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                                                                   Exhibit 10.12





                          MELLON FINANCIAL CORPORATION

                      RETIREMENT PLAN FOR OUTSIDE DIRECTORS



                            Effective January 1, 1994
                       Amended Effective February 15, 2000








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1.       Purpose
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         The purpose of the Mellon Financial Corporation ("Corporation")
         Retirement Plan for Outside Directors ("Plan") is to provide eligible
         non-employee members of the Board of Directors of the Corporation
         ("Board") and the Advisory Board of the Corporation ("Advisory Board")
         with retirement benefits based on their length of service on the Board.

         The Corporate Benefits Committee ("Committee") of the Corporation shall
         be the "administrator" responsible for administering the Plan in
         accordance with its terms but such designation of the Committee shall
         not be construed, directly or indirectly, as evidencing any intent on
         the part of the Corporation that the Plan be governed by or enforceable
         under the Employee Retirement Income Security Act of 1974, as amended
         ("ERISA"); it being the intent of the Corporation that such Plan be
         governed by and enforceable under the laws of the Commonwealth of
         Pennsylvania.

         No persons not otherwise participating in the Plan in accordance with
         its terms or as a result of the operation of section 1 of Appendix A
         shall be entitled to participate in the Plan after February 15, 2000.
         Effective as of April 30, 2000, benefits accruing under the Plan with
         respect to Participants who had not incurred a Termination of Service
         from the Board prior to February 15, 2000, shall be frozen and shall be
         determined in accordance with Appendix A to the Plan.

2.       Eligibility
         -----------

         The "Non Employee Members" of the Board and Advisory Board described in
         subparagraphs (a) and (b) below shall be eligible to become
         participants in the Plan upon their satisfaction of the service
         requirements described in paragraph 3:

         a. Board Members. All individuals who are or become members of the
         Board on or after January 1, 1994 and who are not also serving as
         salaried employees of the Corporation or one of its subsidiaries.

         b. Advisory Board Members. All individuals who are active members of
         the Advisory Board on or after January 1, 1994, who were active members
         of the Board prior to January 1, 1994 and who are not also serving as
         salaried employees of the Corporation or one of its subsidiaries.

3.       Participation
         -------------

         a. Immediate Participation. Those Non Employee Members described in
         paragraph 2 who are credited with sixty (60) or more months of Board
         Service as of January 1, 1994, shall become "Participants" entitled to
         receive a benefit under this Plan as of January 1, 1994.



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         b. Future Participation. Those Non Employee Members described in
         paragraph 2 who are not credited with sixty (60) or more months of
         Board Service as of January 1, 1994, shall become "Participants"
         entitled to receive a benefit under this Plan upon their completion of
         sixty (60) months of Board Service.

         c. Board Service. For purposes of this Plan, "Board Service" shall mean
         the Non Employee Member's months of service as an active member of the
         Board of Directors. Months of service as a member of the Advisory Board
         or as a member of the board of any wholly or partially owned subsidiary
         of the Corporation, regardless of the method by which the subsidiary
         was established or acquired, shall not constitute Board Service.
         Without intending to limit the generality of the preceding sentence, a
         Non Employee Member's months of service as a member of the board of
         directors of any company merged with and into the Corporation shall not
         constitute "Board Service" for any purpose under this Plan unless and
         until the Nominating Committee of the Board takes action to provide
         otherwise.

4.       Benefits
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         a. Amount. The monthly benefit payable under this Plan with respect to
         any Participant shall be determined as of the effective date of the
         Participant's termination of active membership on the Board and shall
         be a fixed dollar amount equal to one-twelfth (1/12th) of the annual
         Retainer then being paid to active Non Employee Members of the Board.

         b. Duration. The amount determined in subparagraph (a) with respect to
         any Participant shall be paid for that number of months equal to the
         lesser of: the Participant's months of Board Service (as defined in
         subparagraph 3(c) above); or one hundred twenty (120) months.

         c. Definitions. The following words shall have the meanings ascribed to
         them:

                  (1) "Retainer" means the base annual cash remuneration
         established by the Nominating Committee and the Board and paid to an
         active Non Employee Member of the Board as the retainer for his or her
         services as an active member of the Board; determined without regard to
         any additional cash remuneration paid as a retainer to any committee
         chairmanship positions, any noncash remuneration or benefits, any
         meeting or per diem fees paid for attendance or any allowances or
         reimbursements for meals, travel, lodging, or other expenses
         attributable to attendance at Board meetings.

                  (2)   "Termination of Service from the Board" means:

                           (a) with respect to Participants who are not
                  appointed to the Advisory Board following the termination of
                  their active membership on the Board, the Participant's
                  termination of active membership from the Board; and


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                           (b) with respect to Participants who are appointed to
                  the Advisory Board following the termination of their active
                  membership on the Board, the Participant's termination of
                  active membership from the Advisory Board,

         in either event with such termination of active membership being
         permitted to occur at any age as a result of retirement, resignation or
         any other reason.

5.       Payment of Benefits
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         Upon a Participant's Termination of Service from the Board, the
         Corporation shall pay to or on behalf of the Participant a Plan benefit
         as determined below:

         a. Upon Termination of Service from the Board for Reason Other than
         Death. Except as otherwise provided in the case of death, the monthly
         benefit determined in paragraph 4 shall be paid to the Participant or
         his Assignee at the same time as are made monthly installments of the
         Retainer paid on behalf of active Non Employee Members of the Board.

         b. Assignments. Any Participant may from time to time direct the
         Corporation to pay all or any portion of his or her benefits hereunder
         directly to any person or persons (natural or otherwise, including a
         trust or an estate) as the Participant's Assignee or Assignees.
         Assignments shall be completely discretionary on the part of the
         Participant and may, at the Participant's election, be either revocable
         by the Participant without prior notice to the Assignee(s) or
         irrevocable. Unless otherwise provided in the instrument effecting the
         assignment, revocable assignments shall become null and void upon the
         Participant's death. Assignments shall be made in writing in the manner
         prescribed by the Committee (or its delegate) and will be effective
         only when filed with the Committee (or its delegate) during the
         Participant's lifetime.

         c. Upon Death

                  (1) Prior to Termination of Service from the Board. In the
         event that the Participant dies prior to his Termination of Service
         from the Board, the Corporation shall pay to the Participant's
         Beneficiary (or his Assignee(s), if applicable) an amount equal to
         fifty percent (50%) of the Present Value of the benefit the Participant
         would have received, if any, had the Participant had a Termination of
         Service from the Board for a reason other than death on the day before
         his or her death. Such then Present Value shall be paid in a single sum
         as soon as administratively possible after the date of death.



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                  (2) After Termination of Service from the Board. In the event
         that the Participant dies after his Termination of Service from the
         Board and prior to his (or his Assignee(s), if applicable) receiving
         all of the benefits to which he or she is entitled under this Plan, the
         Corporation shall pay to the Participant's Beneficiary (or his
         Assignee(s), if applicable) an amount equal to the then Present Value
         of the unpaid portion of the Participant's benefit. Such then Present
         Value shall be paid in a single sum as soon as administratively
         possible after the date of death.

                  (3) Present Value. For purposes of this subparagraph (c), the
         then Present Value shall be computed using an interest equal to the
         lesser of: ten percent (.10); or one percentage point (.01) over the
         rate charged by Mellon Bank, N.A., or its successor, to its best
         commercial customers determined as of the date of death.

         d. Tax Withholding. The amounts payable in accordance with
         subparagraphs (a) or (b) shall be subject to all applicable Federal,
         state and local income and employment taxes and withholding
         requirements.

6.       Designation of Beneficiary
         --------------------------

         Subject to any irrevocable assignments made pursuant to subparagraph
         5(b), each Participant may from time to time designate any person or
         persons (natural or otherwise, including a trust or an estate) as the
         Participant's Beneficiary or Beneficiaries to whom distribution is to
         be made in the event the Participant dies before distribution of his or
         her entire benefit under this Plan. Each Beneficiary designation shall
         be in a manner prescribed by the Committee (or its delegate) and will
         be effective only when filed with the Committee (or its delegate)
         during the Participant's lifetime. Each Beneficiary designation filed
         with the Committee (or its delegate) will cancel all Beneficiary
         designations previously filed with the Committee (or its delegate). If
         a Participant fails to designate a Beneficiary in the manner provided
         above, or if no designated Beneficiary survives the Participant, then
         the Corporation shall distribute the Participant's benefits (or the
         balance thereof) to the estate of such Participant.

7.       Forfeiture of Benefits
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         Notwithstanding any other provision of this Plan to the contrary, a
         Participant shall forfeit his or her right to receive any and all
         benefits scheduled to be paid on and after the date that the highest
         court with jurisdiction over the matter finally determines that the
         Participant has failed to act in accordance with the fiduciary standard
         of care established by Section 1712 of the Pennsylvania Business
         Corporation Law of 1988, as amended, or its successor Section(s), with
         respect to a matter involving the interests of the Corporation or one
         of its subsidiaries.





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8.       Funding
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         a. Participant Contributions. Participant contributions are neither
         permitted nor required.

         b. Corporation Contributions. Except as otherwise provided in (d), the
         Corporation is neither permitted nor required to make contributions to
         any funding vehicle associated with this Plan.

         c. Benefits Paid from General Assets. The Corporation shall be
         responsible for the payment of all benefits provided under this Plan;
         which benefits are to be paid from the general assets of the
         Corporation.

         d. Trust Fund; Insurance Contracts. The Corporation may, solely for its
         own convenience, purchase insurance contracts and/or establish one or
         more trusts, with such trustees as the Board or the Committee may
         approve; which contracts and/or trust assets may, but need not, be used
         to provide for the payment of the benefits provided hereunder. Such
         trust or trusts may be irrevocable, but the assets thereof shall be
         subject to the claims of the Corporation's creditors. To the extent any
         benefits provided under the Plan are actually paid from any such
         insurance contract and/or trust assets, the Corporation shall have no
         further obligation with respect thereto, but to the extent not so paid,
         such benefits shall remain the obligation of, and shall be paid by, the
         Corporation.

9.       Administration
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         Except as otherwise provided in the provisions of Article II,
         Administration, of the Mellon Financial Corporation 1990 Elective
         Deferred Compensation Plan for Directors and Members of the Advisory
         Board (amended and restated as of July 21, 1992), which provisions are
         incorporated herein, mutatis mutandis, by this reference, the Committee
         shall be responsible for administering the Plan in accordance with its
         terms and for the referenced administrative responsibilities with
         respect to the Plan.

10.      Amendment
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         The Board or the Nominating Committee of the Board shall have the
         right, at any time and without the consent of any Participant, former
         Participant or Beneficiary, to amend or modify the Plan in any respect
         or to terminate or repeal the Plan in its entirety. Notwithstanding
         anything in the preceding sentence to the contrary, the Committee shall
         have the power to amend the Plan to the extent authorized by paragraph
         9.



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11.      General Provisions
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         a. Spendthrift Provisions. The Corporation shall, except as otherwise
         provided in the Plan, pay all amounts payable hereunder only to the
         person or persons entitled thereto hereunder, and all such payments
         shall be made directly into the hands of each such person or persons
         and not into the hands of any other person whatsoever, so that said
         payments may not be liable for the debts, contracts or engagements of
         any such designated person or persons, or taken in execution by
         attachment or garnishment or by any other legal or equitable
         proceedings, nor shall any such designated person or persons have any
         right to alienate, arbitrate, execute, pledge, encumber, or assign any
         such payments or the benefits thereof. If the person entitled to
         receive payment be a minor, or a person of unsound mind, whether or not
         adjudicated incompetent, the Corporation, upon the direction of the
         Committee, may make such payments to such person or persons as may be,
         or be acting as, parent or legal or natural guardian of such infant or
         person of unsound mind. The signed receipt of such person shall be a
         full and complete discharge to the Corporation for any such payments.

         b. Participant Rights. No Participant, former Participant, person
         claiming under or through any Participant or any other person shall
         have any right or interest, whether vested or otherwise, in the Plan or
         its continuance, or in or to the payment or the continuance of any
         payments under the Plan, except with respect to payments actually
         received by the Participant or former Participant in accordance with
         the terms, conditions and provisions of the Plan in effect at the time
         any such payments were received. Any and all payments required to be
         made to Participants in accordance with the terms of the Plan shall be
         general and unsecured liabilities of the Corporation.

         c. Right of Corporation to Replace Members of the Board and Advisory
         Board; Obligations. Neither the action of the Corporation in
         establishing this Plan, nor any provisions of this Plan, shall be
         construed as giving any member of the Board or Advisory Board the right
         to be retained in such capacity and the Board or the Nominating
         Committee shall have the right at any time to replace or fail to
         renominate any member of the Board or Advisory Board without any
         liability for any claim against the Corporation for any payment
         whatsoever except to the extent provided for in this Plan. The
         Corporation has no obligation to create any other or subsequent
         retirement, deferred compensation or similar plan for members of the
         Board or Advisory Board.

         d. Independence of Benefits. The benefits payable under this Plan shall
         be independent of and in addition to any other benefits or
         compensation, whether by Retainer, salary, bonus or otherwise, payable
         under any other agreement or pension, welfare or fringe benefit plan,
         fund or program that now exists or may hereafter be established by the
         Corporation on behalf of the Participant or for its other Non Employee
         Members.


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         e. Text of Plan to Control. The headings of the paragraphs and
         subparagraphs are included solely for convenience of reference, and if
         there be any conflict between such headings and the text of this Plan,
         the text shall control. This Plan document sets forth the complete
         terms of the Plan. In the event of any discrepancies or conflicts
         between this Plan document and any summary or other information
         regarding the Plan, the terms of this Plan document shall apply and
         control.

         f. Corporate Successors. This Plan shall be binding upon the
         Corporation, its successors and assigns and the Participant and his or
         her heirs, executors, administrators and legal representatives.

         g. Applicable Law; Severability. This Plan shall be governed by and
         construed in accordance with the laws of the Commonwealth of
         Pennsylvania. If any provisions of this Plan shall be held invalid or
         unenforceable for any reason, such invalidity or unenforceability shall
         not affect the remaining provisions of this Plan, and this Plan shall
         be deemed to be modified to the least extent possible to make it valid
         and enforceable in its entirety.




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                                   APPENDIX A

Effective as of April 30, 2000, all benefits under the Plan shall be determined
in accordance with the following provisions:

1. Participation. Notwithstanding anything in the Plan to the contrary, any
individual who is a Non-Employee Member of the Board as of February 15, 2000,
shall be deemed to be a Participant in the Plan on and after February 15, 2000,
regardless of the amount of Board Service credited to such individual as of such
date. No persons not otherwise participating in the Plan in accordance with its
terms or as a result of the preceding sentence of this Appendix A shall be
entitled to participate in the Plan after February 15, 2000.

2. Retired Participants. Any Participant in the Plan who had a Termination of
Service from the Board prior to February 15, 2000 (any "Retired Participant"),
shall continue to receive a benefit in accordance with the provisions of the
Plan in effect on the date of his Termination of Service from the Board.

3. Current Participants. Any Participant in the Plan who did not have a
Termination of Service from the Board prior to February 15, 2000 (a "Current
Participant"), shall receive a benefit under the Plan, as follows:

         a. Effective as of April 30, 2000, the lump sum present value of the
         benefit accrued as of April 30, 2000, by a Current Participant who also
         is a participant in the Mellon Financial Corporation 1990 Elective
         Deferred Compensation Plan for Directors and Members of the Advisory
         Board (the "Deferred Compensation Plan") as of such date, shall be
         transferred in cash to the Deferred Compensation Plan for the benefit
         of such Current Participant.

         b. As soon as administratively feasible after April 30, 2000, the lump
         sum present value of the benefit accrued as of April 30, 2000, by a
         Current Participant who is not a participant in the Deferred
         Compensation Plan as of such date (less all applicable Federal, state
         and local income and employment taxes), shall be distributed in cash to
         such Current Participant.

         c. The amount of the monthly benefit accrued with respect to any
         Current Participant shall be determined in accordance with Section 4 of
         the Plan; provided, by way of clarification, however, that the annual
         Retainer being paid to active Non-Employee Members of the Board who
         have not incurred a termination of active membership from the Board
         prior to February 15, 2000, shall be deemed to be $30,000. The lump sum
         present value of each Current Participant's benefit shall be determined
         by first assuming that monthly payments commenced as of May 21, 2000,
         regardless of the Current Participant's age and/or the occurrence of a
         Termination of Service from the Board, and then by discounting all
         monthly payments at a rate of 7.5% per year (the FAS 87 discount rate
         for 2000).


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