EXHIBIT 10.27.5
 
                            AMENDMENT NO. SIX TO THE
                  ARTHUR J. GALLAGHER & CO. 1988 NONQUALIFIED
                               STOCK OPTION PLAN
 
  THIS AMENDMENT NO. SIX to the ARTHUR J. GALLAGHER & CO. 1988 NONQUALIFIED
STOCK OPTION PLAN, dated May 21, 1996, is made by Arthur J. Gallagher & Co., a
Delaware corporation (the "Company").
 
  WHEREAS, the Arthur J. Gallagher & Co. 1988 Nonqualified Stock Option Plan
(the "Plan") was adopted by the Company's Board of Directors and approved by
the Company's Stockholders in 1988; and
 
  WHEREAS, the Company's Board of Directors has determined that the Plan should
be amended to increase the number of shares of the Company's Common Stock
subject to the 1988 Nonqualified Plan by 675,000 from 5,500,000 to 6,175,000
subject to approval by the Company's Stockholders, which approval was given on
May 21, 1996;
 
  NOW, THEREFORE, in consideration of the foregoing and in order to reflect the
approvals of the Board of Directors and the Stockholders of the Company:
 
  1. The first sentence of Paragraph 3 of the Plan is hereby amended in its
entirety to read as follows:
 
    "The shares that may be made subject to options under the Plan shall be
  shares of Common Stock of the Company, one dollar ($1.00) par value
  ("Common Stock"), and the total shares subject to option and issued
  pursuant to this Plan shall not exceed, in the aggregate, 6,175,000 shares
  of the Common Stock of the Company."
 
  2. Except as expressly amended and supplemented by this Amendment, the Plan
is hereby ratified and confirmed in all respects.
 
  IN WITNESS WHEREOF, the Company has caused its President and Secretary to
execute this Amendment No. Six to the Plan as of the 21st day of May, 1996.
 
                                          Arthur J. Gallagher & Co.
 
                                          By: _________________________________
                                                J. Patrick Gallagher, Jr.
                                                        President
 
Attest:
 
- -------------------------------------
            Carl E. Fasig
              Secretary