X0202 4 2007-03-30 1 0001023031 DIRECT GENERAL CORP DRCT 0001256045 HARTER WILLIAM J 1281 MURFREESBORO ROAD NASHVILLE TN 37217 0 1 0 0 Sr. Vice President Common Stock 2007-03-30 4 D 0 64250 21.25 D 0 D Employee Stock Option (Right to Buy) 21.00 2007-03-30 4 D 0 18000 D 2013-08-11 Common Stock 18000 0 D Employee Stock Option (Right to Buy) 2.71 2007-03-30 4 D 0 24000 18.54 D 2011-04-01 Common Stock 24000 0 D Pursuant to the terms of the Agreement and Plan of Merger by and among Elara Holdings, Inc., Elara Merger Corporation, and Issuer (the "Merger Agreement"), each share of common stock was cancelled and converted into the right to receive a cash payment of $21.25 per share. Pursuant to the terms of the Merger Agreement, this option, which provided for vesting in five equal annual installments beginning on August 11, 2004, was cancelled and converted into an option to purchase 382 shares of common stock of Elara Holdings, Inc. for $988.24 per share on the same terms as the cancelled option. Pursuant to the terms of the Merger Agreement, this option, which vested in five equal annual installments beginning on April 1, 2001, was cancelled and converted into the right to receive a cash payment of $21.25 less the exercise price per share. /s/ William J. Harter 2007-03-30