SECOND AMENDMENT TO
                           SEAGULL ENERGY CORPORATION

                            MANAGEMENT STABILITY PLAN

         WHEREAS,  SEAGULL  ENERGY  CORPORATION  (the  "Company") has heretofore
adopted and  currently  maintains  the  SEAGULL  ENERGY  CORPORATION  MANAGEMENT
STABILITY PLAN (the "Plan"); and

         WHEREAS, the Company desires to amend the Plan in certain respects;

         NOW,  THEREFORE,  the Plan is hereby amended,  effective as of July 15,
1998:

         1. Section 2.5 of the Plan shall be deleted and the following  shall be
substituted therefor:

                  "2.5   Certain   Additional    Payments   by   the   Employer.
         Notwithstanding anything to the contrary in the Plan, in the event that
         any payment or  distribution by the Employer to or for the benefit of a
         Covered   Employee,   whether  paid  or  payable  or   distributed   or
         distributable  pursuant  to the  terms  of the  Plan  or  otherwise  (a
         "Payment"),  would be subject to the excise tax imposed by Section 4999
         of the Code or any  interest or  penalties  with respect to such excise
         tax (such excise tax, together with any such interest or penalties, are
         hereinafter collectively referred to as the "Excise Tax"), the Employer
         shall pay to the Covered  Employee an  additional  payment (a "Gross-up
         Payment") in an amount such that after payment by the Covered  Employee
         of all taxes (including any interest or penalties  imposed with respect
         to such  taxes),  including  any  Excise Tax  imposed  on any  Gross-up
         Payment, the Covered Employee retains an amount of the Gross-up Payment
         equal to the Excise Tax imposed upon the Payment.  The Employer and the
         Covered  Employee shall make an initial  determination  as to whether a
         Gross-up  Payment  is  required  and the  amount  of any such  Gross-up
         Payment.  The Covered  Employee shall notify the Employer in writing of
         any claim by the Internal  Revenue Service which, if successful,  would
         require the Employer to make a Gross-up  Payment (or a Gross-up Payment
         in excess of that, if any, initially determined by the Employer and the
         Covered  Employee)  within ten days of the receipt of such  claim.  The
         Employer shall notify the Covered Employee in writing at least ten days
         prior to the due date of any  response  required  with  respect to such
         claim if it plans to contest  the  claim.  If the  Employer  decides to
         contest such claim, the Covered Employee shall cooperate fully with the
         Employer in such action; provided, however, the Employer shall bear and
         pay directly or indirectly all costs and expenses (including additional
         interest and  penalties)  incurred in  connection  with such action and
         shall indemnify and hold the Covered Employee harmless, on an after-tax
         basis,  for any  Excise  Tax or  income  tax,  including  interest  and
         penalties with respect  thereto,  imposed as a result of the Employer's
         action.  If, as a result of the  Employer's  action  with  respect to a
         claim, the Covered Employee receives a refund of any amount paid by the
         Employer with respect to such

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<PAGE>


         claim,  the  Covered  Employee  shall  promptly  pay such refund to the
         Employer.  If the Employer fails to timely notify the Covered  Employee
         whether it will contest such claim or the  Employer  determines  not to
         contest such claim,  then the  Employer  shall  immediately  pay to the
         Covered  Employee the portion of such claim,  if any,  which it has not
         previously paid to the Covered Employee."

         2. As amended hereby, the Plan is specifically ratified and reaffirmed.

         EXECUTED this 21st day of July, 1998.

                                         SEAGULL ENERGY CORPORATION

                                         By:    /s/Jack M. Robertson
                                         Name:  Jack M. Robertson   
                                         Title: Vice President, Human Resources 

VEHOU02:114751.1

                                                        -2-
<PAGE>

                               THIRD AMENDMENT TO
                           SEAGULL ENERGY CORPORATION

                            MANAGEMENT STABILITY PLAN

         WHEREAS,  SEAGULL  ENERGY  CORPORATION  (the  "Company") has heretofore
adopted and  currently  maintains  the  SEAGULL  ENERGY  CORPORATION  MANAGEMENT
STABILITY PLAN (the "Plan"); and

         WHEREAS, the Company desires to amend the Plan in certain respects;

         NOW, THEREFORE,  the Plan is hereby amended,  effective as of September
16, 1998:

         1. Section 1.1(c) of the Plan shall be deleted and the following  shall
be substituted therefor:

                  "(c)     'Change of Control' shall mean the occurrence of one 
         of the following events:

                           (1) the Company (A) shall not be the surviving entity
                  in any  merger,  consolidation  or  other  reorganization  (or
                  survives  only  as a  subsidiary  of an  entity  other  than a
                  previously  wholly-owned  subsidiary of the Company) or (B) is
                  to be  dissolved  and  liquidated,  and as a  result  of or in
                  connection  with  such  transaction,   the  persons  who  were
                  directors  of the  Company  before such  transaction  cease to
                  constitute a majority of the Board;

                           (2) any  person or  entity,  including  a 'group'  as
                  contemplated  by Section  13(d)(3) of the Securities  Exchange
                  Act of  1934,  as  amended,  acquires  or gains  ownership  or
                  control (including,  without limitation, power to vote) of 20%
                  or more of the  outstanding  shares  of the  Company's  voting
                  stock  (based  upon  voting  power),  and as a result of or in
                  connection  with  such  transaction,   the  persons  who  were
                  directors  of the  Company  before such  transaction  cease to
                  constitute a majority of the Board; or

                           (3) the Company sells all or substantially all of the
                  assets of the  Company  to any other  person or entity  (other
                  than  a   wholly-owned   subsidiary   of  the  Company)  in  a
                  transaction that requires shareholder approval pursuant to the
                  Texas Business Corporation Act."

                                                        -1-


<PAGE>



         2. Section 1.1(p) of the Plan shall be deleted and the following  shall
be substituted therefor:

                  "(g) 'Retirement' shall mean the Covered Employee's  voluntary
         resignation on or after the date he reaches age sixty-five  (other than
         a  resignation  within  sixty days after the date the Covered  Employee
         receives  notice of a Change in Duties or a resignation  at the request
         of the Company)."

         3. As amended hereby, the Plan is specifically ratified and reaffirmed.

         EXECUTED this 14th day of October, 1998.

                                       SEAGULL ENERGY CORPORATION

                                       By:    /s/ Jack M. Robertson
                                       Name:  Jack M. Robertson
                                       Title: Vice President, Human Resources

VEHOU02:121333.1

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