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                                                                    EXHIBIT 10.1


                                ACE LIMITED 1995
                             OUTSIDE DIRECTORS PLAN

                    (AS AMENDED THROUGH THE SIXTH AMENDMENT)

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SECTION 1   GENERAL ............................................... 1

     1.1. Purpose ................................................. 1

     1.2. Operation and Administration ............................ 1

SECTION 2   RETAINER AWARDS ....................................... 1

     2.1. General ................................................  1

     2.2. Vesting ................................................. 2

     2.3. Limit on Stock .......................................... 2

SECTION 3   COMMITTEE CHAIRMAN AWARDS ............................. 3

SECTION 3A  MEETING AWARDS ........................................ 3

SECTION 3B  OPTION AWARDS ......................................... 5

     3B.1. General................................................. 5

     3B.2. Terms of Option Awards ................................. 5

SECTION 4   OPERATION AND ADMINISTRATION .......................... 6

     4.1.  Effective Date ......................................... 6

     4.2.  Shares Subject to Plan ................................. 7

     4.3.  Fractional Shares ...................................... 7

     4.4.  Adjustments to Shares .................................. 8

     4.5.  Limit on Distribution .................................. 9

     4.6.  Taxes .................................................. 9

     4.7.  Distributions to Disabled Persons ...................... 9

     4.8.  Transferability ........................................ 9

     4.9.  Administration ......................................... 9

     4.10. Form and Time of Elections .............................10

     4.11. Agreement With Company .................................10

     4.12. Evidence ...............................................10

     4.13. Action by Company ......................................10

     4.14. Gender and Number ......................................10

SECTION 5   COMMITTEE .............................................10

     5.1.  Selection of Committee .................................10

     5.2.  Powers of Committee ....................................10

     5.3.  Information to be Furnished to Committee ...............10

     5.4.  Liability and Indemnification of Committee .............11

SECTION 6   AMENDMENT AND TERMINATION .............................11

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SECTION 7    DEFINED TERMS .......................................11

SECTION A-1  DEFERRAL ELECTION ................................... 1

     A-1-1.  General ............................................. 1

     A-1-2.  Stock Deferral Election ............................. 1

     A-1-3.  Cash Deferral Election .............................. 1

SECTION A-2  ACCOUNTS ............................................ 2

     A-2-1.  Stock Account ....................................... 2

     A-2-2.  Cash Account ........................................ 2

     A-2-3.  Statement of Accounts ............................... 3

SECTION A-3  DISTRIBUTIONS ....................................... 3

     A-3-1.  General ............................................. 3

     A-3-2.  Limitation of Implied Rights ........................ 4

                                       -2-

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                                ACE LIMITED 1995
                             OUTSIDE DIRECTORS PLAN

                    (AS AMENDED THROUGH THE SIXTH AMENDMENT)

                                    SECTION 1

                                     GENERAL

     1.1. Purpose. The ACE Limited 1995 Outside Directors Plan (the "Plan") has
been established by ACE Limited (the "Company") to promote the interests of the
Company and its shareholders by enhancing the Company's ability to attract and
retain the services of experienced and knowledgeable directors and by
encouraging such directors to acquire an increased proprietary interest in the
Company.

     1.2. Operation and Administration. The operation and administration of the
Plan shall be subject to the provisions of Section 4. Capitalized terms in the
Plan shall be defined as set forth in Section 7 or elsewhere in the Plan.

                                    SECTION 2

                                 RETAINER AWARDS

     2.1. General.

     (a)  For each Plan Year, each Director who is an Eligible Director on the
          first day of that Plan Year shall be granted a "Retainer Award" for
          the year, which shall be in the form of shares of Stock having a Fair
          Market Value of $35,000. Except as otherwise provided in this
          subsection 2.1, the Retainer Award for any Plan Year shall be made as
          of the first business day of that Plan Year (the "Award Date" for that
          Retainer Award), and the Fair Market Value of the Stock so awarded
          shall be determined as of that date. Notwithstanding the foregoing,
          for the Plan Year beginning in 1999 (the "1999 Plan Year"), the
          Retainer Award for such Plan Year shall include an additional award
          (the "1999 Additional Award"), in the form of shares having a Fair
          Market Value of $8,750 (and for the 1999 Plan Year, reference in the
          Plan to the "Retainer Award" shall include reference to such 1999
          Additional Award). Except as otherwise provided in this subsection
          2.1, the 1999 Additional Award shall be made as of the first business
          day following the adoption of the Second Amendment of the Plan (the
          "1999 Additional Award Date"), and the Fair Market Value of the Stock
          so awarded shall be determined as of that date.

     (b)  If a Director becomes an Eligible Director during a Plan Year, on a
          date other than the first day of the Plan Year, he shall be granted a
          Retainer Award for the year, which shall be in the form of shares of
          Stock having a Fair Market Value

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          equal to $35,000, subject to a pro-rata reduction to reflect the
          portion of the Plan Year prior to the date on which he becomes an
          Eligible Director; provided, however, that with respect to the 1999
          Plan Year, such Retainer Award subject to pro rata reduction shall
          include the 1999 Additional Award. A Director's Retainer Award under
          this paragraph (b) shall be made on the first business day on which he
          is an Eligible Director (the "Award Date" for that Retainer Award),
          and the Fair Market Value of the Stock so awarded shall be determined
          as of that date; provided, however, that if a Director becomes
          eligible for a Retainer Award under this Paragraph (b) on a date
          before the 1999 Additional Award Date, then that portion of the 1999
          Additional Award to which he becomes entitled shall be made as of the
          1999 Additional Award Date, and the Fair Market Value of the Stock so
          awarded shall be determined as of that date.

     (c)  The shares awarded under this subsection 2.1 shall be subject to the
          vesting provision set forth in subsection 2.2.

     (d)  A Participant may elect to defer receipt of his Retainer Awards in
          accordance with Supplement A of the Plan.

     2.2. Vesting. A Participant who ceases to be a Director shall forfeit the
Retainer Award which is not vested on his Date of Termination; provided,
however, that (i) if a Participant ceases to be a Director by reason of his
death or Disability, any portion of the Retainer Award that is not then vested
shall vest on his Date of Termination; and (ii) any portion of the Retainer
Award that is held by an individual serving as a Director on the date of a
Change in Control that is not then vested shall vest on the date of the Change
of Control. Except as otherwise provided in this subsection 2.2, a Participant
shall become vested in 100% of the Retainer Award shares for any Plan Year on
the last day of that Plan Year; provided that a Participant shall become vested
in the Retainer Award shares for the Plan Year only if such Participant's Date
of Termination does not occur prior to the last day of that year.

     2.3. Limit on Stock. Stock granted as a Retainer Award shall be subject to
the following:

     (a)  Such Stock may not be sold, assigned, transferred, pledged or
          otherwise encumbered prior to the date it is vested.

     (b)  Each certificate issued in respect of such Stock shall be registered
          in the name of the Participant and deposited, together with a stock
          power endorsed in blank, with the Company.

     (c)  Except as otherwise provided by the Plan, the Participant as owner of
          shares of Stock granted to him as a Retainer Award shall have all the
          rights of a shareholder, including but not limited to the right to
          vote such shares and the right to receive all dividends paid on such
          shares; provided, however, that no dividends

                                       -2-

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          shall be payable to or for the benefit of a Participant with respect
          to record dates for such dividends occurring on or after the date, if
          any, on which the Participant has forfeited the Stock.

                                    SECTION 3

                            COMMITTEE CHAIRMAN AWARDS

     (a)  Each Eligible Director who serves as the chairman of any committee of
          the Board (a "Committee Chairman") during any Plan Year Quarter shall
          be granted a Committee Chairman Award as of the first business day of
          the next following Plan Year Quarter, which shall be the "Award Date"
          for such award.

     (b)  The amount of the Committee Chairman Award shall be the number of
          shares of Stock having a Fair Market Value (determined as of the Award
          Date) of $1,250 per quarter. If an individual serves as a Committee
          Chairman for less than a full Plan Year Quarter, then the size of the
          Committee Chairman Award shall be subject to a pro-rata reduction to
          reflect the portion of the Plan Year Quarter during which he was not
          Committee Chairman.

     (c)  The shares granted as a Committee Chairman Award under this Section 3
          shall be fully vested at the time of award.

     (d)  A Participant may elect to defer receipt of his Committee Chairman
          Awards in accordance with Supplement A of the Plan.

     (e)  A Participant may elect to receive his Committee Chairman Award in
          cash.

                                   SECTION 3A

                                 MEETING AWARDS

     (a)  Each Eligible Director who is otherwise eligible to receive cash
          compensation for attendance at a meeting of the Board or for
          attendance at a meeting of any committee of the Board, may in lieu of
          such cash compensation, elect to receive to such compensation in
          Stock, and such compensation payable in Stock shall be considered the
          grant of a "Meeting Award." An election to receive a Meeting Award in
          lieu of cash compensation must be made in accordance with the
          requirements of paragraph (c) of this Section 3A. In the event that
          one or more committee or Board meetings are scheduled to occur within
          four consecutive business days of each other (the "Consecutive
          Meetings"), then the Meeting Awards for all such Consecutive Meetings
          shall be granted as of the first business day coincident with or next
          following the date of the last scheduled meeting in such four day
          period, which shall be the "Award Date" for such award. (A committee
          or Board meeting that occurs within four consecutive business days of

                                       -3-

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          some but not all the Consecutive Meetings, or that is scheduled after
          the Meeting Awards for the prior meetings have been issued, will not
          be part of the preceding group of Consecutive Meetings, although, if
          applicable it could be part of a another group of Consecutive
          Meetings.) All other Meeting Awards shall be granted as of the first
          business day coincident with or next following the date of the Board
          or committee meeting to which it relates, which shall be the "Award
          Date" for such award.

     (b)  The amount of the Meeting Award for attendance at a Board meeting
          shall be the number of shares of Stock having a Fair Market Value
          (determined as of the Award Date) of $3,000 per meeting. The amount of
          the Meeting Award for attendance at a committee meeting shall be the
          number of shares of Stock having a Fair Market Value (determined as of
          the Award Date) of $1,000 per meeting.

     (c)  Except as otherwise provided in this paragraph (c), an election to
          receive a Meeting Award in lieu of cash compensation for attendance at
          Board and committee meetings during a Plan Year shall be filed at such
          time and in such form as established by the Committee. An individual
          who becomes an Eligible Director on a date other than the first day of
          the Plan Year may elect to receive a Meeting Award in lieu of cash
          compensation for the remainder of the year by filing a Meeting Award
          election filed at such time and in such form as established by the
          Committee. An election to receive a Meeting Award rather than cash
          compensation shall apply to all Board and committee meetings in the
          Plan Year for which the election is made, provided, however, that such
          election shall be effective only with respect to compensation for
          meetings occurring after the date such election is filed.

     (d)  The shares granted as a Meeting Award under this Section 3A shall be
          fully vested at the time of award.

     (e)  A Participant may elect to defer receipt of his Meeting Awards in
          accordance with Supplement A of the Plan.

     (f)  If a Participant has made no election under this Section 3A with
          respect to the form of payment of compensation for his attendance at
          Board or committee meetings, then such compensation shall be paid in
          cash.

                                   SECTION 3B

                                  OPTION AWARDS

     3B.1. General.

     (a)  For each Plan Year, each Director who is an Eligible Director on the
          first day of that Plan Year shall be granted an "Option Award" which
          shall entitle the Eligible

                                      -4-

<PAGE>

          Director to purchase shares of Stock. The number of shares subject to
          the Option Award with respect to the Option Award granted in the Plan
          Year beginning in 2001 (the "2001/2002 Plan Year") and in each Plan
          Year thereafter shall be 4,000, unless and until the number of shares
          underlying an Option Award in any subsequent Plan Year is modified by
          the Board. Except as otherwise provided in this subsection 3B.1, the
          Option Award for any Plan Year shall be granted as of the first
          business day of that Plan Year (the "Award Date" for that Option
          Award).

     (b)  If a Director becomes an Eligible Director during a Plan Year, on a
          date other than the first day of the Plan Year, he shall be granted an
          Option Award which shall entitle the Eligible Director to purchase
          shares of Stock. The number of shares of Stock subject to the Option
          Award shall be the number which would have been subject to the Option
          if he had become an Eligible Director on the first day of the Plan
          Year, except that such number of shares shall be subject to a pro rata
          reduction to reflect the portion of the Plan Year prior to the date on
          which he becomes an Eligible Director. In no event shall an Option
          Award be granted with respect to a fractional share, and the amount of
          any pro-rata reduction shall be rounded to the nearest whole share. An
          Option Award made under this paragraph (b) shall be granted on the
          first business day on which the Director is an Eligible Director (the
          "Award Date" for that Option Award).

     (c)  In addition to any Option Award granted in accordance with paragraphs
          (b) or (c) of this subsection 3B.1, an individual who is an Eligible
          Director on the first day of the 2001/2002 Plan Year shall be granted
          an Option Award, entitling him to purchase 2,000 shares of Stock. Such
          Option Award shall be granted as the first business day of the
          2001/2002 Plan Year (the "Award Date" for that Option Award).

     3B.2. Terms of Option Awards.

     (a)  An Option Award shall entitle the Director to purchase shares of Stock
          at a per-share price equal to the greater of: (i) 100% of the Fair
          Market Value of a share of Stock as of the Award Date; or (ii) the par
          value of a share of Stock.

     (b)  The full purchase price of each share of Stock purchased upon the
          exercise of any Option Award shall be paid at the time of such
          exercise and, as soon as practicable thereafter, a certificate
          representing the shares so purchased shall be delivered to the person
          entitled thereto.

     (c)  The Option Award purchase price shall be payable in cash or in shares
          of Stock (valued at Fair Market Value as of the day of exercise), or
          in any combination thereof. A Director may elect to pay the purchase
          price upon the exercise of an

                                       -5-

<PAGE>

          Option Award granted pursuant to this Section 3B through a cashless
          exercise procedure established by the Company.

     (d)  The Option Award granted to an Eligible Director shall become
          exercisable with respect to one-third of the shares covered by the
          Option Award on the last day of the Plan Year for which it was
          granted; with respect to an additional one-third of the shares covered
          by the Option Award on the last day of the Plan Year next following
          the Plan Year for which it was granted; and with respect to the
          remaining one-third of the shares covered by the Option Award on the
          last day of the next following Plan Year; provided, however, that such
          portion of the Option Award shall become exercisable only if such
          Director's Date of Termination does not occur on or prior to the last
          day of the applicable Plan Year. Notwithstanding any provision of the
          Plan to the contrary, the foregoing vesting schedule shall be subject
          to acceleration, to the extent permitted by the Committee, in the
          event of the Participant's death, Disability, retirement, or
          involuntary termination or in the event of a Change in Control.

     (e)  An Option Award shall expire on the earlier of: (i) the ten-year
          anniversary of the Award Date or (ii) the one-year anniversary of the
          Director's Date of Termination. Notwithstanding the foregoing, the
          Committee may provide that, following a Director's Date of
          Termination, an Option Award shall expire on any date later than the
          one-year anniversary of the Director's Date of Termination, provided
          that such date of expiration may not be later than the ten-year
          anniversary of the date on which the Option Award was granted. No
          Option shall be exercisable following a Director's Date of Termination
          except to the extent that the Option is exercisable prior to, or
          becomes exercisable as of, such Date of Termination.

                                    SECTION 4

                          OPERATION AND ADMINISTRATION

     4.1. Effective Date. Subject to the approval of the shareholders of the
Company at the Company's 1996 annual meeting of its shareholders, the Plan shall
be effective as of the Effective Date; provided, however, that to the extent
that Awards are made under the Plan prior to its approval by shareholders, they
shall be contingent on approval of the Plan by the shareholders of the Company.
The Plan shall be unlimited in duration and, in the event of Plan termination,
shall remain in effect as long as any shares of Stock awarded under it are
outstanding and not fully vested, or any Option Awards granted under it are
outstanding and not exercised; provided, however, that no new Awards shall be
made under the Plan after the tenth anniversary of the Effective Date. With
respect to any individual who is an Eligible Director on the Effective Date,
receipt of Awards under the Plan shall be contingent on the Director
relinquishing, as of the Effective Date, and subject to this Plan being approved
by the shareholders at the 1996 annual meeting, the ownership rights to any
shares of Stock awarded to

                                       -6-

<PAGE>

him by the Company before the Effective Date, but only with respect to the
shares that had not vested on or before February 1, 1996.

     4.2. Shares Subject to Plan. The shares of Stock with respect to which
Awards may be made under the Plan shall be shares currently authorized but
unissued shares, or shares purchased in the open market by a direct or indirect
wholly owned subsidiary of the Company (as determined by the Chairman or any
Executive Vice President of the Company). The Company may contribute to the
subsidiary an amount sufficient to accomplish the purchase in the open market of
the shares of Stock to be so acquired (as determined by the Chairman or any
Executive Vice President of the Company). The number of shares of Stock
available for Awards under the Plan during any fiscal year of the Company shall
equal:

     (a)  0.5% of the adjusted average of the outstanding Stock, as that number
          is determined by the Company to calculate fully diluted earnings per
          share for the preceding fiscal year;

     REDUCED BY

     (b)  any shares of Stock granted pursuant to Awards under the Plan, and any
          shares of Stock subject to any outstanding award under the Plan;

provided however, that no reduction shall be made in the number of shares
otherwise available under paragraph 4.2(a) for any shares of Stock subject to an
Award under the Plan to the extent that such shares are not issued by reason of
a lapse, forfeiture, expiration or termination of the Award for any reason
without issuance of shares (whether or not cash or other consideration is paid
to a Participant in respect of such shares).

     4.3. Fractional Shares. No fractional shares of Stock shall be distributed
under the Plan and, instead, the Fair Market Value of such fractional share
shall be distributed in cash, with the Fair Market Value determined as of the
date the fractional share would otherwise have been distributable; provided,
however, that in the event that the Participant elects to defer receipt of any
Award under the Plan pursuant to Supplement A of the Plan, the fractional
amounts will be calculated and recorded in the Participant's Stock Account. The
subsequent distribution of a Participant's deferred Stock Awards shall be
subject to payment in whole Shares with the fractional Shares distributed in
cash, with the Fair Market Value determined as of the date the fractional share
would otherwise have been distributable. For purposes of the foregoing sentence,
if more than one Award or type of Award under the Plan is to be distributed in
Shares on a single date, such Shares shall be aggregated prior to determining
the number of whole and fractional shares to be distributed.

     4.4. Adjustments to Shares.

     (a)  If the Company shall effect any subdivision or consolidation of shares
          of Stock or other capital readjustment, payment of stock dividend,
          stock split, combination of

                                       -7-

<PAGE>

          shares or recapitalization or other increase or reduction of the
          number of shares of Stock outstanding without receiving compensation
          therefor in money, services or property, then the Committee shall
          adjust (i) the number of shares of Stock available under the Plan;
          (ii) the number of shares available under any limits; (iii) the number
          of shares of Stock subject to outstanding (non-vested) Awards and to
          deferred Stock Awards; (iv) the number of shares of Stock subject to
          future grants; and (v) the per-share price under any outstanding
          Option Award.

     (b)  If the Company is reorganized, merged or consolidated or is party to a
          plan of exchange with another corporation, pursuant to which
          reorganization, merger, consolidation or plan of exchange the
          shareholders of the Company receive any shares of stock or other
          securities or property, or the Company shall distribute securities of
          another corporation to its shareholders, there shall be substituted
          for the shares subject to outstanding (non-vested) Awards and to
          deferred Stock Awards an appropriate number of shares of each class of
          stock or amount of other securities or property which were distributed
          to the shareholders of the Company in respect of such shares; provided
          that, upon the occurrence of a reorganization of the Company or any
          other event described in this paragraph (b), any successor to the
          Company shall be substituted for the Company.

     (c)  The existence of this Plan and the Awards granted hereunder shall not
          affect in any way the right or power of the Company or its
          shareholders to make or authorize any or all adjustments,
          recapitalizations, reorganizations or other changes in the Company's
          capital structure or its business, any merger or consolidation of the
          Company, any issue of bonds, debentures, preferred or prior preference
          stocks ahead of or affecting the Company's Stock or the rights
          thereof, the dissolution or liquidation of the Company, any sale or
          transfer of all or any part of its assets or business, or any other
          corporate act or proceeding, whether of a similar character or
          otherwise.

     (d)  Except as expressly provided by the terms of this Plan, the issue by
          the Company of shares of stock of any class, or securities convertible
          into shares of stock of any class, for cash or property or for labor
          or services, either upon direct sale, upon the exercise of rights or
          warrants to subscribe therefor or upon conversion of shares or
          obligations of the Company convertible into such shares or other
          securities, shall not affect, and no adjustment by reason thereof
          shall be made with respect to Awards then outstanding hereunder.

     4.5. Limit on Distribution. Distribution of shares of Stock or other
amounts under the Plan shall be subject to the following:

     (a)  Notwithstanding any other provision of the Plan, the Company shall
          have no liability to issue any shares of Stock under the Plan or make
          any other distribution of benefits under the Plan unless such delivery
          or distribution would comply with

                                      -8-

<PAGE>

          all applicable laws and the applicable requirements of any securities
          exchange or similar entity.

     (b)  The Committee shall add such conditions and limitations to any Award
          to any Participant who is subject to Section 16(a) and 16(b) of the
          Securities Exchange Act of 1934, as is necessary to comply with
          Section 16(a) or 16(b) and the rules and regulations thereunder or to
          obtain any exemption therefrom.

     (c)  To the extent that the Plan provides for issuance of certificates to
          reflect the transfer of shares of Stock, the transfer of such shares
          may, at the direction of the Committee, be effected on a
          non-certificated basis, to the extent not prohibited by the provisions
          of Rule 16b-3, applicable local law, the applicable rules of any stock
          exchange, or any other applicable rules.

     4.6. Taxes. All Awards and other payments under the Plan are subject to all
applicable taxes.

     4.7. Distributions to Disabled Persons. Notwithstanding any other provision
of the Plan, if, in the Committee's opinion, a Participant or other person
entitled to benefits under the Plan is under a legal disability or is in any way
incapacitated so as to be unable to manage his financial affairs, the Committee
may direct that payment be made to a relative or friend of such person for his
benefit until claim is made by a conservator or other person legally charged
with the care of his person or his estate, and such payment or distribution
shall be in lieu of any such payment to such Participant or other person.
Thereafter, any benefits under the Plan to which such Participant or other
person is entitled shall be paid to such conservator or other person legally
charged with the care of his person or his estate.

     4.8. Transferability. Awards under the Plan are not transferable except as
designated by the Participant by will or by the laws of descent and
distribution.

     4.9. Administration. The authority to control and manage the operation and
administration of the Plan shall be vested in a committee (the "Committee") in
accordance with Section 5.

     4.10. Form and Time of Elections. Any election required or permitted under
the Plan shall be in writing, and shall be deemed to be filed when delivered to
the Secretary of the Company. Any deferral election made under Supplement A
shall be irrevocable after it is filed with respect to the Plan Year for which
it is filed, and such deferral shall remain in effect and be irrevocable with
respect to any future Plan Year unless a new election with respect to such Plan
Year is filed in accordance with rules established by the Committee, in which
case such new election shall be irrevocable with respect to such Plan Year.

     4.11. Agreement With Company. Each Award of Stock granted under Sections 2
and 3 shall be evidenced by an Agreement (an "Agreement") duly executed on
behalf of the Company

                                      -9-

<PAGE>

and by the Participant to whom such Award is granted and dated as of the
applicable date of grant. Each Agreement shall comply with and be subject to the
terms of the Plan.

     4.12. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.

     4.13. Action by Company. Any action required or permitted to be taken by
the Company shall be by resolution of the Board, or by action of one or more
members of the Board (including a committee of the Board) who are duly
authorized to act for the board, by a duly authorized officer of the Board, or
(except to the extent prohibited by the provisions of Rule 16b-3, applicable
local law, the applicable rules of any stock exchange, or any other applicable
rules) by a duly authorized officer of the Company.

     4.14. Gender and Number. Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.

                                    SECTION 5

                                    COMMITTEE

     5.1. Selection of Committee. The Committee shall be selected by the Board,
and shall consist of not less than two members of the Board.

     5.2. Powers of Committee. The authority to manage and control the operation
and administration of the Plan shall be vested in the Committee. The Committee
will have the authority to establish, amend, and rescind any rules and
regulations relating to the Plan, to determine the terms and provisions of any
agreements made pursuant to the Plan, and to make all other determinations that
may be necessary or advisable for the administration of the Plan.

     5.3. Information to be Furnished to Committee. The Company shall furnish
the Committee with such data and information as may be required for it to
discharge its duties. The records of the Company as to the period of a
Director's service shall be conclusive on all persons unless determined to be
incorrect. Participants and other persons entitled to benefits under the Plan
must furnish the Committee such evidence, data or information as the Committee
considers desirable to carry out the terms of the Plan.

     5.4. Liability and Indemnification of Committee. No member or authorized
delegate of the Committee shall be liable to any person for any action taken or
omitted in connection with the administration of the Plan unless attributable to
his own fraud or willful misconduct; nor shall the Company be liable to any
person for any such action unless attributable to fraud or willful misconduct on
the part of a director or employee of the Company. The Committee, the individual
members thereof, and persons acting as the authorized delegates of the Committee
under the Plan, shall be indemnified by the Company, to the fullest extent
permitted by law,

                                      -10-

<PAGE>

against any and all liabilities, losses, costs and expenses (including legal
fees and expenses) of whatsoever kind and nature which may be imposed on,
incurred by or asserted against the Committee or its members or authorized
delegates by reason of the performance of a Committee function if the Committee
or its members or authorized delegates did not act dishonestly or in willful
violation of the law or regulation under which such liability, loss, cost or
expense arises. This indemnification shall not duplicate but may supplement any
coverage available under any applicable insurance.

                                    SECTION 6

                            AMENDMENT AND TERMINATION

     The Board may, at any time, amend or terminate the Plan, provided that,
subject to subsection 4.4 (relating to certain adjustments to shares), no
amendment or termination may adversely affect the rights of any Participant or
beneficiary under any Award made under the Plan prior to the date such amendment
is adopted by the Board. Notwithstanding the provisions of this Section 6, in no
event shall the provisions of the Plan relating to Awards under the Plan be
amended more than once every six months, other than to comport with changes in
the Code, the Employee Retirement Income Security Act, or the rules thereunder;
provided, however, that the limitation set forth in this sentence shall be
applied only to the extent required under SEC Rule 16b-3(c)(2)(ii)(B) or any
successor provision thereof.

                                    SECTION 7

                                  DEFINED TERMS

     For purposes of the Plan, the terms listed below shall be defined as
follows:

     (a)  Award. The term "Award" shall mean the Retainer Award, the Option
          Award, the Committee Chairman Award, and the Meeting Award granted to
          any person under the Plan.

     (b)  Board. The term "Board" shall mean the Board of Directors of the
          Company.

     (c)  Change in Control. The term "Change in Control" shall mean the
          occurrence of any one of the following events:

          (i)  any "person," as such term is used in Sections 3(a)(9) and 13(d)
               of the Securities Exchange Act of 1934, becomes a "beneficial
               owner," as such term is used in Rule 13d-3 promulgated under that
               act, of 50% or more of the Voting Stock (as defined below) of the
               Company;

          (ii) the majority of the Board consists of individuals other than
               Incumbent Directors, which term means the members of the Board on
               the date of this Agreement; provided that any person becoming a
               director subsequent to

                                      -11-

<PAGE>

               such date whose election or nomination for election was supported
               by three-quarters of the directors who then comprised the
               Incumbent Directors shall be considered to be an Incumbent
               Director;

         (iii) the Company adopts any plan of liquidation providing for the
               distribution of all or substantially all of its assets;

          (iv) all or substantially all of the assets or business of the Company
               is disposed of pursuant to a merger, consolidation or other
               transaction (unless the shareholders of the Company immediately
               prior to such merger, consolidation or other transaction
               beneficially own, directly or indirectly, in substantially the
               same proportion as they owned the Voting Stock of the Company,
               all of the Voting Stock or other ownership interests of the
               entity or entities, if any, that succeed to the business of the
               Company); or

          (v)  the Company combines with another company and is the surviving
               corporation but, immediately after the combination, the
               shareholders of the Company immediately prior to the combination
               hold, directly or indirectly, 50% or less of the Voting Stock of
               the combined company (there being excluded from the number of
               shares held by such shareholders, but not from the Voting Stock
               of the combined company, any shares received by Affiliates (as
               defined below) of such other company in exchange for stock of
               such other company).

     For the purpose of this definition of "Change in Control", (I) an
     "Affiliate" of a person or other entity shall mean a person or other entity
     that directly or indirectly controls, is controlled by, or is under common
     control with the person or other entity specified and (II) "Voting Stock"
     shall mean capital stock of any class or classes having general voting
     power under ordinary circumstances, in the absence of contingencies, to
     elect the directors of a corporation.

     (d)  Date of Termination. A Participant's "Date of Termination" shall be
          the day following the last day on which he serves as a Director.

     (e)  Director. The term "Director" means a member of the Board.

     (f)  Disability. A Participant shall be considered to have a "Disability"
          during the period in which he is unable, by reason of a medically
          determinable physical or mental impairment, to engage in any
          substantial gainful activity, which condition, in the opinion of a
          physician selected by the Committee, is expected to have a duration of
          not less than 120 days.

     (g)  Dollars. As used in the Plan, the term "dollars" or numbers preceded
          by the symbol "$" shall mean amounts in United States Dollars.

                                      -12-

<PAGE>

(h)  Effective Date. The "Effective Date" means the date on which Directors
     begin their yearly term of office on the Board following their election at
     the Company's 1996 annual shareholders meeting.

(i)  Eligible Director. Each Director who is not an employee of the Company or
     any Related Company shall be an "Eligible Director".

(j)  Fair Market Value. The "Fair Market Value" of a share of Stock of the
     Company as of any date shall be the closing market composite price for such
     Stock as reported for the New York Stock Exchange - Composite Transactions
     on that date or, if Stock is not traded on that date, on the next preceding
     date on which Stock was traded.

(k)  Participant. A "Participant" is any person who has received an Award under
     the Plan.

(l)  Plan Year. The term "Plan Year" means the period (i) beginning on the date
     on which members of the Board begin their yearly term as Board members
     following the election of Directors at the Company's annual shareholders
     meeting and (ii) ending on the day immediately prior the first day of the
     following Plan Year. The first Plan Year shall begin on the Effective Date.

(m)  Plan Year Quarter. For any Plan Year, the first Plan Year Quarter shall
     begin on the first day of the plan year, and shall end on the 90th day of
     the Plan Year; the second Plan Year Quarter shall begin on the 91st day of
     the Plan Year, and shall end on the 180th day of the Plan Year; the third
     Plan Year Quarter shall begin on the 181st day of the Plan Year, and shall
     end on the 270th day of the Plan Year; and the fourth Plan Year Quarter
     shall begin on the 271st day of the Plan Year, and shall end on the last
     day of the Plan Year. Notwithstanding the foregoing, with respect to only
     the 1999 Plan Year, there shall be an additional Plan Year Quarter, so that
     the fourth Plan Year Quarter shall begin on the 271st day of the Plan Year,
     and shall end on the 360th day of the Plan Year; and the fifth Plan Year
     Quarter shall begin on the 361st day of the Plan Year, and shall end on the
     last day of the Plan Year.

(n)  Related Companies. The term "Related Company" means any company during any
     period in which it is a "subsidiary corporation" (as that term is defined
     in Code section 424(f)) with respect to the Company.

(o)  SEC. "SEC" shall mean the Securities and Exchange Commission.

(p)  Stock. The term "Stock" shall mean shares of common stock of the Company.

                                      -13-

<PAGE>

                                  SUPPLEMENT A
                                ELECTIVE DEFERRAL

                                   SECTION A-1

                                DEFERRAL ELECTION

General. An individual who is otherwise entitled to receive a Retainer Award or
a Committee Chairman Award, or who is otherwise eligible to receive cash payment
for services provided as a Director ("Cash Compensation"), may elect to defer
delivery of all or a portion of such shares of Stock and such cash, subject to
the following terms of this Section A-1.

Stock Deferral Election.

An individual who is an Eligible Director on the first day of a Plan Year may
elect to defer the receipt of all or a portion of the Stock awarded as the
Retainer Award for the Plan Year, to defer receipt of all or a portion of the
Stock awarded as the Meeting Award for the Plan Year, or to defer the receipt of
all or a portion of the Stock awarded as a Committee Chairman Award for any
quarter of a Plan Year, by filing a deferral election with respect to the Plan
Year at such time and in such form as established by the Committee; provided,
however, that such election shall be effective only with respect to compensation
payable after the date such election is filed.

An individual who becomes an Eligible Director on a date other than the first
day of a Plan Year may elect to defer all or a portion of the Stock awarded as
the Retainer Award for the remainder of the year by filing a deferral election
with respect to the remainder of the year at such time and in such form as
established by the Committee; provided, however, that such election shall be
effective only with respect to compensation payable after the date such election
is filed.

An individual who becomes a Committee Chairman on a date other than the first
day of a Plan Year may elect to defer all or a portion of the Committee Chairman
Award for the remainder of the year by filing a deferral election prior to the
date on which he becomes Committee Chairman; and, by filing a deferral election
within 30 days after becoming a Committee Chairman, he may defer receipt of the
portion of the Committee Chairman Award for the portion of the Plan Year
following the 30-day period.

An individual who becomes an Eligible Director on a date other than the first
day of a Plan Year may elect to defer all or a portion of the Meeting Award for
the remainder of the year by filing a deferral election with respect to the
remainder of the year at such time and in such form as established by the
Committee; provided, however, that such election shall be effective only with
respect to compensation payable after the date such election is filed.

Cash Deferral Election.

An election to defer the receipt of all or a portion of the Cash Compensation
for any Plan year shall be filed with respect to a Plan Year at such time and in
such form as established by the Committee; provided, however, that such election
shall be effective only with respect to Cash Compensation payable after the date
such election is filed.

<PAGE>

An individual who becomes an Eligible Director on a date other than the first
day of a Plan Year may elect to defer all or a portion of the Cash Compensation
for the remainder of the year by filing a deferral election with respect to the
remainder of the year at such time and in such form as established by the
Committee; provided, however, that such election shall be effective only with
respect to Cash Compensation payable after the date such election is filed.

                                  SECTION A-2

                                    ACCOUNTS

Stock Account. A Stock Account shall be maintained on behalf of each Participant
who elects to defer the distribution of shares of Stock under this Supplement A,
for the period during which delivery of shares of Stock is deferred.
A Participant's Stock Account shall be subject to the following adjustments:

The Stock Account will be credited with Share Units equal to the number of
shares of Stock as to which the Participant has elected deferred receipt, with
such Share Units to be credited as of the date on which the shares would
otherwise have been delivered to him in the absence of the deferral.

As of each dividend record date for the Stock following the date any Share Units
are credited to the Participant's Stock Account, and prior to the date of
distribution of shares of Stock with respect to those Share Units, the
Participant's Stock Account shall be credited with additional Share Units
(including fractional Share Units) equal to (i) the amount of the dividend that
would be payable with respect to the number of shares of Stock equal to the
number of Share Units credited to the Participant's Stock Account on the
dividend record date; divided by (ii) the Fair Market Value of a share of Stock
on the date of payment of the dividend.

As of the date of any distribution of shares of Stock with respect to a
Participant's Stock Account under Section A-3, the Share Units credited to a
Participant's Stock Account shall be reduced by the number of Shares so
distributed to the Participant.

Cash Account. A Cash Account shall be maintained on behalf of each Participant
who elects to defer the distribution of cash under this Supplement A, for the
period during which delivery of cash is deferred. A Participant's Cash Account
shall be credited with interest, with the applicable interest rate for any
calendar year equal to the prime rate as of the first business day of that
calendar year, as reported in The Wall Street Journal. As of the date of any
distribution with respect to a Participant's Account under Section A-3, the
balance credited to a Participant's Account shall be reduced by the amount of
the distribution to the Participant.

Statement of Accounts. As soon as practicable after the end of each Plan Year,
the Company shall provide each Participant having one or more Accounts under the
Plan with a statement of the transactions in his Accounts during that year and
his Account balances as of the end of the year.

                                      -2-

<PAGE>

                                   SECTION A-3

                                  DISTRIBUTIONS

General.

Subject to the terms of this Section A-3, a Participant shall specify, as part
of his deferral election with respect to Stock Awards, and as part of his
deferral election with respect to Cash Compensation, the time of distribution of
the amounts deferred pursuant to such election; provided, however, that
distribution of shares of Stock, and of Cash Compensation, shall be made in a
lump sum not later than the first anniversary of the date on which the
individual ceases to be a Director; and further provided that a Participant may
elect only a single date for distribution of all of his deferred Stock Awards
and only a single date for distribution of all of his deferred Cash Compensation
under the Plan, provided that the distribution date for the Participant's
deferred Stock Awards and for deferred Cash Compensation may differ.

At the time of distribution of deferred shares in accordance with the
Participant's election, the Participant shall receive a distribution of shares
of Stock equal to the number of share units credited to his Account immediately
prior to such distribution. If the scheduled distribution date would otherwise
occur after a dividend record date but before the payment of the dividend,
distribution shall be deferred (not more than 30 days) until the dividend is
paid.

At the time of distribution of Cash Compensation in accordance with the
Participant's election, the Participant shall receive the amount then credited
to the Participant's Cash Account as of the date of distribution.

In determining a Participant's right to distributions of stock under this
Section A-3, the vesting provisions of subsection 2.2 of the Plan shall apply to
the share units credited to the Participant's Stock Account as though each unit
represented one share of Stock, and with all units attributable to payment of
dividends being fully vested as of the date they are credited to the
Participant's Stock Account.

Notwithstanding the foregoing provisions of this Section A-3, if any share units
are credited to a Participant's Stock Account as of the date of a Change in
Control, the Participant shall receive a distribution of shares of Stock equal
to the number of such share units. Such distribution shall be in settlement of
the Participant's rights to distribution under this Section A-3, provided that
if the record date for a dividend is prior to a Change in Control, but the
dividend payment is to occur after such Change in Control, the additional shares
attributable to such dividends shall be distributed as soon as practicable
thereafter.

Limitation of Implied Rights. Neither the Participant nor any other person
shall, by reason of deferral of shares of Stock or the deferral of Cash
Compensation, under this Supplement A, acquire any right in or title to any
assets, funds or property of the Company whatsoever prior to the date such
shares are distributed. A Participant shall have only a contractual right to the
shares and cash, if any, distributable under the Plan, unsecured by any assets
of the Company. Nothing contained in the Plan shall constitute a guarantee by
the Company that the assets of the Company shall be sufficient to provide any
benefits to any person.

                                      -3-