Document:

Exhibit 10.6

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

         THIS  AGREEMENT,  made as of the first day of May, 1999, by and between
PMA CAPITAL CORPORATION, a Pennsylvania corporation, (hereinafter the "Company")
and FREDERICK W. ANTON, III, of Philadelphia, Pennsylvania (hereinafter "Anton")
to set forth the terms and  conditions  upon which the Company shall continue to
employ Anton.

                                R E C I T A L S
                                - - - - - - - -

         A. The Company and Anton have previously entered into the Employment
Agreement made as of the first day of April, 1995;

         B.  At its  May  5,  1999  Board  of  Directors  meeting,  the  Company
re-elected Anton to the position of Chairman of the Board, which pursuant to the
terms of the April 1, 1995 Employment Agreement extended Anton's Employment Term
to April 1, 2004;

         C. The Company and Anton mutually desire to amend and restate the terms
of the  Employment  Agreement  in order to continue the  principal  terms of the
April 1, 1995 Employment  Agreement,  to eliminate the contractual death benefit
provisions of the Employment Agreement and in lieu thereof to provide a new life
insurance policy for the benefit of Anton as described herein, and to revise the
terms  of the  life  insurance  policies  issued  on  Anton's  life by  Manulife
Financial Life Insurance and Pacific Life Insurance Company;

                             STATEMENT OF AGREEMENT

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency  of which is hereby  acknowledged,  the  Company  and Anton agree as
follows:

                                     - 1 -
<PAGE>

         1.       The Employment Term.

         During the period  beginning  May 1, 1999 and  ending  April 30,  2004,
(hereinafter  "Employment  Term") the Company shall continue to employ Anton and
Anton agrees to be so employed. If at the annual  organizational  meeting of the
Board of Directors of the Company held in 2000 and in any subsequent year, Anton
is elected as Chairman of the Board of the Company, the Employment Term shall be
automatically  extended  for a further  period of one year  without the need for
further action by the Board of Directors or the execution of a formal  amendment
to this Agreement.

         2.       Duties During the Employment Term.

         Anton shall at all time  throughout the Employment Term devote his full
time and his best  efforts to the  business of the Company and its  subsidiaries
and affiliates.

         3.       Salary During the Employment Term.

         During the Employment  Term, the Company shall pay Anton on a bi-weekly
basis a salary of not less than $700,000 per year.  Anton's annual salary may be
increased but not decreased by the Company at any time and from time to time.

         4.       Inability to Perform.

         If for any reason during the Employment  Term,  Anton shall at any time
or from time to time be unable to perform the services  required of him pursuant
to paragraph 2 hereof,  he shall  nevertheless be entitled to receive the salary
payments  and other  benefits  provided by this  Agreement  until the end of the
Employment  Term  or  until  the  date of his  death,  whichever  first  occurs;
provided,  however,  that if in such circumstance  Anton is living at the end of
the  Employment  Term, he shall be considered to have then retired  whereupon he
shall become entitled to the retirement benefit set forth in Paragraph 8 for his
lifetime;  and provided,  further,  that nothing in this Paragraph  shall impair
Anton's rights during his lifetime to receive the life

                                     - 2 -
<PAGE>

insurance benefits set forth in Paragraph 10. Any question as to Anton's ability
to  continue  to perform  services  hereunder  upon which the  Company and Anton
cannot agree shall be determined by a qualified  independent  physician selected
by Anton (or, if Anton is unable to make such selection, such selection shall be
made by any adult member of his immediate  family or his legal  representative),
and approved by the Company, said approval not to be unreasonably  withheld. The
determination  of such  physician  made in writing to the  Company  and to Anton
shall be final and conclusive for all purposes of this Agreement.

      5.       Expenses.

      The  Company  shall  pay the  ordinary  and  necessary  business  expenses
incurred by Anton in connection  with the performance of his duties on behalf of
the Company.

      6.       Restrictive Covenant.

      Anton  shall  not  during  or  after  the  Employment  Term,  directly  or
indirectly,  either as principal,  agent, stockbroker, or in any other capacity,
engage in or have a material  financial  interest in any business which competes
with the business of the Company or its affiliates as then being conducted.

      7.       Death.

      Anton's  employment  shall  immediately  terminate  upon his death and the
Company  shall be  relieved  of all  obligations  to pay  Anton,  his  heirs and
personal  representatives any salary other than any portion of his annual salary
which has been accrued and unpaid to such date.

      8.       Retirement.

      Anton may elect to retire from full time  employment by the Company at any
time,  and the  Employment  Term  shall  thereupon  terminate  on the  date  his
retirement becomes effective. Beginning on the date of his retirement and

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continuing  throughout Anton's lifetime,  the Company shall pay to Anton in each
month a retirement  benefit  equal to five percent (5%) of his annual  salary on
the date of his  retirement.  It is the  intention of the Company and Anton that
this  retirement  arrangement  be unfunded  for tax purposes and for purposes of
Title I of the Employee Retirement Income Security Act of 1974, as amended,  and
that the benefit be paid out of the general assets of the Company.  However,  in
order to provide  for the payment of the  benefit to Anton,  the  Company  shall
establish, no later than the date of Anton's retirement,  an irrevocable grantor
trust (the  "Trust")  within the  meaning  of subpart E, part I,  subchapter  J,
chapter 1,  subtitle A of the  Internal  Revenue Code of 1986,  as amended.  The
trustee of the Trust  shall be an  independent  third party such as a bank trust
department or other party with corporate trustee powers under Pennsylvania state
law (the  "Trustee").  The Company shall make  contributions  to the Trust in an
amount,  determined on a sound actuarial basis, which shall be sufficient to pay
Anton his retirement benefits as they become due. Such contributions may consist
of cash, annuity contract,  insurance  policies or other property  acceptable to
the Trustee.  Notwithstanding  the  foregoing,  Trust assets shall be treated as
assets of the Company and shall remain  subject to the general  creditors of the
Company. Moreover, Anton shall have no property interest whatsoever in any asset
of the Trust or of the  Company.  Anton shall have only the rights of a general,
unsecured  creditor  against the Company with respect to the retirement  benefit
under this  paragraph  8. The  establishment  of the Trust  shall not in any way
terminate the obligation of the Company to make the retirement payments required
to be made pursuant to this Paragraph 8.

      9.       Employee Benefit Plans.

      No  provision  of this  Agreement  shall in any way abrogate or impair any
rights or  privileges of Anton as an employee of the Company under any qualified
or unqualified retirement,  pension, profit sharing,  disability life insurance,
hospitalization or other employee plan or plans which are now in effect or which
may hereafter be adopted the Company.  Any payments made by the Company pursuant
to Paragraph 4 hereof or any retirement payments made pursuant to

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<PAGE>

Paragraph 8 of this  Agreement  shall be in addition to, and not in lieu of, all
benefits which Anton is or will entitled to receive under the Company's  Pension
Plan and any  supplementary  retirement  plan as well as any other  qualified or
unqualified  benefit  plan or plans  which  presently  are or  hereafter  become
available to the Company's employees.

      10.      Provisions for Life Insurance.

               10.1    Manulife Financial Life Insurance.

               Pursuant to prior  Employment  Agreements  between  Anton and the
Company dated May 1, 1991 and April 1, 1995,  the Company and the trustee of the
Irrevocable  Deed of Trust of Frederick W. Anton,  III,  dated December 18, 1991
(the "1991 Trust")  previously  secured from The  Manufacturer's  Life Insurance
Company (U.S.A.) a life insurance  policy on the life of Anton,  which presently
is subject to a split-dollar agreement with the Company.

               The  Company and the  Trustee of the 1991 Trust  hereby  agree to
replace  the  existing  insurance  policy  with a new  Manulife  Financial  Life
Insurance  Policy  ("Manulife  Policy")  on the  life of Anton  providing  death
benefit of at least one million dollars  ($1,000,000)  payable to the 1991 Trust
in the event of Anton's death. The Manulife Policy will be subject to a separate
Amended and Restated  Split-Dollar  Insurance Agreement which the Company hereby
agrees to enter  into with  Anton and the 1991  Trust and which in all  material
respects  is  similar to the form of  agreement  attached  hereto as  Appendix A
("Manulife Split-Dollar Agreement").

               During the  Employment  Term and at all times  thereafter  during
Anton's lifetime, the Company shall:

                   (1) satisfy its obligations  under the Manulife  Split-Dollar
               Agreement for all benefits granted to Anton thereunder, including
               advancing  its share of the annual  premiums to the issuer of the
               Manulife Policy; and

                   (2) pay to Anton a bonus to cover  the  owner's  share of the
               annual  premiums as set forth below.  Such bonus payment shall be
               made at least  thirty (30) days before the annual  premium is due
               for the Manulife Policy. The bonus

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<PAGE>

               shall be in an amount equal to that portion of the premium  which
               equals the  economic  benefit of the  insurance  protection  then
               provided to the owner of the  Manulife  Policy  under such policy
               and the Manulife Split-Dollar Agreement on the life of Anton. The
               economic benefit  referred to in the preceding  sentence shall be
               the lesser of (i) the P.S. 58 cost for the  insurance  protection
               referred to therein (as determined  under tables published by the
               Internal  Revenue  Service ) and modified as appropriate  (or, if
               applicable,  as specifically  prescribed by the Internal  Revenue
               Service) to reflect that such insurance protection is on the life
               of Anton and that the death benefit under the Manulife  Policy is
               payable  upon the  death  of  Anton,  and (ii) if such  insurance
               protection is available from the issuer of the Manulife Policy as
               term  insurance,  the premium for such  insurance  protection  as
               determined  by  reference  to  such  issuer's  current  published
               premium  rate  for  one-year  term  life   insurance   protection
               available to all standard risks.

                  10.2     John Hancock Life Insurance.

                  The  Company  and  a  trustee  to  be  named  by  Anton  or  a
third-party  to be  selected  by Anton (the  "Owner")  agree to secure from John
Hancock  Mutual Life Insurance  Company & Affiliated  Companies a life insurance
policy on the life of Anton ("John Hancock  Policy").  The John Hancock  Policy,
which will provide an initial death benefit of approximately two million

                                     - 6 -
<PAGE>

dollars ($2,000,000) payable to the Owner in the event of Anton's death, will be
subject to a separate Split-Dollar  Agreement which the Company hereby agrees to
enter  into with  Anton and the Owner  and  which in all  material  respects  is
similar to the form of agreement  attached  hereto as Appendix B ("John  Hancock
Split-Dollar Agreement").

                  During the Employment Term and at all times thereafter  during
Anton's  lifetime,  the Company  shall  satisfy its  obligations  under the John
Hancock  Split-Dollar  Agreement for all benefits  granted to Anton  thereunder,
including, but not limited to, advancing its share of the annual premiums to the
issuer of the John Hancock Policy. The Owner shall be solely responsible for the
payment of the Owner's share of the annual premiums pursuant to the John Hancock
Split-Dollar Agreement.

                  10.3     Pacific Life Insurance.

                  The trustee of the  Irrevocable  Deed of Trust of Frederick W.
Anton,  III,  dated October 25, 1995,  (the "1995 Trust")  previously  secured a
Pacific Mutual Life Insurance policy (policy  #1A2304155-0) on the life of Anton
the premiums for which are being funded by the Company.  The Company,  Anton and
the 1995 Trust agree to replace this policy with a new life insurance  policy on
the life of Anton secured from Pacific Life  Insurance  Company  ("Pacific  Life
Policy").  The  Pacific  Life  Policy,  which  will  provide a death  benefit of
approximately one million  five-hundred-thousand dollars ($1,500,000) payable to
the 1995  Trust in the event of  Anton's  death,  will be  subject to a separate
Split-Dollar  Insurance  Agreement which the Company hereby agrees to enter into
with Anton and the 1995 Trust and which in all  material  respects is similar to
the form of agreement  attached hereto as Appendix C ("Pacific Life Split-Dollar
Agreement").

               During the  Employment  Term and at all times  thereafter  during
Anton's lifetime, the Company shall:

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<PAGE>

                   (1)  satisfy   its   obligations   under  the  Pacific   Life
               Split-Dollar   Agreement  for  all  benefits   granted  to  Anton
               thereunder,  including advancing its share of the annual premiums
               to the issuer of the Pacific Life Policy; and

                   (2) pay to Anton a bonus to cover  the  owner's  share of the
               annual  premiums as set forth below.  Such bonus payment shall be
               paid at least  thirty (30) days before the annual  premium is due
               for the  Pacific  Life  Policy.  The bonus  shall be in an amount
               equal to that  portion of the premium  which  equals the economic
               benefit of the insurance protection then provided to the owner of
               the Pacific  Life Policy  under such policy and the Pacific  Life
               Split-Dollar Agreement on the life of Anton. The economic benefit
               referred to in the preceding  sentence shall be the lesser of (i)
               the P.S. 58 cost for the insurance protection referred to therein
               (as  determined  under tables  published by the Internal  Revenue
               Service ) and  modified as  appropriate  (or, if  applicable,  as
               specifically  prescribed  by the  Internal  Revenue  Service)  to
               reflect that such  insurance  protection  is on the life of Anton
               and that the death  benefit  under  the  Pacific  Life  Policy is
               payable  upon the  death  of  Anton,  and (ii) if such  insurance
               protection  is  available  from the  issuer of the  Pacific  Life
               Policy  as  term  insurance,   the  premium  for  such  insurance
               protection as  determined  by reference to such issuer's  current
               published   premium  rate  for  one-year   term  life   insurance
               protection available to all standard risks.

         11.      Contested Benefits.

         If, for any reason, the Company shall fail to make any payment required
to be made pursuant to this Agreement,  and Anton shall be required to bring one
or more actions at law or in equity  against the Company,  and/or its successors
and assigns, to enforce his rights under this Agreement, Anton shall be entitled
to recover from the Company his reasonable attorney's fees and expenses incurred
in  connection  with such action or actions in which a final order is entered in
Anton's favor.

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<PAGE>
         12.      No Third Party Rights.

         This  Agreement may be amended from time to time hereafter by the joint
agreement of the Company and Anton  without the consent or approval of any other
person or entity.  Such amendment or amendments may, among other things,  change
the persons to whom monies are to be paid or the amount to be paid to any person
or the time for the making of any  payment  except that no change may be made in
respect of the insurance plans set forth in Paragraph 10 hereof.  This Agreement
shall not  create in any  person  who is not a party a vested  right to  receive
monies unless the terms of this Agreement  shall remain in full force and effect
at the time when a determination  is required to be made concerning a payment or
payments hereunder to a person who is not a party.

         13.      Successors and Assigns of the Company.

         This  Agreement  shall inure to the benefit of and be binding  upon the
Company,  its  successors  and  assigns,  and shall  supersede  and  replace the
Employment Agreement between the Company and Anton dated as of April 1, 1993, as
amended  by an  Amendment  and  Supplement  dated as of April 1,  1994,  and the
Employment Agreement between the Company and Anton dated as of April 1, 1995.

         IN WITNESS WHEREOF,  the Company and Anton have executed this Agreement
as of the date and year first above written.

ATTEST:

         /s/ Robert L. Pratter     By: /s/ John W. Smithson
         ---------------------         -----------------------------
         SECRETARY                     PRESIDENT

                                       /s/ Frederick W. Anton, III
                                       -----------------------------
                                       FREDERICK W. ANTON, III

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                                  APPENDIX "A"

                            1999 AMENDED AND RESTATED
                        SPLIT-DOLLAR INSURANCE AGREEMENT

         This 1999 AMENDED AND RESTATED  SPLIT-DOLLAR  INSURANCE  AGREEMENT (the
"Agreement")  made  as of the __th day of May, 1999  by and  among  PMA  Capital
Corporation (formerly Pennsylvania  Manufacturers  Corporation) (the "Company"),
Frederick W. Anton,  III, an employee of the Company (the  "Employee"),  and the
Irrevocable  Deed of Trust of Frederick W. Anton,  III,  dated December 18, 1991
(the "Owner").

                                R E C I T A L S
                                - - - - - - - -

         WHEREAS,  the Employee has rendered  loyal and valuable  service to the
Company; and

         WHEREAS,  the Owner presently owns Manufacturers Life Insurance Company
Policy  Number  5835767-4  which  insures  the  life of  Employee  and  which is
presently subject to a split-dollar life insurance  agreement dated December 20,
1991 (the "Existing Policy"); and

         WHEREAS,  in the Employment  Agreement  dated as of May 1, 1999 between
the Company and the Employee (the "Employment Agreement"), the Company agreed to
provide life insurance protection for the Employee by advancing a portion of the
annual  premiums for such protection  pursuant to a split-dollar  life insurance
arrangement on the terms and conditions contained herein; and

         WHEREAS,  the Owner,  the Employee and the Company have agreed that the
Owner will  exchange  the  Existing  Policy for a new policy of insurance on the
life of the Employee in  accordance  with  Section 1035 of the Internal  Revenue
Code of 1986, as amended; and

         WHEREAS,  the Owner has applied for the new policy insuring the life of
the Employee listed on Schedule A attached to this Agreement (the "Policy") and,
upon its issuance, will possess all incidents of ownership in and to the Policy;
and

         WHEREAS,  the  purpose of this  Agreement  is to amend and  restate the
Split-Dollar Agreement dated December 20, 1991 such that it is applicable to the
Policy and that all the terms of the  split-dollar  agreement among the Company,
the  Employee  and the Owner as of this date with  respect to the Policy are set
forth in this Agreement; and

         WHEREAS,  the parties  desire to enter into this  amended and  restated
split-dollar  agreement  with  respect to the Policy to provide that the Company
will advance a portion of the annual premiums due on the Policy on the terms and
conditions  hereinafter set forth, the Owner will collaterally assign the Policy
to the Company to secure the repayment of the amounts

                                     - 10 -
<PAGE>

advanced,  and the Company will have a security  interest in the aggregate  cash
surrender value of the Policy and in the proceeds thereof;

         NOW THEREFORE, in consideration of the premises and the mutual promises
contained  herein and intending to be legally bound, the parties hereby agree as
follows:

        1. Policy.  The parties  have taken the actions  necessary  to cause the
insurance  company  identified on Schedule A (the "Insurer") to issue the Policy
to the Owner,  and shall take any further  action that may be necessary to cause
the Policy to conform to the  provisions  of this  Agreement.  The parties agree
that the Policy shall be subject to the terms and  conditions of this  Agreement
and of the collateral assignment filed with the Insurer relating to the Policy.

        2. Ownership  Rights.  Except as otherwise  provided  herein,  the Owner
shall  be the  sole  and  absolute  owner of the  Policy  and may  exercise  all
ownership rights granted to the Owner thereunder.

        3. Payment of Annual Premiums.

                  3.1 The Owner  shall pay each  annual  premium  for the Policy
(the  "Premium")  on or before its due date or within the grace period  provided
therefor under the Policy (the "Premium Due Date") as follows:

                           3.1.1 At least ten (10) days  before the  Premium Due
Date, the Owner shall pay the portion of the Premium that would be includable in
the gross  income of the insured for federal  income tax purposes if not paid by
the Insured (the  "Taxable  Portion")  and shall send evidence of its payment to
the Company.

                           3.1.2  Upon  receipt  of  the  Owner's   evidence  of
payment,  the Company promptly shall advance to the Owner the remaining  portion
of the Premium (the "Remaining  Portion"),  or in its discretion the Company may
pay its advance directly to the Insurer.

                           3.1.3 The  obligation  of the  Company to advance the
Remaining  Portion of the Premium under Section  3.1.2 is  conditioned  upon the
Owner's payment of the Taxable Portion of the Premium under Section 3.1.1.

                  3.2 The obligation of the Company to make the annual  payments
provided in Section 3.1 hereof shall be governed by the Employment Agreement.

        4. Proof of  Payment of  Advances.  The  Company  shall,  upon  request,
promptly  furnish the Owner  evidence  of timely  payment of each  advance  paid
directly to the Insurer under Section 3.1.2.

        5.  Collateral  Assignment  of Policies.  To secure the repayment to the
Company of the amounts it advances to the Owner under Section  3.1.2,  the Owner
has,  contemporaneously   herewith,  assigned  the  Policy  to  the  Company  as
collateral,  under the instrument which in all material  respects is the same as
the form attached hereto as Addendum 1. The collateral

                                     - 11 -
<PAGE>

assignment  of the  Policy to the  Company  hereunder  shall not be  terminated,
altered or amended by the Owner,  without  the  express  written  consent of the
Company.  The parties  hereto  agree to take all action  necessary  to cause the
collateral  assignment to conform to the  provisions of this  Agreement.  In the
event of any inconsistency  between the terms of this Agreement and the terms of
the collateral assignment, the terms of this Agreement shall control.

        6.  Limitation  on  Policy  Disposition.  During  the  period  that  the
collateral  assignment  of the Policy is in effect,  the Owner  shall not borrow
from,  pledge,  transfer or assign the Policy and shall not sell,  surrender  or
cancel the Policy, change the beneficiary designation provision or terminate the
dividend  election  without the express  written  consent of the Company,  which
consent shall not be unreasonably withheld.

        7. Policy Proceeds.

                  7.1 Upon the death of the Employee,  the Company and the Owner
shall  promptly take all action  necessary to obtain the death benefit  provided
under the Policy.

                  7.2 The Company shall have the unqualified  right to receive a
portion of the Policy's death benefit equal to the total of the amount which the
Company  advanced to the Existing  Policy and the  aggregate of the amounts that
the Company advanced with respect to the Policy under Section 3.1.2. The balance
of the death  benefit,  if any,  shall be paid  directly to the  beneficiary  or
beneficiaries  designated by the Owner,  in the manner and the amount or amounts
provided in the  beneficiary  designation  provision of the Policy.  In no event
shall the amount  payable to the Company  hereunder  with  respect to the Policy
exceed the amount of the  Policy's  death  benefit.  The parties  agree that the
beneficiary  designation provision of the Policy shall conform to the provisions
hereof.

        8. Termination.

                  8.1 This Agreement shall terminate,  without notice,  upon the
surrender of the Policy by the Owner with the written  consent of the Company as
provided in Section 6.

                  8.2  In  addition,  either  the  Owner  or  the  Employee  may
terminate  this  Agreement by written  notice to the other parties hereto at any
time  that the cash  surrender  value of the  Policy at least  equals  the total
amount that the Company has advanced  with  respect to the Policy under  Section
3.1.2.  Such termination  shall be effective as of the date of such notice.  The
Company may not terminate this Agreement.

        9. Release of Policy Collateral.

                  9.1 For sixty (60) days after the date of  termination of this
Agreement,  the Owner  shall have the  option of  obtaining  the  release of the
collateral  assignment of the Policy to the Company. To obtain such release, the
Owner  shall  pay or  cause to be paid to the  Company  an  amount  equal to the
Policy's then cash surrender  value.  Upon receipt of that payment,  the Company
promptly shall release the collateral assignment of the Policy.

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<PAGE>

                  9.2 If the Owner  fails to exercise  such  option  within such
sixty (60) day period with respect to the Policy,  then the Owner shall transfer
the Policy to the Company.  Thereafter,  neither the Owner,  the  Employee,  nor
their respective heirs, assigns or beneficiaries shall have any further interest
in and to the Policy, either under the terms thereof or under this Agreement.

       10. Insurer.  The Insurer shall be fully  discharged from its obligations
under the Policy by payment of the Policy death  benefit to the  beneficiary  or
beneficiaries  named in the Policy,  subject to the terms and  conditions of the
Policy.  In no event shall the Insurer be considered a party to this  Agreement,
or any modification or amendment hereof. No provision of this Agreement,  nor of
any  modification  or  amendment  hereof,  shall  in  any  way be  construed  as
enlarging,  changing,  varying, or in any other way affecting the obligations of
the  Insurer  as  expressly  provided  in  the  Policy,  except  insofar  as the
provisions  hereof  are made a part of the Policy by the  collateral  assignment
executed by the Owner and filed with the Insurer in connection herewith.

       11. Amendment.  This  Agreement may not be amended,  altered or modified,
except by a written instrument signed by the parties hereto, or their respective
successors or assigns,  and may not be otherwise  terminated  except as provided
herein.

       12. Succession.  This Agreement  shall be binding upon and shall inure to
the benefit of the Company and its successors and assigns, and the Employee, the
Owner and their respective successors, assigns, heirs, executors, administrators
and beneficiaries.

       13. Notices.  Any notice,  consent or demand  required or permitted to be
given under the provisions of this Agreement  shall be in writing,  and shall be
signed by the party giving or making the same. If such notice, consent or demand
is mailed to a party hereto,  it shall be sent by United States  certified mail,
postage  prepaid,  addressed to such party's last known  address as shown on the
records of the  Company.  The date of such  mailing  shall be deemed the date of
notice, consent or demand.

       14.  Captions.  The  captions of the  Sections  herein are  inserted as a
matter of convenience of reference only and in no way define,  limit or describe
the scope of this Agreement or any provisions hereof.

       15.  Governing  Law.  This  Agreement,  and  the  rights  of the  parties
hereunder,  shall be governed by and construed in  accordance  with the internal
laws  of  the  Commonwealth  of  Pennsylvania  and  shall  be  enforced  in  the
Commonwealth of Pennsylvania.

       16. Trust Agreement. Recognizing that the Owner is a trustee and that the
Policy is held in trust,  the  parties  agree  that the terms of this  Agreement
shall  control  in the event of any  inconsistencies  between  the terms of this
Agreement and the terms of the trust agreement.

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<PAGE>
         IN  WITNESS  WHEREOF,   the  Company  has  caused  this  amendment  and
restatement of the Split-Dollar  Agreement to be executed by its duly authorized
officer and the Employee  and the Owner have  hereunto set their hands and seals
on the dates set forth below.

Attest:                          PMA CAPITAL CORPORATION

_____________________            By:  _______________________________

                                 _______________________________
                                 FREDERICK W. ANTON, III

                                 IRREVOCABLE DEED OF TRUST
                                 OF FREDERICK W. ANTON, III,
                                 DATED DECEMBER 18, 1991

                                 By:  _______________________________
                                      Frank G. Cooper, Trustee

                                     - 14 -
<PAGE>

                                   Schedule A

         The following life insurance policy is subject to this 1999 Amended and
Restated Split-Dollar Life Insurance Agreement:

                                                             Approximate
         Insurer                                         Initial Face Amount
         -------                                         -------------------
The Manufacturer's Life Insurance Company                   $1,690,000

                                     - 15 -
<PAGE>

                                  APPENDIX "B"

                                1999 JOHN HANCOCK
                        SPLIT-DOLLAR INSURANCE AGREEMENT

         This SPLIT-DOLLAR  INSURANCE AGREEMENT (the "Agreement") made as of the
__th day of May, 1999 by and  among PMA  Capital  Corporation  (the  "Company"),
Frederick W. Anton,  III, an employee of the Company (the  "Employee"),  and the
Irrevocable  Deed of Trust of Frederick W. Anton,  III,  dated May 11, 1999 (the
"Owner").

                                R E C I T A L S
                                - - - - - - - -

         WHEREAS,  the Employee has rendered  loyal and valuable  service to the
Company; and

         WHEREAS,  in the Employment  Agreement  dated as of May 1, 1999 between
the Company and the Employee (the "Employment Agreement"), the Company agreed to
provide life insurance protection for the Employee by advancing a portion of the
annual  premiums for such protection  pursuant to a split-dollar  life insurance
arrangement on the terms and conditions contained herein; and

         WHEREAS,  the Owner has applied for the policy insuring the life of the
Employee  listed on Schedule A attached to this  Agreement  (the  "Policy") and,
upon its issuance, will possess all incidents of ownership in and to the Policy;
and

         WHEREAS,  the parties desire to enter into this split-dollar  agreement
with respect to the Policy to provide that the Company will advance a portion of
the annual  premiums due on the Policy on the terms and  conditions  hereinafter
set forth,  the Owner  will  collaterally  assign  the Policy to the  Company to
secure the  repayment  of the  amounts  advanced,  and the  Company  will have a
security interest in the aggregate cash surrender value of the Policy and in the
proceeds thereof;

         NOW THEREFORE, in consideration of the premises and the mutual promises
contained  herein and intending to be legally bound, the parties hereby agree as
follows:

        1. Policy.  The parties  have taken the actions  necessary  to cause the
insurance  company  identified on Schedule A (the "Insurer") to issue the Policy
to the Owner,  and shall take any further  action that may be necessary to cause
the Policy to conform to the  provisions  of this  Agreement.  The parties agree
that the Policy shall be subject to the terms and  conditions of this  Agreement
and of the collateral assignment filed with the Insurer relating to the Policy.

        2. Ownership  Rights.  Except as otherwise  provided  herein,  the Owner
shall  be the  sole  and  absolute  owner of the  Policy  and may  exercise  all
ownership rights granted to the Owner thereunder.

                                     - 16 -
<PAGE>
        3. Payment of Annual Premiums.

                  3.1 The Owner  shall pay each  annual  premium  for the Policy
(the  "Premium")  on or before its due date or within the grace period  provided
therefor under the Policy (the "Premium Due Date") as follows:

                           3.1.1 At least ten (10) days  before the  Premium Due
Date, the Owner shall pay the portion of the Premium that would be includable in
the gross  income of the insured for federal  income tax purposes if not paid by
the Insured (the  "Taxable  Portion")  and shall send evidence of its payment to
the Company.

                           3.1.2  Upon  receipt  of  the  Owner's   evidence  of
payment,  the Company promptly shall advance to the Owner the remaining  portion
of the Premium (the "Remaining  Portion"),  or in its discretion the Company may
pay its advance directly to the Insurer.

                           3.1.3 The  obligation  of the  Company to advance the
Remaining  Portion of the Premium under Section  3.1.2 is  conditioned  upon the
Owner's payment of the Taxable Portion of the Premium under Section 3.1.1.

                  3.2 The obligation of the Company to make the annual  payments
provided in Section 3.1 hereof shall be governed by the Employment Agreement.

        4. Proof of  Payment of  Advances.  The  Company  shall,  upon  request,
promptly  furnish the Owner  evidence  of timely  payment of each  advance  paid
directly to the Insurer under Section 3.1.2.

        5.  Collateral  Assignment  of Policies.  To secure the repayment to the
Company of the amounts it advances to the Owner under Section  3.1.2,  the Owner
has,  contemporaneously   herewith,  assigned  the  Policy  to  the  Company  as
collateral,  under the instrument which in all material  respects is the same as
the form attached hereto as Addendum 1. The collateral  assignment of the Policy
to the  Company  hereunder  shall not be  terminated,  altered or amended by the
Owner,  without the express written  consent of the Company.  The parties hereto
agree to take all action necessary to cause the collateral assignment to conform
to the provisions of this Agreement.  In the event of any inconsistency  between
the terms of this  Agreement  and the terms of the  collateral  assignment,  the
terms of this Agreement shall control.

        6.  Limitation  on  Policy  Disposition.  During  the  period  that  the
collateral  assignment  of the Policy is in effect,  the Owner  shall not borrow
from,  pledge,  transfer or assign the Policy and shall not sell,  surrender  or
cancel the Policy, change the beneficiary designation provision or terminate the
dividend  election  without the express  written  consent of the Company,  which
consent shall not be unreasonably withheld.

                                     - 17 -
<PAGE>

        7. Policy Proceeds.

                  7.1 Upon the death of the Employee,  the Company and the Owner
shall  promptly take all action  necessary to obtain the death benefit  provided
under the Policy.

                  7.2 The Company shall have the unqualified  right to receive a
portion of the Policy's death benefit equal to the total amount that it advanced
with  respect  to the  Policy  under  Section  3.1.2.  The  balance of the death
benefit,  if any,  shall be paid directly to the  beneficiary  or  beneficiaries
designated by the Owner, in the manner and the amount or amounts provided in the
beneficiary  designation  provision of the Policy.  In no event shall the amount
payable to the Company hereunder with respect to the Policy exceed the amount of
the Policy's death benefit.  The parties agree that the beneficiary  designation
provision of the Policy shall conform to the provisions hereof.

        8. Termination.

                  8.1 This Agreement shall terminate,  without notice,  upon the
surrender of the Policy by the Owner with the written  consent of the Company as
provided in Section 6.

                  8.2  In  addition,  either  the  Owner  or  the  Employee  may
terminate  this  Agreement by written  notice to the other parties hereto at any
time  that the cash  surrender  value of the  Policy at least  equals  the total
amount that the Company has advanced  with  respect to the Policy under  Section
3.1.2.  Such termination  shall be effective as of the date of such notice.  The
Company may not terminate this Agreement.

        9. Release of Policy Collateral.

                  9.1 For sixty (60) days after the date of  termination of this
Agreement,  the Owner  shall have the  option of  obtaining  the  release of the
collateral  assignment of the Policy to the Company. To obtain such release, the
Owner  shall  pay or  cause to be paid to the  Company  an  amount  equal to the
Policy's then cash surrender  value.  Upon receipt of that payment,  the Company
promptly shall release the collateral assignment of the Policy.

                  9.2 If the Owner  fails to exercise  such  option  within such
sixty (60) day period with respect to the Policy,  then the Owner shall transfer
the Policy to the Company.  Thereafter,  neither the Owner,  the  Employee,  nor
their respective heirs, assigns or beneficiaries shall have any further interest
in and to the Policy, either under the terms thereof or under this Agreement.

       10. Insurer.  The Insurer shall be fully  discharged from its obligations
under the Policy by payment of the Policy death  benefit to the  beneficiary  or
beneficiaries  named in the Policy,  subject to the terms and  conditions of the
Policy.  In no event shall the Insurer be considered a party to this  Agreement,
or any modification or amendment hereof. No provision of this Agreement,  nor of
any  modification  or  amendment  hereof,  shall  in  any  way be  construed  as
enlarging,  changing,  varying, or in any other way affecting the obligations of
the  Insurer  as  expressly  provided  in  the  Policy,  except  insofar  as the
provisions  hereof  are made a part of the Policy by the  collateral  assignment
executed by the Owner and filed with the Insurer in connection herewith.

                                     - 18 -
<PAGE>

       11. Amendment.  This  Agreement may not be amended,  altered or modified,
except by a written instrument signed by the parties hereto, or their respective
successors or assigns,  and may not be otherwise  terminated  except as provided
herein.

       12. Succession.  This Agreement  shall be binding upon and shall inure to
the benefit of the Company and its successors and assigns, and the Employee, the
Owner and their respective successors, assigns, heirs, executors, administrators
and beneficiaries.

       13. Notices.  Any notice,  consent or demand  required or permitted to be
given under the provisions of this Agreement  shall be in writing,  and shall be
signed by the party giving or making the same. If such notice, consent or demand
is mailed to a party hereto,  it shall be sent by United States  certified mail,
postage  prepaid,  addressed to such party's last known  address as shown on the
records of the  Company.  The date of such  mailing  shall be deemed the date of
notice, consent or demand.

       14.  Captions.  The  captions of the  Sections  herein are  inserted as a
matter of convenience of reference only and in no way define,  limit or describe
the scope of this Agreement or any provisions hereof.

       15.  Governing  Law.  This  Agreement,  and  the  rights  of the  parties
hereunder,  shall be governed by and construed in  accordance  with the internal
laws  of  the  Commonwealth  of  Pennsylvania  and  shall  be  enforced  in  the
Commonwealth of Pennsylvania.

       16. Trust Agreement. Recognizing that the Owner is a trustee and that the
Policy is held in trust,  the  parties  agree  that the terms of this  Agreement
shall  control  in the event of any  inconsistencies  between  the terms of this
Agreement and the terms of the trust agreement.

                                     - 19 -
<PAGE>
         IN WITNESS  WHEREOF,  the  Company  has  caused  this  Agreement  to be
executed  by its duly  authorized  officer and the  Employee  and the Owner have
hereunto set their hands and seals on the dates set forth below.

Attest:                      PMA CAPITAL CORPORATION

_____________________        By: _________________________

                             __________________________________
                             FREDERICK W. ANTON, III

                             IRREVOCABLE DEED OF TRUST
                             OF FREDERICK W. ANTON, III,
                             DATED MAY 11, 1999

                             By: _________________________
                             Frank G. Cooper, Trustee

                                     - 20 -
<PAGE>
                                   Schedule A

         The  following  life  insurance  policy  is  subject  to this 1999 John
Hancock Split-Dollar Life Insurance Agreement:

                                                               Approximate
         Insurer                                          Initial Face Amount
         -------                                          -------------------
John Hancock Mutual Life Insurance Company                    $2,144,457

                                     - 21 -
<PAGE>
                                  APPENDIX "C"

                                1999 PACIFIC LIFE
                        SPLIT-DOLLAR INSURANCE AGREEMENT

         This SPLIT-DOLLAR  INSURANCE AGREEMENT (the "Agreement") made as of the
__th day of May, 1999 by and  among PMA  Capital  Corporation  (the  "Company"),
Frederick W. Anton,  III, an employee of the Company (the  "Employee"),  and the
Irrevocable  Deed of Trust of Frederick W. Anton,  III,  dated  October 25, 1995
(the "Owner").

                                R E C I T A L S
                                - - - - - - - -

         WHEREAS,  the Employee has rendered  loyal and valuable  service to the
Company; and

         WHEREAS,  the Owner  presently  owns a policy which insures the life of
the  Employee  and  which  is  not  subject  to a  split-dollar  life  insurance
arrangement (the "Existing Policy"); and

         WHEREAS,  in the  Employment  Agreement  dated as of May 1,  1999  (the
"Employment Agreement"), the Company agreed to provide life insurance protection
for the  Employee  by  advancing  a  portion  of the  annual  premiums  for such
protection  pursuant to a split-dollar  life insurance  arrangement on the terms
and conditions contained herein; and

         WHEREAS,  the Owner, the Company, and the Employee have agreed that the
Owner will  exchange  the  Existing  Policy for a new policy of insurance on the
life of the Employee in  accordance  with  Section 1035 of the Internal  Revenue
Code of 1986, as amended; and

         WHEREAS,  the Owner has applied for the new policy listed on Schedule A
attached to this Agreement  (the "Policy") and, upon its issuance,  will possess
all incidents of ownership in and to the Policy; and

         WHEREAS,  the parties desire to enter into this split-dollar  agreement
with respect to the Policy to provide that the Company will advance a portion of
the annual  premiums due on the Policy on the terms and  conditions  hereinafter
set forth,  the Owner  will  collaterally  assign  the Policy to the  Company to
secure the  repayment  of the  amounts  advanced,  and the  Company  will have a
security interest in the aggregate cash surrender value of the Policy and in the
proceeds thereof;

         NOW THEREFORE, in consideration of the premises and the mutual promises
contained  herein and intending to be legally bound, the parties hereby agree as
follows:

        1. Policy.  The parties  have taken the actions  necessary  to cause the
insurance  company  identified on Schedule A (the "Insurer") to issue the Policy
to the Owner,  and shall take any further  action that may be necessary to cause
the Policy to conform to the  provisions  of this

                                     - 22 -
<PAGE>
Agreement.  The parties  agree that the Policy shall be subject to the terms and
conditions of this  Agreement and of the  collateral  assignment  filed with the
Insurer relating to the Policy.

        2. Ownership  Rights.  Except as otherwise  provided  herein,  the Owner
shall  be the  sole  and  absolute  owner of the  Policy  and may  exercise  all
ownership rights granted to the Owner thereunder.

        3. Payment of Annual Premiums.

                  3.1 The Owner  shall pay each  annual  premium  for the Policy
(the  "Premium")  on or before its due date or within the grace period  provided
therefor under the Policy (the "Premium Due Date") as follows:

                           3.1.1 At least ten (10) days  before the  Premium Due
Date, the Owner shall pay the portion of the Premium that would be includable in
the gross  income of the insured for federal  income tax purposes if not paid by
the Insured (the  "Taxable  Portion")  and shall send evidence of its payment to
the Company.

                           3.1.2  Upon  receipt  of  the  Owner's   evidence  of
payment,  the Company promptly shall advance to the Owner the remaining  portion
of the Premium (the "Remaining  Portion"),  or in its discretion the Company may
pay its advance directly to the Insurer.

                           3.1.3 The  obligation  of the  Company to advance the
Remaining  Portion of the Premium under Section  3.1.2 is  conditioned  upon the
Owner's payment of the Taxable Portion of the Premium under Section 3.1.1.

                  3.2 The obligation of the Company to make the annual  payments
provided in Section 3.1 hereof shall be governed by the Employment Agreement.

        4. Proof of  Payment of  Advances.  The  Company  shall,  upon  request,
promptly  furnish the Owner  evidence  of timely  payment of each  advance  paid
directly to the Insurer under Section 3.1.2.

        5.  Collateral  Assignment  of Policies.  To secure the repayment to the
Company of the amounts it advances to the Owner under Section  3.1.2,  the Owner
has,  contemporaneously   herewith,  assigned  the  Policy  to  the  Company  as
collateral,  under the instrument which in all material  respects is the same as
the form attached hereto as Addendum 1. The collateral  assignment of the Policy
to the  Company  hereunder  shall not be  terminated,  altered or amended by the
Owner,  without the express written  consent of the Company.  The parties hereto
agree to take all action necessary to cause the collateral assignment to conform
to the provisions of this Agreement.  In the event of any inconsistency  between
the terms of this  Agreement  and the terms of the  collateral  assignment,  the
terms of this Agreement shall control.

        6.  Limitation  on  Policy  Disposition.  During  the  period  that  the
collateral  assignment  of the Policy is in effect,  the Owner  shall not borrow
from,  pledge,  transfer or assign the Policy and shall not sell,  surrender  or
cancel the Policy, change the beneficiary designation provision or

                                     - 23 -
<PAGE>

terminate  the  dividend  election  without the express  written  consent of the
Company, which consent shall not be unreasonably withheld.

        7. Policy Proceeds.

                  7.1 Upon the death of the Employee,  the Company and the Owner
shall  promptly take all action  necessary to obtain the death benefit  provided
under the Policy.

                  7.2 The Company shall have the unqualified  right to receive a
portion  of the  Policy's  death  benefit  equal to the  total  amounts  that it
advanced with respect to the Policy under Section 3.1.2,  but such amounts shall
not  include  any amount  that was  transferred  by the Owner from the  Existing
Policy to the Policy.  The balance of the death  benefit,  if any, shall be paid
directly to the  beneficiary or  beneficiaries  designated by the Owner,  in the
manner  and the  amount  or  amounts  provided  in the  beneficiary  designation
provision  of the Policy.  In no event  shall the amount  payable to the Company
hereunder  with respect to the Policy  exceed the amount of the  Policy's  death
benefit.  The parties agree that the  beneficiary  designation  provision of the
Policy shall conform to the provisions hereof.

        8. Termination.

                  8.1 This Agreement shall terminate,  without notice,  upon the
surrender of the Policy by the Owner with the written  consent of the Company as
provided in Section 6.

                  8.2  In  addition,  either  the  Owner  or  the  Employee  may
terminate  this  Agreement by written  notice to the other parties hereto at any
time  that the cash  surrender  value of the  Policy at least  equals  the total
amount that the Company has advanced  with  respect to the Policy under  Section
3.1.2.  Such termination  shall be effective as of the date of such notice.  The
Company may not terminate this Agreement.

        9. Release of Policy Collateral.

                  9.1 For sixty (60) days after the date of  termination of this
Agreement,  the Owner  shall have the  option of  obtaining  the  release of the
collateral  assignment of the Policy to the Company. To obtain such release, the
Owner shall pay or cause to be paid to the Company an amount  equal to the total
amount that the Company has advanced  with  respect to the Policy under  Section
3.1.2 together with any cash surrender value attributable  thereto. Upon receipt
of that payment, the Company promptly shall release the collateral assignment of
the Policy.

                  9.2 If the Owner  fails to exercise  such  option  within such
sixty (60) day period with respect to the Policy,  then the Owner shall transfer
the Policy to the Company.  Thereafter,  neither the Owner,  the  Employee,  nor
their respective heirs, assigns or beneficiaries shall have any further interest
in and to the Policy, either under the terms thereof or under this Agreement.

       10. Insurer.  The Insurer shall be fully  discharged from its obligations
under the Policy by payment of the Policy death  benefit to the  beneficiary  or
beneficiaries  named in the Policy, subject to the terms and conditions of the

                                     - 24 -
<PAGE>

Policy.  In no event shall the Insurer be considered a party to this  Agreement,
or any modification or amendment hereof. No provision of this Agreement,  nor of
any  modification  or  amendment  hereof,  shall  in  any  way be  construed  as
enlarging,  changing,  varying, or in any other way affecting the obligations of
the  Insurer  as  expressly  provided  in  the  Policy,  except  insofar  as the
provisions  hereof  are made a part of the Policy by the  collateral  assignment
executed by the Owner and filed with the Insurer in connection herewith.

       11. Amendment.  This  Agreement may not be amended,  altered or modified,
except by a written instrument signed by the parties hereto, or their respective
successors or assigns,  and may not be otherwise  terminated  except as provided
herein.

       12. Succession.  This Agreement  shall be binding upon and shall inure to
the benefit of the Company and its successors and assigns, and the Employee, the
Owner and their respective successors, assigns, heirs, executors, administrators
and beneficiaries.

       13. Notices.  Any notice,  consent or demand  required or permitted to be
given under the provisions of this Agreement  shall be in writing,  and shall be
signed by the party giving or making the same. If such notice, consent or demand
is mailed to a party hereto,  it shall be sent by United States  certified mail,
postage  prepaid,  addressed to such party's last known  address as shown on the
records of the  Company.  The date of such  mailing  shall be deemed the date of
notice, consent or demand.

       14.  Captions.  The  captions of the  Sections  herein are  inserted as a
matter of convenience of reference only and in no way define,  limit or describe
the scope of this Agreement or any provisions hereof.

       15.  Governing  Law.  This  Agreement,  and  the  rights  of the  parties
hereunder,  shall be governed by and construed in  accordance  with the internal
laws  of  the  Commonwealth  of  Pennsylvania  and  shall  be  enforced  in  the
Commonwealth of Pennsylvania.

       16. Trust Agreement. Recognizing that the Owner is a trustee and that the
Policy is held in trust,  the  parties  agree  that the terms of this  Agreement
shall  control  in the event of any  inconsistencies  between  the terms of this
Agreement and the terms of the trust agreement.

                                     - 25 -
<PAGE>

         IN WITNESS  WHEREOF,  the  Company  has  caused  this  Agreement  to be
executed  by its duly  authorized  officer and the  Employee  and the Owner have
hereunto set their hands and seals on the dates set forth below.

Attest:                      PMA CAPITAL CORPORATION

_____________________        By: _________________________

                             __________________________________
                             FREDERICK W. ANTON, III

                             IRREVOCABLE DEED OF TRUST
                             OF FREDERICK W. ANTON, III,
                             DATED OCTOBER 25, 1995

                             By: _________________________
                             Frank G. Cooper, Trustee

                                     - 26 -
<PAGE>

                                   Schedule A

         The  following  life  insurance  policy is subject to this 1999 Pacific
Life Split-Dollar Life Insurance Agreement:

                                                      Approximate
         Insurer                                 Initial Face Amount
         -------                                 -------------------

Pacific Life Insurance Co.                            $1,567,748

                                     - 27 -Exhibit 10.14

                                 Amendment No. 1
                                     to the
                 Amended and Restated 1991 Equity Incentive Plan

         1. Section 13 of the 1991 Equity  Incentive Plan (the "Plan") is hereby
amended in its entirety to read as follows:

                  13.      Withholding.

                     Whenever  the  Company  proposes or is required to issue or
                  transfer  shares of Class A Stock under the Plan,  the Company
                  shall have the right to require the  recipient to remit to the
                  Company an amount sufficient to satisfy any federal,  state or
                  local  withholding tax  requirements  prior to the delivery of
                  any  certificate  for  such  shares.  If  and  to  the  extent
                  authorized  by the  Committee,  in its  sole  discretion,  the
                  Committee  may require an optionee or permit an  optionee,  by
                  means of a form of election to be prescribed by the Committee,
                  to have  shares  of  Class  A Stock  that  are  acquired  upon
                  exercise  of an Option  withheld  by the  Company or to tender
                  other  shares  of  Class A Stock or  other  securities  of the
                  Company  owned by the  optionee  to the Company at the time of
                  exercise  of an  Option to pay the  amount  of tax that  would
                  otherwise  be required by law to be withheld by the Company as
                  a result of any  exercise  of an  Option.  Any  securities  so
                  withheld or tendered will be valued by the Committee as of the
                  date of exercise.

         2. Section 14 of the Plan is hereby  amended in its entirety to read as
follows:

                  14.      Non-Assignability.

                     (a)  Incentive  Stock  Options.   No  Option  which  is  an
                  Incentive  Stock Option shall be assignable or transferable by
                  the optionee  otherwise than by will or by the laws of descent
                  and distribution and during the lifetime of the optionee, such
                  Incentive  Stock  Option  shall  be  exercisable  only  by the
                  optionee or by his guardian or legal representative.

                     (b)  Nonqualified  Stock  Options.  No  Option  which  is a
                  Nonqualified  Stock Option shall be assignable or transferable
                  by the  optionee  except by will or by the laws of descent and
                  distribution  or by such  other  means  as the  Committee  may
                  approve,  unless such means would be  prohibited by Rule 16b-3
                  under the Exchange  Act.  During the life of the optionee such
                  Nonqualified  Stock Option shall be  exercisable  only by such
                  person or by such person's  guardian or legal  representative.
                  Notwithstanding  the  restrictions  set  forth  above  in this
                  Section  14(b),  the Committee or its designee  shall have the
                  authority, in its sole discretion, to grant (or to sanction by
                  way of  amendment  of an existing  grant)  Nonqualified  Stock
                  Options that may be  transferred  by the  optionee  during his
                  lifetime to any "family  member" of the optionee,  which shall
                  include a child, stepchild,  grandchild,  parent,  stepparent,
                  grandparent,  spouse, former spouse, siblings,  niece, nephew,
                  mother-in-law,   father-in-law,  son-in-law,  daughter-in-law,

<PAGE>

                  brother-in-law    or   sister-in-law,    including    adoptive
                  relationships,  any person  sharing the  optionee's  household
                  (other  than a tenant  or  employee),  a trust in which  these
                  persons  have  more  than 50% of the  beneficial  interest,  a
                  foundation in which these  persons (or the  optionee)  control
                  the management of assets,  and any other entity in which these
                  persons  (or the  optionee)  own more  than 50% of the  voting
                  interests. No Nonqualified Stock Option may be transferred for
                  value.  The following  transfers are not prohibited  transfers
                  for value: (i) a transfer under a domestic  relations order in
                  settlement of marital property rights;  and (ii) a transfer to
                  an entity in which more than 50% of the voting  interests  are
                  owned by family  members (or the  optionee) in exchange for an
                  interest in that entity.  In the case of a grant,  the written
                  documentation  containing  the  terms and  conditions  of such
                  Nonqualified Stock Option shall state that it is transferable,
                  and in the case of an  amendment  to an existing  grant,  such
                  amendment  shall be in writing.  A  Nonqualified  Stock Option
                  transferred as  contemplated  in this Section 14(b) may not be
                  subsequently   transferred  by  the  transferee   (except  for
                  transfers back to the original optionee) except by will or the
                  laws of descent  and  distribution  and shall  continue  to be
                  governed  by and subject to the terms and  limitations  of the
                  Plan and the relevant  grant.  However,  the  Committee or its
                  designee, in its sole discretion at the time that the transfer
                  is  approved,  may  alter the  terms  and  limitations  of the
                  relevant  grant  and  establish  such  additional   terms  and
                  conditions as it shall deem appropriate.

Date of Adoption by the Board of  Directors - December 14, 1991
Date of Approval of  Shareholders - May 4, 1992
Date of Amendment and Restatement by Stock Option Committee - April 12, 1995
Date of Amendment No. 1 by Stock Option  Committee -- May 5, 1999

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