UNITED ASSET MANAGEMENT CORPORATION

                   AMENDED AND RESTATED 1994 STOCK OPTION PLAN
            [AS FURTHER AMENDED AND RESTATED AS OF DECEMBER 29, 1998]


                                    Preamble
                                    --------

         The plan (the "Plan") comprises three subplans: Subplan A covers
options to be granted to any key employees, including officers, and any
non-employees (other than directors) who provide important services to United
Asset Management Corporation, a Delaware corporation ("UAM") or any of its
subsidiaries or parents. Subplan B covers options to be granted to employees of
UAM or of its subsidiaries who are subject to the income tax laws of the United
Kingdom, to the extent that such options can be granted with favorable income
tax treatment under such United Kingdom laws. Subplan C covers options to be
granted to non-employee directors of UAM.

         Subject to the adjustments provided in the Plan, the aggregate number
of shares of Common Stock of UAM which may be issued and sold pursuant to
incentive stock options (as defined below) granted under Subplan A or Options
(as defined below) granted under Subplan B of the Plan shall not exceed
11,900,000 shares of Common Stock (as defined below), which may be either
authorized but unissued shares or treasury shares.(1) Except as provided below,
the aggregate number of shares of Common Stock which may be issued and sold
pursuant to non-incentive stock options (as defined below) granted under Subplan
A or Subplan C of the Plan shall not exceed the number of shares specified in
the preceding sentence (subject to the adjustments provided in the Plan), less
(1) the number of shares issued pursuant to Subplan A incentive stock options
and Subplan B Options and (2) the number of shares underlying outstanding
Subplan A incentive stock options and Subplan B Options. Notwithstanding the
foregoing, additional shares of Common Stock may be issued and sold pursuant to
non-incentive stock options granted under Subplan A or Subplan C in amounts up
to the number of additional shares reserved for such purpose from time to time
under one or more written resolutions adopted by the Committee (as defined
below). The additional shares of Common Stock that the Committee may reserve for
non-incentive stock options pursuant to the preceding sentence shall meet the
following requirements: (1) all such additional shares must have been reacquired
by UAM for not more than their fair market value at the time of reacquisition
and (2) as of the date of the Committee's resolution to reserve the additional
shares, the cumulative amount received in cash by UAM upon the exercise of
options granted under the Plan shall not be less than the aggregate amount paid
for the reacquired shares that are included in such resolution or in any prior
resolution to reserve additional shares. If any option granted under the Plan
shall terminate or expire without being fully exercised, the shares which have
not been purchased will again become available for purposes of the Plan.



--------
(1) Of these 11,900,000 total shares, 6,400,000 were originally reserved under
the Plan by action of the shareholders in 1994 and 5,500,000 have been reserved
under the amended and restated Plan by action of the shareholders in 1997.


<PAGE>


                     SUBPLAN A--U.S. SUBPLAN PORTION OF THE
                     --------------------------------------
                   AMENDED AND RESTATED 1994 STOCK OPTION PLAN
                   -------------------------------------------
               [AS FURTHER AMENDED AND RESTATED DECEMBER 29, 1998]
               ---------------------------------------------------


1.       Purpose of Subplan A

         The purpose of this Subplan A is to encourage key employees, including
officers, of UAM and any present or future subsidiary and parent of UAM
(hereinafter collectively referred to as the "Company") as well as non-employees
(other than directors of UAM) who provide important services to the Company to
acquire shares of common stock of UAM, $.01 par value per share (the "Common
Stock"), and thereby increase their proprietary interest in the Company's
success and provide an added incentive to remain in the employ of the Company.
For purposes of this Subplan A, the words parent and subsidiary shall be
interpreted in accordance with Section 422 and Section 424 of the Internal
Revenue Code of 1986, as from time to time amended (the "Code"). It is intended
that options granted under this Subplan A shall constitute either "incentive
stock options" within the meaning of Section 422 of the Code, or "non-incentive
stock options", as determined by the Committee named in Section 3 of this
Subplan in its sole discretion and indicated on each form of option grant (the
"Option Grant"), and the terms of this Subplan and the Option Grants shall be
construed accordingly.

2.       Shares Reserved Under Subplan A

         Subject to the adjustment provided in Section 9, the aggregate number
of shares of Common Stock which may be issued and sold pursuant to options
granted under this Subplan A of the Plan shall be determined in accordance with
the Preamble above.

3.       Administration

         Except to the extent otherwise provided in Subplan B, the Plan shall be
administered by a committee (the "Committee") consisting of not less than three
(3) members of the Board of Directors of UAM (the "Board"). Each of the members
of the Committee shall be a person who in the opinion of counsel to the Company
is (i) a "non-employee" as such term is used in Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Act"), and (ii) an "outside
director" as such term is used in Treasury regulation Section 1.162-27(e) (3)
under Section 162(m) of the Code. The Committee shall be appointed by, and shall
serve at the pleasure of, the Board of Directors. A majority of the members
present at any meeting at which a quorum is present, and any acts approved in
writing by all the members of the Committee without a meeting, shall constitute
the acts of the Committee. The Committee shall have the powers granted to it in
Sections 3, 4, 5, 7 and 8 of this Subplan A. The Committee is authorized to
interpret this Subplan A and, subject to the provisions of the Subplan, to
prescribe, amend, and rescind rules and regulations relating thereto. The
Committee is further authorized, subject to the express provisions of this
Subplan A, to alter or amend the form of Option Grant attached hereto as Exhibit
A and to make all other determinations necessary or advisable in the
administration of the Subplan. The interpretation and administration by the
Committee of any provisions of this 


                                       1


<PAGE>


Subplan A and the Option Grant shall be final and conclusive on all persons
having any interest therein.

         Notwithstanding any other provision of this Plan, if the Committee
determines that a person to whom an option may be granted under this Subplan A
will neither be a "covered employee" within the meaning of Section 162(m) of the
Code nor an employee subject to the short-swing profits rules of Section 16(b)
of the Act at any time from the date of grant until the end of the term of any
option which could be granted under this Subplan A at the time of such
determination, such options may be granted to such person by a committee
consisting of any number of members of the Board, any or all of whom would not
then be eligible to serve on the Committee. With respect to all options referred
to in this paragraph, the committee referred to in this paragraph shall have all
powers otherwise granted to the Committee in Sections 3, 4, 5, 7 and 8 of this
Subplan A, but the committee referred to in this paragraph shall not otherwise
administer this Subplan A.

         No members of the Committee or of any committee referred to in the
preceding paragraph or of the Board shall be held liable for any action or
determination made in good faith with respect to the Plan, this Subplan A, or
any option granted hereunder.

4.       Option Grants

         Options to purchase shares of Common Stock under this Subplan A may be
granted to key employees (including officers and directors who are employees) of
the Company and to non-employees who provide important services to the Company.
The term "Employee" will include, for purposes of this Subplan A key employees
as well as such non-employees who provide important services to the Company. In
selecting the Employees to whom options will be granted and in deciding how many
shares of Common Stock will be subject to each option, the Committee shall give
consideration to the importance of an Employee's duties, to his experience with
the Company, to his future value to the Company, to his present and potential
contribution to the success of the Company, and to such other factors as the
Committee may deem relevant. Subject to the express provisions of the Plan and
the form of Option Grant incorporated herein by reference as from time to time
altered or amended, the Committee shall have authority to determine with respect
to each Option Grant the number of installments, the number of shares of Common
Stock in each installment, and the exercise dates, and, to the extent not
inconsistent with the applicable provisions of the Code, if any, may specify
additional restrictions and conditions for any Option Grant. Each incentive
stock option shall expire not later than ten years from the date of the grant of
such option.

         Except as provided in Section 7 of this Subplan A, no incentive stock
option may be granted to any Employee who, at the time such option is granted
owns stock possessing more than 10 percent of the total combined voting power of
all classes of stock of the Company within the meaning of Section 422 of the
Code. Non-employees who provide services to the Company shall not be eligible to
receive incentive stock options under the Plan.

         The date of grant of an option under this Subplan A shall be the date
the Committee votes to grant the option, but no optionee shall have the right to
exercise his option until the Company has executed and delivered the Option
Grant to such optionee. Each option granted under this


                                       2


<PAGE>


Subplan A shall be evidenced by and subject to the terms and conditions of the
Option Grant which is incorporated into the Plan by reference as from time to
time altered or amended.

         No incentive stock option may be transferred by the optionee, other
than by will or the laws of descent and distribution. An incentive stock option
can be exercised during such individual's life only by him. Notwithstanding the
foregoing, the Committee may grant non-incentive stock options under this
Subplan A or under Subplan C that are transferable (subject to any terms and
conditions imposed by the Committee) by the optionee, either directly or in
trust, to one or more members of the optionee's family. Following any transfer
permitted pursuant to this paragraph, of which the optionee has notified the
Committee in writing, such option may be exercised by the transferee(s), subject
to all terms and conditions of the Option Grant. For these purposes, the members
of the optionee's family are only the optionee's: (i) spouse; (ii) lineal
descendants; (iii) lineal ancestors; and (iv) siblings and spouses and children
of such siblings.

5.       Option Price

         The price per share at which each option granted under this Subplan A
may be exercised shall be determined by the Committee subject to the provisions
of this Section 5. In the case of an incentive stock option, the exercise price
shall not be less than the fair market value per share on the date of the grant,
as determined by the Committee in accordance with applicable provisions of the
Code then in effect. In the case of a non-incentive stock option, the exercise
price shall not be less than 50% of the fair market value per share on the date
of grant, as so determined. In no event shall the option price per share for any
option under the Plan be less than the par value per share.

6.       Limitation on Amount

         The aggregate fair market value (determined at the time the option is
granted) of the stock with respect to which incentive stock options are
exercisable for the first time by an individual during any calendar year under
all plans of the Company shall not exceed $100,000. To the extent that the
aggregate value of such options (determined in the order in which they were
granted) exceeds such amount, such options shall be treated as non-incentive
stock options.

         The maximum number of shares with respect to which any options may be
granted under the Plan (including this Subplan A) to any individual during any
single calendar year shall be 300,000 shares.

7.       Special Rule for 10 Percent Shareholders

         The Committee may grant incentive stock options under this Subplan A to
Employees who own more than 10 percent of the combined voting stock of the
Company if (i) at the time of the Option Grant the price per share at which the
option may be exercised is at least 110 percent of the fair market value of the
stock subject to the option and (ii) such option is not exercisable after the
expiration of five years from the date such option is granted.

8.       Non-Incentive Stock Options


                                       3


<PAGE>


         Notwithstanding the provisions of Sections 4, 5, 6 and 7 of this
Subplan A, the Committee may grant options which in one or more respects do not
meet the requirements for incentive stock options established by Section 422 of
the Code. The Committee shall indicate on each Option Grant whether an incentive
stock option within the meaning of Section 422 of the Code or a non-incentive
stock option is thereby granted.

         Except as otherwise provided in this Subplan A, the Committee, in its
sole discretion, shall establish the terms and conditions for each non-incentive
stock option which it grants. Such terms and conditions may, but need not,
include some or all of the provisions of Sections 4, 5, 6 and 7 of this Subplan
A with respect to incentive stock options. If the Committee grants an option
which in all respects meets the requirements for incentive stock options it may
nonetheless designate such option a non-incentive stock option on the Option
Grant.

9.       Adjustment of Shares Reserved Under the Plan

         The aggregate number and kind of shares reserved under the Plan, the
maximum number of shares as to which options may be granted to any individual
and the option price per share shall be appropriately adjusted by the Board in
the event of any recapitalization, stock split, stock dividend, combination of
shares, or other similar change in the capitalization of the Company, but no
adjustment in the option price shall be made which would reduce the option price
per share to less than the par value per share, and any adjustment in the option
price for options granted under Subplan B of the Plan shall be subject to the
requirements of Rule 5 of Subplan B.

10.      Dissolution or Reorganization

(A)      Vesting Provisions

 (1) Notwithstanding anything to the contrary in this Subplan A, or in the
Option Grant, an optionee may purchase the full amount of shares of Common Stock
for which options have been granted to such optionee (the "optioned shares") and
for which the options have not been exercised, upon the occurrence of any of the
following events (individually and collectively a "Change of Control" over the
Company):

                  (a) Stock Transfer of 20% or More. The acquisition by any
                  individual, entity or group (within the meaning of Sections
                  13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934
                  (the "Act")) (a "Person") of beneficial ownership (within the
                  meaning of Rule 13d-3 promulgated under the Act) of 20 percent
                  or more of either (i) the then outstanding shares of the
                  Common Stock or (ii) the combined voting power of the then
                  outstanding voting securities of the Company entitled to vote
                  generally in the election of the directors (the "Outstanding
                  Company Voting Securities"); provided, however, that no change
                  in such beneficial ownership percentage that results solely
                  from a change in the aggregate number of outstanding shares of
                  Common Stock or Outstanding Company Voting Securities shall
                  constitute a Change of Control; provided further, however,
                  that the following acquisitions shall not constitute a Change
                  of Control: (A) any acquisition directly from the Company
                  (excluding an acquisition by virtue of the exercise of a
                  conversion privilege); (B) any acquisition by the 


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<PAGE>


                  Company or by any corporation controlled by the Company; (C)
                  any acquisition by any employee benefit plan (or related
                  trust) sponsored or maintained by the Company or any
                  corporation controlled by the Company; or (D) any
                  acquisition by any corporation pursuant to a consolidation
                  or merger, if, following such consolidation or merger, the
                  conditions described in clauses (i), (ii), and (iii) of
                  paragraph (c) below are satisfied; or

                  (b) Change in Incumbent Board of 50% or More. Individuals who,
                  as of November 19, 1998 (the "Effective Date"), constitute the
                  Board (the "Incumbent Board") ceasing for any reason to
                  constitute at least a majority of the Board; provided,
                  however, that any individual becoming a director subsequent to
                  the Effective Date whose election, or nomination for election
                  by the Company's shareholders, was approved by a vote or
                  resolution of at least a majority of the directors then
                  comprising the Incumbent Board shall be considered as though
                  such individual were a member of the Incumbent Board, but
                  excluding, for this purpose, any such individual whose initial
                  assumption of office occurs as a result of either an actual or
                  threatened election contest (as such terms are used in Rule
                  14a-11 of Regulation 14A promulgated under the Act) or other
                  actual or threatened solicitation of proxies or consents by or
                  on behalf of a Person other than the Board; or

                  (c) Merger Without Continuity of Ownership in Excess of 60%.
                  Adoption by the Board of a resolution approving an agreement
                  of consolidation of the Company with or merger of the Company
                  into another corporation or business entity in each case,
                  unless, following such consolidation or merger, (i) more than
                  60 percent of, respectively, the then outstanding shares of
                  common stock of the corporation resulting from such
                  consolidation or merger and/or the combined voting power of
                  the then outstanding voting securities of such corporation or
                  business entity entitled to vote generally in the election of
                  directors (or other persons having the general power to direct
                  the affairs of such entity) is then beneficially owned,
                  directly or indirectly, by all or substantially all of the
                  individuals and entities who were the beneficial owners,
                  respectively, of the Common Stock and Outstanding Company
                  Voting Securities immediately prior to such consolidation or
                  merger in substantially the same proportions as their
                  ownership, immediately prior to such consolidation or merger,
                  of the Common Stock and/or Outstanding Company Voting
                  Securities, as the case may be, (ii) no Person (excluding the
                  Company, any employee benefit plan (or related trust) of the
                  Company or such corporation or other business entity resulting
                  from such consolidation or merger and any Person beneficially
                  owning, immediately prior to such consolidation or merger,
                  directly or indirectly, 35 percent or more of the Common Stock
                  and/or Outstanding Company Voting Securities, as the case may
                  be) beneficially owns, directly or indirectly, 35 percent or
                  more of, respectively, the then outstanding shares of common
                  stock of the corporation resulting from such consolidation or
                  merger or the combined voting power of the then outstanding
                  voting securities of such corporation or business entity
                  entitled to vote generally in the election of its directors
                  (or other persons having the general 


                                       5


<PAGE>


                  power to direct the affairs of such entity) and (iii) at
                  least a majority of the members of the board of directors
                  (or other group of persons having the general power to
                  direct the affairs of the corporation or other business
                  entity) resulting from such consolidation or merger were
                  members of the Incumbent Board at the time of the execution
                  of the initial agreement providing for such consolidation or
                  merger; provided that any right which shall vest by reason
                  of the action of the Board pursuant to this paragraph (c)
                  shall be divested, with respect to any such right not
                  already exercised, upon (A) the rejection of such agreement
                  of consolidation or merger by the stockholders of the
                  Company or (B) its abandonment by either party thereto in
                  accordance with its terms; or

                  (d) Sale of Assets or Dissolution. Adoption by the requisite
                  majority of the whole Board, or by the holders of such
                  majority of stock of the Company as is required by law or by
                  the Certificate of Incorporation or By-Laws of the Company as
                  then in effect, of a resolution or consent authorizing (i) the
                  dissolution of the Company or (ii) the sale or other
                  disposition of all or substantially all of the assets of the
                  Company, other than to a corporation or other business entity
                  with respect to which, following such sale or other
                  disposition, (A) more than 60 percent of, respectively, the
                  then outstanding shares of common stock of such corporation
                  and/or the combined voting power of the outstanding voting
                  securities of such corporation or other business entity
                  entitled to vote generally in the election of directors (or
                  other persons having the general power to direct the affairs
                  of such entity) is then beneficially owned, directly or
                  indirectly, by all or substantially all of the individuals and
                  entities who were the beneficial owners, respectively, of the
                  Common Stock and Outstanding Company Voting Securities
                  immediately prior to such sale or other disposition in
                  substantially the same proportions as their ownership,
                  immediately prior to such sale or other disposition, of the
                  Common Stock and/or Outstanding Company Voting securities, as
                  the case may be, (B) no Person (excluding the Company and any
                  employee benefit plan (or related trust) of the Company or
                  such corporation or other business entity and any Person
                  beneficially owning, immediately prior to such sale or other
                  disposition, directly or indirectly, 35 percent or more of the
                  Common Stock and/or Outstanding Company Voting Securities, as
                  the case may be) beneficially owns, directly or indirectly, 35
                  percent or more of, respectively, the then outstanding shares
                  of common stock of such corporation and/or the combined voting
                  power of the then outstanding voting securities of such
                  corporation or other business entity entitled to vote
                  generally in the election of directors (or other persons
                  having the general power to direct the affairs of such entity)
                  and (C) at least a majority of the members of the board of
                  directors (or other group of persons having the general power
                  to direct the affairs of such corporation or other entity)
                  were members of the Incumbent Board at the time of the
                  execution of the initial agreement or action of the Board
                  providing for such sale or other disposition of assets of the
                  Company; provided that any right which shall vest by reason of
                  the action of the Board or the stockholders pursuant to this
                  paragraph (d) shall be divested, with respect to any such
                  right not already exercised, upon the abandonment by the


                                       6


<PAGE>


                  Company of such dissolution, or such sale or other disposition
                  of assets, as the case may be.

(2) Notwithstanding subsection (1) hereof, holder(s) of any unexercised
option(s) that meet the requirements for incentive stock options under Section
422 of the Code (the rights being "ISO Rights", and such holder being an "ISO
Optionee"), may elect at any time to waive the applicability of subsections (1)
hereof to such ISO Optionee's ISO Rights.

(3) Notwithstanding subsections (1) or (2) hereof, after a Change of Control,
and upon adoption of a plan of dissolution, liquidation, merger, consolidation,
or reorganization of the Company (the "Event"), the Board may decide to
terminate each outstanding option granted under this Subplan A. If the Board so
decides, such option(s) shall terminate as of the effective date of the Event,
but the Board shall suspend the exercise of all outstanding options a reasonable
time prior to the Event, giving each optionee not less than fourteen days' prior
written notice of the date of suspension, prior to which an optionee may
purchase in whole or in part the shares available to him as of the date of
receipt of the notice. If the Event is not consummated, the suspension shall be
removed and all options shall continue in full force and effect, subject to the
terms of their respective option grants.

(B)      Expired Options

         Nothing herein shall allow the optionee to purchase optioned shares,
the options for which have expired.

11.      Amendment and Termination of Plan and Subplan A

         The Board may amend, suspend, or terminate the Plan and/or this Subplan
A, including the form of Option Grant incorporated herein by reference. No such
action, however, may, without approval or ratification by the shareholders,
increase the maximum number of shares reserved under the Plan except as provided
in Section 9 of this Subplan A, Rule 5 of Subplan B, or Section 8 of Subplan C,
alter the class or classes of individuals eligible for options, or make any
other change which, pursuant to the Code or regulations thereunder or Section
16(b) of the Act and the rules and regulations promulgated thereunder, requires
action by the shareholders. No such action may, without the consent of the
holder of the option, alter or impair any option previously granted.

         In any event, the Plan shall terminate 10 years from the date of
adoption of the amended and restated Plan by the Board of Directors, or if
earlier, from the date of its approval by the shareholders. Any shares remaining
under the Plan at the time of termination which are not subject to outstanding
options and any shares which thereafter become available because of the
expiration or termination of an option shall cease to be reserved for purposes
of the Plan.

12.      Right to Terminate Employment

Nothing contained herein or in any Option Grant executed pursuant hereto shall
restrict the right of the Company to terminate the employment of any optionee at
any time.


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<PAGE>


13.      Date of Adoption

         The date of adoption of this amended and restated Plan by the Board is
January 20, 1997, as further amended by action of the board on November 19,
1998.


14.      Date of Approval

The date of approval of this amended and restated Plan by the shareholders and
the Plan's effective date is May 15, 1997.









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<PAGE>



                      SUBPLAN B--UK SUBPLAN PORTION OF THE
                      ------------------------------------
                   AMENDED AND RESTATED 1994 STOCK OPTION PLAN
                   -------------------------------------------
               [AS FURTHER AMENDED AND RESTATED DECEMBER 29, 1998]
               ---------------------------------------------------

                RULES OF THE UNITED ASSET MANAGEMENT CORPORATION
                          EMPLOYEE SHARE OPTION SCHEME

1.       DEFINITIONS

         In this Scheme (hereinafter sometimes referred to as the "UK Subplan"),
         unless the context otherwise requires, the following words and
         expressions shall have the following meanings:

<TABLE>
         <S>                              <C>
         "Act"                            the U.S. Securities Exchange Act of 1934, as amended,
                                          and the rules and regulations promulgated thereunder

         Adoption Date"                   the date on which the Scheme is adopted by the Company

         "Associated Company"             the meaning given to that term in Section 416 of the
                                          U.K. Income and Corporation Taxes Act 1988

         "Auditors"                       the auditors for the time being of the Company
                                          (acting as experts and not as arbitrators)

         "Board"                          the board of directors of the Company

         "Change of Control"              the meaning given to that term in Rule 6.1 of this
                                          Scheme

         "Code"                           the U.S. Internal Revenue Code of 1986, as amended,
                                          and regulations promulgated thereunder

         "Committee"                      the committee established by the Board pursuant to
                                          Rule 10.4

         "Company"                        United Asset Management Corporation

         "Control"                        the meaning given to that word by Section 840 of the
                                          U.K. Income and Corporation Taxes Act 1988

         "Date of Grant"                  the date on which an Option is, was or is to be
                                          granted under the Scheme

         "Effective Date"                 19 November 1998

         "Eligible Employee"              any employee of any Participating Company who is
                                          subject to the income tax laws of the United Kingdom
                                          and who is normally required to devote to his duties
                                          not less than 20 


                                       9


<PAGE>


                                          hours per week (excluding meal breaks) (in the case
                                          of an employee who is also a director of any
                                          Participating Company, 25 hours per week (excluding
                                          meal breaks)) and is not precluded by paragraph 8
                                          of Schedule 9 from participating in the Scheme

         "Event"                          the dissolution, liquidation, merger, consolidation,
                                          or reorganization of the Company

         "Group"                          that group comprising all of the Participating
                                          Companies

         "Incumbent Board"                the individuals who, as of the Effective Date,
                                          constitute the Board

         "Issued Company Voting           the then issued voting securities of the Company entitled
         Securities"                      to vote generally in the election of the Board


         "Market Value"                   on any day the closing sales price in U.S. Dollars of
                                          a Share as derived from the consolidated tape of The
                                          New York Stock Exchange for such day or, if such day,
                                          as not a trading day or if no Shares sold on such
                                          day, such closing sales price on the next previous
                                          trading day on which a sale occurred

         "Option"                         a right to purchase Shares under the Scheme

         "Option                          the certificate embodying an Option granted in accordance 
         Certificate"                     with these Rules

         "Option Holder"                  an individual to whom an Option has been granted
                                          pursuant to the Scheme

         "Participating                   the Company and any other corporation which it Controls
         Company"

         "Person"                         any individual, entity or group (within the meaning
                                          of Section 13(d)(3) or 14(d)(2) of the Act

         "Plan"                           the  United  Asset  Management Corporation 1994 Stock
                                          Option Plan, of which this Scheme is an integral part

         "Price"                          the price determined by the Committee in U.S. Dollars
                                          at which each Share subject to an Option may be acquired
                                          on the exercise of that Option, which price shall be,
                                          subject to Rule 5, not less than the higher of:


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<PAGE>


                                          (i)           the par value (if any) of a Share and

                                          (ii)          the  Market  Value of a Share on the Date
                                                        of Grant of that Option

         "Relevant Emoluments"            the meaning given to that term in sub-paragraph (2) of
                                          paragraph 28 of Schedule 9 by virtue of subparagraph
                                          (4) of that paragraph

         "Rules"                          the terms of the Scheme, as  expressed  herein and as
                                          amended from time to time

         "Schedule 9"                     Schedule  9 to the U.K. Income and Corporation Taxes
                                          Act 1988

         "Scheme"                         this U.K. Subplan, as set forth in these Rules as
                                          amended from time to time

         "Share"                          a share of common stock, U.S. $.01 par value, in the
                                          capital of the Company which satisfies the conditions
                                          specified in paragraphs 10 to 14 inclusive of
                                          Schedule 9 and which may either be an  authorized but
                                          unissued share or a treasury share

         "Sterling Value"                 in respect of an Option, the sterling equivalent of
                                          the appropriate Price, calculated by reference to the
                                          U.S. Dollar/Sterling exchange rate prevailing on the
                                          Date of Grant of that Option

         "Subplan A"                      the portion of the Plan applicable to key  employees
                                          of, and non-employees (other than directors of the
                                          Company) who provide important services to, a
                                          Participating Company

         `Subplan C"                      the portion of the Plan applicable to non-employee
                                          directors of the Company

         "Subsisting Option"              an Option which has neither lapsed nor been exercised
                                          or released, given up, or surrendered by its holder

         "UK Subplan"                     the portion of the Plan  comprising the Scheme as set
                                          forth in these Rules

         "Year of Assessment"             year  beginning  on any 6th  April  and  ending  on the
                                          following 5th April
</TABLE>

Where the context permits the singular shall include the plural and vice versa
and the masculine shall include the feminine. References to any Act or statute
shall include any statutory 

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<PAGE>


modification, amendment or re-enactment thereof. Headings are for ease of
reference only and shall not affect the construction or interpretation of these
Rules.

2.       GRANT OF OPTION

2.1      Subject to the terms of these Rules, the Committee may at its absolute
         discretion, from time to time, grant Options to any Eligible Employees
         under the Scheme by issuing Option Certificates to them, complying with
         Rule 2.2 below.

2.2      Each Option Certificate shall be under seal and shall specify:

         i.         the Date of Grant of the relevant Option;

         ii.        the number of Shares for which the Option is granted (which
                    shall not be so large that the grant of an Option for that
                    number of Shares would cause the applicable limits specified
                    in Rule 3 to be exceeded);

         iii.       the Price at which the relevant Shares can be acquired; and

         iv.        any conditions on the Option imposed by the Committee,
                    including (without limitation) any vesting schedule.

         In addition each Option Certificate shall indicate that Options cannot
         be transferred, assigned or charged and that any purported transfer,
         assignment or charge shall cause the relevant Option to lapse
         forthwith.

         Each Option Certificate shall be accompanied by a "form of acceptance"
         (as described in Rule 4.3) which shall indicate that the Option to
         which it relates will automatically lapse if the Option holder does not
         sign and return such form to the Company within 3 months of the Date of
         Grant.

3.       LIMITATIONS

3.1      Subject to adjustment as provided in Rule 5, the aggregate number of
         Shares in respect of which Options may be granted under the Scheme on
         any Date of Grant or which may be issued and sold pursuant to such
         Options shall not exceed 6,985,367 Shares, less (i) any Shares then
         subject to any outstanding incentive stock option granted under Subplan
         A of the Plan or previously issued pursuant to any such incentive stock
         option and (ii) any shares that are then subject to any outstanding
         non-incentive stock option granted under Subplan A or Subplan C or
         previously issued pursuant to any such non-incentive stock option and
         are not reacquired shares (as described in the Preamble to the Plan).
         If any Option granted under the Plan shall lapse or shall be released,
         given up or surrendered without being fully exercised, the Shares which
         have not been purchased under the Option shall again become available
         for purposes of the Plan.


                                       12


<PAGE>


3.2      No Option shall be granted to an Eligible Employee if immediately
         following such grant he would hold Subsisting Options with an aggregate
         Sterling Value exceeding (pound)30,000.

         For the purposes of this Rule 3.2. Options shall include all Options
         granted under this Scheme and all options granted under any other
         scheme approved under Schedule 9 and established by the Company or any
         Associated Company.

3.3      The maximum number of Shares with respect to which any options may be
         granted under the Plan (including this UK Subplan) to any individual
         during any single calendar year shall be 100,000 Shares.

4.       EXERCISE OF OPTIONS

4.1      Any Option which has not lapsed may be exercised only after the
         earliest of the following events:

         i.         the first anniversary of the Date of Grant;

         ii.        the death of the Option holder;

         iii.       the Option holder ceasing to be an employee of any
                    Participating Company by reason of injury, disability,
                    redundancy or retirement or, at the discretion of the
                    Committee, for any other reason;

         iv.        a Change of Control of the Company, but only in respect of 
                    an Option granted after April 1, 1999.

         Provided always that when granting an Option the Committee may provide
         that the Option or any part of it shall not become exercisable under
         sub Rules 4.1 (i), (ii) or (iii) above until after such time(s) as the
         Committee determine and any such restriction on the Option's
         exercisability shall be set forth in the Option Certificate for that
         Option. For the avoidance of doubt, once an Option has become
         exercisable under Rule 4.1 (iv), it shall be exercisable in full.

4.2      Once an Option has become exercisable under Rule 4.1 above, it may be
         exercised either in whole or in part at any time unless or until it
         shall lapse under Rule 4.3 below, but subject in all cases to Rule 7
         below.

4.3      An Option shall lapse on the earliest of the following events:

         i.         the expiry of three months from the Date of Grant, unless
                    the Option holder has previously given notice to the Company
                    of his acceptance of the Scheme's Rules using the form of
                    acceptance supplied to him with the relevant Option
                    Certificate;


                                       13


<PAGE>


         ii.        subject to a shorter period  specified in the Option
                    Certificate,  the tenth anniversary of the Date of Grant;

         iii.       subject to a shorter period specified in the Option
                    Certificate, the first anniversary of the Option holder's
                    death;

         iv.        the Option holder ceasing to be an employee of any
                    Participating Company by reason of gross misconduct;

         v.         subject to a shorter period specified in the Option
                    Certificate, the expiry of three months after the date on
                    which the Option holder ceases to be an employee of any
                    Participating Company otherwise than by reason of death or
                    gross misconduct in circumstances in which sub-clause (iv)
                    applies;

         vi.        the Option holder being adjudicated bankrupt; and

         vii.       the first date upon which the Option holder purports to
                    transfer, assign or charge the Option.

5.       VARIATION OF SHARE CAPITAL

         In the event of any capitalization or rights issue or any stock split
         or stock dividend or any consolidation, sub-division or reduction of
         capital by the Company, the number of Shares subject to any Option and
         the Price payable for each of those Shares shall be adjusted in such
         manner as the Auditors confirm to be fair and reasonable provided that:

         i.         the  aggregate amount payable on the exercise of any Option
                    in full is not increased;

         ii.        the Price of a Share is not reduced below its par value if
                    any;

         iii.       no adjustments shall be made without the prior approval of
                    the Board of Inland Revenue; and

         iv.        following the adjustment the Shares continue to satisfy the
                    conditions specified in paragraphs 10 to 14 inclusive of
                    Schedule 9.

6.       CHANGE OF CONTROL

6.1      A Change of Control shall be the occurrence of any of the following
         events:

         i.         Stock Transfer of 20% or More

                    the acquisition by a Person of beneficial ownership (within
                    the meaning of Rule 13d-3 promulgated under the Act) of 20
                    percent or more of either (a) the then issued Shares of the
                    Company or (b) the combined voting power of the Issued
                    


                                       14


<PAGE>


                    Company Voting Securities; provided, however, that no change
                    in such beneficial ownership percentage that results solely
                    from a change in the aggregate number of outstanding Shares
                    or Issued Company Voting Securities shall constitute a
                    Change of Control; provided further, however, that the
                    following acquisitions shall not constitute a Change of
                    Control: (A) any acquisition directly from the Company
                    (excluding an acquisition by virtue of the exercise of a
                    conversion privilege); (B) any acquisition by the Company or
                    any Associated Company; (C) any acquisition by any employee
                    benefit plan (or related trust) sponsored or maintained by
                    the Company or any Associated Company; or (D) any
                    acquisition by any corporation pursuant to a consolidation
                    or merger, if, following such consolidation or merger, the
                    conditions described in clauses (a), (b), and (c) of Rule
                    6.1(iii) below are satisfied; or

         ii.        Change in Incumbent Board of 50% or More

                    the Incumbent Board ceasing for any reason to constitute at
                    least a majority of the Board; provided, however, that any
                    individual becoming a director subsequent to the Effective
                    Date whose election, or nomination for election by the
                    Company's shareholders, was approved by a vote or resolution
                    of at least a majority of the directors then comprising the
                    Incumbent Board shall be considered as though such
                    individual were a member of the Incumbent Board, but
                    excluding, for this purpose, any such individual whose
                    initial assumption of office occurs as a result of either an
                    actual or threatened election contest (as such terms are
                    used in Rule 14a-11 of Regulation 14A promulgated under the
                    Act) or other actual or threatened solicitation of proxies
                    or consents by or on behalf of a Person other than the
                    Board; or

         iii.       Merger Without Continuity of Ownership in Excess of 60%

                    the adoption by the Board of a resolution approving an
                    agreement of consolidation of the Company with or merger of
                    the Company into another corporation or business entity in
                    each case, unless, following such consolidation or merger,
                    (a) more than 60 percent of, respectively, the then issued
                    shares of common stock of the corporation resulting from
                    such consolidation or merger and/or the combined voting
                    power of the then issued voting securities of such
                    corporation or business entity entitled to vote generally in
                    the election of directors (or other persons having the
                    general power to direct the affairs of such entity) is then
                    beneficially owned, directly or indirectly, by all or
                    substantially all of the individuals and entities who were
                    the beneficial owners, respectively, of the Shares and
                    Issued Company Voting Securities immediately prior to such
                    consolidation or merger in substantially the same
                    proportions as their ownership, immediately prior to such
                    consolidation or merger, (b) no Person (excluding the
                    Company, any employee benefit plan (or related trust) of the
                    Company or such corporation or other business entity
                    resulting from such consolidation or merger and any Person
                    beneficially owning, immediately prior to such consolidation
                    or merger, directly or indirectly, 35 percent or more of the


                                       15


<PAGE>


                    Shares and/or Issued Company Voting Securities, as the case
                    may be) beneficially owns, directly or indirectly, 35
                    percent or more of, respectively, the then issued shares of
                    common stock of the corporation resulting from such
                    consolidation or merger or the combined voting power of the
                    then outstanding voting securities of such corporation or
                    business entity entitled to vote generally in the election
                    of its directors (or other persons having the general power
                    to direct the affairs of such entity) and (c) at least a
                    majority of the members of the board of directors (or other
                    group of persons having the general power to direct the
                    affairs of the corporation or other business entity)
                    resulting from such consolidation or merger were members of
                    the Incumbent Board at the time of the execution of the
                    initial agreement providing for such consolidation or
                    merger; provided that any right which shall vest by reason
                    of the action of the Board pursuant to this paragraph (iii)
                    shall be divested, with respect to any such right not
                    already exercised upon (A) the rejection of such agreement
                    of consolidation or merger by the shareholders of the
                    Company or (B) its abandonment by either party thereto in
                    accordance with its terms; or

         iv.        Sale of Assets or Dissolution

                    the adoption by the requisite majority of the whole Board,
                    or by the holders of such majority of stock of the Company
                    as is required by law or by the certificate of incorporation
                    or by-laws of the Company as then in effect, of a resolution
                    or consent authorizing (a) the dissolution of the Company or
                    (b) the sale or other disposition of all or substantially
                    all of the assets of the Company, other than to a
                    corporation or other business entity with respect to which,
                    following such sale or other disposition, (A) more than 60
                    percent of, respectively, the then issued shares of common
                    stock of such corporation and/or the combined voting power
                    of the issued voting securities of such corporation or other
                    business entity entitled to vote generally in the election
                    of directors (or other persons having the general power to
                    direct the affairs of such entity) is then beneficially
                    owned, directly or indirectly, by all or substantially all
                    of the individuals and entities who were the beneficial
                    owners, respectively, of the Shares and/or Issued Company
                    Voting Securities immediately prior to such sale or other
                    disposition in substantially the same proportions as their
                    ownership, immediately prior to such sale or other
                    disposition, of the Shares and/or Issued Company Voting
                    Securities, as the case may be, (B) no Person (excluding the
                    Company and any employee benefit plan (or related trust) of
                    the Company or such corporation or other business entity and
                    any Person beneficially owning, immediately prior to such
                    sale or other disposition, directly or indirectly, 35 per
                    cent or more of the Shares and/or Issued Company Voting
                    Securities, as the case may be) beneficially owns, directly
                    or indirectly, 35 percent or more of, respectively, the then
                    issued shares of common stock of such corporation and/or the
                    combined power of the then outstanding voting securities of
                    such corporation or other business entity entitled to vote
                    generally in the election of directors (or other persons
                    having the general power to direct the affairs of such
                    entity) and (C) at least a majority of the members of the
                    board of directors (or other group of 


                                       16


<PAGE>


                    persons having the general power to direct the affairs of
                    such corporation or other entity) were members of the
                    Incumbent Board at the time of the execution of the initial
                    agreement or action of the Board providing for such sale or
                    other disposition of assets of the Company; provided that
                    any right which shall vest by reason of the action of the
                    Board or the stockholders pursuant to this paragraph (iv)
                    shall be divested, with respect to any such right not
                    already exercised, upon the abandonment by the Company of
                    such dissolution, or such sale or other disposition of
                    assets, as the case may be.

6.2      In the event of a Change of Control of the Company, notwithstanding any
         decision of the Board restricting the Option's exercisability under
         Rule 4.1, all Options shall be exercisable in full or in part at the
         Option holder's discretion provided that one of the events referred
         to in Rule 4.1(i) to (iv) has occurred.

6.3      Notwithstanding Rule 4.1, after a Change of Control, and upon the
         adoption of a plan for an Event, the Board may elect to terminate each
         Subsisting Option. If the Board so elects, such Option shall terminate
         as of the effective date of the Event, but the Board shall suspend the
         exercise of all Subsisting Options a reasonable time prior to the
         Event, giving each Option holder not less than fourteen days written
         notice of the date of suspension, prior to which an Option holder may
         purchase in whole or in part the Shares available to him as of the date
         of receipt of the notice. If the Event is not consummated, the
         suspension shall be removed and all Options shall continue in full
         force and effect, subject to the terms of their respective Option
         Certificates.

6.4      For the avoidance of doubt, nothing in this Rule 6 shall entitle an
         Option holder to exercise an Option which has previously lapsed.

7.       MANNER OF EXERCISE OF OPTIONS

7.1      No Option may be exercised by an individual at any time when he is
         precluded by paragraph 8 of Schedule 9 from participating in the
         Scheme.

7.2      An Option shall be exercised by the Option holder, or as the case may
         be his personal representative, giving notice to the Company in writing
         of the number of Shares in respect of which he wishes to exercise the
         Option and making arrangements reasonably acceptable to the Committee
         for payment of the appropriate amount, and submitting the relevant
         Option Certificate. Any such notice shall be effective on the date of
         its receipt by the Company.

7.3      Shares shall be allocated and issued pursuant to a notice of exercise
         within 30 days of the date of exercise.

8.       RIGHTS ATTACHING TO SHARES

         All Shares allocated pursuant to the exercise of an Option shall rank
         pari passu in all respects with all other Shares in issue at the date
         of such allocation.

9.       AVAILABILITY OF SHARES

         The Company shall at all times procure that it can secure the issue or
         the transfer of sufficient Shares to permit the exercise of all
         Subsisting Options.


                                       17


<PAGE>


10.      LOSS OF OFFICE

         If any Option holder shall cease to be an employee of a Participating
         Company within the Group for any reason, he shall not be entitled by
         way of compensation for loss of office or otherwise howsoever to any
         sum or other benefit to compensate him for any loss of any right under
         the Scheme, and in returning the form of acceptance referred to in Rule
         4.3 he shall be deemed to have agreed to this.

11.      ADMINISTRATION AND AMENDMENT

11.1     No member of the Committee or the Board shall be held liable for any
         action or determination made in good faith with respect to the Plan,
         the UK Subplan, these Rules or any Option granted hereunder.

11.2     The cost of establishing and operating the Scheme shall be borne by the
         Participating Companies in such proportions as the Board shall
         determine.

11.3     The Board may from time to time suspend or terminate the Plan and/or
         the UK Subplan or amend these Rules or the form of Option Certificate,
         provided that:

         i.         no such action may, without approval or ratification by the
                    Company's shareholders, increase the maximum number of
                    Shares reserved under the UK Subplan (except as provided in
                    Rule 5) or under the Plan (except as otherwise expressly
                    provided in the Plan), alter the class or classes of
                    employees eligible for Options, or make any other such
                    change which, pursuant to Section 16(b) of the Act and the
                    rules and regulations promulgated thereunder, requires
                    action by the Company's shareholders;

         ii.        except as provided in Rule 11.5, no such action may
                    detrimentally affect an Option holder as regards an Option
                    granted prior to the taking of such action; and

         iii.       no amendment to these Rules shall have effect until approved
                    by the Board of the Inland Revenue.

11.4     The Scheme shall be administered by the Committee, the members of which
         shall be appointed by and shall serve at the pleasure of the Board
         (subject to the restrictions of this Rule 11.4). Notwithstanding the
         foregoing, until and unless the Board shall have constituted the
         Committee pursuant to this Rule 10.4, the committee serving from time
         to time as administrator of the Plan generally shall also serve as the
         Committee for purposes of the UK Subplan. Actions taken by a majority
         of the members present at any meeting of the Committee at which a
         quorum is present, and any acts approved in writing by all members of
         the Committee without a meeting, shall constitute the acts of the
         Committee. The Committee shall have all powers of administration
         granted under these Rules, except such powers as are expressly reserved
         to the Board. The Committee is authorized to 


                                       18


<PAGE>


         interpret these Rules and, subject to the provisions of Rule 11.3, to
         prescribe, amend, and rescind rules and regulations relating thereto.
         The Committee is further authorized. subject to the express provisions
         of the Plan and these Rules, to alter or amend the form of Option
         Certificate pursuant to which Options may be granted under the Scheme
         from time to time and to make all determinations necessary or
         advisable in the administration of the Scheme. The interpretation and
         administration by the Committee of any provisions of the Plan and the
         UK Subplan, including these Rules, and any Option Certificate issued
         pursuant to the Scheme shall be final, binding and conclusive on all
         persons having any interest therein.

11.5     Any notice or communication to be given by or on behalf of the Company
         to any Eligible Employee may be given by personal delivery or by
         sending the same by ordinary post to his last known address in which
         case it shall be deemed to have been received on the day after it was
         posted. Any notice, document, option, share certificate or other
         communication sent by post shall be sent at the risk of the Eligible
         Employee involved.

11.6     Unless otherwise provided any notice or other communication to be given
         by an Eligible Employee to the Company shall be regarded as having been
         properly given if sent or delivered to the company secretary of the
         Participating Company by whom he is employed at that company's
         registered office, any such communication being effective only upon
         receipt.

11.7     The Scheme shall at all times be read in accordance with the provisions
         of the U.K. Income and Corporation Taxes Act 1988 and insofar as any of
         its Rules shall be inconsistent with any of the said provisions and/or
         with any requirements of the Board of Inland Revenue necessary for its
         approval or continued approval under the said Act they shall be deemed
         automatically varied or deleted in such a way as to ensure compliance
         with the same.


                                       19


<PAGE>



          SUBPLAN C--NON-EMPLOYEE ("ELIGIBLE") DIRECTOR PORTION OF THE
          ------------------------------------------------------------
                   AMENDED AND RESTATED 1994 STOCK OPTION PLAN
                   -------------------------------------------
               [AS FURTHER AMENDED AND RESTATED DECEMBER 29, 1998]
               ---------------------------------------------------


1.       Purpose of Subplan C

         The purpose of this Subplan C is to grant options to purchase shares of
the common stock, $.01 par value (the "Common Stock"), of United Asset
Management Corporation (the "Company") to Eligible Directors (as defined in
Section 4 of this Subplan) of the Company at market value on the date of grant,
and to permit the granting of stock options to Eligible Directors at an exercise
price less than market value at the date of grant as an alternative to the
payment of Directors' fees in cash. The Company believes that the granting of
such options will serve to enhance the Company's ability to attract and retain
the services of such persons, to provide additional incentives to them and to
encourage the highest level of performance by them by offering them a
proprietary interest in the Company's success. The Company also believes that
the Plan will encourage directors to make greater equity investment in the
Company, more closely aligning the interests of the directors and the
stockholders.

2.       Shares Reserved Under Subplan C

         Subject to the adjustment provided in Section 8, the aggregate number
of shares of Common Stock which may be issued and sold pursuant to options
granted under this Subplan C of the Plan shall not exceed 800,000 shares (or, if
less, the then remaining aggregate number of shares determined in accordance
with the Preamble to the Plan), which may be either authorized but unissued
shares or treasury shares. If any option granted under the Plan shall terminate
or expire without being fully exercised, the shares which have not been
purchased will again become available for purposes of the Plan.

3.       Administration

         This Subplan C shall be interpreted and administered by a committee
(the "Committee") consisting of not less than three (3) members of the Board of
Directors of the Company (the "Board") appointed pursuant to Section 3 of
Subplan A of the Plan. The interpretation and administration by the Committee of
any provisions of the Plan and any option granted thereunder shall be final and
conclusive on all persons having any interest therein.

         No members of the Committee or the Board shall be held liable for any
action or determination made in good faith with respect to the Plan or any
option granted thereunder.

4.       Option Grants

         "Eligible Directors" shall mean directors of the Company who are
directors on the date of grant and who are not officers or employees of the
Company. All options granted under this Subplan C shall be non-incentive stock
options within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").


                                       20


<PAGE>


         (a)      Regular Options

                           Each Eligible Director who is such on the 30th day
                  following the date on which each Annual Meeting of the
                  Stockholders of the Company (the "Annual Meeting") is held
                  during the term of the Plan shall on such 30th day be granted
                  a stock option to purchase 14,000 shares of Common Stock. Each
                  such option is defined herein as a "Regular Option."

                           The date of grant of an option to an Eligible
                  Director under this Subplan C shall be the applicable day
                  referred to immediately above.

         (b)      Discounted Options

                           (i) Subject to such other rules as the Committee may
                  adopt from time to time, during the term of the Plan, options
                  to purchase Common Stock at a discount from fair market value
                  on the date of grant ("Discounted Options") shall be granted
                  to any Eligible Director who, no later than June 30, with
                  respect to the six-month period following such date, and no
                  later than December 31, with respect to the six-month period
                  following such date (each six month period, a "Semi-Annual
                  Period"), has filed with the Company an irrevocable election
                  to receive a stock option in lieu of all or a specified
                  portion (expressed in terms of a percentage of the Semi-Annual
                  Fee) of the Semi-Annual Fee (as defined in Subsection 4(b)
                  (iii)) earned or expected to be earned by such Director for
                  the Semi-Annual Period specified in the election.

                           (ii) Discounted Options shall be granted to an
                  electing Eligible Director on the first day (July 1 or January
                  1) of each applicable Semi-Annual Period.

                           A separate election must be made for each Semi-Annual
                  Period, although a Director may specify that a particular
                  election shall apply to future Semi-Annual Periods unless
                  amended or revoked; provided, however, that no amendment or
                  revocation may be made with respect to a Semi-Annual Period
                  after the applicable election date for such Semi-Annual
                  Period. The Director shall not be entitled to receive in cash
                  any portion of the Semi-Annual Fee for which an election has
                  been made to receive an option.

                           (iii) Option Formula. The number of shares of Common
                  Stock subject to each Discounted Option granted to any
                  Eligible Director for a Semi-Annual Period shall be equal to
                  the nearest number of whole shares of Common Stock, with cash
                  payment for fractional shares, determined in accordance with
                  the following formula:

<TABLE>
                            <S>                        <C>   <C>
                              Semi-Annual Fee           =    Number of Shares
                           -----------------------
                           Fair Market Value minus
                           Discounted Option Price
</TABLE>
<PAGE>


         "Discounted Option Price" and "Fair Market Value" shall be defined as
set forth in Section 5 below. "Semi-Annual Fee" shall mean the quarterly
retainer fees which the Director will be entitled to receive during a
Semi-Annual Period for serving as a Director pursuant to the policy in effect
for each year during the term of the Plan, but expressly excluding fees paid for
attendance at or participation in meetings of the Board or any committee
thereof; provided, however, that if a Director elects to receive a stock option
in lieu of only a portion of the Semi-Annual Fee, the Semi-Annual Fee for
purposes of the foregoing formula shall equal the portion of the Semi-Annual Fee
so elected. For purposes of this Subplan C, "Semi-Annual Fee" shall also not
include expenses reimbursed by the Company for attendance at or participation in
meetings of the Board or any committee of the Board or fees for any other
services to be provided to the Company.

5.       Option Price

         (a)      Regular Option

                           The price per share at which each Regular Option
                  granted under this Subplan C to an Eligible Director may be
                  exercised ("Regular Option Price") shall be the fair market
                  value of the Common Stock as determined by the closing sales
                  price of such Common Stock on the consolidated tape of the
                  principal exchange on which such Common Stock is traded on the
                  date of grant, or if there are no sales on such date, on the
                  trading day next preceding the date of grant on which a sale
                  took place, or, if the Common Stock is not so traded, then as
                  determined by a principal market maker for such Common Stock
                  selected by the Committee ("Fair Market Value").

         (b)      Discounted Stock Options

                           The price per share at which each Discounted Option
                  granted under this Subplan C to an Eligible Director may be
                  exercised (the "Discounted Option Price," the Regular Option
                  Price and the Discounted Option Price being sometimes
                  hereinafter referred to as the "Option Price") shall be
                  seventy-five percent (75%) of the Fair Market Value of the
                  Common Stock on the date the Discounted Option is granted.

         (c)      In no event shall the Option Price per share for any option
                  under this Subplan C be less than the par value per share.

6.       Terms of Grant

         Each option granted under this Subplan C shall be evidenced by and
subject to the terms and conditions of an Option Grant attached hereto as
Exhibit A. Each Option Grant executed and delivered to an Eligible Director
shall contain the following terms and conditions. Each option shall expire 5
years from the date of grant of such option, and shall be exercisable in full
beginning on or after the date which is 6 months after the date of grant
thereof. Each Eligible Director to whom an option is granted may exercise such
option from time to time, in whole or in part, during the period that it is
exercisable, by payment of the Option Price of each share purchased. The Option
Price of each share purchased shall be paid in cash, or by delivery or 


                                       22


<PAGE>


deemed delivery of other shares of the Company's Common Stock owned by the
Eligible Director with an aggregate Fair Market Value equal to the product of
the Option Price multiplied by the number of the shares to be purchased, or by
withholding by the Company of the number of shares of its Common Stock otherwise
issuable upon exercise of the installment with an aggregate Fair Market Value
equal to the product of the Option Price multiplied by the number of the shares
(including such withheld shares) to be purchased, or by delivery of irrevocable
instructions to a broker promptly to pay to the Company the exercise price of
the shares to be purchased, or in any combination of the forms of payment. A
deemed delivery of shares shall mean the offset by the Company of a number of
shares to be purchased against an equal number of shares of the Company's Common
Stock owned by the Eligible Director. If, however, the applicable Committee
established pursuant to Section 3 of this Subplan C determines in good faith
that an exercise of an option through the delivery or deemed delivery or
withholding of shares of the Company's Common Stock or through delivery of
irrevocable instructions to a broker is not in the best interest of the Company,
the Committee may withhold the right to so exercise the option and require
payment of the purchase price in cash.

         The shares of Common Stock issued upon exercise of an option granted
under this Subplan C will be acquired for investment and not with a view to
distribution thereof unless there shall be an effective registration statement
under the Securities Act of 1933, as amended (the "1933 Act"), with respect
thereto. In the event that the Company, upon the advice of counsel, deems it
necessary to list upon official notice of issuance shares to be issued pursuant
to the Plan on a national securities exchange or to register under the 1933 Act
or other applicable federal or state statute any shares to be issued pursuant to
the Plan, or to qualify any such shares for exemption from the registration
requirements of the 1933 Act under the Rules and Regulations of the Securities
and Exchange Commission or for similar exemption under state law, then the
Company shall notify each Eligible Director to that effect and no shares of
Common Stock subject to an option shall be issued until such registration,
listing or exemption has been obtained. The Company shall make prompt
application for any such registration, listing or exemption pursuant to federal
or state law or rules of such securities exchange which it deems necessary and
shall make reasonable efforts to cause such registration, listing or exemption
to become and remain effective. Nothing in this Subplan C or in the Option Grant
will confer upon any Eligible Director the right to continue as a director of
the Company. The shares of Common Stock issued on exercise of the option shall
be subject to any restrictions on transfer then in effect pursuant to the
Certificate of Incorporation or Bylaws of the Company.

         Options granted under this Subplan C shall be transferable (subject to
any terms and conditions imposed by the Committee) by the optionee, either
directly or in trust, to one or more members of the optionee's family. Following
any transfer permitted pursuant to this paragraph, of which the optionee has
notified the Committee in writing, such option may be exercised by the
transferee(s), subject to all terms and conditions of the Option Grant. For
these purposes, the members of the optionee's family are only the optionee's:
(i) spouse; (ii) lineal descendants; (iii) lineal ancestors; and (iv) siblings
and spouses and children of such siblings.

7.       Termination of Directorship

         An Eligible Director's right to participate in this Subplan C shall
automatically terminate if and when such Director becomes an employee of the
Company. Options granted to an Eligible 


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<PAGE>


Director shall cease to be exercisable 6 months after the date such Director
ceases to be a director for any reason other than death. If an Eligible Director
ceases to be a director on account of his death, any option previously granted
to him, whether or not exercisable at the date of death, may be exercised by his
executor, administrator or the person or persons to whom his rights under the
option shall pass by will or the applicable laws of descent and distribution, at
any time within 12 months after the date of death, but in no event after the
expiration of the option.

8.       Adjustment of Shares Reserved Under the Plan

         The aggregate number and kind of shares that may be issued under this
Subplan C, the maximum number of shares as to which options may be granted to
any individual and the Option Price per share shall be appropriately adjusted by
the Board in the event of any recapitalization, stock split, stock dividend,
combination of shares, or other similar change in the capitalization of the
Company, but no adjustment in the Option Price shall be made which would reduce
the Option Price per share to less than the par value per share.

9.       Dissolution or Reorganization

         Prior to a dissolution, liquidation, merger, consolidation, or
reorganization of the Company (the "Event"), the Board may decide to terminate
each outstanding option. If the Board so decides, such option shall terminate as
of the effective date of the Event, but the Board shall suspend the exercise of
all outstanding options a reasonable time prior to the Event, giving each
optionee not less than fourteen days written notice of the date of suspension,
prior to which an optionee may purchase in whole or in part the shares available
to him as of the date of receipt of the notice. If the Event is not consummated,
the suspension shall be removed and all options shall continue in full force and
effect subject to the terms of their respective Option Grants.

10.      Amendment and Termination of Subplan C

The Board may amend, suspend, or terminate this Subplan C, including the form of
Option Grant incorporated herein by reference. No such action, however, may,
without approval or ratification by the shareholders, increase the maximum
number of shares reserved under this Subplan C except as provided in Section 8,
alter the class or classes of individuals eligible for options, or make any
other change which, pursuant to the Code or regulations thereunder or Section
16(b) of the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder, requires action by the shareholders. No such action may,
without the consent of the holder of the option, alter or impair any option
previously granted.


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