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                                                                    EXHIBIT 3(c)

                             PLAINS RESOURCES INC.



Certificate of Designation, Preferences and Rights of a Series of Preferred 
Stock by Resolution of the Board of Directors Providing for an Issue of 46,600 
Shares of Preferred Stock Designated Series D Cumulative Convertible Preferred 
Stock
        


        Plains Resources Inc., a Delaware corporation (hereinafter called the 
"Company"), pursuant to the provisions of Section 151 of the General 
Corporation Law of the State of Delaware, does hereby state and certify that 
pursuant to the authority expressly vested in the Board of Directors of the 
Company by the Certificate of Incorporation, as amended, the Board of 
Directors, at a meeting thereof duly called and held on October 31, 1997, at 
which meeting a quorum was present and acting throughout, duly adopted the 
following resolutions providing for the issue of shares of Preferred Stock 
hereinafter referred to, and further providing with respect to such issue of 
shares of Preferred Stock for such powers, designations, preferences and 
relative, participating, optional and other special rights, and the 
qualifications, limitations or restrictions thereof, as are hereinafter set 
forth, in addition to those set forth in said Certificate of Incorporation;

        RESOLVED, that pursuant to Article FOURTH of the Certificate of 
Incorporation (which authorizes 2,000,000 shares of Preferred Stock, $1.00 par 
value) the Board of Directors hereby provides for the issue of a series of 
46,600 shares of Preferred Stock designated "Series D Cumulative Convertible 
Preferred Stock"; and

        RESOLVED, that the powers, designations, preferences and relative, 
participating, optional and other special rights, and the qualifications, 
limitations or restrictions thereof, of the shares of the Series D Cumulative 
Convertible Preferred Stock shall be as follows:

        SECTION 1.  Designation and Rank.  The designation of the series of 
Preferred Stock created by this resolution shall be "Series D Cumulative 
Convertible Preferred Stock", and the number of shares constituting this Series 
shall be 46,600.  Shares of this Series shall have a stated value of $500.00 
per share (the "Stated Value").  The number of authorized shares of this Series 
may be reduced by further resolution duly adopted by the Board and by the 
filing of a certificate pursuant to the provisions of the General Corporation 
Law of the State of Delaware stating that such reduction has been so 
authorized.  The shares of this Series shall rank prior to the Junior Stock (as 
defined in Section 9) as to distribution of assets and payment of dividends.  
The shares of this Series shall be of equal rank as to distribution of assets 
and payment of dividends with all other series of Preferred Stock, except as 
provided in a certificate of designation with regard to such other series of 
Preferred Stock filed pursuant to Section 151 of the General Corporation Law of 
the State of Delaware with the Secretary of State of the State of Delaware.
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        SECTION 2.  Dividends.  

        (a)  Shares of this Series shall be entitled to receive, when and as 
declared by the Board of Directors, a cash dividend at the dividend rate of six 
percent per annum (the "Dividend Rate") on the Stated Value per share of this 
Series, and no more.  No such dividends shall accrue prior to January 1, 2000. 
Commencing January 1, 2000, such dividends shall be cumulative, shall accrue 
(whether or not declared and whether or not there shall be funds legally 
available for the payment of dividends) from such date and shall be payable in 
arrears, out of assets legally available therefor, when and as declared by the 
Board of Directors of the Company, on April 1, July 1, October 1, and January 1 
of each year, commencing April 1, 2000 (except that if any such date is a 
Saturday, Sunday or a legal holiday then such dividend shall be payable without 
interest on the next day that is not a Saturday, Sunday or legal holiday) (each 
three-month period expiring on a dividend payment date being referred to herein 
as a "Dividend Period").  Each of such dividends shall be paid to the holders 
of record of shares of this Series as they appear on the stock register of the 
Company on such record dates, not exceeding 30 days preceding the payment dates 
thereof, as shall be fixed by the Board.  Dividends on account of arrears for 
any past Dividend Periods (an "Arrearage") may be declared and paid at any 
time, without reference to any regular dividend payment date, to holders of 
record on such date, not exceeding 45 days preceding the payment date thereof, 
as may be fixed by the Board.

        (b) At any time while there is an Arrearage on shares of this Series, 
such Arrearage shall be exchangeable, in full only, at the option of a majority 
in interest of the record holders thereof for shares of fully paid and 
nonassessable shares of Common Stock (an "Arrearage Exchange") by presentation 
to the Company of a written notice executed by such majority in interest (an 
"Exchange Notice") electing to make an Arrearage Exchange.  The number of 
shares of Common Stock to be issued and delivered to the holders of shares of 
this Series upon an Arrearage Exchange shall be determined by dividing the 
total amount of the Arrearage by the Per Share Market Value on the date of the 
Company's receipt of the Exchange Notice.  Upon the issuance and mailing of 
certificates representing such shares of Common Stock to the record holders of 
shares of this Series, such Arrearage shall be canceled and no holder of shares 
of this Series shall be entitled to any payment on account thereof.  

        (c) No full dividends shall be declared or paid or set apart for payment
on Parity Stock (as defined in Section 9) or Junior Stock for any period unless
full cumulative dividends have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof set apart for such
payment on this Series for all Dividend Periods terminating on or prior to the
date of payment of such full cumulative dividends. When dividends are not paid
in full, as aforesaid, upon the shares of this Series and of any other series of
Parity Stock, all dividends declared upon shares of this Series and of any other
series of Parity Stock shall be declared pro rata so that the amount of
dividends declared per share on this Series and such other series of Preferred
Stock shall in all cases bear to each other the same ratio that accrued
dividends per share on the shares of this Series and such other series of
Preferred Stock bear to each other. Holders of shares of this Series shall not
be entitled to any dividend, whether payable in cash, property or stock, in
excess of full cumulative dividends, as herein provided, on this Series. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on this Series that may be in arrears.

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        (d)  So long as any shares of this Series are outstanding, no dividend 
(other than a dividend in Junior Stock or other than as provided in Section 
2(c) shall be declared or paid or set aside for payment or other distribution 
declared or made upon the Junior Stock, nor shall any Junior Stock be redeemed, 
purchased or otherwise acquired for any consideration (or any moneys be paid to 
or made available for a sinking fund for the redemption of any shares of Junior 
Stock) by the Company (except by conversion into or in exchange for Junior 
Stock) unless, in each case, the full cumulative dividends on all outstanding 
shares of this Series then payable shall have been paid.

        (e)  Dividends payable on this Series for any period less than a full 
Dividend Period shall be computed on the basis of the ratio of the number of 
days in such partial period to the actual number of days in such full Dividend 
Period.


        SECTION 3.  Redemption.

        (a) From and after November 12, 1998, the Company, at its option, may
redeem Shares of this Series, as a whole or in part, at any time or from time to
time, at a cash redemption price per share of this Series equal to the amount of
any Arrearage plus

        (i)     the Conversion Price (as defined in Section 6(b) multiplied by 

        (ii)    the number of shares of Common Stock into which a share of this 
Series is convertible as of the date of such redemption multiplied by 

        (iii)   the Agreed Percentage (as defined in Section 9).

        (b)  In the event that fewer than all of the outstanding shares of this 
Series are to be redeemed, the number of shares to be redeemed shall be 
determined by the Board and the shares to be redeemed shall be determined by 
lot or pro rata as may be determined by the Board or by any other method as may 
be determined by the Board in its sole discretion to be equitable.

        (c)  At such time as the Company shall redeem shares of this Series, 
notice of such redemption shall be given by first class mail, postage prepaid, 
mailed not less than 30 days prior to the redemption date, to each holder of 
record of the shares to be redeemed, at such holder's address as the same 
appears on the stock register of the Company.  Each such notice shall state:  
(i) the redemption date; (ii) the number of shares of this Series to be 
redeemed and, if fewer than all the shares held by such holder are to be 
redeemed, the number of such shares to be redeemed from such holder; (iii) the 
redemption price; (iv) the place or places where certificates for such shares 
are to be surrendered for payment of the redemption price; and (v) that 
dividends on the shares to be redeemed will cease to accrue on such redemption 
date.  Prior to the redemption date specified in such notice, holders of shares 
of this Series may exercise the right to convert shares of this Series into 
shares of Common Stock pursuant to Section 6 hereof and the right to exchange 
Arrearage (if any) into shares of Common Stock pursuant to Section 2(b) hereof.

        (d)  Notice having been mailed as aforesaid, from and after the 
redemption date (unless default shall be made by the Company in providing money 
for the payment of the redemption price) dividends 

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on the shares of this Series so called for redemption shall cease to accrue, and
said shares shall no longer be deemed to be outstanding, and all rights of the
holders thereof as stockholders of the Company (except the right to receive from
the Company the redemption price) shall cease. Upon surrender in accordance with
said notice of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board shall so require and the notice shall so
state), such shares shall be redeemed by the Company at the redemption price
aforesaid. In case fewer than all the shares represented by any such certificate
are redeemed, a new certificate shall be issued representing the unredeemed
shares without cost to the holder thereof.

        (e) Any shares of this Series that shall at any time have been redeemed
or purchased by the Company shall, after such redemption, have the status of
authorized but unissued shares of Preferred Stock, without designation as to
series, until such shares are once more designated as part of a particular
series by the Board.

        SECTION 4.  Voting.

        (a) Except as otherwise required by law and as specified in this Section
4, the holders of shares of this Series shall not have any right or power to
vote on any question or in any proceeding or to be represented at or to receive
notice of any meeting of holders of capital stock of the Company. Holders of
shares of this Series shall be entitled to receive all reports filed by the
Company with the Securities and Exchange Commission. On any matters on which
the holders of shares of this Series shall be entitled to vote, they shall be
entitled to one vote for each share held.

        (b)  So long as any shares of this Series remain outstanding, the 
affirmative vote or consent of the holders of a majority of the shares of this 
Series outstanding at the time, given in person or by proxy, either in writing 
or at a meeting, shall be necessary to permit, effect or validate (i) the 
authorization, creation or issuance, or any increase in the authorized or 
issued amount, of any class or series of Senior Stock (as defined in Section 9) 
and (ii) the amendment, alteration or repeal of any of the provisions of the 
Certificate of Incorporation, as amended, which would materially and adversely 
affect any right, preference, privilege or voting power of shares of this 
Series or of the holders thereof in a manner disproportionate to the effect 
thereof on the holders of any other shares of the Company's capital stock.  
However, the creation and issuance of other series of Parity Stock or Junior 
Stock shall not be deemed to affect materially and adversely such rights, 
preferences or privileges.

        (c) So long as at least 2,000 shares of this Series remain outstanding,
the holders of shares of this Series outstanding at the time shall be entitled
to vote to permit, effect or validate the authorization of a merger or
consolidation of the Company or any compulsory share exchange pursuant to which
the Common Stock is converted into other securities, cash or property. The
holders of shares of this Series shall be entitled to that number of votes equal
to the aggregate of (i) the number of whole shares of Common Stock into which
all shares of this Series held by such holders could be converted pursuant to
the provisions of Section 6 hereof, plus (ii) the number of shares for which
outstanding Arrearage (if any) may be exchanged pursuant to Section 2(b), at the
record date for the determination of the stockholders entitled to vote on such
matters or, if no record date is established, at the day prior to the date such
vote is taken or any written consent of

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stockholders is first executed, such votes to be counted together with all other
shares of capital stock having general voting powers and not separately as a
class.

        SECTION 5.  Liquidation.  In the event of any complete liquidation, 
dissolution or winding-up of the Company, whether voluntary or involuntary, the 
holders of shares of this Series shall each be entitled to receive out of the 
assets of the Company, whether such assets are capital or surplus, for each 
share of this Series a sum equal to the Stated Value plus the amount of any 
accrued and unpaid dividends on such share before any distribution shall be 
made to the holders of Junior Stock of the Company, and if the assets of the 
Company shall be insufficient to pay in full such amounts, then such assets 
shall be distributed among such holders and the holders of any Parity Stock 
ratably in accordance with the respective amounts that would be payable on such 
shares if all amounts payable thereon were paid in full.  In the event of any 
complete liquidation, dissolution or winding-up of the Company, whether 
voluntary or involuntary, the holders of shares of this Series shall not be 
entitled to receive the liquidation price of such shares held by them until the 
liquidation price of all Senior Stock shall have been paid in full.

        SECTION 6.  Conversion.  

        (a) Each share of this Series shall be convertible at the option of the
record holder thereof at any time by presentation of the certificate
representing such share by the record holder in person or by registered mail,
return receipt requested with postage prepaid thereon, at the principal office
of the Company, and at such other offices, if any, as the Board of Directors may
determine, into the number of fully paid and nonassessable shares of Common
Stock determined by dividing the Stated Value by the Conversion Price in effect
on the Conversion Date.

        (b)  The conversion price initially shall be $25.00 (the "Conversion 
Price") and shall be subject to adjustment from time to time as follows:

                (i) If the Company, at any time while any shares of this Series
are outstanding, shall (A) pay a stock dividend or stock dividends or otherwise
make a distribution or distributions on shares of its capital stock payable in
shares of Common Stock (or in securities convertible into shares of Common
Stock), (B) except as set forth in clause (A) above, pay a stock dividend or
make a distribution on shares of its capital stock payable in shares of its
capital stock of any class other than Common Stock or a class convertible into
Common Stock, (C) subdivide outstanding shares of Common Stock into a larger
number of shares, (D) combine outstanding shares of Common Stock into a smaller
number of shares, or (E) issue by reclassification of shares of Common Stock any
shares of capital stock of the Company of any class or classes, the Conversion
Price in effect immediately prior to such action shall be adjusted so that the
holder of any shares of this Series thereafter surrendered for conversion shall
be entitled to receive the number and class or classes of shares of the capital
stock of the Company which he would have owned or have been entitled to receive
immediately after the happening of any of the events described above, had such
shares of this Series been converted on or immediately prior to the record date
for such dividend or distribution or the effective date of such subdivision,
combination or reclassification, as the case may be. An adjustment made pursuant
to this subsection 6(b)(i) shall become effective immediately after the record

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date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification.

                (ii) If the Company, at any time while any shares of this Series
are outstanding, shall issue rights or warrants to all holders of Common Stock
entitling them (for a period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase shares of Common Stock at a price
per share less than the then Per Share Market Value of Common Stock at the
record date mentioned below, the Conversion Price at which each share of this
Series shall thereafter be convertible shall be reduced by multiplying the
Conversion Price in effect immediately prior to such record date by a fraction,
of which the denominator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding on the date of issuance of such
rights or warrants plus the number of additional shares of Common Stock offered
for subscription or purchase, and of which the numerator shall be the number of
shares of Common Stock (excluding treasury shares, if any) outstanding on the
date of issuance of such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered would purchase
at such Per Share Market Value. Such adjustment shall be made whenever such
rights or warrants are issued, and shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
rights or warrants. However, upon the expiration of any right or warrant to
purchase Common Stock the issuance of which resulted in an adjustment in the
Conversion Price of the shares of this Series pursuant to this subsection
6(b)(ii), if any such right or warrant shall expire and shall not have been
fully exercised, the Conversion Price per share of Common Stock at which each
share of this Series shall thereafter be convertible shall immediately upon such
expiration be recomputed and effective immediately upon such expiration be
increased to the price which it would have been (but reflecting any other
adjustments in the Conversion Price made pursuant to the provisions of this
Section 6 after the issuance of such rights or warrants) had the adjustment of
the Conversion Price made upon the issuance of such rights or warrants been made
on the basis of offering for subscription or purchase only that number of shares
of Common Stock actually purchased upon the exercise of such rights or warrants
which were actually exercised.

                (iii) If the Company, at any time while shares of this Series
are outstanding, shall distribute to all holders of Common Stock evidences of
its indebtedness or assets (excluding cash dividends or cash distributions paid
out of earned surplus) or rights or warrants to subscribe for or purchase any
security (excluding those referred to in subsection 6(b)(ii) above) then in each
such case the Conversion Price per share of Common Stock at which each share of
this Series shall thereafter be convertible shall be determined by multiplying
the Conversion Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution by a
fraction, of which the denominator shall be the Per Share Market Value of Common
Stock determined as of the record date mentioned above, and of which the
numerator shall be such Per Share Market Value of the Common Stock, less the
then fair market value (as determined by the Board of Directors of the Company
(the "Board") in good faith, whose determination shall be conclusive if made in
good faith; provided, however that in the event of a distribution or series of
related distributions exceeding 10% of the net assets of the Company, then such
fair market value shall be determined by a nationally recognized or major
regional investment banking firm or

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firm of independent certified public accountants of recognized standing (which
may be the firm that regularly examines the financial statements of the Company)
selected in good faith by the Board, and in either case shall be described in a
statement provided to all registered holders of this Series) of the portion of
assets or evidences of indebtedness so distributed or such subscription rights
applicable to one share of Common Stock. Such adjustment shall be made whenever
any such distribution is made and shall become effective immediately after the
record date mentioned above.

                (iv) If the Company, at any time while any shares of this Series
are outstanding, shall issue or sell shares of Common Stock (excluding stock
issuances referred to in other provisions of this Section 6(b)) for a
consideration per share which is less than the Per Share Market Value of Common
Stock on the date of such issuance or sale, the Conversion Price at which each
share of this Series shall thereafter be convertible shall be reduced by
multiplying the Conversion Price in effect immediately prior to the date of such
issuance or sale by a fraction, of which the denominator shall be the number of
shares of Common Stock (excluding treasury shares, if any) outstanding on the
date of such issuance or sale plus the number of additional shares of Common
Stock issued or sold, and of which the numerator shall be the number of shares
of Common Stock (excluding treasury shares, if any) outstanding on the date of
such issuance or sale plus the number of shares which the aggregate
consideration received or receivable by the Company for the total number of
shares so issued or sold would purchase at such Per Share Market Value. Such
adjustment shall be made whenever such shares are issued, and shall become
effective immediately after such issuance. If the consideration received or
receivable by the Company for such issuance or sale of shares of Common Stock is
not cash, the fair market value of such consideration shall be determined by the
Board, an investment banking firm, or certified public accountants in the manner
specified in subsection 6(b)(iii).

                (v) If the Company, at any time while any shares of this Series
are outstanding, shall issue rights, options, or warrants (excluding those
referred to in other provisions of this Section 6(b)) which entitle the holders
thereof to purchase shares of Common Stock (such rights, options, or warrants
collectively referred to as "Purchase Rights") at a price per share less than
the then Per Share Market Value of Common Stock on the date of the issuance of
such Purchase Rights, the Conversion Price at which each share of this Series
shall thereafter be convertible shall be reduced by multiplying the Conversion
Price in effect immediately prior to the date of issuance of such Purchase
Rights by a fraction, of which the denominator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding on the date of
issuance of such Purchase Rights plus the number of additional shares of Common
Stock offered for purchase, and of which the numerator shall be the number of
shares of Common Stock (excluding treasury shares, if any) outstanding on the
date of issuance of such Purchase Rights plus the number of shares which the
aggregate consideration received or receivable by the Company in connection with
the grant as well as the exercise of such Purchase Rights would purchase at such
Per Share Market Value. Such adjustment shall be made whenever such Purchase
Rights are issued, and shall become effective immediately after the issuance of
such Purchase Rights. However, upon the expiration of any such Purchase Right
the issuance of which resulted in an adjustment in the Conversion Price of the
shares of this Series pursuant to this subsection 6(b)(v), if any such Purchase
Right shall expire and

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shall not have been fully exercised, the Conversion Price per share of Common
Stock at which each share of this Series shall thereafter be convertible shall
immediately upon such expiration be recomputed and effective immediately upon
such expiration be increased to the price which it would have been (but
reflecting any other adjustments in the Conversion Price made pursuant to the
provisions of this Section 6 after the issuance of such Purchase Rights) had the
adjustment of the Conversion Price made upon the issuance of such Purchase Right
been made on the basis of offering for purchase only that number of shares of
Common Stock actually purchased upon the exercise of such Purchase Rights which
were actually exercised. If the consideration for the Purchase Rights received
or receivable by the Company for the grant or exercise of such Purchase Rights
is not cash, the fair market value of such consideration shall be determined by
the Board, an investment banking firm, or certified public accountants in the
manner specified in subsection 6(b)(iii).

                (vi) Notwithstanding any other provision of this Section 6(b) to
the contrary, no adjustment to the Conversion Price shall be made with respect
to the issuance of shares of Common Stock or the grant of options to purchase
shares of Common Stock (or the exercise of such options) which are issued or
granted to directors, officers, or employees of the Company, or to the Company's
401(k) Plan while shares of this Series are outstanding, unless and until the
aggregate number of such shares issued or issuable upon the exercise of such
options exceeds 750,000 shares of Common Stock.

                (vii) No notification to the holders of any adjustment in the
Conversion Price otherwise required by this Section 6 shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustment which by reason of this subsection
6(b)(vii) is not required to be made shall be carried forward and taken into
account in any subsequent adjustments, and that upon presentment of shares of
this Series for conversion, all adjustment shall be made calculating the
conversion rights of such holder. All calculations under this Section 6 shall be
made to the nearest cent or the nearest 1/100th of a share, as the case may be.

                (viii) Whenever the Conversion Price is adjusted, as herein
provided, the Company shall promptly mail to each registered holder of shares of
this Series a notice setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment. Such
notice prepared in good faith shall be conclusive evidence of the correctness of
such adjustment absent manifest error.

                (ix)  In case:

                        (A)  the Company shall declare a dividend (or any other 
distribution) on the Common Stock payable otherwise than in cash 
out of its earned surplus; or

                        (B) the Company shall declare a special nonrecurring
cash dividend on or a redemption of its Common Stock; or

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                        (C) the Company shall authorize the granting to the
holders of the Common Stock of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any other rights; or

                        (D) the approval of any stockholders of the Company
shall be required in connection with any reclassification of the Common Stock of
the Company (other than a subdivision or combination of the outstanding shares
of Common Stock), any consolidation or merger to which the Company is a party,
any sale or transfer of all or substantially all of the assets of the Company,
or any compulsory share exchange whereby the Common Stock is converted into
other securities, cash or property, or

                        (E) of the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company;

then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of the shares of this series, and shall cause to be
mailed to the holders of record of the shares of this Series at their last
addresses as they shall appear upon the stock books of the Company, at least 10
days prior to the applicable record date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution, redemption, rights or warrants are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, share exchange, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up (but no failure to mail such notice or
any defect therein or in the mailing thereof shall affect the validity of the
corporate action required to be specified in such notice).

        (c) In case of any reclassification of the Common Stock, then the
holders of the shares of this Series then outstanding shall have the right
thereafter to convert such shares only into the kind and amount of shares of
stock and other securities and property receivable upon or deemed to be held
following such reclassification by a holder of a number of shares of the Common
Stock of the Company into which such shares of this Series could have been
converted immediately prior to such reclassification. This provision shall
similarly apply to successive reclassifications.

        (d)  In case of any consolidation or merger of the Company with or into 
another Person in which the Company is not the surviving entity or any 
compulsory share exchange pursuant to any of which the Common Stock is 
converted into other securities, cash or property (any such event being 
hereinafter referred to as a "Reorganization"), then the terms of such 
Reorganization shall provide that the holder of a share of this Series then 
outstanding shall have the right to receive in exchange therefor, at the option 
of the Company, either of the following or such combination of the following as 
the Company shall elect:

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        (i) the kind and amount of shares of stock and other securities and
property receivable upon such Reorganization ("Reorganization Consideration") by
a holder of the number of shares of the Common Stock of the Company into which
(x) a share of this Series could have been converted as of the effective date of
the Reorganization multiplied by the Agreed Percentage in effect at the
effective date of the Reorganization, plus (y) the Arrearage (if any) on a share
of this Series could have been exchanged as of the effective date of the
Reorganization; or

        (ii) an amount in cash equal to (x) the Agreed Percentage multiplied by
the Stated Value, plus (y) the Arrearage (if any) on a share of this Series as
of the effective date of the Reorganization.

        (e) In case at any time conditions shall arise by reason of action taken
by the Company, which, in the opinion of the Board of Directors of the Company,
are not adequately covered by the other provisions hereof and which might
materially and adversely affect the rights of the holders of shares of this
Series, or in case at any time any such conditions are expected to arise by
reason of any action contemplated by the Company, the Board of Directors of the
Company shall appoint a firm of independent certified public accountants of
recognized standing (which may be the firm that regularly examines the financial
statements of the Company), who shall give their opinion as to the adjustment,
if any (not inconsistent with the standards established in this Section 6, of
the Conversion Price (including, if necessary, any adjustment as to the
securities into which shares of this Series may thereafter be convertible) which
is or would be required to preserve without dilution the rights of the holders
of shares of this Series. The Board of Directors of the Company shall make the
adjustment recommended forthwith upon the receipt of such opinion or the taking
of any such action contemplated, as the case may be; provided, however, that no
such adjustment of the Conversion Price shall be made which in the opinion of
the investment banking firm or firm of accountants giving the aforesaid opinion
would result in an increase of the Conversion Price to more than the Conversion
Price then in effect.

        Section 7. Matters Relating to Issuance of Common Stock. The following
provisions shall be applicable to issuances of Common Stock upon conversion of
shares of this Series or upon an Arrearage Exchange.

                (a) The Company covenants that it will at all times reserve and
keep available, out of its authorized and unissued Common Stock solely for the
purpose of issuance upon conversion of this Series or upon an Arrearage Exchange
as herein provided, free from preemptive rights or any other actual or
contingent purchase rights of Persons other than the holders of shares of this
Series, such number of shares of Common Stock as shall then be issuable upon the
conversion of all outstanding shares of this Series or the exchange of any
Arrearage on shares of this Series. The Company covenants that all shares of
Common Stock that shall be so issuable shall upon issue be duly and validly
issued and fully paid and nonassessable.

                (b) The Company shall not be required to issue stock
certificates representing fractions of shares of Common Stock, but may, if
otherwise permitted, make a cash payment in respect of any final fraction of a
share based on the Per Share Market Value at such time. 

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<PAGE>
 
If the Company elects not, or is unable, to make such a cash payment, the holder
of a share of this Series shall be entitled to receive, in lieu of the final
fraction of a share, one whole share of Common Stock.

                (c) The issuance of certificates for shares of Common Stock on
conversion of this Series or on an Arrearage Exchange shall be made without
charge to the holders thereof for any documentary stamp or similar taxes that
may be payable in respect of the issue or delivery of such certificate,
provided, that the Company shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issuance and delivery of any
such certificate in a name other than that of the holder of the shares of this
Series converted or upon which an Arrearage Exchange was made and the Company
shall not be required to issue or deliver such certificates unless or until the
Person or Persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.

                (d) The exercise by a holder of shares of this Series of the
conversion or Arrearage Exchange rights granted herein is subject in all
respects to and conditioned upon compliance by the parties with the HSR Act, and
rules and regulations promulgated pursuant thereto, to the extent that said act,
rules and regulations are applicable to such exercise. The Company and such
holder agree to make such filings with and provide such information to the
Federal Trade Commission and the Department of Justice with respect to such
exercise as are required in connection with the HSR Act in a timely manner and
to join each others request for early termination. The Company and such holder
will use such reasonable efforts to obtain all governmental approval required to
permit such exercise and to cause early termination of the waiting period under
the HSR Act.

        SECTION 8. Maturity Date. If any or all shares of this Series have not
been redeemed or converted prior to September 1, 2012, (i) such shares shall
automatically be converted into the number of shares of Common Stock determined
by dividing the Stated Value by the Conversion Price in effect at the time of
conversion, and (ii) the Arrearage (if any) on such shares of this Series shall
automatically be exchanged for the number of shares of Common Stock determined
by dividing the Arrearage by the Per Share Market Value on such date.

        SECTION 9. Definitions. For the purposes hereof, the following terms
shall have the following respective meanings:

                "Arrearage" has the meaning specified in Section 2(a).

                "Arrearage Exchange" has the meaning specified in Section 2(b).

                "Common Stock" means shares now or hereafter authorized of the
class of Common Stock, $.10 par value, of the Company presently authorized and
stock of any other class into which such shares may hereafter have been
reclassified or changed.

                "Conversion Date" means the date the stock certificate is
received by the Company for conversion in accordance with Section 6(a).

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<PAGE>
 
                "Conversion Price" has the meaning specified in Section 6(b).

                "Dividend Period" has the meaning specified in Section 2(a).

                "Dividend Rate" has the meaning specified in Section 2(a).

                "Exchange Notice" has the meaning specified in Section 2(b).

                "Redemption Threshold" means the date on which the Per Share
Market Value first exceeds 140% of the Conversion Price per share of Common
Stock for any 20 out of any 30 consecutive Trading Days.

                "Junior Stock" means the Common Stock of the Company and any
other stock of the Company over which shares of this Series has a preference as
to distribution of assets and payment of dividends.

                "Agreed Percentage" means 140%, provided that if the Redemption 
Threshold has occurred at any time prior to the date of determination, then
"Agreed Percentage" means 100%.

                "Parity Stock" means any stock of the Company ranking as to
distribution of assets and payment of dividends on a parity with this Series.

                "Per Share Market Value" means on any particular date (a) the
last sale price per share of the Common Stock on such date on the principal
stock exchange on which the Common Stock has been listed or, if there is no such
price on such date, then the last price on such exchange on the date nearest
preceding such date, or (b) if the Common Stock is not listed on any stock
exchange, the final bid price for a share of Common Stock in the over-the-
counter market, as reported by the Nasdaq National Market at the close of
business on such date, or the last sales price if such price is reported and
final bid prices are not available, or (c) if the Common Stock is not quoted on
the Nasdaq National Market, the bid price for a share of Common Stock in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding to its functions
of reporting prices), or (d) if the Common Stock is no longer publicly traded,
as determined by a nationally recognized or major regional investment banking
firm or firm of independent certified public accountants of recognized standing
(which may be the firm that regularly examines the financial statements of the
Company) selected in good faith by the Board of Directors of the Company,
provided, that none of the transactions related to the foregoing shall include
purchases by any "affiliate" (as such term is defined in the General Rules and
Regulations under the Securities Act of 1933) of the Company.

                "Person" means a corporation an association, a partnership, an
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.

                "Preferred Stock" means the Company's Preferred Stock, $1.00 par
value.

                                       12
<PAGE>
 
                "Reorganization" has the meaning specified in Section 6(d).

                "Reorganization Consideration" has the meaning specified in
Section 6(d).

                "Senior Stock" means any shares or class of the Company that are
by their terms expressly given priority over this Series as to payment of
dividends or distribution of assets on any liquidation of the Company.

                "Stated Value" has the meaning specified in Section 1.

                "Trading Day" means (a) a day on which the Common Stock is
traded on the principal stock exchange on which the Common Stock has been
listed, or (b) if the Common Stock is not listed on any stock exchange, a day on
which the Common Stock is quoted in the over-the-counter market, as reported by
the Nasdaq Stock Market, or (c) if the Common Stock is not quoted on the Nasdaq
Stock Market, a day on which the Common Stock is quoted in the over-the-counter
market as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding to its functions of reporting prices).

        IN WITNESS WHEREOF, said Plains Resources Inc. has caused this
Certificate to be signed by a duly authorized officer, this 11th day of
November, 1997.


                                                PLAINS RESOURCES INC.

                                                By:  /s/
                                                    ---------------------------
                                                Name: Phillip D. Kramer
                                                Title:   Senior Vice President

ATTEST:

By:  /s/
    ------------------------------- 
Name: Michael R. Patterson
Title:   Secretary

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