incentiveplan.htm


    
EXHIBIT 4.1

      PROASSURANCE
CORPORATION

       

      2008 EQUITY INCENTIVE
PLAN

       

      1. Purpose.  The
purpose of the ProAssurance Corporation 2008 Equity Incentive Plan is to further
corporate profitability and growth in share value of ProAssurance Corporation
(the "Company") by offering proprietary interests in the Company to those key
officers, employees, consultants and directors who will be largely responsible
for such growth, and to enhance the Company's ability to recruit and retain
qualified executives and key employees through long-term incentive compensation
in the form of proprietary interests in the Company.

       

      2. Definitions.

       

      "Award"
shall mean any grant or award under the Plan.

       

      "Award
Notice" shall mean a document or other record, in such form as the
Committee prescribes from time to time, setting forth the terms and conditions
of an Award.  Award Notices may be in the form of individual award
notices, agreements or certificates or a program document describing the terms
and provisions of Awards or series of Awards under the Plan.  An Award
Notice and the acceptance thereof by a Participant shall be in a written
document unless the Committee, in its discretion, provides for the use of
electronic, internet or other non-paper Award Notices, and the use of
electronic, internet or other non-paper means for the acceptance thereof and
actions thereunder by a Participant.

       

      "Award Period"
shall mean the period of one or more calendar years fixed by the
Committee with respect to Awards of Performance Shares with the same Date of
Grant (but no more than five years) commencing with each Date of Grant, except
that the Award Period for a recently hired employee may be for such lesser
period (but not less than one calendar year) as determined by the
Committee.

       

      "Beneficial
Ownership" is used as such term is used within the meaning of Rule 13d-3
promulgated under the Exchange Act.

       

      "Board"
shall mean the Board of Directors of the Company.

       

      "Cause"
shall mean (i) the Participant has been convicted in a federal or
state court of a crime classified as a felony; (ii) action or inaction by
the Participant (A) that constitutes embezzlement, theft, misappropriation or
conversion of assets of the Company or a Subsidiary which, alone or together
with related actions or inactions, involve assets of more than a de minimis
amount, or that constitutes intentional fraud, gross malfeasance of duty, or
grossly inappropriate conduct, and (B) such action or inaction has
adversely affected or is likely to adversely affect the business of the Company
and its Subsidiaries, taken as a whole, or has resulted or is intended to result
in direct or indirect gain or personal enrichment of the Participant to the
detriment of the Company and its Subsidiaries; or (iii) the Participant has
been grossly inattentive to, or in a grossly negligent manner failed to
competently perform, Participant's job duties and the failure was not cured
within 45 days after written notice from the Company.

       

      "Change in
Control" shall mean the occurrence of any one of the following events
during the term of this Agreement:  (i) an acquisition of the voting
securities of the Company by any person, entity or group, immediately after
which such person, entity or group has Beneficial Ownership of more than 50.1%
of the combined voting power of the Company's then outstanding voting
securities; (ii) a merger, consolidation or reorganization involving the Company
in which an entity other than the Company is the surviving entity or in which
the Company is the surviving entity and the stockholders of the Company
immediately preceding such transaction will own less than 50.1% of the
outstanding voting securities of the surviving entity; (iii) the sale or other
disposition of substantially all of the assets of the Company (as defined in the
regulations under Section 409A of the Code) and the Company ceases to function
on a going forward basis as an insurance holding company system that provides
medical professional liability insurance; or (iv) any other event or transaction
that is declared by resolution of the Board to constitute a Change in Control
for purposes of the Plan.

       

      "Code"
shall mean the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.

       

      "Committee"
shall mean the Compensation Committee of the Board (or such other committee of
the Board that the Board shall designate from time to time) or any subcommittee
thereof comprised of two or more directors each of whom shall be determined by
the Board to be independent in accordance with the requirements of the New York
Stock Exchange and shall be an "outside director" within the meaning of
Section 162(m) of the Code and a "non-employee director" within the
meaning of Rule 16b-3, as promulgated under Section 16 of the Exchange
Act.

       

      "Common Stock"
shall mean the common stock, par value $0.01 per share, of the
Company.

       

      "Company"
shall mean ProAssurance Corporation, a Delaware corporation.

       

      "Consultant"
shall mean any natural person engaged by the Company to provide services as a
consultant or advisor, if such consultant or advisor provides bona fide services to the
Company that are not in connection with the offer or sale of securities in a
capital-raising transaction and do not directly or indirectly promote or
maintain a market for the Company's securities.

       

      "Covered
Employee" means a covered employee as defined in Code Section
162(m)(3).

       

      "Date of Grant"
shall mean with respect to an Award under the Plan (other than
Performance Shares) the date specified by the Board or if no date of grant is
specified, the date that the Board or the Committee takes action or is deemed to
take action to grant such Award; and with respect to an Award of Performance
Shares shall mean as of January 1 of the year in which such Award is
made.

       

      "Director"
shall mean a person who is elected and is currently serving as a member of the
Board of Directors of the Company or a Subsidiary.

       

      "Disability"
shall mean a serious injury or illness that requires the Participant to
be under the regular care of a licensed medical physician and renders the
Participant incapable of performing the essential functions of the Participant's
position for 12 months as determined by the Board in good faith and upon receipt
of and in reliance on competent medical advice from one or more individuals
selected by the Board, who are qualified to give professional medical
advice.

      
        
          
          

        

        
          Exhibit
4.1, Page 1

          
            

          

        

        
          
          

        

      

       

      "Employee"
shall mean any natural person (including any officer) employed by the
Company or a Subsidiary in a continuous and regular salaried employment
relationship, which shall include (unless the Committee otherwise determines)
periods of vacation, approved leaves of absence, and any salary continuation or
severance pay period.

       

      "Exchange Act"
shall mean the Securities Exchange Act of 1934, as amended.

       

      "Fair Market
Value" on any date shall mean (i) if the Shares are actively traded on
any national securities exchange or reported on NASDAQ/NMS on a basis which
reports closing prices, the closing sales price of the Shares on the day the
value is to be determined or, if such exchange was not open for trading on such
date, the next preceding day on which it was open; (ii) if the Shares
are  not traded on any national securities exchange, the average of
the closing high bid and low asked prices of the Shares on the over-the-counter
market on the day such value is to be determined, or in the absence of closing
bids on such day, the closing bid on the next preceding day on which there were
bids; or (iii) if the Shares also are not traded on the over-the-counter market,
the Fair Market Value as determined in good faith by the Committee based on such
relevant facts as may be available to the Committee, which may include opinions
of independent experts, the price at which recent sales have been made, the book
value of the Shares, and the Company's current and future earnings.

       

      "Freestanding
SAR" means an SAR that is granted independently of any Options as
described in Section 8 herein.

       

      "Good
Reason" (or a similar term denoting constructive termination) has the
meaning, if any, assigned such term in the employment, severance or similar
agreement, if any, between a Participant and the Company or a Subsidiary;
provided, however, that if there is no such employment, severance or similar
agreement in which such term is defined, "Good Reason" shall have the meaning,
if any, given such term in the applicable Award Notice.  If not
defined in any such document, the term "Good Reason" as used herein shall not
apply to a particular Award.

       

      "Incentive Stock
Option" shall mean an Option which is intended to meet the requirements
of Section 422 of the Code.

       

      "Interim Period"
shall mean a period of calendar years chosen by the Committee commencing
with any Date of Grant, which period is less than the Award Period commencing on
the Date of Grant.

       

      "Nonstatutory
Stock Option" shall mean an Option which is not intended to be an
Incentive Stock Option.

       

      "Normal
Retirement" shall mean retirement at or after the Participant reaches the
later of either (i) sixty (60) years of age or (ii) the earliest age at which
the Participant may retire and receive a retirement benefit without penalty
under any qualified retirement plan maintained by the Company or any of its
Subsidiaries in which such Participant participates.

       

      "Option"
shall mean the right to purchase the number of shares of Common Stock
specified by the Committee, at a price and for the term fixed by the Committee
granted in accordance with Section 7 hereof and subject to any other limitations
and restrictions imposed by the Plan or the Committee.

       

      "Other
Stock-Based Awards" shall mean an Award granted under Section 10
hereof.

       

      "Participant"
shall mean an Employee, Consultant or Director who is selected by the
Committee to receive an Award under the Plan as herein provided.

       

      "Performance
Share" shall mean the equivalent of one share of Common Stock granted
under Section 6 which becomes vested and nonforfeitable upon the
attainment, in whole or in part, of performance objectives determined by the
Committee.  References to Performance Shares shall include Qualified
Performance Shares where no distinction is required.

       

      "Plan"
shall mean the ProAssurance Corporation 2008 Equity Incentive Plan as set
forth herein and as may be amended from time to time.

       

      "Qualified
Business Measures" means one or more of the performance criteria listed
in Section 6(b) hereof upon which performance goals for Qualified Performance
Shares may be established by the Committee.

       

      "Qualified
Performance Shares" means an Award of Performance Shares that is intended
to qualify under Section 162(m) and is made subject to performance goals based
upon Qualified Business Measures.

       

      "Restricted
Period" shall mean the period during which the transfer of Restricted
Stock or Restricted Units is limited in some way (based upon the passage of
time, the achievement of performance objectives, or the occurrence of other
events as determined by the Committee) and the Restricted Stock or Restricted
Units are subject to a substantial risk of forfeiture.

       

      "Restricted
Stock" shall mean any Award of Common Stock granted under Section 9
which becomes vested and nonforfeitable, in whole or in part, upon the
satisfaction of such conditions as shall be determined by the
Committee.

       

      "Restricted Unit"
shall mean any Award of a contractual right granted under Section 9
to receive Common Stock (or, at the discretion of the Committee, cash based on
the Fair Market Value of a Share of the Common Stock) which becomes vested and
nonforfeitable, in whole or in part, upon the satisfaction of such conditions as
shall be determined by the Committee.

       

      "Section 16
Reporting Person" shall mean any person who is an officer or director of
the Company within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.

       

      "Section 162(m)"
shall mean Code Section 162(m).

       

      "Securities
Act" shall mean the Securities Act of 1933, as amended.

       

                     
"Shares" shall mean shares of the Common Stock of the Company reserved
under Section 4 hereof for Awards under the Plan, or such other securities as
may become subject to Awards pursuant to an adjustment pursuant to
Section 13 of the Plan.

       

      "Stock
Appreciation Right" or "SAR" shall mean any Award of a contractual right
granted under Section 8 to receive cash, Common Stock or a combination
thereof.

       

      "Subsidiary"
shall mean any corporation of which the Company possesses directly or
indirectly eighty percent (80%) or more of the total combined voting power of
all classes of stock of such corporation and any other business organization,
regardless of form, in which the Company possesses directly or indirectly eighty
percent (80%) or more of the total combined equity interests in such
organization.

       

      "Tandem
SAR" means an SAR that is granted in connection with a related Option
pursuant to Section 8 herein, the exercise of which shall require forfeiture of
the right to purchase a Share under the related Option (and when a Share is
purchased under the related Option, the Tandem SAR shall be similarly
cancelled).

       

      "Termination"
shall mean the end of a Participant's relationship with the Company or a
Subsidiary as an Employee, Consultant or Director if at such time the
Participant has no other relationship as an Employee, Consultant or Director of
the Company or a Subsidiary.

       

      "2 1⁄2 Month
Period" shall mean the period ending on the later of either the 15th day of
the third month following the Participant's first taxable year in which the
amount is no longer subject to a substantial risk of forfeiture or the 15th day of
the third month following the end of the Company's first taxable year in which
the amount is no longer subject to a substantial risk of forfeiture; Performance
Shares, if earned, shall be considered no longer subject to a risk of forfeiture
on the last day of the Award Period or Interim Period for which they are
earned.

      
        
          
          

        

        
          Exhibit
4.1, Page 2

          
            

          

        

        
          
          

        

      

       

      3. Administration
of the Plan.

       

      The Plan
shall be administered by the Committee which, subject to the provisions of the
Plan, shall have the authority

       

      (a) to select
the Participants in the Plan;

       

      (b) to
determine the Awards to be made to each Participant selected to participate in
the Plan;

       

      (c) to
determine the conditions subject to which Awards will become payable under the
Plan;

       

      (d) to
determine whether and to what extent and under what circumstances an Award may
be settled in, or the exercise price may be paid in cash, Common Stock, other
Awards, or other property;

       

      (e) to
prescribe  the form of each Award Notice, which need not be identical
for each Participant;

       

      (f) to make
all decisions and determinations that may be required under the Plan or as the
Committee deems necessary or advisable to administer the Plan; and

       

      (g) to amend
the Plan or any Award Notice as provided herein.

       

                     
The Committee shall have full power to administer and interpret the Plan and to
adopt such rules, regulations, guidelines and procedures consistent with the
terms of the Plan as the Committee deems necessary or advisable in order to
carry out the provisions of the Plan.  Except as otherwise provided in
the Plan, the Committee's interpretation and construction of the Plan and its
determination of any conditions applicable to Awards or the granting of Awards
to specific Participants shall be conclusive and binding on all
Participants.

       

      The
Committee may delegate to one or more of its members or to one or more officers
of the Company or a Subsidiary or to one or more agents or advisors such
administrative duties or powers as it may deem advisable, and the Committee or
any individuals to whom it has delegated duties or powers as aforesaid may
employ such legal counsel, consultants and agents (including counsel or agents
who are employees of the Company or a Subsidiary) to render advice with respect
to any responsibility the Committee or such individuals may have under the Plan,
and may rely upon any opinion received from any such counsel, consultant or
agent and any computation received from any such consultant or
agent.  All expenses incurred in the administration of the Plan,
including, without limitation, for the engagement of any counsel, consultant or
agent, shall be paid by the Company.  No member or former member of
the Board or the Committee shall be liable for any act, omission,
interpretation, construction or determination made in connection with the Plan
other than as a result of such individual's willful misconduct.

       

      Each
Award shall be evidenced by an Award Notice.  Each Award Notice shall
include such provisions, not inconsistent with the Plan, as may be specified by
the Committee.

       

      4. Maximum
Amount of Shares Available for Awards.

       

      (a) Maximum Number of
Shares.  The number of Shares that may be distributed as Awards
under the Plan shall be a total of 2,000,000 shares of Common Stock subject to
adjustment under Section 13 of the Plan.  Notwithstanding the
foregoing, but subject to the provisions of Section 13, the maximum number
of Shares which may be subject to Awards granted to a Participant in any
calendar year shall be 200,000 shares of Common Stock.

       

      (b) Shares Available for
Issuance.  Shares may be made available from the authorized but
unissued shares of Common Stock, from shares of Common Stock held in the
Company's treasury and not reserved for another purpose, or from shares of
Common Stock purchased on the open market.  If any Award is payable
solely in cash, no shares shall be deducted from the number of shares available
for issuance under Section 4(a) by reason of such Award except in the case
of the exercise of a Stock Appreciation Right.  If any Award in
respect of Shares is canceled or forfeited for any reason without delivery of
the Shares (with the exception of the termination of a Tandem SAR upon exercise
of the related Option or the termination of the related Option upon exercise of
the corresponding Tandem SAR), the Shares subject to such Award shall thereafter
again be available for an Award pursuant to the Plan. Whenever Shares are
received by the Company in connection with the exercise of or payment for any
Award granted under the Plan, only the net number of shares actually issued
shall be counted against the limit in Section 4(a) hereof and the Shares not
issued shall be treated in the same manner as Shares subject to cancelled or
forfeited Awards.

       

      5. Eligibility
and Participation.

       

      (a) Eligibility.  Persons
eligible to participate in this Plan include all Employees, Consultants and
Directors; provided that Directors and Consultants shall not be eligible to
receive Performance Shares under the Plan.

       

                  (b)      Participation.  Subject
to the provisions of the Plan, the Committee may, from time to time, select from
all eligible Employees, Consultants and Directors, Participants to whom Awards
shall be granted and shall determine the nature of such
Awards.  Selection of Participants may be made individually or by
group or class of similarly situated persons who are eligible to participate in
the Plan.  The Committee shall select Participants, who in the
judgment of the Committee, have a opportunity to influence the long-term
profitability of the Company.

       

      6. Performance
Shares.

       

      (a) Performance Share
Awards.  The Committee shall have the authority to grant Awards
of Performance Shares to Employees on such terms and conditions as may be
determined by the Committee.  Performance Shares shall be deemed to be
received by an Employee as of the Date of Grant in the year the related
Performance Share Award is granted.  At the time of grant of each
Performance Share Award, the Committee shall decide the Award Period and whether
there will be an Interim Period.  Any Employee may be granted more
than one Performance Share Award under the Plan.

       

      No
Participant shall be entitled to receive any dividends or dividend equivalents
on Performance Shares; with respect to any Performance Shares, no Participant
shall have any voting or any other rights of a Company stockholder; and no
Participant shall have any interest in or right to receive any Shares prior to
the time the Committee determines the form of payment of Performance Shares
pursuant to this Section 6.

       

      The
Committee may establish performance goals for Performance Shares which may be
based on any criteria selected by the Committee.  Such performance
goals may be described in terms of Company-wide objectives or in terms of
objectives that relate to the performance of the Participant, a Subsidiary or a
division, region, department or function within the Company or a Subsidiary and
may relate to relative performance as compared to an outside reference or peer
group.  If the Committee determines that a change in the business,
operations, corporate structure or capital structure of the Company or the
manner in which the Company or an Affiliate conducts its business, or other
events or circumstances render performance goals to be unsuitable, the Committee
may modify such performance goals in whole or in part, as the Committee deems
appropriate.  If a Participant is promoted, demoted or transferred to
a different business unit or function during a performance period, the Committee
may determine that the performance goals or performance period are no longer
appropriate and may (i) adjust, change or eliminate the performance goals or the
applicable performance period as it deems appropriate to make such goals and
period comparable to the initial goals and period, or (ii) make a cash payment
to the participant in an amount determined by the Committee.  The
foregoing two sentences shall not apply with respect to Awards designated as
Qualified Performance Shares as provided in Section 6(b) below if the recipient
of such Award (a) was a Covered Employee on the date of the modification,
adjustment, change or elimination of the performance goals or performance
period, or (b) in the reasonable judgment of the Committee, may be a Covered
Employee on the date the Performance Shares are expected to be
paid.

      
        
          
          

        

        
          Exhibit
4.1, Page 3

          
            

          

        

        
          
          

        

      

      (b) Qualified Performance
Shares.  The Committee may designate an Award of Performance
Shares as Qualified Performance Shares based upon a determination that the
recipient is or may be a Covered Employee with respect to such Award, and the
Committee wishes such Award to qualify as performance based compensation under
Section 162(m).  If an Award is so designated, the Committee shall
establish performance goals for such Performance Shares within the time period
prescribed by Section 162(m), based on one or more of the following Qualified
Business Measures, which performance goals may be expressed in terms of
Company-wide objectives or in terms of objectives that relate to the performance
of a Subsidiary or a division, region, department or function within the Company
or a Subsidiary:

       

      
        	
                ·  

              	
                Profit
      (net profit, gross profit, operating profit, economic profit, profit
      margins or other corporate profit
measures)

              


      

       

      
        	
                ·  

              	
                Earnings
      (earnings per share or other corporate earnings
  measures)

              


      

       

      
        	
                ·  

              	
                Net
      income (before or after taxes, operating income or other income
      measures)

              


      

       

      
        	
                ·  

              	
                Cash
      (cash flow, cash generation or other cash
  measures)

              


      

       

      
        	
                ·  

              	
                Stock
      price or performance

              


      

       

      
        	
                ·  

              	
                Total
      stockholder return (stock price appreciation divided by beginning share
      price)

              


      

       

      
        	
                ·  

              	
                Economic
      value added

              


      

       

      
        	
                ·  

              	
                Return
      measures (including, but not limited to, return on assets, capital,
      equity, investments or sales, and cash flow return on assets, capital,
      equity, or sales)

              


      

       

      
        	
                ·  

              	
                Market
      share

              


      

       

      
        	
                ·  

              	
                Improvements
      in capital structure

              


      

       

      
        	
                ·  

              	
                Combined
      ratio, operating ratio or any component thereof such as loss ratio,
      underwriting expense ratio, investment income ratio or a combination
      thereof

              


      

       

      
        	
                ·  

              	
                Business
      expansion (acquisitions)

              


      

       

      
        	
                ·  

              	
                Increase
      in book value

              


      

       

      
        	
                ·  

              	
                Premium
      Revenue

              


      

       

      
        	
                ·  

              	
                Total
      Revenue

              


      

       

      
        	
                ·  

              	
                Investment
      Income

              


      

       

      
        	
                ·  

              	
                Cost
      reduction measures

              


      

       

      
        	
                ·  

              	
                Strategic
      plan development and implementation

              


      

       

                      Performance
goals with respect to the foregoing Qualified Business Measures may be specified
in absolute terms, in percentages, or in terms of growth from period to period
or growth rates over time, as well as measured relative to the performance of a
group of comparator companies, or a published or special index, or a stock
market index, that the Committee deems appropriate.  Any member of a
comparator group or index that disappears during a measurement period shall be
disregarded for the entire measurement period.  Performance goals need
not be based upon an increase or positive result under a business criterion and
could include, for example, the maintenance of the status quo or the limitation
of economic losses (measured, in each case, by reference to a specific business
criterion).

       

      The
Committee may provide in any Award of Performance shares that any evaluation of
performance may include or exclude any of the following described events that
occur during an Award Period: (i) changes in capital structure as described in
Section 13 hereof; (ii) the effect of changes in tax laws, accounting principles
or other laws and provisions affecting reported results; or (iii) acquisitions
or divestitures.  To the extent such inclusions and exclusions affect
Awards to Covered Employees, they shall be prescribed in a form that meets the
requirements of Code Section 162(m) for deductibility

       

      Qualified
Performance Shares shall be earned, vested and payable (as applicable) only upon
the achievement of performance goals established by the Committee based upon one
or more of the Qualified Business Measures, together with the satisfaction of
any other conditions, such as continued employment, as the Committee may
determine to be appropriate.  Any payment of Qualified Performance
Shares shall be conditioned on the written certification of the Committee in
each case that the performance goals and any other material conditions were
satisfied.  No Qualified Performance Shares held by a Covered Employee
or by an employee who in the reasonable judgment of the Committee may be a
Covered Employee on the date of payment, may be amended, nor may the Committee
exercise any discretionary authority it may otherwise have under the Plan with
respect to Qualified Performance Shares, in any manner to waive the achievement
of the applicable performance goal based on Qualified Business Measures or to
increase the amount payable pursuant thereto or the value thereof, or otherwise
in a manner that would cause the Qualified Performance Shares to cease to
qualify as performance based compensation under Section 162(m).  The
Committee shall retain the discretion to adjust such Awards downward, either on
a formula or discretionary basis or any combination, as the Committee
determines.

       

      Section 4
sets forth the maximum number of Shares that may be granted in any one-year
period to a Participant in Qualified Performance Shares.

      
        
          
          

        

        
          Exhibit
4.1, Page 4

          
            

          

        

        
          
          

        

      

       

      (c) Payment of Performance Share
Awards.   Each Participant who is granted an Award of
Performance Shares shall be entitled to payment of the Award if and after the
Committee has determined that the conditions for payment of the Award set by the
Committee have been satisfied during the Award Period.  If the
Committee determines that there shall be an Interim Period for the Award to any
Participant, each such Participant granted a Performance Share Award with an
Interim Period shall be entitled to partial payment on account thereof as of the
close of the Interim Period, but only if and after the Committee has determined
that the conditions for partial payment of the Award set by the Committee have
been satisfied.  Performance Shares paid to a Participant for an
Interim Period may be retained by the Participant and shall not be repaid to the
Company, notwithstanding that based on the conditions set for payment at the end
of the Award Period such Participant would not have been entitled to payment of
some or any of the Award.  Any Performance Shares paid to a
Participant for the Interim Period during an Award Period shall be deducted from
the Performance Shares to which such Participant is entitled at the end of the
Award Period.

       

      Unless
otherwise directed by the Committee, payment of Awards of Performance Shares
shall be made, as promptly as possible, by the Company after the determination
by the Committee that payment has been earned, but in no event later than the
end of the 2 1⁄2 Month Period.  Unless otherwise directed by the
Committee, all payments on Awards of Performance Shares to Participants shall be
made partly in Shares and partly in cash, with the cash portion being
approximately equal to the amount of federal, state, and local taxes which the
Participant's employer is required to withhold on account of such
payment.  There shall be deducted from the cash portion of all
Performance Share Award payments all taxes to be withheld with respect to such
Awards.

       

      For
payment of each Performance Share Award, the number of Shares to be distributed
to the Participant shall equal the Fair Market Value of the total Performance
Shares determined by the Committee to have been earned by the Participant less
the portion of the Award that was paid in cash, divided by the Fair Market Value
of a Performance Share.  Unless otherwise provided in
Sections 6(c), (d), (e) or (h) below, the Fair Market Value shall be
determined on the date the Committee authorizes payment of the Performance Share
Award.

       

      (d) Termination  Upon
Death or Disability.   Upon Termination by reason of death
or Disability of a Participant prior to the close of an Award Period,
outstanding Awards of Performance Shares shall be deemed to be earned at the
target level and payment of such Performance Shares shall be made as promptly as
possible after death or the date of the determination of Disability, but in no
event later than the end of the 2 1⁄2 Month Period.  For purposes of
this Section 6(d), the Fair Market Value of the Shares shall be determined
as of the date of death or the date of the determination of
Disability.

       

      (e) Termination Upon Retirement
or for Good Reason.   Upon Termination of a Participant ,
prior to the close of an Award Period, by reason of his or her (i) Normal
Retirement, or (ii) early retirement before the Normal Retirement age with the
consent of the Committee, or (iii) resignation for Good Reason, then, unless the
Committee shall otherwise determine, payment of such Performance Shares shall be
made as promptly as possible after such Termination but no later than the end of
the 2 1⁄2 Month Period, and the number of Performance Shares for each Award to be
paid shall be computed by (x) determining the number of Performance Shares
that would have been paid if the subject Award Period had ended on the
December 31 immediately preceding the date of Termination (based on the
conditions set by the Committee for payment of Performance Share Awards for the
subject Award Period); (y) multiplying the number determined pursuant to
clause (x) by a fraction, the numerator of which is the number of months
during the subject Award Period that the Participant was an active Employee, and
the denominator of which is the number of months in the Award Period; and
(z) reducing the resulting product by any Performance Shares for which
payment has been made with respect to any Interim Period during such Award
Period.  For purposes of this Section 6(e), the Fair Market Value
of the Shares shall be determined as of the date of
Termination.  Notwithstanding the foregoing, any Performance Shares
awarded in the same year that Termination occurs for the reasons herein set
forth shall be automatically cancelled and all rights of Participant with
respect to such cancelled Performance Shares shall forthwith
terminate.

       

      (f) Voluntary Termination or
Discharge.   Upon Termination, prior to the close of an
Award Period and there is no payment due to the Participant under
Sections 6(d) or 6(e), or Section 11 hereof, all of such Participant's
outstanding Performance Shares shall automatically be cancelled and all rights
of the Participant with respect to such cancelled Performance Shares shall
forthwith terminate.

       

      (g) Interpretation.   Any
Plan provision to the contrary notwithstanding, if any Award of Performance
Shares is intended, at the time of grant, to be Qualified Performance Shares, to
the extent required to so qualify any Award hereunder, the Committee shall not
be entitled to exercise any discretion otherwise authorized under the Plan with
respect to such Award if the ability to exercise such discretion (as opposed to
the exercise of such discretion) would cause such Award to fail to qualify as
performance-based compensation within the meaning of Section 162(m)4)(C) of the
Code.

      
         

        7. Stock
Options.

      

       

      (a) Grant.  Subject
to the provisions of the Plan, the Committee shall have the authority to grant
Awards of Options to Participants and to determine (i) the number of shares
to be covered by each Option, (ii) the exercise price therefor and
(iii) the conditions and limitations applicable to the exercise of the
Option.  The Committee shall have the authority to grant Incentive
Stock Options and Nonqualified Stock Options; provided that
Incentive Stock Options may not be granted to any Participant who is not
an Employee at the time of grant.    In the case of
Incentive Stock Options, the terms and conditions of such grants shall be
subject to and comply with Section 422 of the Code.

       

      (b) Option
Price.   The Committee shall establish the exercise price
at the time each Option is granted, which price shall not be less than 100% of
the Fair Market Value of a Share at the Date of Grant.

       

      (c) Exercise.  Each
Option may be exercised at such times and subject to such terms and conditions
as the Committee may specify on Date of Grant or thereafter; provided, however,
that if the Committee does not establish a different exercise schedule at or
after the Date of Grant of an Option, such Option shall become exercisable in
five (5) equal installments on each of the first five anniversaries of the
Date of Grant of the Option.  The Committee may impose such conditions
with respect to the exercise of Options as it shall deem appropriate, including,
without limitation, any conditions relating to the application of federal or
state securities laws; provided that Options shall not be exercisable after the
expiration of ten years from the Date of Grant.

       

      An Option
shall be exercised by (i)  notice of exercise with respect to a specified
number of Shares to be delivered in such form and in such manner as may be
directed by the Committee, and (ii) payment to the Company of the exercise
price for such number of Shares as herein provided; provided that in the absence
of direction by the Committee the notice of exercise shall be in writing and
delivered to the Secretary of the Company at the principal office.  The date of exercise shall be as
determined by the Committee; provided that in the absence of a determination by
the Committee the date of exercise shall be the date the notice of exercise is
received in the form required herein.

       

      The
exercise price is to be paid in full in cash upon the exercise of the Option and
the Company shall not be required to deliver the Shares purchased until such
payment has been made; provided, however, that in lieu of cash, all or any
portion of the exercise price may be paid by exchanging shares of Common Stock
owned by the Participant (which are not the subject of any pledge or security
interest), or by authorization to the Company to withhold Shares otherwise
issuable upon exercise of the Option, in each case to be credited against the
exercise price at the Fair Market Value of such shares on the date of
exercise.   No fractional shares may be so transferred in payment
of the exercise price, and the Company shall not be obligated to make any cash
payments in consideration of any excess of the aggregate Fair Market Value of
Shares transferred over the aggregate exercise price.

       

      In
addition to and at the time of payment of the exercise price, the Participant
shall pay to the Company in cash the full amount of any federal, state, and
local income, employment, or other withholding taxes applicable to the taxable
income of such Participant resulting from such exercise; provided, however, that
in the discretion of the Committee, all or any portion of such tax obligations,
together with additional taxes not exceeding the actual additional taxes to be
owed by the Participant as a result of such exercise, may, upon the irrevocable
election of the Participant, be paid by exchanging whole shares of Common Stock
duly endorsed for transfer and owned by the Participant, or by authorization to
the Company to withhold Shares otherwise issuable upon exercise of the Option,
in either case in that number of shares having a Fair Market Value on the date
of exercise equal to the amount of such taxes thereby being paid.

      
        
          
          

        

        
          Exhibit
4.1, Page 5

          
            

          

        

        
          
          

        

      

                      (d) Restrictions on Share
Transferability.  The Committee may impose such restrictions on
any Shares acquired pursuant to the exercise of an Option granted as an Award
under this Section 7 as it may deem advisable, including without limitation,
restrictions under applicable federal securities laws, under the requirements of
any stock exchange or market upon which the Shares are then listed and/or
traded, and under any blue sky or state securities laws applicable to the
Shares.

       

      (e) Termination on Death or
Disability.   In the event of Termination of a Participant
by reason of his or her death or Disability, then, unless the Committee shall
otherwise determine at or after the Date of Grant, all Options held by such
Participant at the time of such Termination shall be fully exercisable, and such
Participant (or the Participant's beneficiary or legal representative) may
exercise any of such Options for a period of 180 days after the date of
Termination (or such greater or lesser period as the Committee shall determine
at or after the Date of Grant), but in no event after the date the Option
otherwise expires.  .

       

      (f) Termination on Retirement or
Good Reason.  In the event of Termination of a Participant by
reason of his or her (i) Normal Retirement, or (ii) early retirement before the
Normal Retirement age with the consent of the Committee, or (iii) resignation
for Good Reason, then, unless the Committee shall otherwise determine at or
after the Date of Grant, all Options held by such Participant at the time of
such Termination shall be fully exercisable, and such Participant may exercise
any of such Options for a period of 180 days after the date of Termination (or
such greater or lesser period as the Committee shall determine at or after the
Date of Grant), but in no event after the date the Option otherwise
expires.

       

      (g) Other
Termination.  In the event of Termination of a Participant for
any reason other than those described in Sections 7(e) and 7(f) above, then,
unless the Committee shall otherwise determine at or after the Date of Grant,
all vested and unvested Options then held by such Participant, whether or not
exercisable at the time of such Termination, shall be automatically cancelled
and all rights of the Participant with respect to such cancelled Options shall
forthwith terminate.

       

      (h) Nontransferability of
Options.  No Incentive Stock Option granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and
distribution.  Further, all Incentive Stock Options granted to a
Participant under the Plan shall be exercisable during his or her lifetime only
by such Participant.

       

      No
Nonqualified Stock Option granted under the Plan may be sold, transferred,
pledged, or assigned, or otherwise alienated or hypothecated by a Participant,
other than by will or by the laws of descent and distribution, and except that
the Committee, in its discretion, may provide in an Award Notice that a
Nonqualified Stock Option (i) may be transferred by a Participant to members of
such Participant's immediate family, trusts for the benefit of such family
members and/or partnerships or limited liability companies whose partners or
members are such family members, but such transferees may not transfer such
Nonqualified Stock Options to third parties, (ii) shall be subject to all other
conditions and restrictions applicable to Options granted under the Plan prior
to such transfer and (iii) shall set forth the restrictions on transfer
described in (i) and (ii) above, as well as any other restriction necessary to
render the Options not subject to being transferred in accordance with this
Section 7(f) to be exempt pursuant to Rule 16b-3 of the Exchange Act; provided,
however, that if Rule 16b-3, or any comparable rule, as then in effect and
applicable to the Company, were to provide that transfers of the type described
in (i), (ii) and (iii) above shall result in the Nonqualified Stock Options or
the Plan being disqualified from the exception afforded by Rule 16b-3, then such
transfers shall be prohibited under the Plan.

      
         

        8. Stock
Appreciation Rights.

      

       

      (a) Grant of Stock Appreciation
Rights.   Subject to the provisions of the Plan, the
Committee may grant Awards of Stock Appreciation Rights to Participants at such
times and in such amounts and subject to such other terms and conditions not
inconsistent with the Plan as it shall determine.  The Committee may
grant Awards of Freestanding SARS or Tandem SARS or any combination
thereof.  Tandem SARS may be granted either at the same time the
Option is granted or at a later time.   Freestanding SARS shall
have a base price that is not less than 100% of the Fair Market Value of a share
of Common Stock on Date of Grant.  Tandem SARS shall have a base price
equal to the option price of the Related Option.

       

      (b) Exercise of Stock
Appreciation Rights.   A Stock Appreciation Right shall
entitle the Participant to receive from the Company an amount equal to the
excess of the Fair Market Value of a Share on the date of exercise of the Stock
Appreciation Right over the base price thereof.  Each Stock
Appreciation Right may be exercised at such times and subject to such terms and
conditions as the Committee may prescribe on the Date of Grant or thereafter;
provided, however, that Tandem SARS shall be exercisable only at the same time
or times as the related Option is exercisable upon surrender of the right to
exercise the equivalent number of Shares subject to the related Option; and
provided further that unless the Committee shall establish a different exercise
schedule at or after the Date of Grant, Freestanding SARS shall become
exercisable in five (5) equal installments on each of the first five
(5) anniversaries of the Date of Grant.  Stock Appreciation
Rights shall not be exercisable after the expiration of ten years from the date
of grant.

       

      A Stock
Appreciation Right shall be exercised by (i) notice of exercise with respect to
the specified number of Stock Appreciation Rights to be delivered in such form
and in such manner as may be directed by the Committee at or after the Date of
Grant; provided that in the absence of direction by the Committee, the notice of
exercise shall be in writing and delivered to the Secretary of the Company at
its principal office.  The date of exercise shall be at such time as
may be determined by the Committee; provided that in the absence of a
determination by the Committee, the date of exercise shall be the date the
notice is received by the Company in the form required herein.  The
Committee shall determine at or after the Date of Grant whether a Stock
Appreciation Right shall be settled in cash, Shares, or a combination of cash
and Shares.  At the time of exercise of a Stock Appreciation Right,
the Participant shall pay to the Company in cash the full amount of any federal,
state and local income, employment or other withholding taxes applicable to the
taxable income of the Participant resulting from such exercise; provided that in
the discretion of the Committee, the amount of taxes to be paid by the
Participant may be withheld from the cash payment due to Participant on exercise
or at the irrevocable election of Participant, the taxes to be paid by
Participant may be paid by authorization to the Company to withhold Shares
otherwise issuable upon the exercise of the Stock Appreciation Right having a
Fair Market Value on the date of exercise equal to the amount of the taxes
thereby being paid.

       

      (c) Termination on Death or
Disability.   In the event of Termination of a Participant
by reason of his or her death or Disability, then, unless the Committee shall
otherwise determine at or after the Date of Grant, all SARs held by such
Participant at the time of such Termination shall be fully exercisable, and such
Participant (or the Participant's beneficiary or legal representative) may
exercise any of such SARs for a period of 180 days after the date of Termination
(or such greater or lesser period as the Committee shall determine at or after
the Date of Grant), but in no event after the date the SAR otherwise
expires.  .

       

      (d) Termination on Retirement or
Good Reason.  In the event of Termination of a Participant by
reason of his or her (i) Normal Retirement, or (ii) early retirement before the
Normal Retirement age with the consent of the Committee, or (iii) resignation
for Good Reason, then, unless the Committee shall otherwise determine at or
after the Date of Grant, all SARs held by such Participant at the time of such
Termination shall be fully exercisable, and such Participant may exercise any
such SARs for a period of 180 days after the date of Termination (or such
greater or lesser period as the Committee shall determine at or after the Date
of Grant), but in no event after the date the SAR otherwise
expires.

       

      (e) Other
Termination.  In the event of Termination of a Participant for
any reason other than those described in Sections 7(e) and 7(f) above, then,
unless the Committee shall otherwise determine at or after the Date of Grant,
all vested and unvested SARs then held by such Participant, whether or not
exercisable  at the time of such Termination, shall be automatically
cancelled and all rights of the Participant with respect to such cancelled SARs
shall forthwith terminate.

       

      (f) Nontransferability of Stock
Appreciation Rights.  Except as otherwise determined by the
Committee, no Stock Appreciation Right granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution, except that the
Committee, in its discretion, may provide in an Award Notice that a Stock
Appreciation Right (i) may be transferred by a Participant to members of such
Participant's immediate family, trusts for the benefit of such family members
and/or partnerships or limited liability companies whose partners or members are
such family members, but such transferees may not transfer such Stock
Appreciation Rights to third parties, (ii) shall be subject to all other
conditions and restrictions applicable to Stock Appreciation Rights granted
under the Plan prior to such transfer and (iii) shall set forth the restrictions
on transfer described in (i) and (ii) above, as well as any other restriction
necessary to render the Stock Appreciation Rights not being transferred pursuant
to this Section 8(d) to be exempt pursuant to Rule 16b-3 of the Exchange Act;
provided, however, that if Rule 16b-3 or any comparable rule, as then in effect
and applicable to the Company, were to provide that transfers of the type
described in (i), (ii) and (iii) above shall result in the Stock Appreciation
Rights or the Plan being disqualified from the exception afforded by Rule 16b-3,
then such transfers shall be prohibited under the Plan.  Further,
except as otherwise provided in a Participant's Award Agreement, all Stock
Appreciation Rights granted to a Participant under the Plan shall be exercisable
during his or her lifetime only by such Participant.

      
        
          
          

        

        
          Exhibit
4.1, Page 6

          
            

          

        

        
          
          

        

      

      9. Restricted
Stock and Restricted Units.

       

      (a) Grant of Restricted Stock or
Restricted Units.  Subject to the provisions of the Plan, the
Committee may grant Awards of Restricted Stock or Restricted Units to
Participants at such times and in such amounts, and subject to such other terms
and conditions not inconsistent with the Plan, as it shall
determine.  Each grant of Restricted Stock or Restricted Units shall
be evidenced by an Award Notice setting forth the terms, conditions and
restrictions applicable to the Award.  Unless the Committee provides
otherwise at or after the Date of Grant, any shares of Restricted Stock so
granted shall be held in the custody of the Company, as provided in Section 9(d)
in certificated or book entry form until the Restricted Period lapses, and, as a
condition to the grant of any Award of shares of Restricted Stock, the
Participant shall have delivered to the Secretary of the Company a certificate
or stock power, endorsed in blank, relating to the Shares covered by such
Award.

       

      (b) Termination.  Unless
the Committee otherwise determines at or after the Date of Grant, the rights of
a Participant with respect to an Award of Restricted Stock or Restricted Units
outstanding at the time of the Participant's Termination shall be determined
under this Section 9(b).  Upon Termination due to the
Participant's (i) death, (ii) Disability, (iii) early retirement
with the consent of the Committee, (iv) Normal Retirement, or (v)
resignation for Good Reason, any restrictions on an Award of Restricted Stock or
Restricted Units shall lapse.  Unless the Committee otherwise
determines, any portion of any Restricted Stock or Restricted Unit Award as to
which the Restricted Period has not lapsed at the date of a Participant's
Termination for any reason not described in the preceding sentence shall be
forfeited as of such date.

       

      (c) Payment of
Shares.  Payment for Restricted Stock shall be made by the
Company in Shares.  Payment for Restricted Stock Units shall be made
by the Company in Shares, cash or in any combination thereof, as determined by
the Committee.

       

      (d) Restricted Period;
Restrictions on Transferability during Restricted
Period.  Restricted Stock or Restricted Units may not be sold,
assigned, pledged or otherwise encumbered, except as herein provided, during the
Restricted Period.  Unless otherwise determined by the Committee at or
after the Date of Grant, the Restricted Period applicable to any Award of
Restricted Stock or Restricted Units shall lapse, and the Shares related to such
Award shall become transferable, as to an equal amount of shares of Restricted
Stock or Restricted Units on each of the first five (5) anniversaries of the
Date of Grant.  Any certificates issued during the Restricted Period
in respect of Restricted Stock shall be registered in the name of the
participant and deposited by such Participant with the Company, and Shares
issued in book entry form during the Restricted Period in respect to Restricted
Stock shall be held for the account of the Participant in an account maintained
by a custodian controlled by the Company.  Upon the expiration or
termination of the Restricted Period and the satisfaction (as determined by the
Committee) of any other conditions established by the Committee, the
restrictions applicable to the Restricted Stock or Restricted Units shall lapse.
The Shares issued in respect to Restricted Stock or Restricted Units as to which
the restrictions have lapsed shall be delivered to the Participant or the
Participant's beneficiary or estate, as the case may be, in certificated or book
entry form, free of all such restrictions, except any that may be imposed by
law.  No payment will be required to be made by the Participant upon
the delivery of such Shares, except as otherwise provided in
Section 9(a).  At or after the date of grant, the Committee may
accelerate the vesting of any Award of Restricted Stock or Restricted Units or
waive any conditions to the vesting of any such Award.

       

      (e) Rights as a Stockholder;
Dividend Equivalents.  Unless otherwise determined by the
Committee at or after the Date of Grant, Participants granted shares of
Restricted Stock shall be entitled to receive, either currently or at a future
date, as specified by the Committee, all dividends and other distributions paid
with respect to such Shares, provided that if any such dividends or
distributions are paid in Shares or other property (other than cash), such
Shares and other property shall be subject to the same forfeiture restrictions
and restrictions on transferability as apply to the shares of Restricted Stock
with respect to which they were paid.

       

      The
Committee will determine whether and to what extent to credit to the account of,
or to pay currently to, each recipient of Restricted Units, an amount equal to
any dividends paid by the Company during the Restricted Period with respect to
the corresponding number of shares of Common Stock ("Dividend
Equivalents").  To the extent provided by the Committee at or after
the Date of Grant, any Dividend Equivalents with respect to cash dividends on
the Common Stock credited to a Participant's account shall be deemed to have
been invested in shares of Common Stock on the record date established for the
related dividend and a number of additional Restricted Units shall be credited
to such Participant's account equal to the greatest whole number which may be
obtained by dividing (x) the value of such Dividend Equivalent on the
record date by (y) the Fair Market Value of a share of Common Stock on such
date.

      
         

        10. Other
Stock-Based Awards.

      

       

      The
Committee is authorized to grant to Participants Other Stock-Based Awards that
are denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to Shares (including, without limitation,
securities convertible into Shares), as are deemed by the Committee to be
consistent with the purposes of the Plan.  Subject to the terms of the
Plan, the Committee shall determine the terms and conditions of such Other
Stock-Based Awards.  Shares or other securities delivered pursuant to
a purchase right granted under this Section 10 shall be purchased for such
consideration, which may be paid by such method or methods and in such form or
forms, including, without limitation, cash, Shares, other securities, other
Awards, other property, or any combination of the foregoing, as the Committee
shall determine and shall provide in the Award Notice.

       

      11. Change in
Control.  The provisions of this Section 11 shall apply in the
case of a Change in Control, unless otherwise provided in the Award Notice
or  separate agreement with a Participant governing an
Award.

       

      (a) Acceleration of
Awards.  .  Upon the occurrence of a Change in
Control,  (i) outstanding Options and Stock Appreciation Rights shall
become fully exercisable, and (ii) time-based vesting restrictions on
outstanding Awards shall lapse, and  (iii) outstanding Performance
Shares shall be deemed to be earned at the target level and, subject to Section
14(c) hereof, shall be paid to Participants within thirty (30) days following
the Change in Control (or, if later, the first date that such payment may be
made without causing a violation of Section 409A of the Code).  Any
Awards shall thereafter continue or lapse in accordance with the other
provisions of the Plan and the Award Notice unless the Committee, in its
discretion, provides  upon acceleration of an Award under this Section
11 (I) that the Award will expire after a designated period of time after such
acceleration to the extent not then exercised, (II) that the Award will be
settled in cash rather than Shares, (III) that the Award will be assumed by the
surviving entity or otherwise be equitably converted or substituted in
connection with such transaction as provided in Section 11(b) below, (IV) that
the Award may be settled by payment in cash or cash equivalents equal to the
excess of the Fair Market Value of the underlying Shares, as of a specified date
associated with the transaction, over the exercise price of the Award, or (V)
any combination of the foregoing.  The Committee's determination need
not be uniform and may be different for different Participants whether or not
such Participants are similarly situated.  To the extent that this
provision causes Incentive Stock Options to exceed the dollar limitation set
forth in Code Section 422(d), the excess Options shall be deemed to be
Nonstatutory Stock Options.

       

      (b) Awards Assumed or
Substituted in a Change of Control.  Upon the occurrence of a
Change in Control, any Awards (other than Performance Shares) may be assumed by
the surviving entity or otherwise equitably converted or substituted in
connection with the Change in Control in a manner approved by the Committee or
the Board.  With respect to Awards assumed by the surviving entity or
otherwise equitably converted or substituted in connection with a Change in
Control, (i) all of that Participant's outstanding Options and Stock
Appreciation Rights shall become fully exercisable, and (ii) all time-based
vesting restrictions on his or her outstanding Awards shall
lapse.  Any Awards shall thereafter continue or lapse in accordance
with the other provisions of the Plan and the Award Notice.  To the
extent that such acceleration causes Incentive Stock Options to exceed the
dollar limitation set forth in Code Section 422(d), the excess Options shall be
deemed to be Nonstatutory Stock Options.

       

      12. Term
of the Plan.

       

      (a) Effective
Date.  The Plan shall be effective as of the date it is
approved by the stockholders of the Company ("Effective Date").

       

      (b) Termination of the
Plan.  The Plan shall terminate on the tenth anniversary of the
Effective Date unless sooner terminated as provided herein.  The
termination of the Plan on such date shall not effect the validity of any Award
outstanding on date of termination of the Plan, and any such outstanding Award
shall continue to be governed by the applicable terms and conditions of the
Plan.  Notwithstanding the foregoing, no Incentive Stock Options may
be granted more than ten (10) years after the Effective Date.

      
        
          
          

        

        
          Exhibit
4.1, Page 7

          
            

          

        

        
          
          

        

      

      13. Changes
in Capital Structure.

       

      (a) Mandatory
Adjustments.  In the event of a corporate transaction between
the Company and its stockholders that causes the per-share value of the Shares
to change (including, without limitation, any stock dividend, stock split,
spin-off, rights offering, or large nonrecurring cash dividend), the
authorization limits under Section 4 shall be adjusted proportionately, and the
Committee shall make such adjustments to the Plan and Awards as it deems
necessary, in its sole discretion, to prevent dilution or enlargement of rights
immediately resulting from such transaction.  Action by the Committee
may include: (i) adjustment of the number and kind of shares that may be
delivered under the Plan; (ii) adjustment of the number and kind of shares
subject to outstanding Awards; (iii) adjustment of the exercise of base price of
outstanding Awards or the measure to be used to determine the amount of the
benefit payable on an Award; and (iv) any other adjustments that the Committee
determines to be equitable.  Without limiting the foregoing, in the
event of a subdivision of the outstanding Shares (stock-split), a declaration of
a dividend payable in Shares, or a combination or consolidation of the
outstanding Stock into a lesser number of Shares, the authorization limits under
Section 4 shall automatically be adjusted proportionately, and the Shares then
subject to each Award shall automatically, without the necessity for any
additional action by the Committee, be adjusted proportionately without any
change in the aggregate purchase price therefore.

       

      (b) Discretionary
Adjustments.  Upon the occurrence or in anticipation of any
corporate event or transaction involving the Company (including, without
limitation, any merger, reorganization, recapitalization, combination or
exchange of shares, or any transaction described in Section 13(a) above), the
Committee may, in its sole discretion, provide (i) that Awards will be settled
in cash rather than Stock, (ii) that Awards will become immediately vested and
exercisable and will expire after a designated period of time to the extent not
then exercised, (iii) that Awards will be assumed by another party to a
transaction or otherwise be equitably converted or substituted in connection
with such transaction in accordance with Section 11(b), (iv) that outstanding
Awards may be settled by payment in cash or cash equivalents equal to the excess
of the Fair Market Value of the underlying Stock, as of a specified date
associated with the transaction, over the exercise price of the Award, (v) that
performance targets and performance periods for Performance Shares will be
modified, consistent with Code Section 162(m) where applicable, or (vi) any
combination of the foregoing.  The Committee's determination need not
be uniform and may be different for different Participants whether or not such
Participants are similarly situated.

       

      (c) General.  Any
discretionary adjustments made pursuant to this Section 13 shall be subject to
the provisions of Section 14(l) hereof.  To the extent that any
adjustments made pursuant to this Section 13 cause Incentive Stock Options to
cease to qualify as Incentive Stock Options, such Options shall be deemed to be
Nonstatutory Stock Options.

      
         

        14. General
Provisions.

      

       

      (a) Withholding.   The
Company shall have the right to deduct from all amounts paid to a Participant in
cash (whether under the Plan or otherwise) any taxes required by law to be
withheld in respect of Awards under the Plan.  In the case of any
Award satisfied in the form of Common Stock, no Shares shall be issued unless
and until arrangements shall have been made to satisfy any withholding tax
obligations applicable with respect to such Award in accordance with the Plan
and otherwise satisfactory to the Committee.  Without limiting the
generality of the foregoing and subject to such terms and conditions as the
Committee may impose, the Company shall have the right to retain, or the
Committee may, subject to such terms and conditions as it may establish from
time to time, permit Participants to elect to tender, shares of Common Stock
(including Shares issuable pursuant to an Award) to satisfy, in whole or in
part, the amount required to be withheld.

       

      (b) Award
Notices.   Each Award hereunder shall be evidenced in an
Award Notice.  The Award Notice shall be delivered to the Participant
and shall incorporate the terms of the Plan by reference and specify the terms
and conditions thereof and any rules applicable thereto.

       

      (c) Compliance with Code Section
409A.  It is intended that this Plan, as written and in
operation, will be exempt from Code Section 409A. For purposes of determining
whether Awards may be payable to a Participant in compliance with Code Section
409A, the Participant's Termination will  be considered as having
occurred for purposes of the Plan if the parties reasonably anticipate either
(i) that Participant will no longer perform any services for the Company or a
Subsidiary or (ii) that the level of bona fide services performed for the
Company or a Subsidiary  (whether as an Employee, Consultant or
Director ) will permanently decrease to no more than 20% of the average level of
bona fide services performed by Participant over the immediately preceding
36-month period (or the full period of services if Participant has been
providing services to the Company and its Subsidiaries for less than 36 months).
Notwithstanding the foregoing,  if payment of any Award is deemed to
be "nonqualified deferred compensation" under Section 409A, and if the
Participant is a "specified employee" within the meaning of Code Section
409A(a)(2)(b)(i), the payment schedule for Awards shall be modified or adjusted
to provide that no payments shall be made until the expiration of six (6) months
following the date of Termination or Change in Control.  In the event
that payments are so delayed, a lump sum payment of the accumulated unpaid
amounts attributable to the six (6) month period shall be made to Participant on
the first day of the seventh month following the date of Termination or Change
in Control.  This six month delay shall not apply to any Awards which
are not subject to the requirements of Section 409A of the Code by reason of
their being separation pay upon an involuntary separation from service and their
meeting the requirements and limitations of the regulations under the above
referenced Code section.  In no event shall the aggregate amount of
Awards be reduced as a result of such modification or adjustment

       

      (d) Investment
Representation.   All Shares paid pursuant to the Plan are
to be taken subject to an investment representation by the Participant or other
recipient that any such shares are acquired for investment and not with a view
to distribution and that such shares shall not be transferred or sold until
registered in compliance with the Securities Act of 1933 or unless an exemption
therefrom is available in the opinion of legal counsel satisfactory to the
Company.

       

      (e) Designation of
Beneficiary.   Each Participant may designate a
beneficiary or beneficiaries (which beneficiary may be an entity other than a
natural person) to receive any payments which may be made or to exercise any
Options or Stock Appreciation Rights following the Participant's
death.  Such designation may be changed or canceled at any time
without the consent of any such beneficiary.  Any such designation,
change or cancellation must be made in a form approved by the Committee and
shall not be effective until received by the Committee.  If no
beneficiary has been named, or the designated beneficiary or beneficiaries shall
have predeceased the Participant, the beneficiary shall be the Participant's
spouse or, if no spouse survives the Participant, the Participant's
estate.  If a Participant designates more than one beneficiary, the
rights of such beneficiaries shall be payable in equal shares, unless the
Participant has designated otherwise.

       

      (f) Employment
Rights.   An Award made under the Plan shall not confer
any right on the Participant to continue in the employ of the Company or any
subsidiary or limit in any way the right of the Participant's employer to
terminate his or her employment at any time.

       

      (g) Expenses.   The
expenses of administering the Plan shall be borne by the Company.

       

      (h) No Rights to Awards, No
Shareholder Rights.   No Employee, Consultant or Director
shall have any claim to be granted any Award under the Plan, and there is no
obligation of uniformity of treatment of Employees, Consultants and
Directors.  Subject to the provisions of the Plan and the applicable
Award, no person shall have any rights as a stockholder with respect to any
Shares to be issued under the Plan prior to the issuance thereof.

      
         

                        
(i) Construction of the
Plan.   The validity, construction, interpretation,
administration and effect of the Plan and of its rules and regulations, and
rights relating to the Plan, shall be determined solely in accordance with the
laws of the State of Delaware.

      

       

      (j) Legend.   To
the extent any stock certificate is issued to a Participant in respect of shares
of Restricted Stock awarded under the Plan prior to the expiration of the
applicable Restricted Period, such certificate shall be registered in the name
of the Participant and shall bear the following (or similar)
legend:

       

      "The
shares of stock represented by this certificate are subject to the terms and
conditions contained in the ProAssurance Corporation 2008 Equity Incentive Plan
and the Award Agreement, dated as of                        
, between the Company and the Participant, and may not be sold, pledged,
transferred, assigned, hypothecated or otherwise encumbered in any manner
(except as provided in the Plan or in such Award Agreement) until                        
."

       

      Upon the
lapse of the Restricted Period with respect to any such shares of Restricted
Stock, the Company shall issue or have issued new share certificates without the
legend described herein in exchange for those previously issued.

      
        
          
          

        

        
          Exhibit
4.1, Page 8

          
            

          

        

        
          
          

        

      

       

      (k) Amendment of
Plan.   The Board may amend, suspend or terminate the Plan
or any portion thereof at any time, provided that no amendment shall be made
without stockholder approval if such amendment would constitute a material
change or revision that requires stockholder approval to comply with any of the
following:

       

      (i) the
corporate governance rules for listed companies on the New York Stock Exchange,
including without limitation, Section 303A.08 of the Listed Company
Manual;

       

      (ii) the
exception for performance based compensation under Code Section 162(m) and the
regulations promulgated thereunder; or

       

      (iii) the
exemption from Section 16 of Exchange Act provided by SEC Rule
16b-3.

       

      Without
the written consent of an affected Participant, no termination, suspension or
modification of the Plan shall adversely affect any right of such Participant
under the terms of an Award granted before the date of such termination,
suspension or modification.

       

                      
(l) Amendment of
Awards.   The Committee shall have the authority to amend
any Award to include any provision which, at the time of such amendment, is
authorized under the terms of the Plan; provided, however, that (i) no
outstanding Award may be revoked or altered in a manner unfavorable to the
Participant without the written consent of the Participant, (ii) no
Performance Share shall be altered in a manner to increase the amount of
compensation that would otherwise be due upon the attainment of the performance
criteria; (iii) no outstanding Option may be altered in a manner that reduces
the exercise price (except as provided in Section 13 hereof), and
(iv) no outstanding Stock Appreciation Right may be altered in a manner
that reduces the base price (except as provided in Section 13
hereof).

       

      (m) Application of
Proceeds.   The proceeds received by the Company from the
sale of Shares under the Plan will be used for general corporate
purposes.

       

      (n) Compliance with Legal and
Exchange Requirements.   The Plan, the grant and exercise
of Awards hereunder, and the other obligations of the Company under the Plan,
shall be subject to all applicable federal and state laws, rules, and
regulations, and to such approvals by any regulatory or governmental agency as
may be required.  The Company, in its discretion, may
(i) postpone the exercise of Awards, the issuance or delivery of Shares
under any Award or any other action under the Plan to permit the Company, with
reasonable diligence, to complete such stock exchange listing or registration or
qualification of such Common Stock or other required action under any federal or
state law, rule, or regulation, (ii) require any Participant to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of Shares in compliance with applicable
laws, rules, and regulations, and (iii) pay the Participant, in lieu of
Shares, cash in an amount based upon the Fair Market Value of a Share as of the
date Shares would otherwise be issuable with respect to an Award.  The
Company shall not be obligated to recognize the exercise of any Award or to
otherwise sell or issue Common Stock in violation of any such laws, rules, and
regulations.  Any postponement of the exercise or settlement of any
Award under this Section 14(n) shall not extend the term of such Award, and
the Company, its officers and employees, the Board and the Committee shall have
no obligation or liability to a Participant with respect to any Award (or Shares
issuable thereunder) because of any actions taken pursuant to the provisions of
this Section 14(n).

       

      (o) Gender and
Number.   Except when otherwise indicated by the context,
words in the masculine gender used in the Plan shall include the feminine
gender, the singular shall include the plural, and the plural shall include the
singular.


      
         

        Originally
adopted by the Board of Directors of the Company on March 12, 2008 and amended
on May 21, 2008, and approved by the stockholders of the Company as
so  adopted and amended on May 21,
2008.