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                                                                   EXHIBIT 10.29



                       ORANGE AND ROCKLAND UTILITIES, INC.

                         DEFERRED COMPENSATION PLAN FOR

                             NON-EMPLOYEE DIRECTORS



As Amended and Restated Effective February 5, 1998
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                       ORANGE AND ROCKLAND UTILITIES, INC.

              DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS


1.       ELIGIBILITY

                  Each member (a "DIRECTOR") of the Board of Directors (the
"BOARD") of Orange and Rockland Utilities, Inc. (the "COMPANY") who is not a
current or former employee of the Company, or of any of its subsidiaries or
related entities (an "ELIGIBLE DIRECTOR"), is eligible to become a participant
(a "PARTICIPANT") in the Orange and Rockland Utilities, Inc. Deferred
Compensation Plan for Non-Employee Directors (the "PLAN"), as set forth herein.
Each Participant in the Plan shall have his or her interest in the Plan
reflected in a bookkeeping account (the "PARTICIPANT'S ACCOUNT").

2.       PARTICIPATION

                  (a) MANDATORY DEFERRALS. Effective as of April 1, 1998, the
Board may direct that a certain portion of each Eligible Director's fees
(including, but not limited to, annual retainer fees, any meeting fees for
services as a member of the Board and any committee thereof, any fees for
serving as Chairman of the Board or as chairperson of any committee thereof, and
any fees for additional services on behalf of the Board or a committee) (the
"FEES") shall be automatically deferred under the Plan and credited to his or
her Participant's Account. The Fees which the Board directs to be deferred on a
mandatory basis shall be referred to as "MANDATORY DEFERRAL FEES". The remaining
Fees, as well as any Fees received with respect to periods prior to April 1,
1998, shall be referred to as "DISCRETIONARY DEFERRAL FEES".

                  (b) VOLUNTARY DEFERRALS. Prior to the beginning of any
calendar quarter, each Eligible Director may elect to defer Discretionary
Deferral Fees by directing that all or any percentage of such Discretionary
Deferral Fees which would
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otherwise have been payable currently during such upcoming calendar quarter and
subsequent calendar quarters shall be credited to his or her Participant's
Account, subject to the terms of the Plan. No election to defer Discretionary
Deferral Fees shall be permitted if the Discretionary Deferral Fees which are
deferred are less than $3,500 per calendar year. Any person who shall become an
Eligible Director during any calendar quarter and who was not an Eligible
Director immediately prior to the beginning of such calendar quarter may elect,
within 30 calendar days after becoming an Eligible Director, to defer payment of
all or any part of the Discretionary Deferral Fees for the remainder of such
calendar quarter and subsequent calendar quarters.

                  (c) An Eligible Director who elects to defer Discretionary
Deferral Fees shall do so by filing a written deferral election and other
necessary documents and agreements with the Secretary of the Company within the
time specified in paragraph 2(b). An election to participate in the Plan,
related to Discretionary Deferral Fees otherwise payable with respect to
services as an Eligible Director in a given and subsequent calendar quarters,
shall be irrevocable for such quarter and shall become irrevocable as of the
close of the calendar quarter preceding each such subsequent calendar quarter.

                  An election to defer Discretionary Deferral Fees shall
continue in effect until a Participant ceases to be an Eligible Director, or
until the Participant terminates or modifies such election by written notice
executed by the Participant and filed with the Secretary of the Company. Any
notice of termination or modification of an election with respect to the
deferral of Discretionary Deferral Fees shall become effective as of the close
of the calendar quarter in which such notice is given and only with respect to
Discretionary Deferral Fees payable with respect to services in subsequent
calendar quarters. Amounts credited to a Participant's Account prior to the
effective date of any termination or modification of a deferral election shall


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not be affected by such termination or modification and shall be distributed
only in accordance with the terms of the Plan.

                  (d) A Participant who has filed a termination of election to
defer Discretionary Deferral Fees may thereafter file another written deferral
election with the Secretary of the Company, electing to voluntarily defer
Discretionary Deferral Fees for any calendar quarter commencing after the filing
of such election and subsequent calendar quarters during which he or she is an
Eligible Director.

                  (e) Each Eligible Director who is serving on the Board on
February 5, 1998, and who has an amount credited under the Plan in connection
with his or her cessation of coverage under the Orange and Rockland Utilities,
Inc. Post-Director Service Retainer Continuation Program (the "SRCP") as of that
date, shall have his or her Participant's Account hereunder credited as of
February 5, 1998 with an amount of Phantom Share Units (as defined in paragraph
3(b)) equal in value to the amount credited from the SRCP.

                  For purposes of converting the credited amount from the SRCP
to a number of Phantom Share Units under this paragraph 2(e), the value of a
Phantom Share Unit will be equal to the Fair Market Value (as defined in
paragraph 3(d)(4)) of the Company's Shares (as defined in paragraph 3(a)) as of
February 5, 1998.

3.       THE PARTICIPANT'S ACCOUNT

                  (a) All deferred Fees (Discretionary Deferral Fees and,
effective on and after April 1, 1998, Mandatory Deferral Fees) with respect to
periods of service on and after January 1, 1998 shall be credited to the
Participant's Account as of the date set forth in paragraph 3(d) or 3(e)(1), as
applicable. Each Participant's Account shall consist of up to three subaccounts.
One subaccount, which represents deferred Fees for periods of service prior to
January 1, 1998 that have not been transferred

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to the Investment Account at the Participant's election pursuant to paragraph
3(c), and which bears interest as provided in paragraph 3(c), shall be
designated the "CASH ACCOUNT". A second subaccount, which (i) represents
deferred Discretionary Deferral Fees for periods of service on and after January
1, 1998, amounts transferred from the Cash Account at the Participant's election
pursuant to paragraph 3(c), and amounts transferred from the Phantom Share Unit
Account at the Participant's election in accordance with paragraph 4(b)(3), and
(ii) is credited with earnings in accordance with paragraph 3(e), shall be
designated the "INVESTMENT ACCOUNT". The final subaccount, which shall be valued
as if invested in shares of the Company's Common Stock, $5 par value per share
("SHARES"), as provided in paragraph 3(d), shall be designated the "PHANTOM
SHARE UNIT ACCOUNT".

                  Subaccounts may be further divided into additional
subaccounts, including (but not limited to) the following:

                           (1) Separate subaccounts will be created under the
         Phantom Share Unit Account to reflect: (i) Phantom Share Units
         attributable to deferrals of Discretionary Deferral Fees, plus
         additional amounts credited with respect to such deferrals in
         accordance with paragraph 3(d); and (ii) Phantom Share Units
         attributable to deferrals of Mandatory Deferral Fees on or after April
         1, 1998, plus amounts credited under paragraph 2(e) as of February 5,
         1998, plus additional amounts credited under paragraph 3(d) with
         respect to such deferrals and such amounts credited under paragraph
         2(e). The amounts described in clause (i) of the preceding sentence
         will be recorded in a subaccount identified in this Plan as "PSU
         SUBACCOUNT 1", while amounts described in clause (ii) of the preceding
         sentence will be placed in a subaccount identified in this Plan as "PSU
         SUBACCOUNT 2".

                           (2) If necessary, separate subaccounts will be
         created under a Participant's Investment Account to reflect:


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         (i) amounts originally credited to the Investment Account pursuant to a
         Deferred Fee Allocation (as defined below in this paragraph 3(a)), plus
         amounts reallocated from PSU Subaccount 1 in accordance with paragraph
         4(b)(3), plus any earnings or losses credited with respect to such
         amounts in accordance with paragraph 3(e)(3); and (ii) amounts
         reallocated to the Investment Account from PSU Subaccount 2 in
         accordance with paragraph 4(b)(3), plus any earnings or losses on such
         amounts credited with respect to such amounts in accordance with
         paragraph 3(e)(3). The amounts described in clause (i) of the preceding
         sentence will be recorded in a subaccount identified in this Plan as
         "INVESTMENT SUBACCOUNT 1", while amounts described in clause (ii) of
         the preceding sentence will be placed in a subaccount identified in
         this Plan as "INVESTMENT SUBACCOUNT 2".

                  An Eligible Director's election to make deferrals under the
Plan with respect to Discretionary Deferral Fees for periods of service on or
after January 1, 1998 shall specify that the Discretionary Deferral Fees that he
or she has deferred shall be credited (i) 100% to the Investment Account, (ii)
100% to the Phantom Share Unit Account, or (iii) 50% to the Investment Account
and 50% to the Phantom Share Unit Account (the "DEFERRED FEE ALLOCATION"). An
Eligible Director's Deferred Fee Allocation shall apply, in any calendar quarter
in which such Deferred Fee Allocation is in effect, to deferred Discretionary
Deferral Fees that are otherwise payable during the entire calendar quarter. Any
modification of a Deferred Fee Allocation shall be made in a written
modification notice provided for in, and shall become effective in accordance
with, paragraph 2(c).

                  All amounts deferred under paragraph 2(a), and all amounts
credited to the Participant's Account under paragraph 2(e), shall be credited to
the Participant's Phantom Share Unit Account.


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                  (b) The balance, if any, credited to a Participant's Account
as of the close of business on August 14, 1996 was recorded in the Cash Account
as of August 15, 1996 and shall thereafter be considered for all purposes of the
Plan (except as otherwise provided in paragraphs 3(a) and 3(c)) to be a part of
the Cash Account. The opening balance of the Phantom Share Unit Account as of
August 15, 1996 was zero. Deferred Fees that have been credited to the Cash
Account (including any interest credited under paragraph 3(c)) or the Investment
Account (including any earnings credited under paragraph 3(e)) may not be
reallocated or transferred to the Phantom Share Unit Account. Deferred Fees that
have been credited as units denominated in Shares ("PHANTOM SHARE UNITS") in the
Phantom Share Unit Account (including any additional Phantom Share Units
credited under paragraph 3(d)) may not be reallocated or transferred to the Cash
Account or the Investment Account, except that amounts may be reallocated from
the Phantom Share Unit Account to the Investment Account pursuant to paragraph
4(b)(3).

                  (c) Interest shall be credited on the deferred Fees credited
to the Cash Account, commencing on the date such Fees would otherwise have been
paid and continuing through the date of valuation for distribution or transfer,
at a rate per annum equivalent to the Company's latest allowable rate of return
in effect from time to time as set by the Public Service Commission of the State
of New York. Amounts so determined shall be credited to the Cash Account as of
the close of each calendar quarter, based on the daily balances of the Cash
Account during such quarter; provided, however, that, with respect to any final
distribution from a Cash Account that is not valued as of the close of a
calendar quarter, interest shall be credited to the Cash Account as of the date
of valuation for distribution, based upon the daily balances of the Cash Account
during the period beginning on the first day of the quarter in which such
valuation date occurs and ending on such valuation date. Amounts credited to the
Cash Account may not be transferred to the Phantom Share


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Unit Account or the Investment Account; provided, however, that each Participant
who has a balance in his or her Cash Account was given a one-time opportunity to
elect to have the entire balance of his or her Cash Account, valued as of
December 31, 1997, transferred to his or her Investment Account as of January 1,
1998. Any amounts so transferred have been and will continue to be credited with
a rate of return in the manner described in paragraph 3(e).

                  (d) Deferred Fees (both Mandatory Deferral Fees and
Discretionary Deferral Fees) credited to a Phantom Share Unit Account shall be
deemed invested in Phantom Share Units as of the date such Fees would otherwise
have been paid. Such deferred Fees shall be deemed to be invested in such number
of Phantom Share Units which results from dividing the dollar amount of such
Fees by the Fair Market Value (as hereinafter defined) of a Share at the date
such Fees would otherwise have been paid and, for purposes of such Phantom Share
Unit Account, thereafter shall be reflected as a number of Phantom Share Units
and not as a dollar amount. The number of Phantom Share Units credited to the
Phantom Share Unit Account shall for all purposes be calculated to at least
three decimal places.

                           (1) If the Company declares and pays a dividend or
         distribution in the form of cash or property other than Shares in
         respect of Shares, then a number of additional Phantom Share Units
         shall be credited to the Phantom Share Unit Account as of the payment
         date for such dividend or distribution equal to (i) the number of
         Phantom Share Units credited to such Account as of the record date for
         such dividend or distribution, multiplied by (ii) the amount of cash
         plus the Fair Market Value of any property other than Shares actually
         paid as a dividend or distribution on each Share at such payment date,
         divided by (iii) the Fair Market Value of a Share at such payment date.


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                           (2) If the Company declares and pays a dividend or
         distribution in the form of additional Shares payable in respect of
         Shares, or there occurs a forward stock split of Shares, then a number
         of additional Phantom Share Units shall be credited to the Phantom
         Share Unit Account as of the payment date for such dividend or
         distribution or forward stock split equal to (i) the number of Phantom
         Share Units credited to such Account as of the record date for such
         dividend or distribution or split, multiplied by (ii) the number of
         additional Shares actually paid as a dividend or distribution or issued
         in such split on each Share.

                           (3) The number of Phantom Share Units credited to a
         Phantom Share Unit Account shall be appropriately adjusted to reflect
         any changes in the number of outstanding Shares of stock resulting from
         reverse stock splits, recapitalizations, reorganizations, or other
         extraordinary transactions. If, as a result of a merger, consolidation,
         share exchange, recapitalization, reorganization, or other
         extraordinary transaction, Shares cease to be a class of outstanding
         securities, each Phantom Share Unit shall be deemed to be invested in
         the aggregate type and amount of consideration received for one Share
         in the transaction or series of transactions by which Shares ceased to
         be a class of outstanding securities.

                           (4) In the case of Shares, "FAIR MARKET VALUE" as of
         a given date shall mean the average of the high and the low sales
         prices of a Share reported in the table entitled "New York Stock
         Exchange Composite Transactions" contained in The Wall Street Journal
         (or an equivalent successor table) for such date or, if no such prices
         were reported for such date, for the most recent trading day prior to
         such date for which such prices were reported. In the case of property
         other than Shares, "FAIR MARKET VALUE" as of a


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         given date shall be determined in good faith by the Secretary of the
         Company.

                           (5) In the case of Shares, "MONTHLY AVERAGE FAIR
         MARKET VALUE" for a given final day of a calendar month shall mean the
         average of the closing sales prices of a Share, as reported in the
         table entitled "New York Stock Exchange Composite Transactions"
         contained in The Wall Street Journal (or an equivalent successor
         table), for each business day in which Shares traded in such calendar
         month.

                  (e) As of the last business day of the calendar month in which
deferred Discretionary Deferral Fees for services on or after January 1, 1998
would otherwise have been paid to a Participant, the deferral shall be credited
to the Participant's Investment Account to the extent elected by the
Participant. Such amount shall be credited with a deemed rate of return, in
accordance with the remainder of this paragraph 3(e), until the appropriate
valuation date. Amounts credited to the Investment Account may not be
transferred or reallocated to the Phantom Share Unit Account or the Cash
Account.

                           (1) A Participant shall be given the opportunity to
         specify the investment funds (the "INVESTMENT FUNDS") in which his or
         her Investment Account shall be deemed to be invested. The Investment
         Funds shall be selected by the Orange and Rockland Utilities, Inc.
         Retirement Committee (the "COMMITTEE"), and such Investment Funds may
         be changed from time to time in the Committee's discretion.

                           (2) Each Participant shall specify in the manner
         designated by the Committee or its designee, in whole numbers, the
         percentage of his or her deferrals which shall be deemed to be invested
         in one or more of the available Investment Funds, which percentage for
         each Investment Fund selected must be at least 10%. Such investment
         election shall remain in effect until changed in accordance with


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         paragraph 3(e)(5) below. If a Participant fails to select any
         Investment Funds, he or she shall be deemed to have failed to make a
         valid deferral election with respect to any amounts which were to have
         been credited to the Investment Account.

                           (3) As of the last business day of each calendar
         month, the Participant's Investment Account shall be credited with
         earnings or losses based upon the rates of return of the Investment
         Funds in which such Investment Account is deemed to be invested.

                           (4) A Participant may elect to change, as of the last
         business day of a calendar quarter, his or her Investment Fund election
         with respect to subsequent deferrals credited to the Investment
         Account; provided, however that the deemed investment percentage with
         respect to each Investment Fund selected must be a whole number equal
         to at least 10% of the amount to be deferred. Such change shall be made
         by giving notice in the manner established by the Committee or its
         designee, and shall be effective for any deferrals or reallocations
         thereafter credited to the Investment Account, until another change is
         made in accordance with this paragraph 3(e)(5).

                           (5) A Participant may elect to reallocate the
         then-current balance of the Investment Account among the then-available
         Investment Funds, subject to any limitations imposed by the Committee,
         as of the last business day of any calendar quarter. Such reallocation
         must be in whole percentages, and the amount allocated to any one
         Investment Fund selected must be at least 10% of the funds in the
         Participant's Investment Account as of the last business day of the
         calendar quarter. A Participant shall make such an election by giving
         notice in the manner established by the Committee or its designee.


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                           (6) The election among the available Investment Funds
         shall be the sole responsibility of each Participant. The Company, the
         Committee, and their delegates are not authorized to make any
         recommendations to any Participant with respect to such election. Each
         Participant assumes all risk in connection with any election of
         Investment Funds and the adjustment to the value of his or her
         Investment Account as the result of changes to the value of such
         Investment Funds. Neither the Company nor the Committee in any way
         guarantees against loss with respect to an Investment Account.

                           (7) All payments from the Investment Account (or, if
         applicable, from a subaccount under the Investment Account) shall be
         recorded as having been made proportionately from each available
         Investment Fund in which the Investment Account (or the subaccount, if
         applicable) is deemed to be invested at the time of payment.

                  (f) The Participant's Account shall be 100% vested at all
times.

4.      POST-TERMINATION DISTRIBUTIONS FROM THE PARTICIPANT'S ACCOUNT

                  (a) Post-termination distributions under the Plan shall be
made solely in cash. In the case of such distributions relating to a Cash
Account or an Investment Account (or a subaccount thereunder), cash shall be
distributed based on the balance credited to such accounts (or subaccounts) as
of the applicable valuation date set forth herein. In the case of such
distributions relating to a subaccount under a Phantom Share Unit Account, cash
shall be distributed based upon the Full Settlement Value (as hereinafter
defined) of such subaccount. For purposes of the Plan, the "FULL SETTLEMENT
VALUE" as of a given valuation date shall mean the number of Phantom Share Units
then credited to a subaccount under the Phantom Share Unit Account (or the


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entire Phantom Share Unit Account, if applicable) multiplied by the Monthly
Average Fair Market Value of a Share at that date.

                  (b) At the time of his or her initial participation in the
Plan, a Participant shall make a written election with respect to the
post-termination distribution of amounts credited to the Participant's Account
(an "INITIAL ELECTION"). A Participant may elect to receive such distribution in
one lump-sum payment or in some other number of ratable annual installments (not
exceeding 10); provided, however, that installments will only be available if,
as of the valuation date for the initial distribution, the Participant's Account
has a balance greater than $25,000.

                           (1) With respect to amounts in a Participant's Cash
         Account, Investment Subaccount 1, and PSU Subaccount 1, the lump-sum
         payment or the first installment, as elected by the Participant, shall
         be distributed as soon as practicable after one of the following dates,
         as elected by the Participant: (i) the first business day of the
         calendar year immediately following the calendar year in which such
         Participant ceases to be a Director; or (ii) the first business day of
         such later calendar year as such Participant shall have elected.
         Subsequent installments, if any, shall be distributed as soon as
         practicable after the first business day of each succeeding calendar
         year until the entire amount that is subject to this paragraph 4(b)(1)
         shall have been distributed. Amounts to be paid shall be based upon the
         value of the applicable subaccount as of the last business day of the
         calendar year preceding the calendar year of distribution.

                           The "ratable" amount distributable under paragraph
         4(b)(1) in any given installment shall equal (i) the sum of the
         balances of the Cash Account and Investment Subaccount 1, plus the Full
         Settlement Value of PSU Subaccount 1, divided by (ii) the number of
         installments


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         (including the given installment) remaining to be distributed.
         Installments subject to this paragraph 4(b)(1) shall initially be paid
         from the Cash Account. When the Cash Account has a zero balance,
         payments shall be made from Investment Subaccount 1 until it has a zero
         balance. Thereafter, the remaining payments shall be made from PSU
         Subaccount 1.

                           (2) With respect to amounts in a Participant's
         Investment Subaccount 2 and PSU Subaccount 2, the lump-sum payment or
         the first installment, as elected by the Participant, shall be
         distributed as soon as practicable after one of the following dates, as
         elected by the Participant: (i) the first business day of the calendar
         month immediately following the calendar month in which such
         Participant ceases to be a Director (or, if later, the first business
         day of the calendar month following the date on which distributions
         with respect to the Participant's Phantom Share Account cease to be
         subject to liability under Section 16(b) of the Securities Exchange Act
         of 1934, as amended (the "EXCHANGE ACT")); or (ii) the first business
         day of such later calendar month as such Participant shall have
         elected. Subsequent installments, if any, shall be distributed as soon
         as practicable after the anniversary date of the first business day of
         the calendar month described in the preceding sentence, until the
         entire amount that is subject to this paragraph 4(b)(2) shall have been
         distributed. Amounts to be paid shall be based upon the value of the
         applicable account or subaccount as of the last business day of the
         calendar month preceding the calendar month of distribution.

                           The "ratable" amount distributable under paragraph
         4(b)(2) in any given installment shall equal (i) the balance of
         Investment Subaccount 2 plus the Full Settlement Value of PSU
         Subaccount 2, divided by (ii) the number of installments


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         (including the given installment) remaining to be distributed.
         Installments subject to this paragraph 4(b)(2) shall initially be paid
         from Investment Subaccount 2, until it has a zero balance. Thereafter,
         the remaining payments shall be made from PSU Subaccount 2.

                           (3) A Participant who has terminated service as a
         Director may elect to reallocate all or a portion of the amount in his
         or her Phantom Share Unit Account to his or her Investment Account;
         provided, however, that no such reallocation shall be permitted unless
         it would not result in liability under Section 16(b) of the Exchange
         Act. The effective date of the reallocation (the "REALLOCATION DATE")
         shall be the first business day of the second calendar month following
         the Participant's submission of a written reallocation election to the
         Secretary of the Company, or any later month designated in advance by
         the Participant in his or her reallocation election, so long as the
         Reallocation Date is after the date on which the Participant terminates
         service as a Director. The amount of such reallocation shall be based
         upon the Monthly Average Fair Market Value of the Participant's Phantom
         Share Unit Account as of the last business day of the calendar month
         preceding the Reallocation Date. If the Participant elects to
         reallocate a portion of his or her Phantom Share Unit Account, the
         Participant may designate the extent to which the distribution is made
         from PSU Subaccount 1 or PSU Subaccount 2. If the Participant fails to
         make such a designation, the Phantom Share Units in the Phantom Share
         Unit Account will be reallocated on a "first-in, first-out" basis.

                           Amounts that are reallocated from the Participant's
         Phantom Share Account to the Participant's Investment Account shall be
         subject to the most recent Investment Fund election which as of the
         date of


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         reallocation is in effect under paragraph 3(e)(5). If the Participant
         has no Investment Fund election in effect under paragraph 3(e)(5), he
         or she shall be given the opportunity in advance of the reallocation to
         make such election; no reallocation will be permitted absent such an
         election.

                  (c) A Participant may, while a Director, at any time modify
any Initial Election or prior modification of an election with respect to the
distribution of amounts credited or to be credited to the Participant's Account.
The Participant's modification may relate to distributions of amounts to be
credited with respect to services as an Eligible Director in calendar quarters
that commence after the effective date of such modification, including amounts
to be credited to the Investment Account or the Phantom Share Unit Account,
and/or to distributions of amounts credited with respect to services as an
Eligible Director in calendar quarters that commenced prior to the effective
date of such modification ("PRIOR SERVICE AMOUNTS", which includes any interest,
earnings, and additional Phantom Share Units credited thereon); provided,
however, that any modification with respect to Prior Service Amounts may only
provide for the further deferral of such Prior Service Amounts. In the event
that a Participant has made more than one modification of his or her
distribution election with respect to specific amounts credited or to be
credited to his or her Participant's Account, the most recent such modification
shall control the distribution of such amounts. Any modification of a
distribution election shall become effective as of the close of the calendar
quarter in which such notice of modification is given in writing to the
Secretary of the Company.

                  (d) Notwithstanding the terms of any Initial Election or
modification thereof made pursuant to paragraphs 4(b) and (c), if a Participant
becomes employed by any governmental agency having jurisdiction over the
activities of the Company or any of its subsidiaries, the Company shall
distribute to such


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Participant, in a single lump-sum cash payment, as soon as practicable after the
last day of the month in which such employment commences, the entire amount
credited to the Participant's Cash Account, the entire amount credited to the
Participant's Investment Account, and the Full Settlement Value of the
Participant's Phantom Share Unit Account, valued in all cases as of the last
business day of the month in which such employment commences.

                  (e) If a Participant should die before payment in full of the
entire amount credited to his or her Participant's Account, the Company shall
distribute to such Participant's Beneficiary (as hereinafter defined in Section
6), in a single lump-sum cash payment:

                           (1) As soon as practicable after the first business
         day of the calendar year immediately following the calendar year of
         death, the entire amount remaining credited to the Participant's Cash
         Account and Investment Subaccount 1, and an amount equal to the Full
         Settlement Value of the Participant's PSU Subaccount 1, valued in all
         cases as of the last business day of the calendar year in which the
         Participant's death occurs.

                           (2) As soon as practicable after the first business
         day of the calendar month immediately following the calendar month of
         death, the entire amount credited to Investment Subaccount 2, and an
         amount equal to the Full Settlement Value of PSU Subaccount 2, valued
         in all cases as of the last business day of the calendar month in which
         the Participant's death occurs.

                  (f) The Company shall deduct from the distributions to be made
from a Participant's Account any Federal, State, or local withholding or other
taxes or charges which the Company is from time to time required to deduct under
applicable law.


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5.       IN-SERVICE WITHDRAWALS

                  (a) Notwithstanding the terms of any election with respect to
the distribution of amounts credited to the Participant's Account or
modification thereof made by a Participant hereunder, the Secretary of the
Company may, in his or her sole discretion, permit the distribution without
penalty, in the form of a withdrawal of all or a portion of (i) the amount
credited to the Participant's Cash Account and Investment Account, and (ii) the
amount equal to the Rule 16b-3 Limited Settlement Value (as defined in
subsection (d) below) of the Participant's PSU Subaccount 1, if, upon the
written request of the Participant or the Participant's representative to the
Secretary, or following the death of the Participant upon the written request of
the Participant's Beneficiary or such Beneficiary's representative to the
Secretary, the Secretary determines that the Participant or Beneficiary, as the
case may be, is confronted with an unforeseeable emergency. Amounts in the
Participant's PSU Subaccount 1 in excess of the Rule 16b-3 Limited Settlement
Value may also be withdrawn in the event of hardship, if such withdrawal as
approved by the Secretary is also approved by the Compensation Committee of the
Board in its sole discretion. For this purpose, an unforeseeable emergency is an
unanticipated emergency caused by an event that is beyond the control of the
Participant or Beneficiary and that would result in severe financial hardship to
the Participant or Beneficiary if an early hardship withdrawal were not
permitted. The Participant or Beneficiary shall provide to the Secretary (or to
the Compensation Committee, if applicable) such evidence as the Secretary (or
Compensation Committee) may require to demonstrate that such emergency exists
and that financial hardship would occur if the withdrawal were not permitted.
Any such withdrawal under this paragraph shall be limited to the amount
necessary to meet the emergency.


                                      -17-
<PAGE>   19
                  (b) At any time while a member of the Board, a Participant may
elect to withdraw all or any portion of (i) the amount credited to the
Participant's Cash Account and Investment Account, and (ii) the amount equal to
the Rule 16b-3 Limited Settlement Value (as defined in paragraph (d) below) of
the Participant's PSU Subaccount 1, subject to a 10% withdrawal penalty. Amounts
in the Participant's PSU Subaccount 1 in excess of the Rule 16b-3 Limited
Settlement Value may also be withdrawn subject to a 10% withdrawal penalty, if
such withdrawal is approved by the Compensation Committee of the Board in its
sole discretion. The Participant may make such an election by filing a written
notice with the Secretary of the Company on a form provided by the Secretary of
the Company, and the amount withdrawn shall be paid to the Participant in a cash
lump sum payment. Upon the payment of such withdrawal, (a) an amount equal to
one-tenth of the amount withdrawn shall be forfeited, (b) the Participant shall
cease to be eligible to defer Discretionary Deferral Fees for the remainder of
the calendar year in which the withdrawal occurs and shall be ineligible to
defer Discretionary Deferral Fees during the calendar year immediately following
the calendar year in which the withdrawal occurs, and (c) any deferral elections
made under paragraph 2(c) by the Participant for such periods shall be
terminated.

                  (c) In-service withdrawals shall be made in cash as soon as
practicable following the end of the month in which the Participant's notice of
withdrawal is received by the Secretary of the Company (or, if later, the end of
the month in which any necessary approval is granted by the Secretary or the
Compensation Committee), and the amounts withdrawn shall be taken from the
Participant's Account in the following order: (1) the Cash Account, (2) the
Investment Account, and (3) PSU Subaccount 1 (to the extent available). Amounts
withdrawn under this Section 5 shall be valued as of the last business day of
the month prior to the date of distribution.


                                      -18-
<PAGE>   20
                  (d) The "RULE 16b-3 LIMITED SETTLEMENT VALUE" as of a given
valuation date shall mean the number of Phantom Share Units originally credited
to a Phantom Share Unit subaccount more than six months before such valuation
date plus any additional Phantom Share Units credited at any time under
paragraph 3(d) in respect of such originally credited Phantom Share Units and
such previously credited additional Phantom Share Units then credited to such
Phantom Share Unit subaccount multiplied by the Monthly Average Fair Market
Value of a Share at that date.

6.       DESIGNATION OF BENEFICIARIES

                  Each Participant may file with the Secretary of the Company a
written designation of one or more persons as the beneficiary who, from and
after the death of the Participant, shall have the rights of the Participant
under the Plan (the "BENEFICIARY"). A Participant may at any time and from time
to time revoke or change the Participant's Beneficiary designation without the
consent of any previously designated Beneficiary by filing a new designation
with the Secretary of the Company. The last such designation received by the
Secretary of the Company shall be controlling; provided, however, that no
designation or revocation or change thereof shall be effective unless received
by the Secretary of the Company prior to the Participant's death, and in no
event shall it be effective as of a date prior to such receipt. If no such
Beneficiary designation is in effect at the time of a Participant's death, or if
no Beneficiary survives the Participant, or if such designation conflicts with
law, the Participant's estate shall be the Beneficiary entitled to receive the
amount, if any, distributable under the Plan upon the death of the Participant.
If the Secretary of the Company is in doubt as to the right of any person to
receive such amount, the Company may delay the distribution of such amount
(which shall remain credited to the Participant's Account) until the Secretary
determines the rights thereto, or the Company may distribute such amount into
any New York State or Federal Court of appropriate


                                      -19-
<PAGE>   21
jurisdiction, and such distribution shall be a complete discharge of the
liability of the Company therefor.

7.       MISCELLANEOUS

                  (a) Neither a Participant nor any Beneficiary shall have the
right to, directly or indirectly, alienate, assign, transfer, pledge,
anticipate, or encumber (except by reason of death) any amount that is or may be
distributable hereunder, nor shall any such amount be subject to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of the Participant or any Beneficiary or to the debts,
contracts, liabilities, engagements, or torts of the Participant or any
Beneficiary or transfer by operation of law in the event of bankruptcy or
insolvency of the Participant or any Beneficiary, or any legal process.

                  (b) All distributions provided for from a Participant's
Account shall be made by check from the general funds of the Company as soon as
practicable after the applicable valuation date provided in the Plan; provided,
however, that such distributions shall be reduced by the amount of any payments
made to the Participant or his or her Beneficiary from the trust (the "TRUST")
established by the Company to assist it in making such payments. The Company
shall transfer to the Trust with respect to each Participant an amount equal to
the amount of Discretionary Deferral Fees deferred by that Participant under the
Plan with respect to services on or after January 1, 1998, and such other
amounts at such other times as shall be determined by the Company in its sole
discretion.

                  No Participant or Beneficiary shall have any right, title, or
interest whatever in or to any assets of the Trust. To the extent that any
person acquires a right to receive payments from the Company hereunder, such
right shall be no greater than the right of an unsecured creditor of the
Company.


                                      -20-
<PAGE>   22
                  (c) Copies of the Plan and any and all amendments thereto
shall be made available to all Participants and Beneficiaries at all reasonable
times at the office of the Secretary of the Company.

                  (d) The Plan shall be administered by the Secretary of the
Company who shall have full power, discretion, and authority to interpret,
construe, and administer the Plan and any part thereof. The Secretary's
interpretations and constructions of the Plan, and the actions taken thereunder
by the Secretary, shall, except as otherwise determined by the Board, be binding
and conclusive on all persons for all purposes.

                  (e) The Board may at any time amend or terminate the Plan. No
amendment or termination of the Plan shall impair the rights of any person with
respect to amounts then in the Participant's Account.

                  (f) The Company, its officers, and its Board shall have the
right to rely upon a written opinion of legal counsel, which may be independent
legal counsel or legal counsel regularly employed by the Company, if any
question should arise as to any distribution from a Participant's Account or any
obligation under the Plan.

                  (g) Each Participant or his or her Beneficiary shall receive a
quarterly statement indicating the amount credited to the Participant's Account
as of the close of the preceding calendar quarter.

                  (h) All elections, designations, requests, notices,
instructions, and other communications from a Participant, Beneficiary, or other
person to the Secretary of the Company required or permitted under the Plan
shall be in such form as is prescribed from time to time by the Secretary and
shall be mailed by first class mail or delivered to such location as shall be
specified by the Secretary.


                                      -21-
<PAGE>   23
                  (i) It is the intent of the Company that the crediting of
Phantom Share Units to the Phantom Share Unit Account of a Participant who is
then subject to Section 16 of the Exchange Act with respect to the Company shall
be exempt from Section 16(b) liability under Rule 16b-3(d) under the Exchange
Act (effective August 15, 1996 and as in effect thereafter), and that
distributions of amounts from such a Participant's Phantom Share Unit Account
shall be exempt under Rule 16b-3(e) or (f), or such other exemptions from
Section 16(b) liability as may be available at the time. Accordingly, the Plan
shall be construed in a manner consistent with the applicable requirements of
Rule 16b-3 necessary to ensure that each such transaction is either exempt or
will not result in Section 16(b) liability, and, if any provision of the Plan
does not comply with any such applicable requirement, then such provision shall
be construed or deemed amended to the extent necessary to conform to such
applicable requirement. In furtherance thereof, any distribution with respect to
a subaccount under a Participant's Phantom Share Unit Account shall be deemed to
be a disposition to the Company of the Phantom Share Units earliest credited to
such subaccount and not previously deemed disposed of in a prior distribution.

                  (j) The terms of the Plan shall be binding upon the Company
and its successors and assigns.

                  (k) All disputes and controversies arising out of or relating
to the Plan shall be settled exclusively by arbitration in New York, New York in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any State or
Federal Court sitting in the State of New York having jurisdiction thereof.
Notwithstanding any provision of the Plan to the contrary, Participants and
Beneficiaries shall be entitled to seek in any State or Federal Court sitting in
the State of New York having jurisdiction thereof specific performance of their
respective rights to receive distributions provided for in the Plan during


                                      -22-
<PAGE>   24
the pendency of any such dispute or controversy arising out of or relating to
the Plan.

                  (l) The Plan shall be governed by and construed in accordance
with the laws of the State of New York, as from time to time in effect, without
regard to the conflicts of law rules thereof, and applicable Federal law. Each
Participant and his or her Beneficiary and any other person claiming from or
through them irrevocably submit to the exclusive jurisdiction of any State or
Federal Court sitting in the State of New York over any suit, action, or
proceeding arising out of or relating to the Plan, and each such person agrees
and consents that, to the extent provided for under applicable law, all service
of process in any such suit, action, or proceeding in any State or Federal Court
sitting in the State of New York may be made by certified or registered mail,
return receipt requested, directed to him or her at the address indicated in the
records of the Company, unless the Company is otherwise notified in writing of a
new address, and service so made shall be complete 10 days after the same shall
have been so mailed.

8.       CHANGE IN CONTROL; POTENTIAL CHANGE IN CONTROL

                  (a) A Participant shall be deemed to have irrevocably elected
the distribution of his or her Participant's Account in the event of the
occurrence of a Change in Control (as hereinafter defined) or a Potential Change
in Control (as hereinafter defined), as specified in this paragraph 8(a).
Notwithstanding anything else herein to the contrary, in the event of the
occurrence of a Change in Control or a Potential Change in Control, each
Participant or his or her Beneficiary shall have the right to receive, and shall
be paid, as soon as practicable after such Change in Control or Potential Change
in Control, a lump-sum cash distribution equal to the sum of (i) the entire
unpaid balance of the Participant's Cash Account, (ii) the entire unpaid balance
of the Participant's Investment Account, and (iii) the Daily-Basis Full
Settlement Value (as defined in


                                      -23-
<PAGE>   25
paragraph (f) below) of the Participant's Phantom Share Unit Account. All
amounts distributed in accordance with the preceding sentence shall be based
upon the subaccounts' values as of the date immediately preceding the Change in
Control or the Potential Change in Control. Notwithstanding anything else herein
to the contrary, Discretionary Deferral Fees which are otherwise payable to an
Eligible Director in the calendar quarter in which a Change in Control or
Potential Change in Control has occurred may not be deferred under the Plan, and
Discretionary Deferral Fees otherwise payable in subsequent calendar quarters
may not be deferred under the Plan unless an Eligible Director has filed, after
the occurrence of the Change in Control or Potential Change in Control, a new
election to defer Discretionary Deferral Fees in accordance with paragraph 2(c).

                  (b) A "CHANGE IN CONTROL" shall be deemed to have occurred if
the event set forth in any one of the following paragraphs shall have occurred:

                           (1) any Person (as hereinafter defined) is or becomes
         the Beneficial Owner (as hereinafter defined), directly or indirectly,
         of securities of the Company (not including in the securities
         beneficially owned by such Person any securities acquired directly from
         the Company or its affiliates other than in connection with the
         acquisition by the Company or its affiliates of a business)
         representing 20% or more of either the then-outstanding Shares or the
         combined voting power of the Company's then-outstanding securities;

                           (2) the following individuals cease for any reason to
         constitute a majority of the number of Directors then serving:
         individuals who, on April 1, 1997, constituted the Board and any new
         Director (other than a Director whose initial assumption of office is
         in connection with an actual or threatened election contest, including
         but not limited to a consent solicitation, relating to the


                                      -24-
<PAGE>   26
         election of Directors of the Company (as such terms are used in Rule
         14a-11 of Regulation 14A under the Exchange Act)) whose appointment or
         election by the Board or nomination for election by the Company's
         shareholders was approved by a vote of at least two-thirds (2/3) of the
         Directors then still in office who either were Directors on April 1,
         1997 or whose appointment, election or nomination for election was
         previously so approved;

                           (3) the shareholders of the Company approve a merger
         or consolidation of the Company with any other corporation or approve
         the issuance of voting securities of the Company in connection with a
         merger or consolidation of the Company (or any direct or indirect
         subsidiary of the Company) pursuant to applicable stock exchange
         requirements, other than (A) a merger or consolidation which would
         result in the voting securities of the Company outstanding immediately
         prior to such merger or consolidation continuing to represent (either
         by remaining outstanding or by being converted into voting securities
         of the surviving entity or any parent thereof), in combination with the
         ownership of any trustee or other fiduciary holding securities under an
         employee benefit plan of the Company, at least 65% of the combined
         voting power of the voting securities of the Company or such surviving
         entity or any parent thereof outstanding immediately after such merger
         or consolidation, or (B) a merger or consolidation effected to
         implement a recapitalization of the Company (or similar transaction) in
         which no Person is or becomes the Beneficial Owner, directly or
         indirectly, of securities of the Company (not including in the
         securities beneficially owned by such Person any securities acquired
         directly from the Company or its affiliates other than in connection
         with the acquisition by the Company or its affiliates of a business)
         representing 20% or more of either the then-outstanding Shares or the


                                      -25-
<PAGE>   27
         combined voting power of the Company's then-outstanding securities; or

                           (4) the shareholders of the Company approve a plan of
         complete liquidation or dissolution of the Company or an agreement for
         the sale or disposition by the Company of all or substantially all of
         the Company's assets, other than a sale or disposition by the Company
         of all or substantially all of the Company's assets to an entity, at
         least 65% of the combined voting power of the voting securities of
         which are owned by Persons in substantially the same proportions as
         their ownership of the Company immediately prior to such sale.

Notwithstanding the foregoing, no "Change in Control" shall be deemed to have
occurred if there is consummated any transaction or series of integrated
transactions immediately following which the record holders of Shares
immediately prior to such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which owns all or
substantially all of the assets of the Company immediately following such
transaction or series of transactions.

                  (c) A "POTENTIAL CHANGE IN CONTROL" shall be deemed to have
occurred if the event set forth in any one of the following paragraphs shall
have occurred:

                           (1) the Company enters into an agreement, the
         consummation of which would result in the occurrence of a Change in
         Control;

                           (2) the Company or any Person publicly announces an
         intention to take or to consider taking actions which if consummated,
         would constitute a Change in Control;

                           (3) any Person becomes the Beneficial Owner, directly
         or indirectly, of securities of the Company representing 10% or more of
         either the then-outstanding 

                                      -26-
<PAGE>   28
         securities; or the combined voting power of the Company's
         then-outstanding securities; or

                           (4) the Board adopts a resolution to the effect that,
         for purposes of any severance agreement to which the Company is a
         party, a Potential Change in Control has occurred.

                  (d) "BENEFICIAL OWNER" shall have the meaning set forth in
Rule 13d-3 under the Exchange Act.

                  (e) "PERSON" shall have the meaning given in Section 3(a)(9)
of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the Company or any of its affiliates
(as defined in Rule 12b-2 promulgated under the Exchange Act), (ii) a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any of its affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company.

                  (f) "DAILY-BASIS FULL SETTLEMENT VALUE" as of a given
valuation date shall mean the number of Phantom Share Units then credited to the
Participant's Phantom Share Unit Account multiplied by the Fair Market Value of
a Share on that date.


                                      -27-