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                               AMENDED AND RESTATED
                             MERCER INTERNATIONAL INC.
                        1992 NON-QUALIFIED STOCK OPTION PLAN

This Amended and Restated 1992 Non-Qualified Stock Option Plan (the "Plan") 
provides for the grant of options to acquire shares of beneficial interest 
("Shares"), $1.00 par value per share, of Mercer International Inc. (the 
"Company").  The non-qualified stock options to acquire Shares granted 
pursuant to this Plan are hereinafter referred to as "Options" and any party 
to whom an Option is granted under this Plan shall be referred to hereinafter 
as an "Optionee".

       1.   PURPOSE.

The purpose of the Plan is to attract and retain the services of people with 
training, experience and ability and to provide additional incentive to such 
persons by granting them an opportunity to participate in the ownership of 
the Company.

      2.    SHARES SUBJECT TO THE PLAN.

The Shares subject to this Plan shall be the Company's shares of beneficial 
interest, presently authorized but unissued or reacquired by the Company.  
Subject to adjustment as provided in Section 8 hereof, the aggregate amount 
of Shares to be delivered upon the exercise of all Options granted under this 
Plan shall not exceed Two Million (2,000,000) Shares, as such Shares were 
constituted on the effective date of this Plan, allocated as follows:

            (i)   to those non-employee Trustees eligible to receive Options 
only under the formula established in Section 5.1 hereof, 
the number of Shares covered by Options granted hereunder 
shall not exceed a total of One Hundred Thousand (100,000) 
Shares, and 

            (ii)  to all other persons eligible to receive Options under 
Section 5.2 hereof, the number of Shares covered by Options 
granted hereunder shall not exceed a total of One Million 
Nine Hundred Thousand (1,900,000) Shares.

If any Option granted under this Plan shall expire, be surrendered, exchanged 
for another Option, cancelled or terminated for any reason without having 
been exercised in full, the unpurchased Shares subject thereto shall 
thereupon again be available for purposes of this Plan, including for 
replacement Options which may be granted in exchange for such surrendered, 
cancelled or terminated Options.

     3.     EFFECTIVENESS OF THE PLAN.

The Plan was originally adopted by the Company's Board of Trustees on April 
15,1992, and approved by its shareholders at its annual meeting held on July 
17,1992.  The Plan was amended by the Board of Trustees in October 1994 and 
subsequently approved by the shareholders at the following annual meeting of 

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shareholders of the Company.  The Plan was further amended by the Board of 
Trustees on May 29, 1997 and approved by the shareholders at the annual 
meeting of shareholders held on June 27, 1997.  Such amendments to the Plan 
are included in this Amended and Restated Plan.

     4.     ADMINISTRATION

     4.1   Appointment of Committee.  The authority to award options under 
the Plan shall be vested in the Board of Trustees of the Company (the 
"Board").  Notwithstanding the foregoing, an independent committee consisting 
of two or more non-employed Trustees (the "Committee"), each of whom shall be 
a Disinterested Trustee (as defined below) shall make any and all decisions 
to award options under the Plan to officers of the Company who are subject to 
the reporting requirements under Section 16 of the Securities Exchange Act of 
1934, as amended (the "Exchange Act").  The members of the Committee shall be 
appointed by the Board for such term as the Board may determine.  The Board 
may from time to time remove members from, or add members to, the Committee, 
and vacancies on the Committee, however caused, may be filled by the Board; 
provided, however, that all members of the Committee shall at all times be 
Disinterested Trustees.  When acting in its capacity authorized hereunder, 
the Board or the Committee are referred to herein as the "Plan 
Administrator".

     For purposes hereof, a Disinterested Trustee is a member of the Board 
who meets the definition of "disinterested person" as set forth in the rules 
and regulations promulgated under Section 16(b) of the Exchange Act, as 
amended from time to time.  Currently, a Disinterested Trustee is a non-
employee member of the Board who is not, during the one (1) year prior to 
service as an administrator of the Plan, or during such service, granted or 
awarded equity securities of the Company pursuant to this Plan (other than 
pursuant to Section 5.1 hereof) or any other plan of the Company or any of 
its affiliates.

     4.2    Power and Authority.  The Plan Administrator shall have the 
authority, in its discretion, to determine all matters relating to the 
Options to be granted under Section 5.2 of this Plan, including selection of 
the persons to be granted Options, the number of Shares to be subject to each 
Option, the exercise price, the vesting schedule, and all other terms and 
conditions of the Options.  Grants under Section 5.2 of the Plan need not to 
be identical in any respect, even when made simultaneously.  The Plan 
Administrator may also interpret the Plan; prescribe, amend and rescind rules 
and regulations relating to the Plan; amend the Plan from time to time 
(subject to the limitations set forth in Section 10); and make all other 
determinations necessary or advisable for the administration of the Plan.  
The interpretation and construction by the Plan Administrator of any terms or 
provisions of this Plan or any Option issued under Section 5.2 hereof, or of 
any rule or regulation promulgated in connection herewith, shall be 
conclusive and binding on all interested parties.  Notwithstanding anything 
in this Plan to the contrary, the Plan Administrator shall exercise no 
discretion with respect to the terms or conditions of Options granted under 
Section 5.1 hereof.

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      5.    GRANTS OF OPTIONS

            5.1     Grants to Committee Members.

                    (a)     Eligibility.  Options shall be granted under this 
Section 5.1 of the Plan to each non-employee Trustee on the last 
day of each of the Company's fiscal years ("Eligibility Date"), 
commencing December 31, 1992, while this Plan is in effect; 
provided, however, that only non-employee Trustees who have 
served on the Board at least three months prior to the last day 
of the applicable fiscal year shall be eligible to receive a 
grant of Options under this Section 5.1.

                    (b)     Number of Shares; Exercise Price.  Subject to the 
overall limit on Shares covered by Options to be granted to non-
employee Trustees set forth in Section 2(i), on each Eligibility 
Date, each non-employee Trustee shall be granted Options to 
acquire Six-Thousand (6,000) Shares.  The exercise price 
("Exercise Price") of such Options shall be the last sale price 
of the Company's Shares on the Eligibility Date on the NASDAQ 
National Market System or on such other national exchange or 
association which at the date of grant is the primary market for 
trading of the Company's Shares.  If the Eligibility Date is a 
day when the primary market for trading of the Company's Shares 
is not open, the Eligibility Date shall be the nearest previous 
day of trading in the Company's Shares.

                    (c)     Duration of Options.  Except as provided in 
Section 7 below, each Option granted under this Section 5.1 shall 
continue in effect for a period of fifteen (15) years following 
the date of grant.

                    (d)      Limits on Amendments.  The provisions of this 
Section 5.1 shall not be amended more than once every six months, 
other than to comport with changes in the Internal Revenue Code 
of 1986, as amended, the Employee Retirement Income Security Act 
of 1974, as amended, or the rules thereunder.

            5.2     Grants to Other Persons.

                    (a)       Eligibility.  Options may be granted under this 
Section 5.2 only to persons who, at the time the Option is 
granted, are employees, officers, and trustees or directors who 
are employees of the Company or any of its subsidiary 
corporations as determined in the discretion of the Plan 
Administrator.  Options granted hereunder shall be in such amount 
annually without restriction as determined by the Plan 
Administrator.

                   (b)        Exercise Price.  The Exercise Price per Share 
of each Option granted under this Section 5.2 shall be determined 

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without restriction by the Plan Administrator, and may be greater 
or less than the fair market value per share of the Company's 
shares of beneficial interest at the time the Option is granted.

                   (c)        Duration of Options.  Except as provided in 
Section 7 below, the term of each Option granted under this 
Section 5.2 shall be as established by the Plan Administrator, 
and if not so established, shall be fifteen (15) years.

                   (d)        Other Terms.  The Plan Administrator in its 
sole discretion may establish other terms and conditions for the 
exercise of the granted Options.  The terms of the grant of an 
Option may be set forth in a written stock option agreement 
between the grantee and the Company.

      6.    EXERCISE OF OPTION

            6.1    Exercise.  Each Option granted pursuant to Section 5.1 
shall be exercisable in whole or in part immediately upon the 
grant thereof.  Each Option granted pursuant to Section 5.2 
shall prescribe the terms and conditions, if any, on which such 
Option or portions thereof shall become exercisable, as 
determined by the Plan Administrator. The Plan Administrator, in 
it absolute discretion, may waive or accelerate any vesting 
requirement contained in outstanding Options granted pursuant to 
Section 5.2.  Notwithstanding the foregoing, no fewer that one 
hundred (100) Shares (or the remaining Shares then purchasable 
under the Option, if less than 100 Shares) may be purchased upon 
any exercise of any Option rights hereunder and only whole Shares 
will be issued pursuant to the exercise of any Option.  Options 
shall be exercised by delivery to the Company of written notice 
from the Optionee, specifying the number of Shares as to which 
the Optionee desires to exercise the Option, and the date on 
which the Optionee desires to complete the transaction.  In 
addition, unless in the opinion of counsel for the Company such a 
representation is not required in order to comply with the Securities 
Act of 1933, as amended, such notice shall contain a 
representation that it is the Optionee's intention to acquire the 
Shares for investment and not with a view to, or in connection 
with, any distribution thereof.

            6.2     Payment of Exercise Price.  On or before the date 
specified for completion of the purchase of Shares pursuant to an 
Option, the Optionee must have paid the Company therefor the full 
Exercise Price of said Shares (i) in cash, (ii) in previously 
acquired Shares of the Company having a fair market value on the 
date of exercise equal to the Exercise Price, or (iii) a 
combination of cash and previously acquired Shares; provided, 
however, that payment in Shares held by an Optionee subject to 
Section 16(b) of the Exchange Act shall not be made unless the 
Shares shall have been owned by the Optionee for a period of at 
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least six (6) months.  At the election of the Optionee, the 
exercise of an Option may be made by simultaneous and successive 
exercise of the Option (referred to as "pyramiding") and in such 
event, actual delivery and issuance of Shares shall not be 
required but may be effected through bookkeeping entries in the 
Company's records and the Optionee shall be issued new 
certificates for the net Shares obtained.  No Shares shall be 
issued until full payment therefor has been made and an Optionee 
shall have none of the rights of a shareholder until Shares are 
issued to such Optionee.

            6.3   Withholding Tax Requirements.  The Company shall have the 
right to retain and withhold from any payment of cash or Shares 
under the Plan the amount of taxes required by any government to 
be withheld or otherwise deducted and paid with respect to such 
payment.  At its discretion, the Company may require an Optionee 
receiving Shares to reimburse the Company for any such taxes 
required to be withheld by the Company and withhold any 
distribution in whole or in part until the Company is so 
reimbursed.  In lieu thereof, the Company shall have the right to 
withhold a number of Shares having a market value not less than 
the amount of such taxes required to be withheld by the Company 
to reimburse the Company for any such taxes and cancel (in whole 
or in part) any such Shares so withheld.  If required by Section 
16(b) of the Exchange Act, the election to pay withholding taxes 
by delivery of Shares held by any person who at the time of 
exercise is subject to Section 16(b) of the Exchange Act, shall 
be made within six (6) months prior to the date the Option 
exercise becomes taxable or during the quarterly 10-day window 
period required under Section 16(b) of the Exchange Act for 
exercises of stock appreciation rights.

            6.4   Payment of Taxes by Company.  Notwithstanding the 
provisions of Section 6.3 above, the Plan Administrator may agree 
to require the Company to pay any issuance or transfer taxes on 
Shares issued pursuant to the exercise of an Option under this 
Plan.

            6.5   Nonassignability.  Options granted under this Plan and the 
rights and privileges conferred hereby may not be transferred, 
assigned, pledged or hypothecated in any manner (whether by 
operation of law or otherwise) other than by the applicable laws 
of descent and distribution, and shall not be subject to 
execution, attachment or similar process.  Any attempt to 
transfer, assign, pledge, hypothecate or otherwise dispose of any 
Option under this Plan or of any right or privilege conferred 
hereby, contrary to the provisions of this Plan, or the sale or 
levy or any attachment or similar process upon the rights and 
privileges conferred hereby shall be null and void.  
Notwithstanding the foregoing, an Optionee may during the 
Optionee's lifetime, designate a person who may exercise the 
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Option after the Optionee's death by giving written notice of 
such designation to the Plan Administrator.  Such designation may 
be changed from time to time by the Optionee by giving written 
notice to the Plan Administrator revoking any earlier designation 
and making a new designation.

      7.    TERMINATION OF SERVICE, DISABILITY AND DEATH.

7.1   General.  If the employment or service of an Optionee by 
the Company or its subsidiaries shall terminate by reason of 
retirement, disability or failure to be re-elected (collectively, 
"termination"), the Option may be exercised by the Optionee at 
any time prior to the expiration of ninety (90) days after the 
date of such termination (unless by its terms the Option sooner 
terminates or expires), but only if and to the extent the 
Optionee was entitled to exercise the Option at the date of such 
termination.  For the purposes of this Plan, an Optionee will be 
considered to be disabled if the Optionee is unable to engage in 
any substantial gainful activity by reason of any medically 
determinable mental or physical impairment which can be expected 
to result in death or which has lasted or can be expected to last 
a continuous period of not less than twelve (12) months. 

7.2   Death.  In the event of the death of an Optionee while in 
the employ or service of the Company or a subsidiary, the Option 
may be exercised at any time prior to the expiration of one (1) 
year after the date of such death (unless by its terms the Option 
sooner terminates and expires), but only if and to the extent the 
Optionee was entitled to exercise the Option at the date of such 
death and only by the person or persons to whom such Optionee's 
rights under the Option shall pass by the Optionee's will or by 
the laws of descent and distribution of the state or country of 
the Optionee's domicile at the time of death.

7.3   Termination for Cause.  If the Optionee's employment or 
service with the Company is terminated for cause, any Option 
granted hereunder shall automatically terminate as of the first 
advice or discussion thereof, and such Optionee shall thereupon 
have no right to purchase any Shares pursuant to such Option.  
"Termination for Cause" shall mean dismissal for dishonesty, 
conviction or confession of a crime punishable by law (except 
minor violations), intoxication while at work, fraud, misconduct 
or disclosure of confidential information.

7.4   Waiver or Extension of Time Periods.  The Plan 
Administrator shall have the authority, prior to or within the 
time periods specified in this Section 7 for the exercise of any 
Option granted under Section 5.2 hereof, to extend or waive any 
such time period (but not beyond the expiration of the term of 
such Option) or to accelerate or remove any vesting conditions.  
In addition, the Plan Administrator may extend, reduce or 
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eliminate the time periods specified in this Section 7.  The 
foregoing discretionary authority shall not apply to any Option 
granted under the formula set forth in Section 5.1 hereof.

7.5  Termination of Options.  To the extent that the Option of 
any deceased employee, officer, trustee or director whose 
employment or service is terminated shall not have been exercised 
within the limited periods prescribed in this Section 7, all 
further rights to purchase Shares pursuant to such Option shall 
cease and terminate at the expiration of such period.

      8.    ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

            8.1   Adjustments.  The number of Shares subject to options 
granted under the Plan shall be adjusted as follows:

      (a)   in the event that the outstanding Shares are changed 
by any stock dividend, stock split or combination of shares, the 
number of Shares subject to the Plan and to Options granted under 
the Plan shall be proportionately adjusted;

      (b)   except as provided in subsection (d), in the event of 
any merger, consolidation or reorganization of the Company with 
any other corporation or corporations, there may be substituted 
on an equitable basis as determined by the Plan Administrator, 
for each Share then subject to the Plan, whether or not at the 
time subject to outstanding options, the number and kind of 
shares of stock or other securities or other property (including 
cash) to which the holders of Shares of the Company will be 
entitled pursuant to such transaction;

      (c)   in the event of any other relevant change in the 
capitalization of the Company, the Plan Administrator shall 
provide for an equitable adjustment in the number of shares then 
subject to the Plan, whether or not then subject to outstanding 
options.  In the event of any such adjustment, the purchase price 
per share shall be proportionately adjusted; and 

      (d)   notwithstanding the foregoing provisions of this 
Section 8, upon the dissolution of the Company, or upon any 
merger or consolidation of the Company:

      (i)   the surviving corporation (whether the Company 
or otherwise) shall agree to exchange options to purchase 
its shares of stock for options granted under the Plan, on 
terms fairly reflecting the terms of the merger or 
consolidation; or

      (ii)   all vesting schedules, repurchase rights and 
obligations, and other terms and conditions applicable to 
Shares granted under this Plan shall be eliminated, and all 
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options granted under the Plan shall terminate and 
thereupon become null and void; provided, however, that the 
Optionee shall have the right, immediately prior to such 
dissolution, merger or consolidation, to exercise any such 
option without regard to any otherwise applicable 
restriction as to time of exercise, other than expiration 
of the Option Period; or

      (iii)   the Plan Administrator shall make such other 
arrangements, which may include termination of outstanding 
options against payment therefor, as the Plan Administrator 
may at the time deem fair and equitable in its discretion.

      9.    SECURITIES REGULATION.

      Shares shall not be issued with respect to an Option granted under this 
Plan unless the exercise of such Option and the issuance and delivery of such 
Shares pursuant thereto shall comply with all relevant provisions of law, 
including, without limitation, any applicable state securities laws, the 
Securities Act of 1933, as amended, the Exchange Act, the rules and 
regulations promulgated thereunder, and the requirements of any stock 
exchange upon which the Shares may then be listed, and shall be further 
subject to the approval of counsel for the Company with respect to such 
compliance, including the availability of an exemption from registration for 
the issuance and sale of any Shares hereunder.  Inability of the Company to 
obtain from any regulatory body having jurisdiction, the authority deemed by 
the Company 's counsel to be necessary for the lawful issuance and sale of 
any Shares hereunder or the unavailability of an exemption from registration 
for the issuance and sale of any Shares hereunder shall relieve the Company 
of any liability in respect of the nonissuance or sale of such Shares as to 
which such requisite authority shall not have been obtained.

      As a condition to the exercise of an Option, the Company may require 
the Optionee to represent and warrant at the time of any such exercise that 
the Shares are being purchased only for investment and without any present 
intention to sell or distribute such Shares if, in the opinion of counsel for 
the Company, such a representation is required by any relevant provision of 
the aforementioned laws.  At the option of the Company, a stop-transfer order 
against any Shares may be placed on the official stock books and records of 
the Company, and a legend indicating that the Shares may not be pledged, sold 
or otherwise transferred unless an opinion of counsel is provided (concurred 
in by counsel for the Company) stating that such transfer is not in violation 
of any applicable law or regulation, may be stamped on certificates 
representing the Shares in order to assure exemption from registration.  The 
Plan Administrator may also require such other action or agreement by the 
Optionee as may from time to time be necessary to comply with the federal and 
state securities laws.  THIS PROVISION SHALL NOT OBLIGATE THE COMPANY TO 
UNDERTAKE REGISTRATION OF THE OPTIONS OR SHARES HEREUNDER.

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      10    AMENDMENT AND TERMINATION.

            10.1    Board Action.  Except as provided in Section 5.1(d), the 
Board may at any time suspend, amend or terminate this Plan; 
provided, however, that except as set forth in Section 8, the 
approval of the holders of a majority of the Company's 
outstanding Shares is necessary within twelve (12) months before 
or after the adoption by the Board of any amendment which will:

     (a) increase the number of Shares which are to be 
reserved for the issuance of Options under this Plan;

     (b) permit the granting of Options to a class of 
persons other than those presently permitted to receive 
Options under this Plan; or

     (c) require shareholder approval under applicable law, 
including Section 16(b) of the Exchange Act.


10.2  Automatic Termination.  The Plan shall continue in effect 
until the earlier of (a) fifteen (15) years from the date of the 
first grant of Options hereunder or (b) the termination of the 
Plan by Action of the Board.  No Option may be granted after such 
termination or during any suspension of this Plan.  The amendment 
or termination of this Plan shall not, without the consent of the 
Option holder, alter or impair any rights or obligations under 
any Option theretofore granted under this Plan.