STORAGE USA, INC.

                  1998 NON-EXECUTIVE EMPLOYEE STOCK OPTION PLAN

1.       Purpose.

         The purpose of the STORAGE USA, INC. 1998 NON-EXECUTIVE  EMPLOYEE STOCK
OPTION PLAN (the  "Plan") is to further the  earnings of STORAGE  USA,  INC.,  a
Tennessee corporation, SUSA PARTNERSHIP,  L.P., a Tennessee limited partnership,
and  their  subsidiaries,  including  any  corporations,  partnerships  or other
business  associations in which Storage USA, Inc. owns a 50% or greater economic
interest,  (collectively, the "Company") by assisting the Company in attracting,
retaining  and  motivating  employees  of high caliber and  potential.  The Plan
provides for the award of long-term  incentives  to those  employees who are not
officers  or  directors  who  make,  in the  sole  discretion  of  the  Company,
substantial  contributions  to  the  Company  by  their  loyalty,  industry  and
invention.


2.       Administration.

         The Plan  shall be  administered  by the  Compensation  Committee  (the
"Committee")  of the Company's  Board of Directors  (the "Board of  Directors").
Each Committee  member shall be ineligible to receive awards under the Plan. The
Committee shall have full and final authority in its discretion to interpret the
provisions  of the Plan and to  decide  all  questions  of fact  arising  in its
application. Subject to the provisions hereof, the Committee shall have full and
final  authority in its  discretion  to determine  the  employees to whom awards
shall be made under the Plan; to determine the type of awards to be made and the
amount,  size and terms and conditions of each such award; to determine the time
when awards shall be granted;  to determine  the  provisions  of each  agreement
evidencing an award; and to make all other determinations necessary or advisable
for the administration of the Plan.


3.       Stock Subject to the Plan.

         The Company may grant  awards  under the Plan with  respect to not more
than a total of 500,000  shares of $.01 par value  common  stock of the  Company
(the  "Shares")  (subject,  however,  to  adjustment as provided in paragraph 0,
below).  Such Shares may be authorized and unissued  Shares or treasury  Shares.
Except as otherwise  provided  herein,  any Shares subject to an option or right
which for any reason is surrendered  before exercise or expires or is terminated
unexercised  as to such Shares  shall  again be  available  for the  granting of
awards under the Plan.  Similarly,  if any Shares granted pursuant to restricted
stock awards are forfeited,  such forfeited  Shares shall again be available for
the granting of awards under the Plan.


4.       Eligibility to Receive Awards.

         Persons  eligible to receive  awards under the Plan shall be limited to
employees of the Company who are not officers or directors  and who are selected
from time to time by the Committee.


5.       Form of Awards.

         Awards  may be made from time to time by the  Committee  in the form of
stock  options  which  qualify as  incentive  stock  options  ("Incentive  Stock
Options")  within the meaning of Section 422(b) of the Internal  Revenue Code of
1986,  as  amended  (the  "Code")  or options  which are not  intended  to be so
qualified ("Nonqualified Stock Options").


6.       Stock Options.

         Stock  options for the purchase of Shares shall be evidenced by written
agreements in such form not  inconsistent  with the Plan as the Committee  shall
approve from time to time. Such agreement shall contain the terms and conditions
applicable  to the  options,  including  in substance  the  following  terms and
conditions:


         (a)      Option Type. Each option  agreement shall identify the options
                  represented thereby as Incentive Stock Options or Nonqualified
                  Stock  Options,  as the case may be,  and  shall set forth the
                  number of Shares subject to the options.


         (b)      Option  Price.  The  option  exercise  price to be paid by the
                  optionee  to the  Company  for each Share  purchased  upon the
                  exercise of an option shall be  determined  by the  Committee,
                  but shall in no event be less than the par value of a Share.


         (c)      Exercise Term. Each option agreement shall state the period or
                  periods of time within which the option may be  exercised,  in
                  whole or in part,  as  determined by the Committee and subject
                  to such  terms  and  conditions  as are  prescribed  for  such
                  purpose by the  Committee,  provided  that no option  shall be
                  exercisable  after ten years  from the date of grant  thereof.
                  The Committee,  in its  discretion,  may provide in the option
                  agreement  circumstances  under which the option  shall become
                  immediately   exercisable,   in  whole   or  in   part,   and,
                  notwithstanding    the    foregoing,    may   accelerate   the
                  exercisability  of any  option,  in whole  or in part,  at any
                  time.


         (d)      Payment  for  Shares.  The  purchase  price of the Shares with
                  respect  to which an option is  exercised  shall be payable in
                  full at the time of  exercise  in cash,  Shares at fair market
                  value,  or  a  combination   thereof,  as  the  Committee  may
                  determine  and subject to such terms and  conditions as may be
                  prescribed by the Committee for such purpose.  If the purchase
                  price  is paid  by  tendering  Shares,  the  Committee  in its
                  discretion  may grant the  optionee a new stock option for the
                  number of Shares used to pay the purchase price.


         (e)      Rights  Upon  Termination.  In the  event of  Termination  (as
                  defined  below) of an optionee's  status as an employee of the
                  Company  for any cause  other  than  death or  Disability  (as
                  defined  below),  all  unexercised   options  shall  terminate
                  immediately unless the Committee shall determine  otherwise at
                  the time of Termination. (As used herein, "Termination" means,
                  the cessation of the  grantee's  employment by the Company for
                  any reason, and "Terminates" has the corresponding meaning. As
                  used  herein,  "Disability"  means a  condition  that,  in the
                  judgment of the Committee,  has rendered a grantee  completely
                  and  presumably  permanently  unable to perform  any and every
                  duty  of  his  regular  occupation,  and  "Disabled"  has  the
                  corresponding  meaning). In the event that an optionee dies or
                  becomes  Disabled  prior to the  expiration  of his option and
                  without having fully exercised his option, the optionee or his
                  Beneficiary  (as  defined  below)  shall  have  the  right  to
                  exercise  the option  during  its term  within a period of one
                  year  after  Termination  due to death or  Disability,  to the
                  extent  that  the  option  was  exercisable  at  the  time  of
                  Termination,  or within such other period, and subject to such
                  terms and  conditions,  as may be specified by the  Committee.
                  (As used  herein,  "Beneficiary"  means the  person or persons
                  designated in writing by the grantee as his  Beneficiary  with
                  respect to an award  under the Plan;  or, in the absence of an
                  effective  designation or if the designated  person or persons
                  predecease the grantee, the grantee's Beneficiary shall be the
                  person or persons  who acquire by bequest or  inheritance  the
                  grantee's  rights  in  respect  of an  award).  In order to be
                  effective, a grantee's designation of a Beneficiary must be on
                  file with the Committee  before the grantee's  death,  but any
                  such   designation  may  be  revoked  and  a  new  designation
                  substituted therefor at any time before the grantee's death.


7.       General Restrictions.

         Each award under the Plan shall be subject to the  requirement  that if
at any time the Company shall  determine that (i) the listing,  registration  or
qualification  of the  Shares  subject or related  thereto  upon any  securities
exchange  or under any state or federal  law, or (ii) the consent or approval of
any  regulatory  body,  or (iii) an agreement by the  recipient of an award with
respect to the  disposition of Shares,  or (iv) the  satisfaction of withholding
tax or other withholding liabilities is necessary or desirable as a condition of
or in connection  with the granting of such award or the issuance or purchase of
Shares  thereunder,  such  award  shall not be  consummated  in whole or in part
unless such listing, registration,  qualification, consent, approval, agreement,
or  withholding  shall have been effected or obtained free of any conditions not
acceptable  to the Company.  Any such  restriction  affecting an award shall not
extend the time within which the award may be exercised; and neither the Company
nor its  directors or officers nor the  Committee  shall have any  obligation or
liability  to the grantee or to a  Beneficiary  with  respect to any Shares with
respect  to which an award  shall  lapse or with  respect  to which  the  grant,
issuance  or  purchase  of Shares  shall not be  effected,  because  of any such
restriction.


8.       Single or Multiple Agreements.

         Multiple awards,  multiple forms of awards, or combinations thereof may
be evidenced by a single agreement or multiple agreements,  as determined by the
Committee.


9.       Rights of the Shareholder.

         The  recipient  of any award under the Plan,  shall have no rights as a
shareholder  with respect thereto unless and until  certificates  for Shares are
issued to him, and the issuance of Shares shall confer no  retroactive  right to
dividends.


10.      Rights to Terminate.

         Nothing in the Plan or in any  agreement  entered into  pursuant to the
Plan shall confer upon any person the right to continue in the employment of the
Company  or  affect  any right  which  the  Company  may have to  terminate  the
employment of such person.


11.      Withholding.


         (a)      Prior to the  issuance or  transfer of Shares  under the Plan,
                  the recipient shall remit to the Company an amount  sufficient
                  to  satisfy  any  federal,  state  or  local  withholding  tax
                  requirements.   The  recipient  may  satisfy  the  withholding
                  requirement  in  whole  or in part  by  electing  to have  the
                  Company  withhold  Shares  having a value  equal to the amount
                  required  to be  withheld.  The  value  of  the  Shares  to be
                  withheld shall be the fair market value,  as determined by the
                  Committee,  of the stock on the date that the amount of tax to
                  be withheld is determined (the "Tax Date"). Such election must
                  be made prior to the Tax Date, must comply with all applicable
                  securities law and other legal requirements, as interpreted by
                  the  Committee,  and may not be made  unless  approved  by the
                  Committee, in its discretion.


         (b)      Whenever  payments  to a grantee in respect of an award  under
                  the Plan to be made in cash, such payments shall be net of the
                  amount  necessary  to  satisfy  any  federal,  state  or local
                  withholding tax requirements.


12.      Non-Assignability.

         No  award  under  the  Plan  shall  be  sold,  assigned,   transferred,
exchanged, pledged, hypothecated, or otherwise encumbered, other than by will or
by the laws of descent and distribution, or by such other means as the Committee
may  approve.  Except  as  otherwise  provided  herein,  during  the life of the
recipient,  such  award  shall be  exercisable  only by such  person  or by such
person's guardian or legal representative.


13.      Non-Uniform Determinations.

         The  Committee's  determinations  under  the  Plan  (including  without
limitation determinations of the persons to receive awards, the form, amount and
timing  of  such  awards,  the  terms  and  provisions  of such  awards  and the
agreements  evidencing  same, and the  establishment  of values and  performance
targets)  need not be uniform  and may be made  selectively  among  persons  who
receive, or are eligible to receive,  awards under the Plan, whether or not such
persons are similarly situated.


14.      Change In Control Provisions.


         (a)      In the event of a Change in Control (as defined),  but only if
                  and to the extent so  determined  by the Board of Directors at
                  or after grant  (subject  to any right of  approval  expressly
                  reserved  by the  Board  of  Directors  at the  time  of  such
                  determination),  any stock options  awarded under the Plan not
                  previously   exercisable   and  vested   shall   become  fully
                  exercisable and vested.


         (b)      As used  herein,  the  term  "Change  in  Control"  means  the
                  happening after the date of this Plan of any of the following:


                  (i)      The acquisition of the power to direct,  or cause the
                           direction  of, the  management  and  policies  of the
                           Company  by a person who did not  previously  possess
                           such  power,  acting  alone  or in  conjunction  with
                           others,  whether through the ownership of Shares,  by
                           contract or otherwise; or


                  (ii)     The acquisition, directly or indirectly, of the power
                           to vote  more  than  20  percent  of the  outstanding
                           Shares by any person or by two or more persons acting
                           together,  except an acquisition  from the Company or
                           by  the  Company,   the  Company's  management  or  a
                           Company-sponsored employee benefit plan;


                  (iii)    Provided,  however, that customary agreements with or
                           between  underwriters  and selling group members with
                           respect to a bonafide public offering of Shares shall
                           be disregarded for purposes of this definition.


         (c)      As used in this  paragraph 0, the term "person"  means natural
                  person,  corporation,   partnership,   joint  venture,  trust,
                  government, or instrumentality of a government.


15.      Adjustments.

         In the  event of any  change  in the  outstanding  common  stock of the
Company,  by  reason  of a stock  dividend  or  distribution,  recapitalization,
merger, consolidation, reorganization, split-up, combination, exchange or Shares
or  the  like,  the  Board  of  Directors,   in  its   discretion,   may  adjust
proportionately  the number of Shares  which may be issued  under the Plan,  the
number of Shares subject to outstanding awards, and the option exercise price of
each outstanding  option, and may make such other changes in outstanding options
and restricted stock awards, as it deems equitable in its absolute discretion to
prevent  dilution or  enlargement  of the rights of grantees,  provided that any
fractional Shares resulting from such adjustments shall be eliminated.


16.      Amendment.

         The Board of Directors may terminate, amend, modify or suspend the Plan
at any time,  except that the Board shall not, without the  authorization of the
holders of a majority of  Company's  outstanding  Shares,  increase  the maximum
number of  Shares  which may be issued  under  the Plan  (other  than  increases
pursuant  to  paragraph 0 hereof),  extend the last date on which  awards may be
granted under the Plan,  extend the date on which the Plan  expires,  change the
class of persons eligible to receive awards, or change the minimum option price.
No  termination,  modification,  amendment  or  suspension  of  the  Plan  shall
adversely  affect  the  rights  of any  grantee  or  Beneficiary  under an award
previously  granted,  unless the grantee or Beneficiary  shall  consent;  but it
shall be  conclusively  presumed  that any  adjustment  pursuant to  paragraph 0
hereof does not adversely affect any such right.


17.      Effect on Other Plans.

         Participation in this Plan shall not affect a grantee's  eligibility to
participate  in any other benefit or incentive  plan of the Company.  Any awards
made  pursuant  to this  Plan  shall  not be used in  determining  the  benefits
provided  under any  other  plan of the  Company  unless  specifically  provided
therein.


18.      Effective Date and Duration of the Plan.

         The Plan shall become effective when adopted by the Board of Directors,
provided  that  the  Plan  is  approved  by the  holders  of a  majority  of the
outstanding  Shares on the date of its adoption by the Board or before the first
anniversary  of that date.  Unless it is sooner  terminated in  accordance  with
paragraph 0 hereof,  the Plan shall  remain in effect until all awards under the
Plan have been  satisfied  by the  issuance of Shares or payment of cash or have
expired or  otherwise  terminated,  but no award shall be granted  more than ten
years  after  the  earlier  of the  date  the Plan is  adopted  by the  Board of
Directors.


19.      Unfunded Plan.

         The Plan shall be unfunded,  except to the extent otherwise provided in
accordance with Section 7 hereof. Neither the Company nor any affiliate shall be
required to segregate any assets that may be represented any award,  and neither
the Company nor any affiliate  shall be deemed to be a trustee of any amounts to
be paid under any award.  Any  liability of the Company or any  affiliate to pay
any grantee or Beneficiary  with respect to an option shall be based solely upon
any contractual  obligations  created pursuant to the provisions of the Plan; no
such  obligations will be deemed to be secured by a pledge or encumbrance on any
property of the Company or an affiliate.


20.      Governing Law.

         The  Plan  shall  be  construed   and  its   provisions   enforced  and
administered in accordance with the laws of the State of Tennessee except to the
extent that such laws may be superseded by any federal law.



DEEMED  ADOPTED BY THE BOARD OF DIRECTORS OF STORAGE USA, INC. AS OF THE 4TH DAY
OF NOVEMBER, 1998.


                                     By: /s/ Christopher P. Marr
                                        ---------------------------
                                            Christopher P. Marr