Document:

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                                                                    EXHIBIT 10.1

                                  UNITRIN, INC.

                             1990 STOCK OPTION PLAN

                             AS AMENDED AND RESTATED

                                   May 3, 2000

1.   Purpose.
     -------

     The purpose of this 1990 Stock Option Plan (the "Plan") of Unitrin, Inc., a
Delaware corporation (the "Company"), is to secure for the Company and its
shareholders the benefits arising from stock ownership by selected executive and
other key employees of the Company or its subsidiaries and such other persons
(other than Directors who are not employees of the Company) as the Stock Option
Committee, may from time to time determine. The Plan will provide a means
whereby (i) such employees may purchase shares of the Common Stock of the
Company pursuant to options which will qualify as "incentive stock options"
under Section 422A of the Internal Revenue Code of 1986, as amended (the
"Code"), (ii) such employees or other persons (other than Directors who are not
employees of the Company), may purchase shares of Common Stock of the Company
pursuant to "non-incentive" or "non-qualified" stock options and (iii) any of
such persons may receive shares of the Common Stock of the Company, or cash in
lieu thereof, pursuant to stock appreciation rights granted in tandem with such
options.

2.   Administration.
     --------------

     The Plan shall be administered by a Stock Option Committee (the
"Committee") appointed by the Board of Directors of the Company consisting of
two or more directors of the Company, all of whom shall be "non-employee
directors" (within the meaning of Rule 16b-3 of the Securities Exchange Act of
1934, as amended), to whom administration of the Plan has been duly delegated.
Any action of the Committee with respect to administration of the Plan shall be
taken by a majority vote or written consent

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of its members.

     Subject to the provisions of the Plan, the Committee shall have authority
(i) to construe and interpret the Plan, (ii) to define the terms used herein,
(iii) to prescribe, amend and rescind rules and regulations relating to the
Plan, (iv) to determine the individuals to whom and the time or times at which
options shall be granted, whether such options will be incentive stock options
or non-qualified stock options, whether to include a stock appreciation right
with an option and the terms of such rights, the number of shares to be subject
to each option, the option price, the number of installments, if any, in which
each option may be exercised, and the duration of each option, (v) to approve
and determine the duration of leaves of absence which may be granted to
participants without constituting a termination of their employment for the
purposes of the Plan, and (vi) to make all other determinations necessary or
advisable for the administration of the Plan. All determinations and
interpretations made by the Committee shall be binding and conclusive on all
participants in the Plan and their legal representatives and beneficiaries.

3.   Shares Subject to the Plan.
     --------------------------

     Subject to adjustment as provided in paragraph 16 hereof, the shares to be
offered under the Plan shall consist of the Company's authorized but unissued
Common Stock, and the aggregate amount of such stock which may be issued upon
exercise of all options under the Plan shall not exceed Five Million (5,000,000)
of such shares. If any option granted under the Plan shall expire or terminate
for any reason (other than surrender at the time of exercise of a related stock
appreciation right provided for in paragraph 8 hereof), without having been
exercised in full, the unpurchased shares subject thereto shall again be
available for options to be granted under the Plan.

     Any shares of the Company's Common Stock that are used (whether actually or

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constructively) by an option holder as full or partial payment to the Company of
the purchase price of the shares of Common Stock being acquired through the
exercise of an option granted under the Plan shall be added to the aggregate
number of shares of Common Stock available for issuance under the Plan.

4.   Eligibility and Participation.
     -----------------------------

     All executive and other key employees of the Company or of any subsidiary
corporation (as defined in Section 425(f) of the Code) and directors of the
Company who are regular employees of the Company, shall be eligible for
selection to participate in the Plan. Other non-employees (excluding Committee
members for the periods specified in paragraph 2 hereof and other directors who
are not regular employees of the Company), may participate in the Plan with
respect to non-qualified stock options, but only selected executive and other
key employees of the Company or a subsidiary may receive incentive stock options
under the Plan. An individual who has been granted an option, may if such
individual is otherwise eligible, be granted an additional option or options if
the Committee shall so determine, subject to the other provisions of the Plan.
No incentive stock option may be granted to any person who, at the time the
incentive stock option is granted, owns shares of the Company's outstanding
Common Stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company (and of its affiliates if
applicable), unless the exercise price of such option is at least 110 percent
(110%) of the fair market value of the stock subject to the option and such
option by its terms is not exercisable after the expiration of five years from
the date such option is granted.

     The aggregate fair market value (determined at the time the option is
granted) of the stock with respect to which incentive stock options (whenever
granted and including the substitute options) are exercisable for the first time
by an optionee during any

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calendar year (under all incentive stock option plans of the Company and its
subsidiaries) shall not exceed $100,000.

     All options granted under the Plan shall be granted on or before February
15, 2000, except for restorative stock options which may continue to be granted
after February 15, 2000 until the expiration dates of the original options to
which such restorative options relate.

5.   Duration of Options.
     -------------------

     Each option and all rights associated therewith, shall expire on such date
as the Committee may determine, and shall be subject to earlier termination as
provided herein; provided, however, that in the case of incentive stock options,
each incentive stock option and all rights associated therewith shall expire in
any event within ten (10) years of the date on which such incentive stock option
is granted.

6.   Purchase Price.
     --------------

     The purchase price of the stock covered by each option shall be determined
by the Committee, but in the case of incentive stock options, shall not be less
than one hundred percent (100%) of the fair market value of such stock on the
date the incentive stock option is granted. The purchase price of the shares
upon exercise of an option shall be paid in full at the time of exercise (i) in
cash or by check payable to the order of the Company, (ii) by delivery of shares
of Common Stock of the Company already owned by, and in the possession of the
option holder, or (iii) if authorized by the Committee or if specified in the
option being exercised, by a promissory note made by option holder in favor of
the Company, upon the terms and conditions determined by the Committee and
secured by the shares issuable upon exercise complying with applicable law
(including, without limitation, state corporate and federal margin
requirements), or any combination

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thereof. Shares of Common Stock used to satisfy the exercise price of an option
shall be valued at their fair market value determined (in accordance with
paragraph 9 hereof) as of the close of business on the date of exercise (or if
such date is not a business day, as of the close of the business day immediately
preceding such date).

7.   Exercise of Option/Grant of Restorative Stock Option
     ----------------------------------------------------

     Each option granted under this Plan shall be exercisable in such
installments during the period prior to its expiration date as the Committee
shall determine, but in no event shall any option be exercisable for at least
six months after grant except in the case of the death or disability of the
option holder; provided that, unless otherwise determined by the Committee, if
the option holder shall not in any given installment period purchase all of the
shares which the option holder is entitled to purchase in such installment
period, then the option holder's right to purchase any shares not purchased in
such installment period shall continue until the expiration date or sooner
termination of the option holder's option. No option may be exercised for a
fraction of a share and no partial exercise of any option may be for less than
fifty (50) shares.

     Upon the exercise of an option by an option holder by delivering (whether
actually or constructively) previously-acquired shares of Common Stock of the
Company in full or partial payment for the shares received upon such exercise
(as provided in Section 6), the Committee shall grant the option holder a
"restorative stock option" to purchase additional shares of Common Stock of the
Company. A restorative stock option shall also be granted to an option holder
who delivers previously-acquired shares or has shares withheld from an exercise
to the extent permitted in paragraph 10 in connection with the income tax
withholding liability arising from such exercise. The number of shares of Common
Stock subject to a restorative stock option shall be equal to the number of
shares delivered in payment of the purchase price and/or the number of shares

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delivered or withheld in connection with the related tax withholding obligation.
The purchase price of the restorative stock option shall not be less than one
hundred percent (100%) of the fair market value of such Common Stock on the date
other restorative stock option is granted. All other terms of restorative stock
options granted hereunder, including, but not limited to, vesting and
expiration, shall be identical to the terms of the initial option upon which the
restorative stock option is granted.

8.   Stock Appreciation Rights.
     -------------------------

     If deemed appropriate by the Committee, any stock option may be coupled
with a stock appreciation right at the time of the grant of the option, or, the
Committee may grant a stock appreciation right to any person at any time after
granting an option to such person prior to the end of the term of such
associated option. Such stock appreciation right shall be subject to such terms
and conditions not inconsistent with the Plan as the Committee shall impose,
provided that:

     (1) A stock appreciation right shall be exercisable to the extent, and only
to the extent, the associated option is exercisable and shall be exercisable
only for such period as the Committee may determine (which period may expire
prior to the expiration date of the option);

     (2) A stock appreciation right shall entitle the option holder to surrender
to the Company unexercised the option to which it is related, or any portion
thereof, and to receive from the Company in exchange therefor that number of
shares (rounded down to the nearest whole number) having an aggregate value
equal to the excess of the fair market value of one share (determined as
thereinafter provided) over the option price per share specified in such option
multiplied by the number of shares subject to the option, or portion thereof,
which is so surrendered; and

     (3) The Committee may elect to settle, or the stock appreciation right may
permit the optionee to elect to receive (subject to approval by the Committee),
any part or

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all of the Company's obligation arising out of the exercise of a stock
appreciation right by the payment of cash equal to the aggregate fair market
value of that part or all of the shares it would otherwise be obligated to
deliver, provided that in no event shall cash be payable to an officer or
director of the Company upon exercise of a stock appreciation right (i) if the
stock appreciation right was exercised during the first six months of its term;
and (ii) unless the stock appreciation right was exercised during a period of
ten business days beginning with the third business day after the release to the
public of a quarterly or annual summary statement of the Company's sales and
earnings; or (iii) unless the transaction is otherwise exempt from the operation
of Section 16(b) of the Securities Exchange Act of 1934.

9.   Fair Market Value of Common Stock.
     ---------------------------------

     The fair market value of a share of Common Stock of the Company shall be
determined for purposes of the Plan by reference to the closing price on the New
York Stock Exchange (or other principal stock exchange on which such shares are
then listed) or, if such shares are not then listed on such exchange (or other
principal stock exchange), by reference to the closing price (if a National
Market Issue) or the mean between the bid and asked price (if other
over-the-counter issue) of a share as supplied by the National Association of
Securities Dealers through NASDAQ (or its successor in function), in each case
as reported by The Wall Street Journal, for the date on which the option or
               -----------------------
stock appreciation right is granted or exercised, or if such date is not a
business day, for the business day immediately preceding such date (or, if for
any reason no such price is available, in such other manner as the Committee may
deem appropriate to reflect the then fair market value thereof).

10.  Withholding Tax.
     ---------------

     Upon (i) the disposition by an employee or other person of shares of Common

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Stock acquired pursuant to the exercise of an incentive stock option granted
pursuant to the Plan within two years of the granting of the incentive stock
option or within one year after exercise of the incentive stock option, (ii) the
exercise of "non-incentive" or "non-qualified" options, or (iii) the exercise of
a stock appreciation right, the Company shall have the right to (a) require such
employee or such other person to pay the Company the amount of any taxes which
the Company may be required to withhold with respect to such shares or (b)
deduct from all amounts paid in cash with respect to the exercise of a stock
appreciation right the amount of any taxes which the Company may be required to
withhold with respect to such cash amounts.

     Subject to the limitation set forth in the next sentence, any
holder of an option or stock appreciation right hereunder may elect to satisfy
all or any portion of the tax withholding obligations arising from the exercise
of such option or stock appreciation right either by delivering
previously-acquired shares of Common Stock of the Company or by having the
Company withhold shares that would otherwise be issued pursuant to such
exercise. With respect to exercises of options and stock appreciation rights
granted on or after May 5, 1999, no holder thereof shall have the right to
deliver previously-acquired shares of Common Stock or to have shares of Common
Stock withheld in excess of the minimum number required to satisfy applicable
tax withholding requirements based on minimum statutory withholding rates for
federal and state tax purposes, including payroll taxes.

11.  Nontransferability.
     ------------------

     An option (and any accompanying stock appreciation right) granted under the
Plan shall, by its terms, be non-transferable by the option holder, either
voluntarily or by operation of law, otherwise than by will or the laws of
descent and distribution, and shall be exercisable during option holder's
lifetime only by the option holder, regardless of any

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community property interest therein of the spouse of the option holder, or such
spouse's successors in interest. If the spouse of the option holder shall have
acquired a community property interest in such option (or accompanying stock
appreciation right), the option holder, or the option holder's permitted
successors in interest, may exercise the option (or accompanying stock
appreciation right) on behalf of the spouse of the option holder or such
spouse's successors in interest.

12.  Holding of Stock After Exercise of Option.
     -----------------------------------------

     At the discretion of the Committee, any option may provide that the option
holder, by accepting such option, represents and agrees, for the option holder
and the option holder's permitted transferees (by will or the laws of descent
and distribution), that none of the shares purchased upon exercise of the option
or any accompanying stock appreciation right will be acquired with a view to any
sale, transfer or distribution of said shares in violation of the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder, or
any applicable state "blue sky" laws, and the person entitled to exercise the
same shall furnish evidence satisfactory to the Company (including a written and
signed representation) to that effect in form and substance satisfactory to the
Company, including an indemnification of the Company in the event of any
violation of the Securities Act of 1933 or state blue sky law by such person.

13.  Termination of Employment.
     -------------------------

     If a holder of an incentive stock option ceases to be employed by the
Company or one of its subsidiaries for any reason other than the option holder's
death or permanent disability (within the meaning of Section 105(d) (4) of the
Code), the option holder's incentive stock option (and any accompanying stock
appreciation right) shall be exercisable for a period of three (3) months after
the date option holder ceases to be an employee of the Company or such
subsidiary (unless by its terms it sooner expires) to

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the extent exercisable on the date of such cessation of employment and shall
thereafter expire and be void and of no further force or effect. A leave of
absence approved in writing by the Committee shall not be deemed a termination
of employment for the purposes of this paragraph 13, but no option may be
exercised during any such leave of absence, except during the first three (3)
months thereof. Termination of employment or other relationship with the Company
by the holder of a non-qualified stock option will have the effect specified in
the individual option agreement, as determined by the Committee.

14.  Death or Permanent Disability of Option Holder.
     ----------------------------------------------

     If the holder of an incentive stock option dies or becomes permanently
disabled while option holder is employed by the Company or one of its
subsidiaries, option holder's option (and any accompanying stock appreciation
right) shall expire one (1) year after the date of such death or permanent
disability unless by its terms it sooner expires. During such period after
death, such option (and any accompanying stock appreciation right) may, to the
extent that it remained unexercised (but exercisable by the option holder
according to such option's terms) on the date of such death, be exercised by the
person or persons to whom the option holder's rights under the option shall pass
by option holder's will or by the laws of descent and distribution. The death or
disability of a holder of a non-qualified stock option will have the effect
specified in the individual option agreement as determined by the Committee.

15.  Privileges of Stock Ownership.
     -----------------------------

     No person entitled to exercise any option or stock appreciation right
granted under the Plan shall have any of the rights or privileges of a
shareholder of the Company in respect of any shares of stock issuable upon
exercise of such option or stock appreciation right until certificates
representing such shares shall have been issued and

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delivered. No shares shall be issued and delivered upon the exercise of any
option or accompanying stock appreciation rights unless and until there shall
have been full compliance with all applicable requirements of the Securities Act
of 1933 (whether by registration or satisfaction of exemption conditions), all
applicable listing requirements of any national securities exchange on which
shares of the same class are then listed and any other requirements of law or of
any regulatory bodies having jurisdiction over such issuance and delivery.

16.  Adjustments.
     -----------

     If the outstanding shares of the Common Stock of the Company are increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities of the Company through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
similar transaction, an appropriate and proportionate adjustment shall be made
in the maximum number and kind of shares as to which options may be granted
under this Plan. A corresponding adjustment changing the number or kind of
shares allocated to unexercised options or portions thereof, which shall have
been granted prior to any such change, shall likewise be made. Any such
adjustment in the outstanding options shall be made without change in the
aggregate purchase price applicable to the unexercised portion of the option but
with a corresponding adjustment in the price for each share or other unit of any
security covered by the option. The share limit in paragraph 3 of this Amended
and Restated Plan has been restated in accordance with this paragraph 16 to
reflect the Company's 2-for-1 stock split effective March 26, 1999.

     Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon a sale of substantially all

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the property or more than eighty percent (80%) of the then outstanding stock of
the Company to another corporation, the Plan shall terminate, and all options
and stock appreciation rights theretofore granted hereunder shall terminate;
provided, however, that notwithstanding the foregoing, the Board of Directors
shall provide in writing in connection with such transaction for any or all of
the following alternatives (separately or in combinations): (i) for the options
and any accompanying stock appreciation rights theretofore granted more than six
months before such transaction to become immediately exercisable notwithstanding
the provisions of paragraph 7 hereof, except the last sentence thereof; (ii) for
the assumption by the successor corporation of the options and stock
appreciation rights theretofore granted or the substitution by such corporation
for such options and rights of new options and rights covering the stock of the
successor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; (iii) for the
continuance of the Plan by such successor corporation in which event the Plan
and the options and any accompanying stock appreciation rights theretofore
granted shall continue in the manner and under the terms so provided; or (iv)
for the payment in cash or stock in lieu of and in complete satisfaction of such
options and rights.

     Adjustments under this paragraph 16 shall be made by the Committee, whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive. No fractional shares of stock shall be
issued under the Plan on any such adjustment.

     At the discretion of the Committee, any option may contain provisions to
the effect that upon the happening of certain events, including a change in
control (as defined by the Committee in the option) of the Company, any
outstanding options and accompanying stock appreciation rights not theretofore
exercisable shall immediately

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become exercisable in their entirety, notwithstanding any of the other
provisions of the option.

17.  Amendment and Termination of Plan.
     ---------------------------------

     The Committee may at any time suspend or terminate the Plan. The Committee
may also at any time amend or revise the terms of the Plan, provided that no
such amendment or revision shall, unless appropriate shareholder approval of
such amendment or revision is obtained, increase the maximum number of shares in
the aggregate which may be sold pursuant to options granted under the Plan,
except as permitted under the provisions of paragraph 16, or change the minimum
purchase price of incentive stock options set forth in paragraph 6, or increase
the maximum term of incentive stock options provided for in paragraph 5, or
permit the granting of options or stock appreciation rights to anyone other than
as provided in paragraph 4.

     Notwithstanding the foregoing, no amendment, suspension or termination of
the Plan shall, without specific action of the Committee and the consent of the
option holder, in any way modify, amend, alter or impair any rights or
obligations under any option or accompanying stock appreciation right
theretofore granted under the Plan.

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                                                                    EXHIBIT 10.2

                                  UNITRIN, INC.
                             1997 STOCK OPTION PLAN
                             AS AMENDED AND RESTATED
                                   May 3, 2000

         1.  PURPOSE

         The purpose of the Unitrin, Inc. 1997 Stock Option Plan is to secure
         for Unitrin, Inc. and its shareholders the benefits arising from stock
         ownership by selected executive and other key employees of Unitrin,
         Inc. or its subsidiaries or affiliates and such other persons as the
         Committee (as defined hereafter) may from time to time determine.

         2.  DEFINITIONS

         As used herein, the following words or terms have the meanings set
         forth below:

         "Board" means the Board of Directors of the Company.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
         time, or any successor statute.

         "Committee" means the Stock Option Committee of the Board or any
         successor committee. The Committee shall be composed of two or more
         persons who qualify both as "outside directors" under Section 162(m) of
         the Code and related regulations and "non-employee directors" under
         Rule 16b-3 of the Securities Exchange Act of 1934, or any successor
         provisions.

         "Company" means Unitrin, Inc., a Delaware corporation.

         "Constructive or Actual Delivery" means either: (i) presentation to the
         Company of a recent brokerage account statement or other written
         evidence satisfactory to the Committee evidencing beneficial ownership
         by the Participant of shares of Stock other than shares held in 401(k),
         pension, IRA or similar accounts, or (ii) physical delivery of
         certificates evidencing shares of Stock, properly indorsed for transfer
         to the Company or with an appropriately executed stock power.

         "Disability" means a physical or mental disability of such a nature
         that it would qualify a Participant for benefits under the long-term
         disability insurance plan of Unitrin, Inc., or one of its subsidiaries
         or affiliates.

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         "Exercise Price" means the price at which the Stock underlying an
         Option granted under this Plan may be purchased upon exercise of the
         Option.

         "Fair Market Value," as used to refer to the price of a share of Stock
         on a particular day, means the closing price for the Common Stock for
         that day as subsequently reported in The Wall Street Journal, or if no
         prices are quoted for that day, the last preceding day on which such
         prices of Stock are so quoted (or, if for any reason no such price is
         available, in such other manner as the Committee may deem appropriate
         to reflect the fair market value.)

         "ISO" means an Option that satisfies the requirements of Section 422(b)
         of the Code and any regulations promulgated thereunder from time to
         time, or any successor provisions thereto.

         "Non-Qualified Option" means an Option that does not satisfy the
         requirements for an ISO.

         "Option" means an option, including a Non-Qualified Option, an ISO and
         a Restorative Option, granted to a Participant under this Plan to
         purchase a designated number of shares of Stock.

         "Option Agreement" means an agreement between the Company and a
         Participant evidencing the terms and conditions of a particular Option.

         "Participant" means an individual selected by the Committee to receive
         an Option under the Plan.

         "Representative" means an executor, administrator, guardian, trustee or
         other representative of a Participant who has legal authority to
         exercise such Participant's Options or Stock Appreciation Rights on
         behalf of such Participant or such Participant's estate.

         "Restorative Option" means an Option granted to a Participant under
         Section 8 of the Plan.

         "Retirement" means the termination of employment with the Company
         and/or its subsidiaries or affiliates by a Participant after attaining
         age 55, where such Participant does not continue to render services as
         a consultant, advisor or director to the Company or any such
         subsidiaries or affiliates.

         "Stock" means the Common Stock of the Company.

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         "Stock Appreciation Right" means a stock appreciation right granted
         pursuant to Section 9 of the Plan.

         "Substantial Cause" means (a) the commission of a criminal act against,
         or in derogation of, the interests of the Company or its subsidiaries
         or affiliates; (b) knowingly divulging confidential information about
         the Company or its subsidiaries or affiliates to a competitor or to the
         public or using such information for personal gain; or (c) the
         performance of any similar action that the Committee, in its sole
         discretion, may deem to be sufficiently injurious to the interests of
         the Company or its subsidiaries or affiliates to constitute substantial
         cause for the termination of services by a Participant as an employee,
         director, consultant or advisor. Nothing in this Plan shall be
         construed to imply that a Participant's employment may only be
         terminated for Substantial Cause.

         3.  THE COMMITTEE

         a) Administration. The Plan shall be administered by the Committee,
         which shall have authority: (i) to construe and interpret the Plan and
         to prescribe, amend and rescind rules and regulations relating to the
         Plan, (ii) to make all determinations as to eligibility pursuant to
         Section 5 of the Plan, (iii) to grant Options and Stock Appreciation
         Rights as more fully described in Section 3(b) below, (iv) to approve
         and determine the duration of leaves of absence which may be granted to
         Participants without constituting a termination of their employment for
         the purposes of the Plan, and (v) to make all other determinations
         necessary or advisable for the administration of the Plan. All
         determinations and interpretations made by the Committee shall be
         binding and conclusive on all Participants and their Representatives,
         successors in interest and beneficiaries. Any action of the Committee
         with respect to administration of the Plan shall be taken by a majority
         vote or written consent of its members.

         b) Granting Authority. Subject to the provisions of the Plan, the
         Committee shall have sole authority and discretion to determine the
         Participants to whom and the time or times at which Options shall be
         granted, whether an Option will be an ISO or a Non-Qualified Option,
         whether to couple a Stock Appreciation Right with an Option and the
         terms of such Right, the number of shares of Stock to be subject to
         each Option, the Exercise Price, the number of installments, if any, in
         which each Option may vest, and the expiration date of each Option.

         4.  SHARES SUBJECT TO PLAN

         Subject to adjustment as provided in Section 14 hereof, the maximum
         number of shares of Stock which may be issued pursuant to the exercise
         of Options and Stock

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         Appreciation Rights granted under the Plan shall not exceed four
         million (4,000,000) shares in total. The maximum number of shares that
         may be granted to an individual Participant under the Plan shall be
         one-third of such total. If any Option granted under the Plan shall
         expire or terminate for any reason (other than surrender at the time of
         exercise of a related Stock Appreciation Right provided for in
         paragraph 9 hereof), without having been exercised in full, the
         unpurchased shares subject thereto shall again be available for Options
         to be granted under the Plan. Any shares of Stock that are used by
         Constructive or Actual Delivery as full or partial payment for the
         Exercise Price of an Option and/or the withholding taxes arising from
         the exercise of such Option, or that are withheld from the shares that
         would otherwise be issued upon exercise of such Option in full or
         partial payment of such withholding taxes, shall in each case be added
         to the aggregate number of shares of Stock available for issuance under
         this Plan.

         5.  ELIGIBILITY

         The following persons shall be eligible to receive grants of Options
         and Stock Appreciation Rights under this Plan:

         a) all executive and other key employees of the Company or of any
         subsidiary or affiliate of the Company who are designated as such by
         the Committee in its sole discretion;

         b) directors of the Company who are regular employees of the Company or
         any such subsidiary or affiliate; and

         c) key persons selected by the Committee in its sole discretion who
         render services to the Company or its subsidiaries or affiliates as
         consultants or advisors, but such persons shall only be eligible to
         receive Non-Qualified Options (including Restorative Options issued
         with respect to such Options).

         6.  TERMS OF OPTIONS

         a) Duration. Each Option and all rights associated therewith, shall
         expire on such date as the Committee may determine, subject to earlier
         termination as provided herein. All Options granted under this Plan
         shall be granted on or before December 31, 2006, except for Restorative
         Options which may continue to be granted after December 31, 2006 until
         the expiration dates of the original Options to which such Restorative
         Options relate, subject to the limitations in the last sentence of
         Section 8.

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         b) Exercise Price. The Exercise Price of the Stock covered by each
         Option shall be determined by the Committee.

         c) Vesting. Each Option granted under this plan shall vest and be
         exercisable in such installments, if any, during the period prior to
         its expiration date as the Committee shall determine, and, unless
         otherwise specified in an Option Agreement, no Option shall be
         exercisable for at least six months after grant except in the case of
         the death or Disability of the Participant.

         d) Non-Transferability. Unless otherwise provided in an Option
         Agreement, an Option (and any accompanying Stock Appreciation Right)
         granted under the Plan shall, by its terms, be non-transferable by the
         Participant, either voluntarily or by operation of law, otherwise than
         by will or the laws of descent and distribution, and shall be
         exercisable during the Participant's lifetime only by the Participant
         (or, in the case of the incapacity of the Participant, by the
         Participant's Representative) regardless of any community property
         interest therein of the spouse of the Participant, or such spouse's
         successors in interest. If the spouse of the Participant shall have
         acquired a community property interest in such Option (or accompanying
         Stock Appreciation Right), the Participant, or the Participant's
         Representative, may exercise the Option (or accompanying Stock
         Appreciation Right) on behalf of the spouse of the Participant or such
         spouse's successors in interest.

         e) Option Agreements. The terms of each Option granted pursuant to this
         Plan shall be evidenced by an Option Agreement in a form approved by
         the Committee and signed by both the Company and the Participant,
         except that a Restorative Option may be evidenced by a certificate
         reciting the essential terms of such Option and signed only by the
         Company.

         7.  EXERCISE OF OPTIONS

         a) Notice by Participant. Each Participant (or such Participant's
         Representative) who desires to exercise an Option shall give advance
         written notice of such exercise to the Company in such form as may be
         prescribed from time to time by the Committee.

         b) Payment for Exercises. The Exercise Price of an Option shall be paid
         in full at the time of exercise of such Option: (i) by check payable to
         the order of the Company, (ii) by Constructive or Actual Delivery,
         (iii) by wire transfer or other means acceptable to the Committee, (iv)
         if authorized by the Committee, by a promissory note made by the
         Participant in favor of the Company, upon such terms and conditions and
         secured by such collateral as may be required by the

                                       5

<PAGE>

         Committee, or (v) any combination of the foregoing acceptable to the
         Committee. Shares of Stock used by Constructive or Actual Delivery to
         satisfy the Exercise Price of an Option shall be valued at their Fair
         Market Value on the date of exercise.

         c) Partial Exercises. No Option may be exercised for a fraction of a
         share and no partial exercise of any Option may be made for less than
         fifty (50) shares.

         d) Withholding Taxes. Upon the exercise of a Non-Qualified Option or a
         Stock Appreciation Right, the Company shall have the right to: (i)
         require such Participant (or such Participant's Representative) to pay
         the Company the amount of any taxes which the Company may be required
         to withhold with respect to such exercise, or (ii) deduct from all
         amounts paid in cash with respect to the exercise of a Stock
         Appreciation Right the amount of any taxes which the Company may be
         required to withhold with respect to such cash amounts.

         Subject to the limitation set forth in the next sentence, a Participant
         or such Participant's Representative may elect to satisfy all or any
         portion of the tax withholding obligations arising from the exercise of
         an Option or Stock Appreciation Right either by: (i) Constructive or
         Actual Delivery, or (ii) directing the Company to withhold shares that
         would otherwise be issued pursuant to such exercise. With respect to
         exercises of Options and Stock Appreciation Rights granted on or after
         May 5, 1999, no Participant or Participant's Representative shall have
         the right to utilize Constructive or Actual Delivery or have shares of
         Stock withheld in excess of the minimum number required to satisfy
         applicable tax withholding requirements based on minimum statutory
         withholding rates for federal and state tax purposes, including payroll
         taxes. Shares of Stock used in either of the foregoing ways to satisfy
         tax withholding obligations will be valued at their Fair Market Value
         on the date of exercise.

         8.  GRANT OF RESTORATIVE OPTIONS

         Subject to the remaining provisions of this Section 8, if a Participant
         elects to pay some or all of the Exercise Price of an Option (the
         "Underlying Option") and/or any related withholding taxes by
         Constructive or Actual Delivery (or, in the case of such taxes, by
         directing the Company to withhold shares that would otherwise be issued
         upon exercise of such Underlying Option), then such Participant shall
         be granted a Restorative Option to purchase additional shares of Stock.
         The number of shares of Stock subject to the Restorative Option shall
         be equal to the sum of: (a) any shares used by Constructive or Actual
         Delivery to pay the Exercise Price and/or the related withholding
         taxes, and (b) any shares withheld in connection with the exercise in
         payment of withholding taxes. The Exercise Price of the Restorative
         Option shall be equal to one hundred percent (100%) of the Fair

                                       6

<PAGE>

         Market Value of the Stock on the date the Underlying Option is
         exercised. The Restorative Option shall be fully vested beginning six
         months after the date of its grant and shall expire on the expiration
         date of the Underlying Option. All other terms of the Restorative
         Option shall be identical to the terms of the Underlying Option. No
         Restorative Option shall be granted: (i) to any Participant who is not
         actively employed by the Company or one of its subsidiaries or
         affiliates on the date of exercise of the Underlying Option or who is
         not then rendering services to the Company or any such subsidiaries or
         affiliates as a consultant, advisor or director, or (ii) if, on the
         date of exercise of the Underlying Option such Option would be
         scheduled to expire within six months.

         9.  STOCK APPRECIATION RIGHTS

         If deemed appropriate by the Committee, any Option may be coupled with
         a Stock Appreciation Right at the time of the grant of the Option, or
         the Committee may grant a Stock Appreciation Right to any Participant
         at any time after granting an Option to such Participant but prior to
         the expiration date of such associated Option. Such Stock Appreciation
         Right shall be subject to such terms and conditions consistent with the
         Plan as the Committee shall impose, provided that:

         (a) A Stock Appreciation Right shall be exercisable to the extent, and
         only to the extent, the associated Option is exercisable and shall be
         exercisable only for such period as the Committee may determine (which
         period may expire prior to the expiration date of the Option);

         (b) A Stock Appreciation Right shall entitle the Participant to
         surrender to the Company unexercised the Option to which it is related,
         or any portion thereof, and to receive from the Company in exchange
         therefor that number of shares (rounded down to the nearest whole
         number) having an aggregate value equal to the excess of the Fair
         Market Value of one share over the Exercise Price per share specified
         in such Option, multiplied by the number of shares subject to the
         Option, or portion thereof, which is so surrendered; and

         (c) The Committee may elect to settle, or the Stock Appreciation Right
         may permit the Participant to elect to receive (subject to approval by
         the Committee), any part or all of the Company's obligation arising out
         of the exercise of a Stock Appreciation Right by the payment of cash
         equal to the aggregate Fair Market Value of that part or all of the
         shares it would otherwise be obligated to deliver, provided that in no
         event shall cash be payable to an officer or director of the Company
         upon exercise of a Stock Appreciation Right: (i) if the Stock
         Appreciation Right was exercised during the first six months of its
         term; or (ii)

                                       7

<PAGE>

         unless the transaction is otherwise exempt from the operation of
         Section 16(b) of the Securities Exchange Act of 1934.

         10.  HOLDING OF STOCK AFTER EXERCISE OF OPTION

         At the discretion of the Committee, any Option Agreement may provide
         that the Participant, by accepting such Option, represents and agrees,
         for the Participant and the Participant's permitted transferees, that
         none of the shares purchased upon exercise of the Option or any
         accompanying Stock Appreciation Right will be acquired with a view to
         any sale, transfer or distribution of said shares in violation of the
         Securities Act of 1933, as amended, and the rules and regulations
         promulgated thereunder, or any applicable state "blue sky" laws, and
         the person entitled to exercise the same shall furnish evidence
         satisfactory to the Company (including a written and signed
         representation) to that effect in form and substance satisfactory to
         the Company, including an indemnification of the Company in the event
         of any violation of the Securities Act of 1933 or state blue sky law by
         such person.

         11.  CESSATION OF SERVICES

         Unless otherwise specified in an Option Agreement or approved in
         writing by the Committee, if a Participant ceases to provide services
         to any of the Company, its subsidiaries and affiliates as an employee,
         director, consultant or advisor, other than as a result of the
         Participant's Retirement, death or Disability, the Participant's
         outstanding Options (and any accompanying Stock Appreciation Rights)
         shall, to the extent such Options are already vested, be exercisable
         for a period of 90 days after the date such Participant ceases to
         provide all such services and shall thereafter expire and be void and
         of no further force or effect. A leave of absence approved in writing
         by the Committee shall not be deemed a cessation of services for
         purposes of this paragraph, but no Option (or accompanying Stock
         Appreciation Right) may be exercised during any such leave of absence,
         except during the first 90 days thereof unless otherwise agreed to in
         writing by the Committee. If a Participant's services as an employee,
         director, consultant or advisor are terminated for Substantial Cause,
         all of the Participant's outstanding Options (and accompanying Stock
         Appreciation Rights) will terminate as of the date of such termination.

         12.  RETIREMENT, DEATH OR DISABILITY OF PARTICIPANT

         Upon the Retirement of a Participant or upon such Participant's death
         or Disability while employed by the Company or one of its subsidiaries
         or affiliates or while such Participant was providing services thereto
         as a director, consultant or advisor,

                                       8

<PAGE>

         the Participant's outstanding Options (and any accompanying Stock
         Appreciation Rights) shall expire one (1) year after the date of such
         Retirement, death or Disability unless by their terms they expire
         sooner. During such period after the death of a Participant, such
         Options (and any accompanying Stock Appreciation Rights) may, to the
         extent that they were vested but unexercised on the date of death, be
         exercised by the Participant's Representative.

         13.  PRIVILEGES OF STOCK OWNERSHIP

         No Participant shall have any of the rights or privileges of a
         shareholder of the Company in respect of any shares of Stock issuable
         upon exercise of any Option or Stock Appreciation Right until
         certificates representing such shares shall have been issued and
         delivered. No shares shall be issued and delivered upon the exercise of
         any Option or accompanying Stock Appreciation Rights unless and until
         there shall have been full compliance with all applicable requirements
         of the Securities Act of 1933 (whether by registration or satisfaction
         of exemption conditions), all applicable listing requirements of The
         Nasdaq Stock Market or any national securities exchange on which shares
         of the same class are then listed and any other requirements of law or
         of any regulatory bodies having jurisdiction over such issuance and
         delivery.

         14.  ADJUSTMENTS

         If the outstanding shares of the Stock of the Company are increased,
         decreased, changed into or exchanged for a different number or kind of
         shares of securities of the Company through reorganization,
         recapitalization, reclassification, stock dividend, stock split,
         reverse stock split or other similar transaction, an appropriate and
         proportionate adjustment shall be made in the maximum number and kind
         of shares as to which Options (and accompanying Stock Appreciation
         Rights) may be granted under this Plan. A corresponding adjustment
         changing the number or kind of shares allocated to unexercised Options
         or portions thereof, which shall have been granted prior to any such
         change, shall likewise be made. Any such adjustment in an outstanding
         Option shall be made without change in the aggregate purchase price
         applicable to the unexercised portion of such Option but with a
         corresponding adjustment in the Exercise Price for each share or other
         unit of any security covered by the Option. The share limit in Section
         4 of this Amended and Restated Plan has been restated in accordance
         with this Section 14 to reflect the Company's 2-for-1 stock split
         effective March 26, 1999.

         Upon the dissolution or liquidation of the Company, or upon a
         reorganization, merger or consolidation of the Company with one or more
         corporations as a result of which the Company is not the surviving
         corporation, or upon a sale of

                                       9

<PAGE>

         substantially all the property or more than eighty percent (80%) of the
         then outstanding Stock of the Company to another corporation, this Plan
         shall terminate; provided, however, that notwithstanding the foregoing,
         the Board shall provide in writing in connection with such transaction
         for any one or more of the following alternatives (separately or in
         combinations); (i) for each Option and any accompanying Stock
         Appreciation Rights theretofore granted to become immediately
         exercisable notwithstanding the provisions of Section 6(c) hereof, (ii)
         for the assumption by the successor corporation of the Options and
         Stock Appreciation Rights theretofore granted or the substitution by
         such corporation for such Stock Appreciation Rights theretofore granted
         or the substitution by such corporation for such Options and rights of
         new Options and rights covering the stock of the successor corporation,
         or a parent or subsidiary thereof, with appropriate adjustments as to
         the number and kind of shares and prices; (iii) for the continuance of
         the Plan by such successor corporation in which event the Plan and the
         Options and any accompanying Stock Appreciation Rights therefore
         granted shall continue in the manner and under the terms so provided;
         or (iv) for the payment in cash or stock in lieu of and in complete
         satisfaction of such Options and rights.

         Adjustments under this paragraph shall be made by the Committee, whose
         determination as to which adjustments shall be made, and the extent
         thereof, shall be final, binding and conclusive. No fractional shares
         of Stock shall be issued under the plan on any such adjustment.

         At the discretion of the Committee, any Option Agreement may contain
         provisions to the effect that upon the happening of certain events,
         including a change in control (as defined by the Committee in such
         Option Agreement) of the Company, any outstanding Options and
         accompanying Stock Appreciation Rights not theretofore vested shall
         immediately become vested and exercisable in their entirety,
         notwithstanding any of the other provisions of the Option.

         15.  AMENDMENT AND TERMINATION OF PLAN

         The Board may at any time suspend or terminate the Plan or amend or
         revise the terms of the Plan. In the event that any provision of
         applicable law mandates that any such amendment or revision be approved
         by the Company's shareholders, then such amendment or revision shall be
         submitted to such shareholders for approval or ratification within a
         time period that satisfies such law. In the case of other laws that
         require shareholder approval of amendments or revisions as a condition
         to receiving or preserving certain benefits (e.g., deductibility of
         certain compensation under Section 162(m) of the Code) or achieving a
         "safe harbor" status, the Board

                                       10

<PAGE>

         shall have sole discretion to determine whether or not to submit
         amendments and revisions to the Company's shareholders for approval.

         Notwithstanding the foregoing, no amendment, suspension or termination
         of the Plan shall, without specific action of the Board and the consent
         of the Option holder, in any way modify, amend, alter or impair any
         rights or obligations under any Option or accompanying Stock
         Appreciation Right theretofore granted under the Plan.

                                       11

<PAGE>

                         AMENDMENT TO THE UNITRIN, INC.
                             1997 STOCK OPTION PLAN
                             As Amended and Restated
                                   May 3, 2000

WHEREAS, Section 157(c) of the Delaware General Corporation Law permits a board
of directors of a Delaware corporation to delegate to one or more officers of
such corporation the power to designate the persons to whom options to purchase
shares of such corporation's stock may be granted and the number and terms of
such options;

WHEREAS, Unitrin, Inc. (the "Company") is a Delaware corporation and has options
available for grant under the Unitrin, Inc. 1997 Stock Option Plan (the "Plan");

WHEREAS, the Board of Directors has concluded that it is in the best interest of
the Company to amend the terms of the Plan to permit such a delegation upon the
conditions described below;

RESOLVED, that effective immediately, paragraph (b) of Section 3 of the Plan is
hereby amended to read in its entirety as follows:

(b) Granting Authority. Subject to the provisions of the Plan, the authority and
discretion to determine the Participants to whom and the time or times at which
Options shall be granted, whether an Option will be an ISO or a Non-Qualified
Option, whether to couple a Stock Appreciation Right with an Option and the
terms of such Right, the number of shares of Stock to be subject to each Option,
the Exercise Price, the number of installments, if any, in which each Option may
vest, and the expiration date of each Option shall reside with the following
persons:

               (i)  the Committee; and

               (ii) if authorized by a resolution adopted by the Board, one or
more executive officers of the Company may be delegated such authority and
discretion, provided that no such officer may grant Options or Rights to himself
or herself or to any officer of the Company who is subject to the reporting and
short-swing liability provisions of Section 16 of the Securities Exchange Act of
1934.

The Company has executed this Amendment this 7th day of November, 2001.

                                                      UNITRIN, INC.

                                                      By:  /s/ Scott Renwick
                                                           ---------------------
                                                           Scott Renwick
                                                           Secretary

                                       12

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