to have the Company
         withhold (or by returning to the Company) Common Shares, which shares
         shall be valued, for this purpose, at their Fair Market Value on the
         date an amount is includible in income by the Grantee. An election to
         use Common Shares to satisfy tax withholding requirements must be made
         in compliance with and subject to the Withholding Rules. The Committee
         may limit the number of Common Shares withheld to satisfy the tax
         withholding requirements to the extent necessary to avoid adverse
         accounting consequences.

         SECTION 7 RESTRICTED STOCK AGREEMENTS - OTHER PROVISIONS

                  Restricted Stock granted under the Plan shall be subject to
Restricted Stock Agreements in such form as the Committee shall, from time to
time, approve, which Restricted Stock Agreements shall contain such provisions,
not inconsistent with the provisions of the Plan, as the Committee shall deem
advisable. Each Grantee shall enter into, and be bound by, such Restricted Stock
Agreement.

         SECTION 8 CAPITAL ADJUSTMENTS

                  The number of Common Shares which may be delivered under the
Plan and to any single Key Employee under the Plan, as stated in Section 4
hereof, and the number of Common Shares of outstanding Restricted Stock under
the Plan shall be adjusted to reflect any stock dividend, stock split, share
combination, or similar change in the capitalization of the Company.

                  In the event of a corporate transaction (as that term is
described in section 424(a) of the Code and the Treasury Regulations issued
thereunder, as, for example, a merger, consolidation, acquisition of property or
stock, separation, reorganization, or liquidation), each outstanding grant of
Restricted Stock shall be assumed by the surviving or successor corporation or
by a parent or subsidiary of such corporation if such corporation is the
employer corporation (as provided in section 424(a) of the Code and the
regulations thereunder); provided, however, that, in the event of a proposed
corporate transaction, the Committee may terminate all or a portion of the
outstanding Restricted Stock grants to Key Employees if it determines that such
termination is in the best interests of the Company. Further, the Committee, in
its discretion, may remove the restrictions from the outstanding shares of
Restricted Stock.


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                  The Committee also may, in its discretion, change the terms of
any outstanding Restricted Stock grant to reflect any such corporate
transaction.

         SECTION 9 AMENDMENT OR DISCONTINUANCE OF THE PLAN

                  The Board from time to time may suspend or discontinue the
Plan or amend it in any respect whatsoever. Notwithstanding the foregoing,
except as otherwise provided in the Plan no such suspension, discontinuance or
amendment shall materially impair the rights of any holder of outstanding
Restricted Stock without the consent of such holder.

         SECTION 10 MISCELLANEOUS

                  (a) GOVERNING LAW. The operation of, and the rights of
         Grantees under, the Plan and the Restricted Stock Agreements thereunder
         shall be governed by applicable United States laws and otherwise by the
         laws of Bermuda (without reference to principles of conflict of laws).

                  (b) RIGHTS. Neither the adoption of the Plan nor any action of
         the Board or the Committee shall be deemed to give any individual any
         right to be granted Restricted Stock, or any other right hereunder,
         unless and until the Committee shall have granted such individual
         Restricted Stock, and then his or her rights shall be only such as are
         provided by the Restricted Stock Agreement.

                  Notwithstanding any provisions of the Plan or the Restricted
         Stock Agreement with a Grantee, the Company shall have the right, in
         its discretion, to retire a Key Employee at any time pursuant to its
         retirement rules or otherwise to terminate a Key Employee's employment
         or service at any time for any reason whatsoever.

                  (c) INDEMNIFICATION OF BOARD AND COMMITTEE. Without limiting
         any other rights of indemnification which they may have from the
         Company and any Related Corporation, the members of the Board and the
         members of the Committee shall be indemnified by the Company against
         all costs and expenses incurred by them (including reasonable
         attorneys' fees and expenses) in connection with any claim, action,
         suit, or proceeding 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 Restricted Stock Agreement thereunder, and
         against all amounts paid by them in settlement thereof (provided such
         settlement is approved by legal counsel selected by the Company) or
         paid by them in satisfaction of a judgment in any such action, suit, or
         proceeding, except to the extent that by law such indemnification may
         not be so provided. Upon the making or institution of any such claim,
         action, suit, or proceeding, the Board or Committee member shall notify
         the Company in writing, giving the Company an opportunity, at its own
         expense, to handle and defend the same before such Board or Committee
         member undertakes to handle it on his or her own behalf.


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         SECTION 11 CHANGE IN CONTROL

         (a) GENERAL. All restrictions shall be removed from any outstanding
shares of Restricted Stock upon a Change in Control of the Company.

         (b) DEFINITION OF CHANGE IN CONTROL. For purposes of this Section 11, a
"Change in Control" of the Company shall be deemed to have occurred if:

                  (1) Any person, including a group of persons acting in
         concert, becomes the beneficial owner of shares of the Company having
         50 percent or more of the total number of votes that may be cast for
         the election of directors of the Company;

                  (2) There occurs any cash tender or exchange offer for shares
         of the Company, merger or other business combination, or any
         combination of the foregoing transactions, and as a result of or in
         connection with any such event persons who were directors of the
         Company before the event shall cease to constitute a majority of the
         board of directors of the Company or any successor to the Company; or

                  (3) There occurs a sale, conveyance, or other disposition
         (other than by way of merger or consolidation), in one or a series of
         related transactions, of all or substantially all of the assets of the
         Company.


                  IN WITNESS WHEREOF, Annuity and Life Re (Holdings), Ltd. has
caused these presents to be duly executed this 12th day of February, 2002.


                                     ANNUITY AND LIFE RE (HOLDINGS), LTD.



                                     By:  /s/ Lawrence S. Doyle
                                        ----------------------------------------
                                          President and Chief Executive Officer


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