AMENDED
AND RESTATED

    MERCURY
GENERAL CORPORATION

    2005
EQUITY INCENTIVE AWARD PLAN

     

    ARTICLE
1

     

    PURPOSE

     

    The
purpose of the Amended and Restated Mercury General Corporation 2005 Equity
Incentive Award Plan (the “Plan”) is to promote
the success and enhance the value of Mercury General Corporation (the “Company”) by linking
the personal interests of Employees to those of Company stockholders and by
providing such individuals with an incentive for outstanding performance to
generate superior returns to Company stockholders.  The Plan is
further intended to provide flexibility to the Company in its ability to
motivate, attract, and retain the services of Employees upon whose judgment,
interest, and special effort the successful conduct of the Company’s operation
is largely dependent.

    


    ARTICLE
2

     

    DEFINITIONS
AND CONSTRUCTION

    


    Wherever
the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise.  The singular
pronoun shall include the plural where the context so indicates.

    


    2.1           “Award” means an
Option, a Restricted Stock award, a Stock Appreciation Right award, a
Performance Share award, a Performance Stock Unit award, a Dividend Equivalents
award, a Stock Payment award, a Deferred Stock award, a Restricted Stock Unit
award, an Other Stock-Based Award, or a Performance-Based Award granted to a
Participant pursuant to the Plan.

     

    2.2           “Award Agreement”
means any written agreement, contract, or other instrument or document
evidencing an Award.

     

    2.3           “Board” means the
Board of Directors of the Company.

     

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

     

    2.5           “Committee” means the
committee of the Board described in Article 12.

     

    2.6           “Covered Employee”
means an Employee who is, or could be, a “covered employee” within the meaning
of Section 162(m) of the Code.

     

    2.7           “Deferred Stock” means
a right to receive a specified number of shares of Stock during specified time
periods pursuant to Article 8.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    2.8           “Disability” means that the
Participant qualifies to receive long-term disability payments under the
Company’s long-term disability insurance program, as it may be amended from time
to time.

     

    2.9           “Dividend Equivalents”
means a right granted to a Participant pursuant to Article 8 to receive the
equivalent value (in cash or Stock) of dividends paid on Stock.

     

    2.10         “Effective Date” shall
have the meaning set forth in Section 13.1.

     

    2.11         “Eligible Individual”
means any person who is an Employee, as determined by the
Committee.

     

    2.12         “Employee” means any
officer or other employee (as defined in accordance with Section 3401(c) of the
Code) of the Company or any Subsidiary.

     

    2.13         “Exchange Act” means
the Securities Exchange Act of 1934, as amended.

     

    2.14         “Fair Market Value”
means, as of any given date, the fair market value of a share of Stock on the
date determined by such methods or procedures as may be established from time to
time by the Committee.  Unless otherwise determined by the Committee,
the Fair Market Value of a share of Stock as of any date shall be (i) the mean
between the highest and lowest selling price of a share of Common Stock on the
principal exchange on which shares of Common Stock are then trading, if any, on
such date, or if shares were not traded on such date, then on the closest
preceding date on which a trade occurred; or (ii) if Common Stock is not traded
on an exchange, the mean between the closing representative bid and asked prices
for the Common Stock on such date as reported by NASDAQ or, if NASDAQ is not
then in existence, by its successor quotation system; or (iii) if Common Stock
is not publicly traded, the Fair Market Value of a share of Common Stock as
established by the Committee acting in good faith.

     

    2.15         “Incentive Stock
Option” means an Option that is intended to meet the requirements of
Section 422 of the Code or any successor provision thereto.

     

    2.16         “Non-Employee
Director” means a member of the Board who qualifies as a “Non-Employee
Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor
definition adopted by the Board.

     

    2.17         “Non-Qualified Stock
Option” means an Option that is not intended to be an Incentive Stock
Option.

     

    2.18         “Option” means a right
granted to a Participant pursuant to Article 5 of the Plan to purchase a
specified number of shares of Stock at a specified price during specified time
periods.  An Option may be either an Incentive Stock Option or a
Non-Qualified Stock Option.

     

    2.19         “Other Stock-Based
Award” means an Award granted or denominated in Stock or units of Stock
pursuant to Section 8.7 of the Plan.

     

    2.20         “Participant” means
any Eligible Individual who has been granted an Award pursuant to the
Plan.


    
      
         


      

      
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    2.21         “Performance-Based
Award” means an Award granted to selected Covered Employees pursuant to
Articles 6 and 8, but which is subject to the terms and conditions set forth in
Article 9.  All Performance-Based Awards are intended to qualify as
Qualified Performance-Based Compensation.

     

    2.22         “Performance Criteria”
means the criteria that the Committee selects for purposes of establishing the
Performance Goal or Performance Goals for a Participant for a Performance
Period.  The Performance Criteria that will be used to establish
Performance Goals are limited to the following: net earnings (either before or
after interest, taxes, depreciation and amortization), economic value-added (as
determined by the Committee), sales or revenue, net income (either before or
after taxes), underwriting income, underwriting results, operating earnings,
cash flow (including, but not limited to, operating cash flow and free cash
flow), cash flow return on capital, return on net assets, return on
stockholders’ equity, return on assets, return on capital, stockholder returns,
return on sales, gross or net profit margin, productivity, expense, margins,
operating efficiency, customer satisfaction, working capital, earnings per
share, price per share of Stock, and market share, any of which may be measured
either in absolute terms or as compared to any incremental increase or as
compared to results of a peer group.  The Committee shall, within the
time prescribed by Section 162(m) of the Code, define in an objective fashion
the manner of calculating the Performance Criteria it selects to use for such
Performance Period for such Participant.

     

    2.23         “Performance Goals”
means, for a Performance Period, the goals established in writing by the
Committee for the Performance Period based upon the Performance
Criteria.  Depending on the Performance Criteria used to establish
such Performance Goals, the Performance Goals may be expressed in terms of
overall Company performance or the performance of a division, business unit, or
an individual.  The Committee, in its discretion, may, within the time
prescribed by Section 162(m) of the Code, adjust or modify the calculation of
Performance Goals for such Performance Period in order to prevent the dilution
or enlargement of the rights of Participants (a) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction,
event, or development, or (b) in recognition of, or in anticipation of, any
other unusual or nonrecurring events affecting the Company, or the financial
statements of the Company, or in response to, or in anticipation of, changes in
applicable laws, regulations, accounting principles, or business
conditions.

     

    2.24         “Performance Period”
means the one or more periods of time, which may be of varying and overlapping
durations, as the Committee may select, over which the attainment of one or more
Performance Goals will be measured for the purpose of determining a
Participant’s right to, and the payment of, a Performance-Based
Award.

     

    2.25         “Performance Share”
means a right granted to a Participant pursuant to Article 8, to receive Stock,
the payment of which is contingent upon achieving certain Performance Goals or
other performance-based targets established by the Committee.

     

    2.26         “Performance Stock
Unit” means a right granted to a Participant pursuant to Article 8, to
receive Stock, the payment of which is contingent upon achieving certain
Performance Goals or other performance-based targets established by the
Committee.


    
      
         


      

      
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    2.27         “Plan” means this
Mercury General Corporation 2005 Equity Incentive Award Plan, as it may be
amended from time to time.

     

    2.28         “Qualified Performance-Based
Compensation” means any compensation that is intended to qualify as
“qualified performance-based compensation” as described in
Section 162(m)(4)(C) of the Code.

     

    2.29         “Restricted Stock”
means Stock awarded to a Participant pursuant to Article 6 that is subject to
certain restrictions and may be subject to risk of forfeiture.

     

    2.30         “Restricted Stock
Unit” means an Award granted pursuant to Section 8.6.

     

    2.31         “Securities Act” shall
mean the Securities Act of 1933, as amended.

     

    2.32         “Stock” means the
common stock of the Company, without par value, and such other securities of the
Company that may be substituted for Stock pursuant to Article 11.

     

    2.33         “Stock Appreciation
Right” or “SAR” means a right
granted pursuant to Article 7 to receive a payment equal to the excess of the
Fair Market Value of a specified number of shares of Stock on the date the SAR
is exercised over the Fair Market Value on the date the SAR was granted as set
forth in the applicable Award Agreement.

     

    2.34         “Stock Payment” means
(a) a payment in the form of shares of Stock, or (b) an option or other right to
purchase shares of Stock, as part of any bonus, deferred compensation or other
arrangement, made in lieu of all or any portion of the compensation, granted
pursuant to Article 8.

     

    2.35         “Subsidiary” means any
“subsidiary corporation” as defined in Section 424(f) of the Code and any
applicable regulations promulgated thereunder or any other entity of which a
majority of the outstanding voting stock or voting power is beneficially owned
directly or indirectly by the Company.

     

    ARTICLE
3

     

    SHARES
SUBJECT TO THE PLAN

    


    3.1          Number of
Shares.

     

    (a)           Subject
to Article 11 and Section 3.1(b), the aggregate number of shares of Stock which
may be issued or transferred pursuant to Awards under the Plan shall be
5,400,000 shares.  In order that the applicable regulations under the
Code relating to Incentive Stock Options be satisfied, the maximum number of
shares of Stock that may be delivered upon exercise of Incentive Stock Options
shall be the number specified in this Section 3.1(a), and, if necessary to
satisfy such regulations, such maximum limit shall apply to the number of shares
of Stock that may be delivered in connection with each other type of Award under
the Plan (applicable separately to each type of Award).


    
      
         


      

      
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    (b)           To
the extent that an Award terminates, expires, or lapses for any reason, any
shares of Stock subject to the Award shall again be available for the grant of
an Award pursuant to the Plan.  Additionally, any shares of Stock
tendered or withheld to satisfy the grant or exercise price or tax withholding
obligation pursuant to any Award shall again be available for the grant of an
Award pursuant to the Plan.  To the extent permitted by applicable law
or any exchange rule, shares of Stock issued in assumption of, or in
substitution for, any outstanding awards of any entity acquired in any form of
combination by the Company or any Subsidiary shall not be counted against shares
of Stock available for grant pursuant to this Plan.  The payment of
Dividend Equivalents in conjunction with any outstanding Awards shall not be
counted against the shares available for issuance under the Plan.

     

    3.2          Stock
Distributed.  Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.

     

    3.3          Limitation on Number of
Shares Subject to Awards.  Notwithstanding any provision in the
Plan to the contrary, and subject to Article 11, the maximum number of shares of
Stock with respect to one or more Awards that may be granted to any one
Participant during a one-year period (measured from the date of any grant) shall
be 100,000.

     

    ARTICLE
4

     

    ELIGIBILITY
AND PARTICIPATION

    


    4.1          Eligibility.  Each
Eligible Individual shall be eligible to be granted one or more Awards pursuant
to the Plan.

     

    4.2          Participation.  Subject
to the provisions of the Plan, the Committee may, from time to time, select from
among all Eligible Individuals, those to whom Awards shall be granted and shall
determine the nature and amount of each Award.  No Eligible Individual
shall have any right to be granted an Award pursuant to this Plan.

     

    4.3          Foreign
Participants.  In order to assure the viability of Awards
granted to Participants employed in foreign countries, the Committee may provide
for such special terms as it may consider necessary or appropriate to
accommodate differences in local law, tax policy, or
custom.  Moreover, the Committee may approve such supplements to, or
amendments, restatements, or alternative versions of, the Plan as it may
consider necessary or appropriate for such purposes without thereby affecting
the terms of the Plan as in effect for any other purpose; provided, however, that no
such supplements, amendments, restatements, or alternative versions shall
increase the share limitations contained in Sections 3.1 and 3.3 of the
Plan.


    
      
         


      

      
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    ARTICLE
5

     

    STOCK
OPTIONS

    


    5.1          General.  The
Committee is authorized to grant Options to Participants on the following terms
and conditions:

     

    (a)           Exercise
Price.  The exercise price per share of Stock subject to an
Option shall be determined by the Committee and set forth in the Award
Agreement; provided
that the exercise price for any Option shall not be less than 100% of the Fair
Market Value of a share of Stock on the date of the grant.

     

    (b)           Time and Conditions of
Exercise.  The Committee shall determine the time or times at
which an Option may be exercised in whole or in part; provided that the term of any
Option granted under the Plan shall not exceed ten years.  The
Committee shall also determine the performance or other conditions, if any, that
must be satisfied before all or part of an Option may be exercised.

     

    (c)           Payment.  The
Committee shall determine the methods by which the exercise price of an Option
may be paid, the form of payment, including, without limitation: (i) cash, (ii)
promissory note bearing interest at no less than such rate as shall preclude the
imputation of interest under the Code, (iii) shares of Stock held for such
period of time as may be required by the Committee in order to avoid adverse
accounting consequences and having a Fair Market Value on the date of delivery
equal to the aggregate exercise price of the Option or exercised portion
thereof, or (iv) other property acceptable to the Committee (including through
the delivery of a notice that the Participant has placed a market sell order
with a broker with respect to shares of Stock then issuable upon exercise of the
Option, and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to the Company in satisfaction of the Option exercise
price; provided that
payment of such proceeds is then made to the Company upon settlement of such
sale), and the methods by which shares of Stock shall be delivered or deemed to
be delivered to Participants.  Notwithstanding any other provision of
the Plan to the contrary, no Participant who is an “executive officer” of the
Company within the meaning of Section 13(k) of the Exchange Act shall be
permitted to pay the exercise price of an Option in any method which would
violate Section 13(k) of the Exchange Act.

     

    (d)           Evidence of
Grant.  All Options shall be evidenced by a written Award
Agreement between the Company and the Participant.  The Award
Agreement shall include such additional provisions as may be specified by the
Committee.

     

    5.2          Incentive Stock
Options.  The terms of any Incentive Stock Options granted
pursuant to the Plan must comply with the conditions and limitations contained
Section 13.2 and this Section 5.2.

     

    (a)           Eligibility.  Incentive
Stock Options may be granted only to employees of the Company or any “subsidiary
corporation” thereof (within the meaning of Section 424(f) of the Code and the
applicable regulations promulgated thereunder).


    
      
         


      

      
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    (b)           Exercise
Price.  The exercise price per share of Stock shall be set by
the Committee; provided
that subject to Section 5.2(e) the exercise price for any Incentive Stock Option
shall not be less than 100% of the Fair Market Value on the date of
grant.

     

    (c)           Expiration.  Subject
to Section 5.2(e), an Incentive Stock Option may not be exercised to any extent
by anyone after the tenth anniversary of the date it is granted, or such earlier
time set forth in the Award Agreement.

     

    (d)           Individual Dollar
Limitation.  The aggregate Fair Market Value (determined as of
the time the Option is granted) of all shares of Stock with respect to which
Incentive Stock Options are first exercisable by a Participant in any calendar
year may not exceed $100,000 or such other limitation as imposed by Section
422(d) of the Code, or any successor provision.  To the extent that
Incentive Stock Options are first exercisable by a Participant in excess of such
limitation, the excess shall be considered Non-Qualified Stock
Options.

     

    (e)           Ten Percent
Owners.  An Incentive Stock Option shall be granted to any
individual who, at the date of grant, owns stock possessing more than ten
percent of the total combined voting power of all classes of Stock of the
Company only if such Option is granted at a price that is not less than 110% of
Fair Market Value on the date of grant and the Option is exercisable for no more
than five years from the date of grant.

     

    (f)
           Notice of
Disposition.  The Participant shall give the Company prompt
notice of any disposition of shares of Stock acquired by exercise of an
Incentive Stock Option within (i) two years from the date of grant of such
Incentive Stock Option or (ii) one year after the transfer of such shares of
Stock to the Participant.

     

    (g)           Right to
Exercise.  During a Participant’s lifetime, an Incentive Stock
Option may be exercised only by the Participant.

     

    5.3          Substitution of Stock
Appreciation Rights.  The Committee may provide in the Award
Agreement evidencing the grant of an Option that the Committee, in its sole
discretion, shall have to right to substitute a Stock Appreciation Right for
such Option at any time prior to or upon exercise of such Option, subject to the
provisions of Section 7.2 hereof; provided that such Stock Appreciation Right
shall be exercisable with respect to the same number of shares of Stock for
which such substituted Option would have been exercisable.

     

    5.4          Paperless
Exercise.  In the event that the Company establishes, for
itself or using the services of a third party, an automated system for the
exercise of Options, such as a system using an internet website or interactive
voice response, then the paperless exercise of options by a Participant may be
permitted through the use of such an automated system.

     

    ARTICLE
6

     

    RESTRICTED
STOCK AWARDS

    


    6.1          Grant of Restricted
Stock.  The Committee is authorized to make Awards of
Restricted Stock to any Participant selected by the Committee in such amounts
and subject to such terms and conditions as determined by the
Committee.  All Awards of Restricted Stock shall be evidenced by a
written Restricted Stock Award Agreement.


    
      
         


      

      
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    6.2          Issuance and
Restrictions.  Restricted Stock shall be subject to such
restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted
Stock).  These restrictions may lapse separately or in combination at
such times, pursuant to such circumstances, in such installments, or otherwise,
as the Committee determines at the time of the grant of the Award or
thereafter.

     

    6.3          Forfeiture.  Except
as otherwise determined by the Committee at the time of the grant of the Award
or thereafter, upon termination of employment or service during the applicable
restriction period, Restricted Stock that is at that time subject to
restrictions shall be forfeited; provided, however, that the
Committee may (a) provide in any Restricted Stock Award Agreement that
restrictions or forfeiture conditions relating to Restricted Stock will be
waived in whole or in part in the event of terminations resulting from specified
causes, and (b) in other cases waive in whole or in part restrictions or
forfeiture conditions relating to Restricted Stock.

     

    6.4          Certificates for Restricted
Stock.  Restricted Stock granted pursuant to the Plan may be
evidenced in such manner as the Committee shall determine.  If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock, and
the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse.

     

    ARTICLE
7

     

    STOCK
APPRECIATION RIGHTS

     

    7.1          Grant of Stock Appreciation
Rights.  A Stock Appreciation Right may be granted to any
Participant selected by the Committee.  A Stock Appreciation Right may
be granted (a) in connection and simultaneously with the grant of an
Option, (b) with respect to a previously granted Option, or
(c) independent of an Option.  A Stock Appreciation Right shall
be subject to such terms and conditions not inconsistent with the Plan as the
Committee shall impose and shall be evidenced by an Award
Agreement.

     

    7.2          Coupled Stock Appreciation
Rights.

     

    (a)           A
Coupled Stock Appreciation Right (“CSAR”) shall be
related to a particular Option and shall be exercisable only when and to the
extent the related Option is exercisable, provided, however, that the exercise
price for any CSAR shall not be less than 100% of the Fair Market Value on the
date of grant; and provided, further, that, the Committee
in its sole and absolute discretion may provide that the CSAR may be exercised
subsequent to a termination of employment or service, as applicable, or because
of the Participant’s retirement, death or disability, or otherwise.

     

    (b)           A
CSAR may be granted to a Participant for no more than the number of shares
subject to the simultaneously or previously granted Option to which it is
coupled.


    
      
         


      

      
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    (c)           A
CSAR shall entitle the Participant (or other person entitled to exercise the
Option pursuant to the Plan) to surrender to the Company the unexercised portion
of the Option to which the CSAR relates (to the extent then exercisable pursuant
to its terms) and to receive from the Company in exchange therefor an amount
determined by multiplying the difference obtained by subtracting the Option
exercise price from the Fair Market Value of a share of Stock on the date of
exercise of the CSAR by the number of shares of Stock with respect to which the
CSAR shall have been exercised, subject to any limitations the Committee may
impose.

    


    7.3          Independent Stock
Appreciation Rights.

     

    (a)           An
Independent Stock Appreciation Right (“ISAR”) shall be
unrelated to any Option and shall have a term set by the
Committee.  An ISAR shall be exercisable in such installments as the
Committee may determine.  An ISAR shall cover such number of shares of
Stock as the Committee may determine.  The exercise price per share of
Stock subject to each ISAR shall be set by the Committee; provided, however, that the
exercise price for any ISAR shall not be less than 100% of the Fair Market Value
on the date of grant; and provided, further, that, the
Committee in its sole and absolute discretion may provide that the ISAR may be
exercised subsequent to a termination of employment or service, as applicable,
or because of the Participant’s retirement, death or disability, or
otherwise.

     

    (b)           An
ISAR shall entitle the Participant (or other person entitled to exercise the
ISAR pursuant to the Plan) to exercise all or a specified portion of the ISAR
(to the extent then exercisable pursuant to its terms) and to receive from the
Company an amount determined by multiplying the difference obtained by
subtracting the exercise price per share of the ISAR from the Fair Market Value
of a share of Stock on the date of exercise of the ISAR by the number of shares
of Stock with respect to which the ISAR shall have been exercised, subject to
any limitations the Committee may impose.

     

    7.4          Payment and Limitations on
Exercise.

     

    (a)           Payment
of the amounts determined under Sections 7.2(c) and 7.3(b) above shall be in
cash, in Stock (based on its Fair Market Value as of the date the Stock
Appreciation Right is exercised) or a combination of both, as determined by the
Committee.

     

    (b)           To
the extent any payment under Section 7.2(c) or 7.3(b) is effected in Stock it
shall be made subject to satisfaction of all provisions of Article 5 above
pertaining to Options.

    


    ARTICLE
8

     

    OTHER
TYPES OF AWARDS

    


    8.1          Performance Share
Awards.  Any Participant selected by the Committee may be
granted one or more Performance Share awards which shall be denominated in a
number of shares of Stock and which may be linked to any one or more of the
Performance Criteria or other specific performance criteria determined
appropriate by the Committee, in each case on a specified date or dates or over
any period or periods determined by the Committee.  In making such
determinations, the Committee shall consider (among such other factors as it
deems relevant in light of the specific type of award) the contributions,
responsibilities and other compensation of the particular
Participant.


    
      
         


      

      
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    8.2         
Performance Stock
Units. Any
Participant selected by the Committee may be granted one or more Performance
Stock Unit awards which shall be denominated in units of value including dollar
value of shares of Stock and which may be linked to any one or more of the
Performance Criteria or other specific performance criteria determined
appropriate by the Committee, in each case on a specified date or dates or over
any period or periods determined by the Committee.  In making such
determinations, the Committee shall consider (among such other factors as it
deems relevant in light of the specific type of award) the contributions,
responsibilities and other compensation of the particular
Participant.

     

    8.3          Dividend
Equivalents.

     

    (a)           Any
Participant selected by the Committee may be granted Dividend Equivalents based
on the dividends declared on the shares of Stock that are subject to any Award,
to be credited as of dividend payment dates, during the period between the date
the Award is granted and the date the Award is exercised, vests or expires, as
determined by the Committee.  Such Dividend Equivalents shall be
converted to cash or additional shares of Stock by such formula and at such time
and subject to such limitations as may be determined by the
Committee.

     

    (b)           Dividend
Equivalents granted with respect to Options or SARs that are intended to be
Qualified Performance-Based Compensation shall be payable, with respect to
pre-exercise periods, regardless of whether such Option or SAR is subsequently
exercised.

    


    8.4          Stock
Payments.  Any Participant selected by the Committee may
receive Stock Payments in the manner determined from time to time by the
Committee.  The number of shares shall be determined by the Committee
and may be based upon the Performance Criteria or other specific performance
criteria determined appropriate by the Committee, determined on the date such
Stock Payment is made or on any date thereafter.

     

    8.5          Deferred
Stock.  Any Participant selected by the Committee may be
granted an award of Deferred Stock in the manner determined from time to time by
the Committee.  The number of shares of Deferred Stock shall be
determined by the Committee and may be linked to the Performance Criteria or
other specific performance criteria determined to be appropriate by the
Committee, in each case on a specified date or dates or over any period or
periods determined by the Committee.  Stock underlying a Deferred
Stock award will not be issued until the Deferred Stock award has vested,
pursuant to a vesting schedule or performance criteria set by the
Committee.  Unless otherwise provided by the Committee, a Participant
awarded Deferred Stock shall have no rights as a Company stockholder with
respect to such Deferred Stock until such time as the Deferred Stock Award has
vested and the Stock underlying the Deferred Stock Award has been
issued.


    
      
         


      

      
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    8.6          Restricted Stock
Units.  The Committee is authorized to make Awards of
Restricted Stock Units to any Participant selected by the Committee in such
amounts and subject to such terms and conditions as determined by the
Committee.  At the time of grant, the Committee shall specify the date
or dates on which the Restricted Stock Units shall become fully vested and
nonforfeitable, and may specify such conditions to vesting as it deems
appropriate.  At the time of grant, the Committee shall specify the
maturity date applicable to each grant of Restricted Stock Units which shall be
no earlier than the vesting date or dates of the Award and may be determined at
the election of the grantee.  On the maturity date, the Company shall,
subject to Section 10.5(b),  transfer to the Participant one
unrestricted, fully transferable share of Stock for each Restricted Stock Unit
scheduled to be paid out on such date and not previously
forfeited.  The Committee shall specify the purchase price, if any, to
be paid by the grantee to the Company for such shares of Stock.

     

    8.7          Other Stock-Based
Awards.  Any Participant selected by the Committee may be
granted one or more Awards that provide Participants with shares of Stock or the
right to purchase shares of Stock or that have a value derived from the value
of, or an exercise or conversion privilege at a price related to, or that are
otherwise payable in shares of Stock and which may be linked to any one or more
of the Performance Criteria or other specific performance criteria determined
appropriate by the Committee, in each case on a specified date or dates or over
any period or periods determined by the Committee.  In making such
determinations, the Committee shall consider (among such other factors as it
deems relevant in light of the specific type of Award) the contributions,
responsibilities and other compensation of the particular
Participant.

     

    8.8          Term.  Except
as otherwise provided herein, the term of any Award of  Performance
Shares, Performance Stock Units, Dividend Equivalents, Stock Payments, Deferred
Stock, Restricted Stock Units or Other Stock-Based Award shall be set by the
Committee in its discretion.

     

    8.9          Exercise or Purchase
Price.  The Committee may establish the exercise or purchase
price, if any, of any Award of Performance Shares, Performance Stock Units,
Deferred Stock, Stock Payments, Restricted Stock Units or Other Stock-Based
Award; provided,
however, that such price shall not be less than the par value of a share
of Stock on the date of grant, unless otherwise permitted by applicable state
law.

     

    8.10        Exercise Upon Termination of
Employment or Service.  An Award of Performance Shares,
Performance Stock Units, Dividend Equivalents, Deferred Stock, Stock Payments,
Restricted Stock Units and Other Stock-Based Award shall only be exercisable or
payable while the Participant is an Employee; provided, however, that the
Committee in its sole and absolute discretion may provide that an Award of
Performance Shares, Performance Stock Units, Dividend Equivalents, Stock
Payments, Deferred Stock, Restricted Stock Units or Other Stock-Based Award may
be exercised or paid subsequent to a termination of employment or service, as
applicable, or because of the Participant’s retirement, death or disability, or
otherwise; provided,
however, that any such provision with respect to Performance Shares or
Performance Stock Units shall be subject to the requirements of Section 162(m)
of the Code that apply to Qualified Performance-Based
Compensation.


    
      
         


      

      
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    8.11        Form of
Payment.  Payments with respect to any Awards granted under
this Article 8 shall be made in cash, in Stock or a combination of both, as
determined by the Committee.

     

    8.12        Award
Agreement.  All Awards under this Article 8 shall be subject to
such additional terms and conditions as determined by the Committee and shall be
evidenced by a written Award Agreement.

     

    ARTICLE
9

     

    PERFORMANCE-BASED
AWARDS

    


    9.1          Purpose.  The
purpose of this Article 9 is to provide the Committee the ability to qualify
Awards other than Options and SARs and that are granted pursuant to Articles 6
and 8 as Qualified Performance-Based Compensation.  If the Committee,
in its discretion, decides to grant a Performance-Based Award to a Covered
Employee, the provisions of this Article 9 shall control over any contrary
provision contained in Articles 6 or 8; provided, however, that the
Committee may in its discretion grant Awards to Covered Employees that are based
on Performance Criteria or Performance Goals but that do not satisfy the
requirements of this Article 9.

     

    9.2          Applicability.  This
Article 9 shall apply only to those Covered Employees selected by the Committee
to receive Performance-Based Awards.  The designation of a Covered
Employee as a Participant for a Performance Period shall not in any manner
entitle the Participant to receive an Award for the period.  Moreover,
designation of a Covered Employee as a Participant for a particular Performance
Period shall not require designation of such Covered Employee as a Participant
in any subsequent Performance Period and designation of one Covered Employee as
a Participant shall not require designation of any other Covered Employees as a
Participant in such period or in any other period.

     

    9.3          Procedures with Respect to
Performance-Based Awards.  To the extent necessary to comply
with the Qualified Performance-Based Compensation requirements of Section
162(m)(4)(C) of the Code, with respect to any Award granted under Articles 6 and
8 which may be granted to one or more Covered Employees, no later than ninety
(90) days following the commencement of any fiscal year in question or any other
designated fiscal period or period of service (or such other time as may be
required or permitted by Section 162(m) of the Code), the Committee shall, in
writing, (a) designate one or more Covered Employees, (b) select the Performance
Criteria applicable to the Performance Period, (c) establish the Performance
Goals, and amounts of such Awards, as applicable, which may be earned for such
Performance Period, and (d) specify the relationship between Performance
Criteria and the Performance Goals and the amounts of such Awards, as
applicable, to be earned by each Covered Employee for such Performance
Period.  Following the completion of each Performance Period, the
Committee shall certify in writing whether the applicable Performance Goals have
been achieved for such Performance Period.  In determining the amount
earned by a Covered Employee, the Committee shall have the right to reduce or
eliminate (but not to increase) the amount payable at a given level of
performance to take into account additional factors that the Committee may deem
relevant to the assessment of individual or corporate performance for the
Performance Period.


    
      
         


      

      
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    9.4     
    Payment of Performance-Based
Awards.  Unless otherwise provided in the applicable Award
Agreement, a Participant must be employed by the Company or a Subsidiary on the
day a Performance-Based Award for such Performance Period is paid to the
Participant.  Furthermore, a Participant shall be eligible to receive
payment pursuant to a Performance-Based Award for a Performance Period only if
the Performance Goals for such period are achieved.

     

    9.5          Additional
Limitations.  Notwithstanding any other provision of the Plan,
any Award which is granted to a Covered Employee and is intended to constitute
Qualified Performance-Based Compensation shall be subject to any additional
limitations set forth in Section 162(m) of the Code (including any amendment to
Section 162(m) of the Code) or any regulations or rulings issued thereunder that
are requirements for qualification as qualified performance-based compensation
as described in Section 162(m)(4)(C) of the Code, and the Plan shall be deemed
amended to the extent necessary to conform to such requirements.

     

    ARTICLE
10

     

    PROVISIONS
APPLICABLE TO AWARDS

    


    10.1        Stand-Alone and Tandem
Awards.  Awards granted pursuant to the Plan may, in the
discretion of the Committee, be granted either alone, in addition to, or in
tandem with, any other Award granted pursuant to the Plan. Awards granted in
addition to or in tandem with other Awards may be granted either at the same
time as or at a different time from the grant of such other Awards.

     

    10.2        Award
Agreement.  Awards under the Plan shall be evidenced by Award
Agreements that set forth the terms, conditions and limitations for each Award
which may include the term of an Award, the provisions applicable in the event
the Participant’s employment or service terminates, and the Company’s authority
to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an
Award.

     

    10.3        Limits on
Transfer.  No right or interest of a Participant in any Award
may be pledged, encumbered, or hypothecated to or in favor of any party other
than the Company or a Subsidiary, or shall be subject to any lien, obligation,
or liability of such Participant to any other party other than the Company or a
Subsidiary.  Except as otherwise provided by the Committee, no Award
shall be assigned, transferred, or otherwise disposed of by a Participant other
than by will or the laws of descent and distribution.  The Committee
by express provision in the Award or an amendment thereto may permit an Award
(other than an Incentive Stock Option) to be transferred to, exercised by and
paid to certain persons or entities related to the Participant, including but
not limited to members of the Participant’s family, charitable institutions, or
trusts or other entities whose beneficiaries or beneficial owners are members of
the Participant’s family and/or charitable institutions, or to such other
persons or entities as may be expressly approved by the Committee, pursuant to
such conditions and procedures as the Committee may establish.  Any
permitted transfer shall be subject to the condition that the Committee receive
evidence satisfactory to it that the transfer is being made for estate and/or
tax planning purposes (or to a “blind trust” in connection with the
Participant’s termination of employment or service with the Company or a
Subsidiary to assume a position with a governmental, charitable, educational or
similar non-profit institution) and on a basis consistent with the Company’s
lawful issue of securities.


    
      
         


      

      
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    10.4        Beneficiaries.  Notwithstanding
Section 10.3, a Participant may, in the manner determined by the Committee,
designate a beneficiary to exercise the rights of the Participant and to receive
any distribution with respect to any Award upon the Participant’s
death.  A beneficiary, legal guardian, legal representative, or other
person claiming any rights pursuant to the Plan is subject to all terms and
conditions of the Plan and any Award Agreement applicable to the Participant,
except to the extent the Plan and Award Agreement otherwise provide, and to any
additional restrictions deemed necessary or appropriate by the
Committee.  If the Participant is married and resides in a community
property state, a designation of a person other than the Participant’s spouse as
his or her beneficiary with respect to more than 50% of the Participant’s
interest in the Award shall not be effective without the prior written consent
of the Participant’s spouse.  If no beneficiary has been designated or
survives the Participant, payment shall be made to the person entitled thereto
pursuant to the Participant’s will or the laws of descent and
distribution.  Subject to the foregoing, a beneficiary designation may
be changed or revoked by a Participant at any time provided the change or
revocation is filed with the Committee.

     

    10.5        Stock Certificates; Book
Entry Procedures.

     

    (a)           Notwithstanding
anything herein to the contrary, the Company shall not be required to issue or
deliver any certificates evidencing shares of Stock pursuant to the exercise of
any Award, unless and until the Board has determined, with advice of counsel,
that the issuance and delivery of such certificates is in compliance with all
applicable laws, regulations of governmental authorities and, if applicable, the
requirements of any exchange on which the shares of Stock are listed or
traded.  All Stock certificates delivered pursuant to the Plan are
subject to any stop-transfer orders and other restrictions as the Committee
deems necessary or advisable to comply with federal, state, or foreign
jurisdiction, securities or other laws, rules and regulations and the rules of
any national securities exchange or automated quotation system on which the
Stock is listed, quoted, or traded.  The Committee may place legends
on any Stock certificate to reference restrictions applicable to the
Stock.  In addition to the terms and conditions provided herein, the
Board may require that a Participant make such reasonable covenants, agreements,
and representations as the Board, in its discretion, deems advisable in order to
comply with any such laws, regulations, or requirements. The Committee shall
have the right to require any Participant to comply with any timing or other
restrictions with respect to the settlement or exercise of any Award, including
a window-period limitation, as may be imposed in the discretion of the
Committee.

     

    (b)           Notwithstanding
any other provision of the Plan, unless otherwise determined by the Committee or
required by any applicable law, rule or regulation, the Company shall not
deliver to any Participant certificates evidencing shares of Stock issued in
connection with any Award and instead such shares of Stock shall be recorded in
the books of the Company (or, as applicable, its transfer agent or stock plan
administrator).


    
      
         


      

      
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    ARTICLE
11

     

    CHANGES
IN CAPITAL STRUCTURE

    


    11.1        Adjustments.

     

    (a)           In
the event of any stock dividend, stock split, combination or exchange of shares,
merger, consolidation, spin-off, recapitalization, distribution of Company
assets to stockholders (other than normal cash dividends), or any other
corporate event affecting the Stock or the share price of the Stock, the
Committee may make such proportionate adjustments, if any, as the Committee in
its discretion may deem appropriate to reflect such changes with respect to (i)
the aggregate number and type of shares that may be issued under the Plan
(including, but not limited to, adjustments of the limitations in Sections 3.1
and 3.3); (ii) the terms and conditions of any outstanding Awards (including,
without limitation, any applicable performance targets or criteria with respect
thereto); and (iii) the grant or exercise price per share for any outstanding
Awards under the Plan.  Any adjustment affecting an Award intended as
Qualified Performance-Based Compensation shall be made consistent with the
requirements of Section 162(m) of the Code.

     

    (b)           In
the event of any transaction or event described in Section 11.1(a) or any
unusual or nonrecurring transactions or events affecting the Company, any
affiliate of the Company, or the financial statements of the Company or any
affiliate, or of changes in applicable laws, regulations or accounting
principles, and whenever the Committee determines that action is appropriate in
order to prevent the dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan or with respect to any
Award under the Plan, to facilitate such transactions or events or to give
effect to such changes in laws, regulations or principles, the Committee, in its
sole discretion and on such terms and conditions as it deems appropriate, either
by amendment of the terms of any outstanding Awards or by action taken prior to
the occurrence of such transaction or event and either automatically or upon the
Participant’s request, is hereby authorized to take any one or more of the
following actions:

     

    (i)           To
provide for either (A) termination of any such Award in exchange for an amount
of cash and/or other property, if any, equal to the amount that would have been
attained upon the exercise of such Award or realization of the Participant’s
rights (and, for the avoidance of doubt, if as of the date of the occurrence of
the transaction or event described in this Section 11.1(b) the Committee
determines in good faith that no amount would have been attained upon the
exercise of such Award or realization of the Participant’s rights, then such
Award may be terminated by the Company without payment) or (B) the replacement
of such Award with other rights or property selected by the Committee in its
sole discretion;

     

    (ii)           To
provide that such Award be assumed by the successor or survivor corporation, or
a parent or subsidiary thereof, or shall be substituted for by similar options,
rights or awards covering the stock of the successor or survivor corporation, or
a parent or subsidiary thereof, with appropriate adjustments as to the number
and kind of shares and prices; and


    
      
         


      

      
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    (iii)           To
make adjustments in the number and type of shares of Stock (or other securities
or property) subject to outstanding Awards, and in the number and kind of
outstanding Restricted Stock or Deferred Stock and/or in the terms and
conditions of (including the grant or exercise price), and the criteria included
in, outstanding options, rights and awards and options, rights and awards which
may be granted in the future;

     

    (iv)           To
provide that such Award shall be exercisable or payable or fully vested with
respect to all shares covered thereby, notwithstanding anything to the contrary
in the Plan or the applicable Award Agreement; and

     

    (v)           To
provide that the Award cannot vest, be exercised or become payable after such
event.

     

    11.2        Outstanding Awards – Other
Changes.  In the event of any other change in the
capitalization of the Company or corporate change other than those specifically
referred to in this Article 11, the Committee may, in its absolute discretion,
make such adjustments in the number and kind of shares or other securities
subject to Awards outstanding on the date on which such change occurs and in the
per share grant or exercise price of each Award as the Committee may consider
appropriate to prevent dilution or enlargement of rights.

     

    11.3        No Other
Rights.  Except as expressly provided in the Plan, no
Participant shall have any rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend, any increase or
decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger, or consolidation of the Company or any other
corporation.  Except as expressly provided in the Plan or pursuant to
action of the Committee under the Plan, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number of shares of Stock subject to an Award or the grant or exercise price
of any Award.

     

    ARTICLE
12

     

    ADMINISTRATION

    


    12.1        Committee.  Unless
and until the Board delegates administration of the Plan to a Committee as set
forth below, the Plan shall be administered by the full Board, and for such
purposes the term “Committee” as used in this Plan shall be deemed to refer to
the Board.  The Board, at its discretion or as otherwise necessary to
comply with the requirements of Section 162(m) of the Code, Rule 16b-3
promulgated under the Exchange Act or to the extent required by any other
applicable rule or regulation, shall delegate administration of the Plan to a
Committee.  The Committee shall consist solely of two or more members
of the Board each of whom is both an “outside director,” within the meaning of
Section 162(m) of the Code and any other applicable rules and regulations, and a
Non-Employee Director.  Notwithstanding the foregoing, the Committee
may delegate its authority hereunder to the extent permitted by Section
12.5.  Appointment of Committee members shall be effective upon
acceptance of appointment.  The Board may abolish the Committee at any
time and revest in the Board the administration of the
Plan.  Committee members may resign at any time by delivering written
notice to the Board.  Vacancies in the Committee may only be filled by
the Board.  Notwithstanding the foregoing, in its sole discretion, the
Board may at any time and from time to time exercise any and all rights and
duties of the Administrator under the Plan and all actions of the Administrator
shall be subject to approval of the Board, except in each case with respect to
matters which are required to be determined in the sole discretion of the
Committee under Rule 16b-3 of the Exchange Act or Section 162(m) of the Code, or
any regulations or rules issued thereunder.


    
      
         


      

      
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    12.2        Action by the
Committee.  A majority of the Committee shall constitute a
quorum.  The acts of a majority of the members present at any meeting
at which a quorum is present, and acts approved in writing by a majority of the
Committee in lieu of a meeting, shall be deemed the acts of the
Committee.  Each member of the Committee is entitled to, in good
faith, rely or act upon any report or other information furnished to that member
by any officer or other employee of the Company or any Subsidiary, the Company’s
independent certified public accountants, or any executive compensation
consultant or other professional retained by the Company to assist in the
administration of the Plan.

     

    12.3        Authority of
Committee.  Subject to any specific designation in the Plan,
the Committee has the power, authority and discretion to:

     

    (a)           Designate
Participants to receive Awards;

     

    (b)           Determine
the type or types of Awards to be granted to each Participant;

     

    (c)           Determine
the number of Awards to be granted and the number of shares of Stock to which an
Award will relate;

     

    (d)           Determine
the terms and conditions of any Award granted pursuant to the Plan, including,
but not limited to, the exercise price, grant price, or purchase price, any
reload provision, any restrictions or limitations on the Award, any schedule for
lapse of forfeiture restrictions or restrictions on the exercisability of an
Award, and accelerations or waivers thereof, any provisions related to
non-competition and recapture of gain on an Award, based in each case on such
considerations as the Committee in its sole discretion determines; provided, however, that the
Committee shall not have the authority to accelerate the vesting or waive the
forfeiture of any Performance-Based Awards;

     

    (e)           Determine
whether, to what extent, and pursuant to what circumstances an Award may be
settled in, or the exercise price of an Award may be paid in, cash, Stock, other
Awards, or other property, or an Award may be canceled, forfeited, or
surrendered;

     

    (f)           Prescribe
the form of each Award Agreement, which need not be identical for each
Participant;

     

    (g)           Decide
all other matters that must be determined in connection with an
Award;

     

    (h)           Establish,
adopt, or revise any rules and regulations as it may deem necessary or advisable
to administer the Plan;


    
      
         


      

      
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    (i)           Interpret
the terms of, and any matter arising pursuant to, the Plan or any Award
Agreement; and

     

    (j)           Make
all other decisions and determinations that may be required pursuant to the Plan
or as the Committee deems necessary or advisable to administer the
Plan.

     

    12.4        Decisions
Binding.  The Committee’s interpretation of the Plan, any
Awards granted pursuant to the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.

     

    12.5        Delegation of
Authority.  To the extent permitted by applicable law, the
Committee may from time to time delegate to a committee of one or more members
of the Board or one or more officers of the Company the authority to grant or
amend Awards to Participants other than (a) senior executives of the Company who
are subject to Section 16 of the Exchange Act, (b) Covered Employees, or (c)
officers of the Company to whom authority to grant or amend Awards has been
delegated hereunder.  Any delegation hereunder shall be subject to the
restrictions and limits that the Committee specifies at the time of such
delegation, and the Committee may at any time rescind the authority so delegated
or appoint a new delegatee.  At all times, the delegatee appointed
under this Section 12.5 shall serve in such capacity at the pleasure of the
Committee.

     

    ARTICLE
13

     

    EFFECTIVE
AND EXPIRATION DATE

    


    13.1        Effective
Date.  The Plan was effective as of May 11, 2005, the date the
Plan was approved by the Company’s stockholders (the “Effective
Date”).  The amendment and restatement of the Plan set forth
herein incorporates all amendments to the Plan adopted by the Board prior to the
date hereof.

     

    13.2        Expiration
Date.  The Plan will expire on, and no Incentive Stock Option
or other Award may be granted pursuant to the Plan after, the earlier of the
tenth anniversary of (i) the Effective Date or (ii) the date this Plan is
approved by the Board.  Any Awards that are outstanding on the tenth
anniversary of the Effective Date shall remain in force according to the terms
of the Plan and the applicable Award Agreement.

     

    ARTICLE
14

     

    AMENDMENT,
MODIFICATION, AND TERMINATION

    


    14.1        Amendment, Modification, And
Termination.  With the approval of the Board, at any time and
from time to time, the Committee may terminate, amend or modify the Plan; provided, however, that (a)
to the extent necessary and desirable to comply with any applicable law,
regulation, or stock exchange rule, the Company shall obtain stockholder
approval of any Plan amendment in such a manner and to such a degree as
required, and (b) stockholder approval is required for any amendment to the Plan
that (i) increases the number of shares available under the Plan (other than any
adjustment as provided by Article 11), (ii) permits the Committee to grant
Options with an exercise price that is below Fair Market Value on the date of
grant, (iii) permits the Committee to extend the exercise period for an Option
beyond ten years from the date of grant or (iv) results in a material increase
in benefits or a change in eligibility requirements.  Notwithstanding
any provision in this Plan to the contrary, absent approval of the stockholders
of the Company, no Option may be amended to reduce the per share exercise price
of the shares subject to such Option below the per share exercise price as of
the date the Option is granted and, except as permitted by Article 11, no Option
may be granted in exchange for, or in connection with, the cancellation or
surrender of an Option having a higher per share exercise
price.


    
      
         


      

      
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    14.2        Awards Previously
Granted.  No termination, amendment, or modification of the
Plan shall adversely affect in any material way any Award previously granted
pursuant to the Plan without the prior written consent of the
Participant.

     

    ARTICLE
15

     

    GENERAL
PROVISIONS

    


    15.1        No Rights to
Awards.  No Eligible Individual or other person shall have any
claim to be granted any Award pursuant to the Plan, and neither the Company nor
the Committee is obligated to treat Eligible Individuals, Participants or any
other persons uniformly.

     

    15.2        No Stockholders
Rights.  Except as otherwise provided herein, a Participant
shall have none of the rights of a stockholder with respect to shares of Stock
covered by any Award until the Participant becomes the record owner of such
shares of Stock.

     

    15.3        Withholding.  The
Company or any Subsidiary shall have the authority and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy federal, state, local and foreign taxes (including the Participant’s
FICA obligation) required by law to be withheld with respect to any taxable
event concerning a Participant arising as a result of this Plan.  The
Committee may in its discretion and in satisfaction of the foregoing requirement
allow a Participant to elect to have the Company withhold shares of Stock
otherwise issuable under an Award (or allow the return of shares of Stock)
having a Fair Market Value equal to the sums required to be
withheld.  Notwithstanding any other provision of the Plan, the number
of shares of Stock which may be withheld with respect to the issuance, vesting,
exercise or payment of any Award (or which may be repurchased from the
Participant of such Award within six months (or such other period as may be
determined by the Committee) after such shares of Stock were acquired by the
Participant from the Company) in order to satisfy the Participant’s federal,
state, local and foreign income and payroll tax liabilities with respect to the
issuance, vesting, exercise or payment of the Award shall be limited to the
number of shares which have a Fair Market Value on the date of withholding or
repurchase equal to the aggregate amount of such liabilities based on the
minimum statutory withholding rates for federal, state, local and foreign income
tax and payroll tax purposes that are applicable to such supplemental taxable
income.

     

    15.4        No Right to Employment or
Services.  Nothing in the Plan or any Award Agreement shall
interfere with or limit in any way the right of the Company or any Subsidiary to
terminate any Participant’s employment or services at any time, nor confer upon
any Participant any right to continue in the employ or service of the Company or
any Subsidiary.


    
      
         


      

      
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    15.5        Unfunded Status of
Awards.  The Plan is intended to be an “unfunded” plan for
incentive compensation.  With respect to any payments not yet made to
a Participant pursuant to an Award, nothing contained in the Plan or any Award
Agreement shall give the Participant any rights that are greater than those of a
general creditor of the Company or any Subsidiary.

     

    15.6        Indemnification.  To
the extent allowable pursuant to applicable law, each member of the Committee or
of the Board shall be indemnified and held harmless by the Company from any
loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by such member in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action or failure to act pursuant to the Plan and
against and from any and all amounts paid by him or her in satisfaction of
judgment in such action, suit, or proceeding against him or her; provided he or she gives the
Company an opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own
behalf.  The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
pursuant to the Company’s Certificate of Incorporation or Bylaws, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or
hold them harmless.

     

    15.7        Relationship to other
Benefits.  No payment pursuant to the Plan shall be taken into
account in determining any benefits pursuant to any pension, retirement,
savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Subsidiary except to the extent otherwise expressly provided in
writing in such other plan or an agreement thereunder.

     

    15.8        Expenses.  The
expenses of administering the Plan shall be borne by the Company and its
Subsidiaries.

     

    15.9        Titles and
Headings.  The titles and headings of the Sections in the Plan
are for convenience of reference only and, in the event of any conflict, the
text of the Plan, rather than such titles or headings, shall
control.

     

    15.10      Fractional
Shares.  No fractional shares of Stock shall be issued and the
Committee shall determine, in its discretion, whether cash shall be given in
lieu of fractional shares or whether such fractional shares shall be eliminated
by rounding up or down as appropriate.

     

    15.11      Limitations Applicable to
Section 16 Persons.  Notwithstanding any other provision of the
Plan, the Plan, and any Award granted or awarded to any Participant who is then
subject to Section 16 of the Exchange Act, shall be subject to any additional
limitations set forth in any applicable exemptive rule under Section 16 of the
Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that
are requirements for the application of such exemptive rule.  To the
extent permitted by applicable law, the Plan and Awards granted or awarded
hereunder shall be deemed amended to the extent necessary to conform to such
applicable exemptive rule.


    
      
         


      

      
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    15.12      Government and Other
Regulations.  The obligation of the Company to make payment of
awards in Stock or otherwise shall be subject to all applicable laws, rules, and
regulations, and to such approvals by government agencies as may be
required.  The Company shall be under no obligation to register
pursuant to the Securities Act of 1933, as amended, any of the shares of Stock
paid pursuant to the Plan.  If the shares paid pursuant to the Plan
may in certain circumstances be exempt from registration pursuant to the
Securities Act of 1933, as amended, the Company may restrict the transfer of
such shares in such manner as it deems advisable to ensure the availability of
any such exemption.

     

    15.13      Governing
Law.  The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of
California.

     

    *  *  *  *  *

     

    I hereby
certify that the foregoing amendment and restatement of the Plan was duly
adopted by the Board of Directors of Mercury General Corporation on October 29,
2010.

    


    
      
        
          
            
              
                	 
      	
                        /s/ Judith A Walters

                      	 
	 
      	
                        Corporate
      Secretary

                      	 


              

            

          

        

      

    

     

    
      
         

      

      
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