1990 Stock Option Plan



                          SEAGULL ENERGY CORPORATION

                             1990 STOCK OPTION PLAN



                             I. PURPOSE OF THE PLAN

         The SEAGULL ENERGY  CORPORATION  1990 STOCK OPTION PLAN (the "Plan") is
intended  to  provide  a means  whereby  certain  employees  of  SEAGULL  ENERGY
CORPORATION,  a Texas  corporation  (the  "Company"),  and its  subsidiaries may
develop a sense of  proprietorship  and personal  involvement in the development
and financial  success of the Company,  and to encourage them to remain with and
devote their best efforts to the business of the Company,  thereby advancing the
interests  of the Company  and its  shareholders.  Accordingly,  the Company may
grant to certain  employees  the option  ("Option")  to  purchase  shares of the
common stock of the Company ("Stock"), as hereinafter set forth. Options granted
under the Plan may be either  incentive  stock  options,  within the  meaning of
section  422A(b) of the Internal  Revenue Code of 1986, as amended (the "Code"),
("Incentive  Stock Options") or options which do not constitute  Incentive Stock
Options.

                               II. ADMINISTRATION

         The Plan  shall be  administered  by the  Compensation  Committee  (the
"Committee") of the Board of Directors of the Company (the "Board").  Members of
the  Committee  shall be persons  that are  "disinterested  persons"  within the
meaning of Rule 16b-3 promulgated under the Securities  Exchange Act of 1934, as
amended (the "1934 Act").  The Committee shall have sole authority to select the
individuals  who are to be granted  Options from among those eligible  hereunder
and to establish the number of shares which may be issued under each Option. The
Committee is  authorized  to interpret  the Plan and may from time to time adopt
such rules and  regulations,  consistent  with the provisions of the Plan, as it
may deem advisable to carry out the Plan. All decisions made by the Committee in
selecting the individuals to whom Options shall be granted,  in establishing the
number of shares  which may be issued  under each Option and in  construing  the
provisions of the Plan shall be final.

                             III. OPTION AGREEMENTS

         Each Option shall be evidenced by an Option Agreement and shall contain
such terms and conditions,  and may be exercisable  for such periods,  as may be
approved by the Committee.  The terms and  conditions of the  respective  Option
Agreements need not be identical.  Specifically, an Option Agreement may provide
for the surrender of the right to purchase shares under the Option in return for
a  payment  in cash or shares of Stock or a  combination  of cash and  shares of
Stock equal in value to the excess of the fair mar-






ket  value of the  shares  with  respect  to which  the  right  to  purchase  is
surrendered over the option price therefor  ("Stock  Appreciation  Rights"),  on
such terms and conditions as the Committee in its sole discretion may prescribe;
provided,  that with respect to Stock  Appreciation  Rights granted to employees
who  are  subject  to  Section  16 of  the  1934  Act,  except  as  provided  in
Subparagraph  VIII(c) hereof,  the Committee shall retain final authority (i) to
determine whether an optionee shall be permitted, or (ii) to approve an election
by an  optionee,  to  receive  cash in  full  or  partial  settlement  of  Stock
Appreciation Rights.  Moreover,  an Option Agreement may provide for the payment
of the option price,  in whole or in part, by the delivery of a number of shares
of Stock  (plus cash if  necessary)  having a fair  market  value  equal to such
option  price.  Finally,  in the case of an option which does not  constitute an
Incentive  Stock  Option,  an Option  Agreement  may  provide for payment of the
amount of federal or state income tax  withholding  required with respect to the
exercise of such Option by permitting  an Optionee to surrender  shares of Stock
or authorize the Company to withhold from shares of Stock acquired upon exercise
of such  Option  shares  of Stock  equal in value to such  withholding.  For all
purposes  under  the  Plan,  the  fair  market  value  of a share  of Stock on a
particular date shall be equal to the closing price of the Stock on the New York
Stock Exchange Composite Tape on that date, or if no prices are reported on that
date,  on the last  preceding  date on which  such  prices  of the  Stock are so
reported.   Each  Option  and  all  rights  granted   thereunder  shall  not  be
transferable  other than by will or the laws of descent  and  distribution,  and
shall be exercisable during the optionee's  lifetime only by the optionee or the
optionee's guardian or legal representative.

                           IV. ELIGIBILITY OF OPTIONEE

         Options  may be  granted  only to  individuals  who  are key  employees
(including  officers and directors who are also key employees) of the Company or
any parent or subsidiary  corporation (as defined in section 425 of the Code) of
the  Company at the time the Option is  granted.  Options  may be granted to the
same  individual on more than one occasion.  No Incentive  Stock Option shall be
granted to an individual if, at the time the Option is granted,  such individual
owns stock  possessing  more than 10% of the total combined  voting power of all
classes  of stock of the  Company or of its  parent or  subsidiary  corporation,
within the  meaning of section  422A(b)(6)  of the Code,  unless (i) at the time
such  Option is  granted  the option  price is at least 110% of the fair  market
value of the Stock  subject to the  Option and (ii) such  Option by its terms is
not  exercisable  after the expiration of five years from the date of grant.  To
the extent that the  aggregate  fair market  value  (determined  at the time the
respective  Incentive  Stock  Option is granted) of stock with  respect to which
Incentive Stock Options granted after 1986 are exercisable for the first time by
an individual during any calendar year under all incentive stock option plans of
the Company and its parent and subsidiary  corporations  exceeds $100,000,  such
Incentive  Stock  Options  shall be treated as options  which do not  constitute
Incentive  Stock Options.  The Committee  shall  determine,  in accordance  with
applicable provisions of the Code, Treasury Regulations and other administrative
pronouncements,  which  of  an  optionee's  Incentive  Stock  Options  will  not
constitute Incentive Stock Options because of such


                                       -2-





limitation  and shall  notify  the  optionee  of such  determination  as soon as
practicable after such determination.

                          V. SHARES SUBJECT TO THE PLAN

         The  aggregate  number of shares  which  may be  issued  under  Options
granted under the Plan shall not exceed 500,000 shares of Stock. Such shares may
consist of authorized but unissued  shares of Stock or previously  issued shares
of Stock reacquired by the Company. Any of such shares which remain unissued and
which are not  subject to  outstanding  Options at the  termination  of the Plan
shall cease to be subject to the Plan,  but, until  termination of the Plan, the
Company shall at all times make available a sufficient  number of shares to meet
the  requirements of the Plan.  Should any Option  hereunder expire or terminate
prior to its exercise in full, the shares theretofore subject to such Option may
again be subject to an Option  granted under the Plan.  The aggregate  number of
shares which may be issued under the Plan shall be subject to  adjustment in the
same manner as provided in Paragraph VIII hereof with respect to shares of Stock
subject  to  Options  then  outstanding.  Exercise  of an Option in any  manner,
including an exercise  involving a Stock  Appreciation  Right, shall result in a
decrease in the number of shares of Stock  which may  thereafter  be  available,
both for purposes of the Plan and for sale to any one individual,  by the number
of shares as to which the Option is exercised. Separate stock certificates shall
be issued by the Company for those shares  acquired  pursuant to the exercise of
an Incentive Stock Option and for those shares acquired pursuant to the exercise
of any Option which does not constitute an Incentive Stock Option.

                                VI. OPTION PRICE

         The  purchase  price  of  Stock  issued  under  each  Option  shall  be
determined by the Committee,  but in the case of an Incentive Stock Option, such
purchase  price shall not be less than the fair market value of Stock subject to
the Option on the date the Option is granted.

                                VII. TERM OF PLAN

         The Plan shall be effective upon the date of its adoption by the Board,
provided the Plan is approved by the  shareholders  of the Company within twelve
months  thereafter.  Except with  respect to Options  then  outstanding,  if not
sooner terminated under the provisions of Paragraph IX, the Plan shall terminate
upon and no further  Options shall be granted after the  expiration of ten years
from the date of its adoption by the Board.

                    VIII. RECAPITALIZATION OR REORGANIZATION

         (a) The existence of the Plan and the Options  granted  hereunder shall
not affect in any way the right or power of the Board or the shareholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Com-

E:\SEA322\STOCK\1990.SOP
                                       -3-




pany's capital  structure or its business,  any merger or  consolidation  of the
Company,  any issue of debt or equity  securities ahead of or affecting Stock or
the rights  thereof,  the dissolution or liquidation of the Company or any sale,
lease,  exchange  or  other  disposition  of all or any  part of its  assets  or
business or any other corporate act or proceeding.

         (b) The shares with respect to which  Options may be granted are shares
of Stock as presently constituted, but if, and whenever, prior to the expiration
of an Option  theretofore  granted,  the Company shall effect a  subdivision  or
consolidation  of shares of Stock or the  payment of a stock  dividend  on Stock
without receipt of consideration  by the Company,  the number of shares of Stock
with respect to which such Option may  thereafter  be exercised (i) in the event
of an  increase in the number of  outstanding  shares  shall be  proportionately
increased,  and the purchase price per share shall be  proportionately  reduced,
and (ii) in the event of a reduction in the number of  outstanding  shares shall
be  proportionately   reduced,  and  the  purchase  price  per  share  shall  be
proportionately increased.

         (c) If the  Company  recapitalizes  or  otherwise  changes  its capital
structure,  thereafter  upon any exercise of an Option  theretofore  granted the
optionee shall be entitled to purchase under such Option,  in lieu of the number
of shares of Stock as to which such Option shall then be exercisable, the number
and class of shares of stock and  securities  to which the  optionee  would have
been  entitled  pursuant to the terms of the  recapitalization  if,  immediately
prior to such  recapitalization,  the  optionee had been the holder of record of
the number of shares of Stock as to which such  Option is then  exercisable.  If
(i) the Company shall not be the surviving entity in any merger or consolidation
(or  survives  only  as a  subsidiary  of an  entity  other  than  a  previously
wholly-owned  subsidiary  of the  Company),  (ii) the Company  sells,  leases or
exchanges or agrees to sell, lease or exchange all or  substantially  all of its
assets to any other person or entity  (other than a  wholly-owned  subsidiary of
the  Company),  (iii) the Company is to be dissolved  and  liquidated,  (iv) any
person or entity, including a "group" as contemplated by Section 13(d)(3) of the
1934 Act, acquires or gains ownership or control (including, without limitation,
power to vote) of more than 40% of the outstanding  shares of Stock, or (v) as a
result of or in connection with a contested  election of directors,  the persons
who were directors of the Company before such election shall cease to constitute
a majority of the Board  (each such event is referred to herein as a  "Corporate
Change"), then effective as of a date (selected by the Committee) within (a) ten
days after the  approval  by the  shareholders  of the  Company of such  merger,
consolidation, sale, lease or exchange of assets or dissolution or such election
of directors or (b) thirty days of such change of control, the Committee, acting
in its sole  discretion  without the consent or approval of any optionee,  shall
effect  one  or  more  of the  following  alternatives,  which  may  vary  among
individual optionees:  (1) accelerate the time at which Options then outstanding
may be  exercised  so that such  Options may be  exercised in full for a limited
period of time on or before a  specified  date  (before or after such  Corporate
Change)  fixed by the  Committee,  after which  specified  date all  unexercised
Options and all rights of optionees thereunder shall terminate,  (2) require the
mandatory  surrender to the Company by selected  optionees of some or all of the
outstanding Options held by such optionees (irrespective of whether such Options
are then exercis-


                                       -4-





able  under  the  provisions  of the Plan) as of a date,  before  or after  such
Corporate Change, specified by the Committee, in which event the Committee shall
thereupon  cancel such  Options  and pay to each  optionee an amount of cash per
share equal to the excess of the amount  calculated  in  Subparagraph  (d) below
(the  "Change of Control  Value") of the shares  subject to such Option over the
exercise price(s) under such Options for such shares,  (3) make such adjustments
to Options then  outstanding as the Committee deems  appropriate to reflect such
Corporate  Change  (provided,  however,  that the Committee may determine in its
sole discretion that no adjustment is necessary to Options then  outstanding) or
(4) provide that thereafter upon any exercise of an Option  theretofore  granted
the optionee  shall be entitled to purchase  under such  Option,  in lieu of the
number of shares of Stock as to which such Option shall then be exercisable, the
number and class of shares of stock or other securities or property to which the
optionee  would have been  entitled  pursuant to the terms of the  agreement  of
merger, consolidation or sale of assets and dissolution if, immediately prior to
such merger,  consolidation  or sale of assets and  dissolution the optionee had
been the  holder  of record  of the  number of shares of Stock as to which  such
Option is then exercisable.

         (d) For the  purposes  of clause (2) in  Subparagraph  (c)  above,  the
"Change of Control Value" shall equal the amount  determined in clause (i), (ii)
or (iii),  whichever is applicable,  as follows: (i) the per share price offered
to shareholders of the Company in any such merger, consolidation, sale of assets
or dissolution transaction,  (ii) the price per share offered to shareholders of
the Company in any tender  offer or exchange  offer  whereby a Corporate  Change
takes place,  or (iii) if such Corporate  Change occurs other than pursuant to a
tender or exchange  offer,  the fair  market  value per share of the shares into
which such Options  being  surrendered  are  exercisable,  as  determined by the
Committee  as of  the  date  determined  by the  Committee  to be  the  date  of
cancellation and surrender of such Options.  In the event that the consideration
offered to  shareholders  of the Company in any  transaction  described  in this
Subparagraph (d) or Subparagraph (c) above consists of anything other than cash,
the Committee  shall  determine  the fair cash  equivalent of the portion of the
consideration offered which is other than cash.

         (e) Any adjustment provided for in Subparagraphs (b) or (c) above shall
be subject to any required shareholder action.

         (f) Except as  hereinbefore  expressly  provided,  the  issuance by the
Company of shares of stock of any class or securities convertible into shares of
stock of any class,  for cash,  property,  labor or services,  upon direct sale,
upon  the  exercise  of  rights  or  warrants  to  subscribe  therefor,  or upon
conversion of shares or obligations of the Company  convertible into such shares
or other  securities,  and in any case whether or not for fair value,  shall not
affect,  and no adjustment by reason  thereof shall be made with respect to, the
number of shares of Stock subject to Options theretofore granted or the purchase
price per share.



                                       -5-




                    IX. AMENDMENT OR TERMINATION OF THE PLAN

         The Board in its  discretion  may  terminate  the Plan at any time with
respect to any shares for which Options have not theretofore  been granted.  The
Board shall have the right to alter or amend the Plan or any part  thereof  from
time to time; provided,  that no change in any Option theretofore granted may be
made which would impair the rights of the  optionee  without the consent of such
optionee;  and provided,  further, that the Board may not make any alteration or
amendment which would materially  increase the benefits accruing to participants
under the Plan,  increase  the  aggregate  number of shares  which may be issued
pursuant to the provisions of the Plan, change the class of individuals eligible
to receive  Options  under the Plan or extend the term of the Plan,  without the
approval of the shareholders of the Company.



                                       -6-


                       NONSTATUTORY STOCK OPTION AGREEMENT


         AGREEMENT made as of the ______ day of ________________, 19___, between
SEAGULL  ENERGY   CORPORATION,   a  Texas   corporation   (the   "Company")  and
____________________________ ("Employee").

         To carry out the purposes of the SEAGULL ENERGY  CORPORATION 1990 STOCK
OPTION PLAN (the  "Plan"),  by affording  Employee the  opportunity  to purchase
shares of common stock of the Company  ("Stock"),  and in  consideration  of the
mutual  agreements  and other  matters  set forth  herein  and in the Plan,  the
Company and Employee hereby agree as follows:

         1. GRANT OF OPTION.  The Company hereby  irrevocably grants to Employee
the right and option  ("Option")  to purchase all or any part of an aggregate of
______ shares of Stock,  on the terms and conditions set forth herein and in the
Plan,  which  Plan  is  incorporated  herein  by  reference  as a part  of  this
Agreement.  This Option shall not be treated as an incentive stock option within
the meaning of section 422A(b) of the Internal  Revenue Code of 1986, as amended
(the "Code").

         2. PURCHASE PRICE.  The purchase price of Stock  purchased  pursuant to
the  exercise of this Option  shall be $_______  per share.  For all purposes of
this  Agreement,  fair market value of Stock shall be  determined  in accordance
with the provisions of the Plan.

         3. EXERCISE OF OPTION. Subject to the earlier expiration of this Option
as herein  provided,  this  Option may be  exercised,  by written  notice to the
Company at its  principal  executive  office  addressed to the  attention of its
Corporate  Secretary,  at any time and from time to time after the date of grant
hereof,  but,  except as  otherwise  provided  below,  this Option  shall not be
exercisable for more than a percentage of the aggregate number of shares offered
by this  Option  determined  by the  number of full years from the date of grant
hereof to the date of such exercise, in accordance with the following schedule:



                                              PERCENTAGE OF
                                               SHARES THAT
NUMBER OF FULL YEARS                        MAY BE PURCHASED
--------------------                        ----------------

Less than 1 year .....................             0%
1 year ...............................            20%
2 years ..............................            40%
3 years ..............................            60%
4 years ..............................            80%
5 years or more ......................           100%








         Notwithstanding  anything  in  this  agreement  to  the  contrary,  the
Committee  appointed by the Board of Directors to the Company to administer  the
Plan (the  "Committee") in its sole discretion may waive the foregoing  schedule
of vesting and permit  Employee to exercise the Option in such amount or amounts
and at such time or times as the Committee shall determine.

         This Option is not  transferable by Employee  otherwise than by will or
the laws of descent  and  distribution,  and may be  exercised  only by Employee
during  Employee's  lifetime  and while  Employee  remains  an  employee  of the
Company, except that:

     (a) If Employee's  employment with the Company terminates for cause or vol-
         untarily by  Employee (other than by reason of normal retirement at or
         after age  sixty-five) without the written consent of the Company, this
         Option  shall immediately terminate and shall no longer be exercisable.
         For  purposes of this  Agreement,  "cause"  shall mean Employee's gross
         negligence  or  willful  misconduct in performance of the duties of Em-
         ployee's employment, or Employee's final conviction of a felony or of a
         misdemeanor involving moral turpitude.

     (b) If  Employee's  employment  with  the Company terminates for any reason
         other than  death or as  described in (a) above, this Option may be ex-
         ercised by Employee at any time  during the period of three months fol-
         lowing such termination, or by Employee's estate (or the person who ac-
         quires  this Option by will or the  laws of descent and distribution or
         otherwise  by  reason  of the death of Employee) during a period of one
         year following Employee's death if  Employee  dies  during  such three-
         month period, but in each case only as to the number of shares Employee
         was entitled to purchase hereunder as of the date Employee's employment
         so terminates unless such termination was by reason of retirement  (in-
         cluding normal retirement at or after  age sixty-five or early  retire-
         ment with the prior written consent of the Company) or total and perma-
         nent disability in  either  which case this Option shall be exercisable
         in full.

     (c) If Employee dies while in the employ of the Company, Employee's estate,
         or the person  who acquires  this Option by will or the laws of descent
         and  distribution or otherwise by reason  of the death of Employee, may
         exercise this Option in full at any time during  the period of one year
         following the date of Employee's death.

This Option shall not be  exercisable  in any event after the  expiration of ten
years from the date of grant  hereof.  The purchase  price of shares as to which
this Option is  exercised  shall be paid in full at the time of exercise  (a) in
cash  (including  check,  bank draft or money order  payable to the order of the
Company),  (b) by delivering to the Company shares of Stock having a fair market
value equal to the purchase price, or (c) any com-


                                       -2-





bination  of cash or Stock.  No  fraction of a share of Stock shall be issued by
the Company upon  exercise of an Option or accepted by the Company in payment of
the purchase  price thereof;  rather,  Employee shall provide a cash payment for
such amount as is necessary to effect the issuance and  acceptance of only whole
shares of Stock.  Unless and until a certificate  or  certificates  representing
such shares shall have been issued by the Company to Employee,  Employee (or the
person permitted to exercise this Option in the event of Employee's death) shall
not be or have any of the rights or privileges  of a shareholder  of the Company
with respect to shares acquirable upon an exercise of this Option.

         4.  WITHHOLDING  OF TAX. To the extent that the exercise of this Option
or the  disposition  of shares of Stock  acquired  by  exercise  of this  Option
results in  compensation  income to  Employee  for  federal or state  income tax
purposes, except as hereinafter provided,  Employee shall deliver to the Company
at the time of such exercise or disposition  such amount of money as the Company
may require to meet its obligation  under  applicable  tax laws or  regulations.
Employee may elect with  respect to this Option to  surrender  or authorize  the
Company to withhold  shares of Stock  (valued at their fair market  value on the
date of surrender or  withholding  of such shares) in  satisfaction  of any such
withholding  obligation (a "Stock Surrender  Withholding  Election");  provided,
however, that:

     (a) Any  Stock  Surrender  Withholding  Election  shall be made by  written
         notice to the Company and thereafter shall be irrevocable by Employee;

     (b) Any  Stock  Surrender   Withholding   Election  shall  be  subject  to
         disapproval by the Committee at any time;

     (c) Any Stock  Surrender  Withholding  Election shall be  made prior to the
         date  Employee  recognizes  income with respect to the exercise of this
         Option (the "Tax Date"); and

     (d) If Employee is an "officer"  of the Company or other person subject to
         section 16(b)of the Securities Exchange Act of 1934, as amended, or any
         successor  law  and  wishes  to  make  a  Stock  Surrender  Withholding
         Election,  such  person  shall  make  any  Stock  Surrender Withholding
         Election:

                  (i)      more than six months  after the date of grant of this
                           Option,  except that this limitation  shall not apply
                           in the event of death or disability of Employee prior
                           to the expiration of the six-month period; and

                  (ii)     either at least six  months  prior to the Tax Date or
                           during the period beginning on the third business day
                           following the date of release for  publication of the
                           Company's summary statement of sales and earnings for
                           a quarter or fiscal  year and  ending on the  twelfth
                           business day following such date.



                                       -3-





         (e)      When the Tax Date falls after the  exercise of this Option and
                  Employee makes a Stock  Surrender  Withholding  Election,  the
                  full  number of shares of Stock for which this Option is being
                  exercised   shall   be   issued,   but   Employee   shall   be
                  unconditionally obligated to deliver to the Company on the Tax
                  Date a number of shares of Stock  having a value  equal to any
                  tax required to be withheld.

If Employee  fails to deliver such money or make a Stock  Surrender  Withholding
Election pursuant to this Paragraph,  the Company is authorized to withhold from
any cash or Stock  remuneration  then or thereafter  payable to Employee any tax
required to be withheld.

         5. STATUS OF STOCK. The Company intends to register for issue under the
Securities  Act of 1933,  as amended (the "Act") the shares of Stock  acquirable
upon exercise of this Option, and to keep such registration effective throughout
the  period  this  Option  is  exercisable.  In the  absence  of such  effective
registration or an available exemption from registration under the Act, issuance
of shares of Stock acquirable upon exercise of this Option will be delayed until
registration of such shares is effective or an exemption from registration under
the Act is available. The Company intends to use its best efforts to ensure that
no such delay will occur. In the event exemption from registration under the Act
is available upon an exercise of this Option,  Employee (or the person permitted
to exercise  this Option in the event of  Employee's  death or  incapacity),  if
requested  by the Company to do so,  will  execute and deliver to the Company in
writing an agreement  containing  such  provisions as the Company may require to
assure compliance with applicable securities laws.

         Employee  agrees that the shares of Stock which Employee may acquire by
exercising  this Option will not be sold or otherwise  disposed of in any manner
which would constitute a violation of any applicable  securities  laws,  whether
federal or state.  Employee also agrees (i) that the  certificates  representing
the shares of Stock  purchased under this Option may bear such legend or legends
as the Committee deems appropriate in order to assure compliance with applicable
securities  laws,  (ii) that the Company may refuse to register  the transfer of
the shares of Stock purchased under this Option on the stock transfer records of
the  Company  if  such  proposed  transfer  would  in  the  opinion  of  counsel
satisfactory to the Company constitute a violation of any applicable  securities
law and (iii) that the Company may give  related  instructions  to its  transfer
agent,  if any,  to stop  registration  of the  transfer  of the shares of Stock
purchased under this Option.

         6. EMPLOYMENT  RELATIONSHIP.  For purposes of this Agreement,  Employee
shall be considered  to be in the  employment of the Company as long as Employee
remains an employee of either the Company,  a parent or  subsidiary  corporation
(as defined in section 425 of the Code) of the Company,  or a  corporation  or a
parent or subsidiary of such  corporation  assuming or substituting a new option
for  this  Option.  Any  question  as to  whether  and  when  there  has  been a
termination of such employment, and the cause


                                       -4-




     of  such  termination,  shall  be  determined  by the  Committee,  and  its
determination shall be final.

         7. BINDING  EFFECT.  This Agreement  shall be binding upon and inure to
the benefit of any successors to the Company and all persons  lawfully  claiming
under Employee.

     8.  GOVERNING  LAW. This  Agreement  shall be governed by, and construed in
accordance with, the laws of the State of Texas.

         IN WITNESS  WHEREOF,  the Company has caused this  Agreement to be duly
executed by its officer  thereunto  duly  authorized,  and Employee has executed
this Agreement, all as of the day and year first above written.

                                      SEAGULL ENERGY CORPORATION




                                      By: ______________________________________



                                      ------------------------------------------
                                      Employee



                                       -5-


                                  AMENDMENT TO
                            STOCK OPTION AGREEMENT(S)



         WHEREAS,  SEAGULL  ENERGY  CORPORATION  (the  "Company") has previously
adopted the SEAGULL  ENERGY  CORPORATION  1981 STOCK  OPTION  PLAN,  the SEAGULL
ENERGY  CORPORATION  1981 STOCK  OPTION  PLAN  (RESTATED),  the  SEAGULL  ENERGY
CORPORATION  1983 STOCK OPTION PLAN, the SEAGULL ENERGY  CORPORATION  1983 STOCK
OPTION PLAN (RESTATED),  the SEAGULL ENERGY  CORPORATION 1986 STOCK OPTION PLAN,
the SEAGULL ENERGY  CORPORATION 1986 STOCK OPTION PLAN  (RESTATED),  the SEAGULL
ENERGY  CORPORATION  1990 STOCK OPTION PLAN and the SEAGULL  ENERGY  CORPORATION
1993 STOCK OPTION PLAN (collectively, the "Option Plans"); and

         WHEREAS,  certain  nonstatutory  stock  options  ("NSOs") and incentive
stock options  (collectively,  "Options")  have  heretofore  been granted to the
optionee, an employee of the Company other than an individual subject to Section
16 of the Securities Exchange Act of 1934, as amended (the "Employee"), that are
currently  outstanding under the Option Plans, each of such Options being listed
on the schedule  attached  hereto and evidenced by a  Nonstatutory  Stock Option
Agreement  or  an   Incentive   Stock  Option   Agreement   (collectively,   the
"Agreements"); and

         WHEREAS, the Employee's  employment with the Company will be terminated
as the result of the Company's workforce reduction, geographic consolidation and
segment  disposition  announced  April 4, 1995, and the Company desires to amend
the Agreements in certain respects;

         NOW, THEREFORE,  the Agreements shall be amended as follows,  effective
as of _______________ (Employee's employment termination date):

         1. The vesting schedule contained in the Agreements shall be waived and
all Options outstanding under such Agreements shall be exercisable in full.

         2.  Notwithstanding  any  provision in the  Agreements to the contrary,
with respect to any NSOs (or portions  thereof) that were exercisable  under the
Agreements as of _______________ (day before Employee's  employment  termination
date)("Vested  NSOs"),  such Vested NSOs shall continue to be exercisable by the
Employee,  his estate or the person who acquires such Vested NSOs by will or the
laws of descent and distribution, at any time on or before December 31, 1996.

         3.  As amended hereby, the Agreements are specifically ratified and
             reaffirmed.







         IN WITNESS  WHEREOF,  the Company has caused this  amendment to be duly
executed by one of its officers thereunto duly authorized,  and the Employee has
executed this amendment, effective as of ________________ (Employee's employment
termination date).

                                     SEAGULL ENERGY CORPORATION



                                      By _______________________________________




                                      ------------------------------------------
                                      Employee