Exhibit 10.7


                    THE COASTAL CORPORATION STOCK GRANT PLAN
                  (AMENDED AND RESTATED AS OF OCTOBER 9, 1997)


      1. Purpose. The Stock Grant Plan (the "Plan") is intended to provide
incentives which will attract and retain highly qualified persons as members of
the Board of Directors of The Coastal Corporation (the "Company") by providing
them with opportunities to acquire common stock of the Company ("Common Stock")
pursuant to grants ("Grants") described herein.

      2. Administration. The members of the Board of Directors of the Company
who are employed by the Company ("Committee") shall supervise and administer the
Plan. Any questions of interpretation of the Plan or of any Grants issued under
it shall be determined by the Committee and such determination shall be final
and binding upon all persons. A majority of members of the Committee shall
constitute a quorum, and all determinations of the Committee shall be made by a
majority of its members. Any determination of the Committee under the Plan may
be made, without notice or meeting of the Committee, by a writing signed by a
majority of the Committee members.

      3. Eligibility of Participants. Eligible Participants shall include all
members of the Board of Directors of the Company who are not employed by the
Company or any of its subsidiaries.

      4. Grants. Grants will consist of Common Stock transferred to Participants
as compensation for service rendered to the Company without other payment
therefor. Each Participant shall be eligible to receive a single Grant under
this Plan. The amount of such Grant, when made by the Committee, shall be one
thousand shares of Common stock for an eligible Participant. Grants shall be
made at such time as is determined by the Committee. Such Grants shall vest at a
rate of one-third of the shares of Common Stock upon completion of each year of
Service on the Board of Directors of the Company after the date of grant.
Eligible Participants shall receive credit for prior service in that capacity
for purposes of vesting hereunder. Vesting shall be in whole shares only and any
shares which remain unvested due to vesting of whole shares shall vest at the
end of the third year.

      Upon vesting, the Company shall deliver a certificate for vested shares to
the Participant. Such shares shall be issued from treasury shares. The
Participant shall have the right to vote and receive dividends with respect to
vested and forfeitable shares. The Common Stock granted pursuant to this Plan
shall be forfeitable until vested in the Participant.

      5. Adjustment Provisions. If the Company shall at any time change the
number of issued shares of Common Stock without new consideration to the Company
(by stock dividends, stock splits, or similar transactions), the number of
shares covered by each outstanding Grant shall be adjusted so that the value of
each Grant shall not be changed. Grants may also contain provisions for their
continuation of for other equitable adjustments after changes in the Common
Stock resulting from reorganization, sale, merger, consolidation or similar
occurrences.

      6. Nontransferability. Each Grant made under the Plan to a Participant
shall not be transferable by him until vested pursuant to provisions of the
Plan. In the event of the termination of service as a director or in the event
of death of a Participant prior to the vesting of any portion of the Grant held
by him hereunder, the portion of such Grant which was not vested shall be
forfeited.

      7. Other Provisions. Any Grant under the Plan may also be subject to such
other provision (whether or not applicable to the Grant to any other
Participant) as the Committee determines appropriate, including without
limitation, provisions of the forfeiture of and restrictions of the sale, resale
or other disposition of shares acquired under any Grant, provisions giving the
Company the right to repurchase shares acquired under any Grant, provisions to
comply with Federal and state securities laws, or any understanding or
conditions as to the Participant's service in addition to those specifically
provided for under the Plan.

      8. Tenure. A Participant's right, if any, to continue to serve the Company
and its subsidiaries as a member of the Board of Directors, officer, employee or
otherwise, shall not be enlarged or otherwise affected by his designation as a
Participant under the Plan.


                                        1

<PAGE>



      9. Duration, Amendment, and Termination. No Grant shall be granted more
than 10 years after the effective date of this Plan; provided, however, that the
terms and conditions applicable to any Grant made within such period may
thereafter be amended or modified by mutual agreement between the Company and
the Participant or such other persons as may then have an interest therein.
Also, by mutual agreement between the Company and a Participant, or under any
future plan of the Company, Grants may be made to such Participant in
substitution and exchange for, and in cancellation of, any Grants previously
made to such Participant under this Plan, or any benefit previously or
thereafter granted to him under any future plan of the Company. The Board of
Directors of the Company may amended the Plan from time to time or terminate the
Plan at any time. However, no action authorized by this paragraph shall reduce
the amount of any existing Grant or change the terms and conditions thereof
without the Participant's consent.

      10. Effective Date. The effective date of the Plan is December 1, 1988.
The effective date of the Amended and Restated Plan is October 9, 1997.

                                        2