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                                                                  EXHIBIT 10(h)




                           1992 DIRECTORS' EQUITY PLAN

                                NOVEMBER 11, 1992
                               STOCK OPTION GRANT

PURPOSE

         The purpose of the 1992 Directors' Equity Plan is to provide Clayton
Homes, Inc., Common Stock as a component of the compensation package for B. Joe
Clayton, Dan Evins, and Joseph H. Stegmayer non-employee directors of the
Company on November 11, 1992 (the "Participating Directors") in order to
strengthen the commonality of interest between the Participating Directors and
shareholders and improve the Company's ability to attract and retain talented
individuals to serve as Company directors.

STOCK OPTION AWARD TO EACH PARTICIPATING DIRECTOR

         The Stock Option is a right to purchase 2,500 shares of Clayton Homes,
Inc., Common Stock at the market value at the date of grant of $22.60 (option
price), which shall be November 11, 1992.

STOCK OPTION TERMS

         Each of the non-qualified stock options becomes exercisable in 20%
installments beginning one year after the date of grant and becomes exercisable
20% each year thereafter, provided, however, that the first installment of the
grant hereunder shall become exercisable six months and one day following
shareholder approval of this plan. Should a Participating Director's Board
service terminate prior to all or a portion of an option becoming exercisable,
the portion of the option not then exercisable will be canceled unless such
termination is due to death or disability. (See discussion below.) Options will
have generally a 10-year term and are not transferable by a Participating
Director other than by will or the laws of descent.

         Once the stock option becomes exercisable, a Participating Director may
purchase some or all of the exercisable shares by notifying the Secretary of the
Company, in writing, of his intent to exercise and by concurrently submitting a
check in payment of the exercise cost (i.e., number of shares being exercised
times the option price).

         Upon retirement from the Board or upon earlier termination as described
herein, the exercisable portion of any stock option will remain exercisable for
two years from such termination date.

DEATH OR DISABILITY

         If a Participating Director's service as a director terminates because
of death or permanent disability, he (or the named beneficiary or estate) will
receive the awards


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through such termination of service. For these purposes, permanent disability
will be considered to have occurred if a Participating Director would be
eligible to receive a Primary Social Security Disability benefit under the
definition of such laws and regulations. In either event, stock options will
become immediately exercisable, if not already exercisable. Options will then
have a two-year period from the date of termination of Board service during
which it can be exercised by the beneficiary, or the estate. Should a
Participating Director die during such two-year post-termination exercise
period, the beneficiary or estate will have the greater of: (1) the remainder of
the two-year post-termination exercise period or (2) one year from the date of
death in which to exercise the stock option.

CHANGES IN CAPITALIZATION

         In the event of any change in outstanding Clayton Homes, Inc., Stock
which requires an adjustment in stock options and/or stock awards under the
Company's stock incentive plans for employees, any such adjustment or
adjustments will also be made to the stock options hereunder.

AUTHORIZED SHARES

         The maximum number of authorized shares which may be issued to the
Participating Directors under this Program shall be 7,500 subject to adjustment
as described in "Changes in Capitalization."

SHAREHOLDER APPROVAL

         This program is subject to approval by the Company's shareholders at
the 1993 Annual Meeting.