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                                                                   EXHIBIT 10.3



                              ORYX ENERGY COMPANY





                     EQUITY AND DEFERRED COMPENSATION PLAN
                           FOR NON-EMPLOYEE DIRECTORS





                          Effective as of May 2, 1996
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                              ORYX ENERGY COMPANY

                     EQUITY AND DEFERRED COMPENSATION PLAN
                           FOR NON-EMPLOYEE DIRECTORS



         SECTION 1.       ESTABLISHMENT AND PURPOSE.  Oryx Energy Company, a
Delaware corporation (the "Company"), hereby establishes this Oryx Energy
Company Equity and Deferred Compensation Plan for Non-Employee Directors (the
"Plan").  The purposes of the equity compensation features of the Plan are to
encourage non-employee directors of the Company to acquire shares of the
Company's common stock, and thereby to align their interests more closely with
the interests of the other stockholders of the Company, and to encourage the
highest level of director performance by providing the non-employee directors
with a more direct interest in the Company's attainment of its financial goals.
The purpose of the elective deferral features of the Plan is to permit
non-employee directors of the Company to defer to the date of termination of
their service as directors of the Company or other fixed date all or part of
their regular cash compensation.

         SECTION 2.       CERTAIN DEFINITIONS.  For purposes of the Plan, the
following terms shall have the indicated meanings:

         (a)     "annual retainer" shall have the meaning specified in Section
6(a) hereof.

         (b)     "Average Share Price" means the average of the Fair Market
Value of the Common Stock on each of the following days within the period for
which Average Share Price is being determined under the Plan:  (i) the last
Trading Day of the calendar quarter ending on March 31; (ii) the last Trading
Day of the calendar quarter ending on June 30; (iii) the last Trading Day of
the calendar quarter ending on September 30; and (iv) the last Trading Day of
the calendar quarter ending on December 31 (as appropriately adjusted to take
into account any stock dividend, split, or combination during such period with
respect to the Common Stock).

         (c)     "Board of Directors" means the Board of Directors of the
Company.

         (d)     "Cash Compensation" means the cash compensation earned by an
Outside Director for his services as a director of the Company.

         (e)     "cash retainer" shall have the meaning specified in Section
6(a) hereof.

         (f)     "Cash Unit" shall have the meaning specified in Section 8(d)
hereof.

         (g)     "Common Stock" means the Common Stock, par value $1.00 per
share, of the Company, or any stock or other securities of the Company
hereafter issued or issuable in substitution or exchange for the Common Stock.
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         (h)     "Compensation Committee" means the Compensation Committee of
the Board of Directors.

         (i)     "Deferred Compensation Account" shall have the meaning
specified in Section 8(d) hereof.

         (j)     "Fair Market Value" of the Common Stock on any Trading Day
shall be the average of the high and low sales prices of the Common Stock for
such day, or if no such sale is made on such day, the average of the closing
bid and asked prices of the Common Stock for such day, in each case as
officially reported on the New York Stock Exchange (or, if the Common Stock is
not then listed or admitted to trading on the New York Stock Exchange, the
principal national stock exchange or stock market on which the Common Stock is
then listed or admitted to trading).

         (k)     "Initial Restricted Period" shall have the meaning specified
in Section 7(a)(i) hereof.

         (l)     "Interest Equivalent" shall have the meaning specified in
Section 8(d) hereof.

         (m)     "Outside Director" means an individual duly elected or chosen
as a director of the Company who is not also an officer or employee of the
Company or its subsidiaries.

         (n)     "Participant" shall have the meaning specified in Section 8(a)
hereof.

         (o)     "plan quarter" means each three-month period ending on July
31, October 31, January 31, and April 30 of each Plan Year, except that the
plan quarters for the first Plan Year hereunder shall be the three-month period
ending on September 30, 1996, the three-month period ending on December 31,
1996, and the four-month period ending on April 30, 1997.

         (p)     "Plan Year" means each 12-month period commencing on May 1 and
ending on and including the next following April 30, except that the first Plan
Year hereunder shall commence on July 1, 1996 and end on and include April 30,
1997.

         (q)     "Required Share Amount" means an amount of money constituting
50% of an Outside Director's annual retainer earned by such Outside Director
for his services as a director of the Company for a Plan Year, which amount is
payable in shares of Common Stock pursuant to Section 6(c) hereof.  The
Required Share Amount is not Cash Compensation for purposes of the Plan.

         (r)     "Restricted Period" shall have the meaning specified in
Section 7(a)(i) hereof.

         (s)     "Restricted Shares" means shares of Common Stock issued
pursuant to the Plan that are subject to the restrictions imposed by the
provisions of Section 7 hereof.





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         (t)     "Share Award" means an award, grant, sale, or other issuance
of Shares, Restricted Shares or Unrestricted Shares to an Outside Director
pursuant to the provisions of the Plan.

         (u)     "Shares" means shares of Common Stock issued pursuant to the
Plan that are not subject to the restrictions imposed by the provisions of
Section 7 hereof, but are subject to the restrictions on transfer set forth in
Section 10 hereof.

         (v)     "Term of Office" means the term of office as a director of the
Company for which the Outside Director has been elected pursuant to and in
accordance with the provisions of the certificate of incorporation and bylaws
of the Company.

         (w)     "Trading Day" means any day on which the stock exchange or
stock market referred to in Section 2(j) hereof is open for trading on a
regular basis.

         (x)     "Unrestricted Shares" means shares of Common Stock issued
pursuant to the Plan that are not subject to the restrictions imposed by the
provisions of Section 7 or 10 hereof.

         (y)     "Voluntary Share Amount" means the amount of Cash Compensation
(including the cash retainer) earned by an Outside Director for a Plan Year
which the Outside Director elects to apply to the purchase of shares of Common
Stock pursuant to Section 6(b) hereof.

         SECTION 3.       PLAN ADMINISTRATION.  The Compensation Committee
shall be responsible for the administration of the Plan.  However, the
Compensation Committee shall have no authority, discretion, or power to select
the Outside Directors who will receive Share Awards, determine the Share Awards
to be made pursuant to the Plan, the number of Shares, Restricted Shares or
Unrestricted Shares to be issued thereunder, or the time at which Share Awards
are to be made, establish the duration or nature of the restrictions applicable
to Shares or Restricted Shares, or alter any other terms or conditions
specified in the Plan, except in the sense of administering the Plan subject to
the express provisions hereof, including Section 12 hereof.  Subject to the
foregoing limitations, the Compensation Committee is authorized to interpret
the Plan, prescribe, amend, and rescind rules and regulations relating to the
Plan, provide for conditions and assurances deemed necessary or advisable to
protect the interests of the Company in connection with the operation of the
Plan, and make all other determinations necessary or advisable for the
administration of the Plan, but only to the extent not contrary to the express
provisions of the Plan.  No member of the Board of Directors or the
Compensation Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any agreement entered into pursuant to
the Plan.  The determinations, interpretations, and other actions of the Board
of Directors and the Compensation Committee pursuant to the provisions of the
Plan shall be binding and conclusive for all purposes and on all persons.

         SECTION 4.       STOCK SUBJECT TO THE PLAN.

         (a)     Number of Shares.  Three hundred thousand (300,000) shares of
Common Stock are authorized for issuance under the Plan in accordance with the
provisions of the Plan.  Shares of Common Stock that are issued as Shares,
Restricted Shares or Unrestricted Shares shall be





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applied to reduce the maximum number of shares of Common Stock remaining
available for use under the Plan.  Any Restricted Shares that are forfeited to
the Company pursuant to the provisions of Section 7(b) hereof shall again be
available for use under the Plan.  Any shares of Common Stock issuable to an
Outside Director under the Plan that for any reason are not issued to the
Outside Director shall automatically become available for use under the Plan.
The Company shall at all times during the term of the Plan retain as authorized
and unissued Common Stock at least the number of shares from time to time
required under the provisions of the Plan or otherwise assure itself of its
ability to perform its obligations hereunder.  Shares of Common Stock issued
pursuant to the Plan may be shares of original issuance or treasury shares or a
combination of the foregoing, as the Board of Directors, in its discretion,
shall from time to time determine.

         (b)     Adjustments Upon Changes in Common Stock.  In the event the
Company shall effect a split of the Common Stock or a dividend payable in
Common Stock, or in the event the outstanding Common Stock shall be combined
into a smaller number of shares, (i) the maximum number of shares of Common
Stock that may be issued under the Plan shall be increased or decreased
proportionately and (ii) the Board of Directors shall make an appropriate
adjustment in the number of shares of Common Stock then subject to issuance
under Sections 5(b) and 5(c) hereof.  In the event of a reclassification of the
Common Stock not covered by the foregoing, or in the event of a liquidation or
reorganization (including a merger, consolidation, or sale of assets) of the
Company, the Board of Directors shall make such adjustments, if any, as it may
deem appropriate in the number and kind of shares that are authorized for
issuance or are issuable pursuant to the Plan.

         SECTION 5.       INITIAL AND ANNUAL AUTOMATIC GRANTS OF COMMON STOCK.

         (a)     Initial Grants to Current Directors.  Effective as of the next
business day after the 1996 annual meeting of stockholders of the Company, the
Company shall issue 5,500 shares of Common Stock to each person who is an
Outside Director on such date.

         (b)     Initial Grants to Newly Elected Directors.  Commencing after
the date of the 1996 annual meeting of stockholders of the Company, 5,000
shares of Common Stock shall be issued by the Company automatically to each
Outside Director who is newly elected to the Board of Directors after such
date, irrespective of whether such Outside Director is elected by the Board of
Directors or by the stockholders.  The effective date of issuance of such
shares shall be the effective date of such Outside Director's election to the
Board of Directors.  For purposes of this Section 5(b), the term "newly elected
to the Board of Directors" shall mean that the Outside Director was not serving
as a director of the Company immediately prior to the time of his election in
respect of which such shares are issued.

         (c)     Annual Grants.  Beginning with the year 1997, 500 shares of
Common Stock shall be issued by the Company automatically effective as of the
date of each annual meeting of stockholders of the Company, to each person who
(i) is an Outside Director on the date of and immediately following such annual
meeting and (ii) has served in that capacity for at least six months
immediately preceding the date of such annual meeting.





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         (d)     Form of Share Awards.  Each Share Award granted to an Outside
Director pursuant to this Section 5 shall be made either (i) all in Restricted
Shares or (ii) all in Shares, as shall be designated by the recipient of such
award by notice in writing delivered to the Company (A) prior to March 15, 1996
(in the case of an award under Section 5(a) hereof), (B) prior to the effective
date of issuance of such shares (in the case of an award under Section 5(b)
hereof), or (C) prior to the January 1 immediately preceding the annual meeting
of stockholders in respect of which the award is made (in the case of an award
under Section 5(c) hereof).  All such designations shall be on a form
prescribed for this purpose by the Compensation Committee and shall be
irrevocable.  If no such designation is made with respect to a Share Award
granted under this Section 5, such award shall be made all in Shares.

         (e)     Declinations.  Any Outside Director may decline to accept any
Share Award granted to him pursuant to this Section 5 by giving written notice
to the Company of his election to decline to accept such award.

         SECTION 6.       SHARE AWARDS APPLICABLE TO RETAINER AND OTHER CASH
                          COMPENSATION.

         (a)     Retainer; Required Share Amount.  The amount of the retainer
to be paid to each Outside Director for each Plan Year (the "annual retainer")
shall be determined by the Board of Directors from time to time; 50% of the
annual retainer shall be the cash component of the retainer, payable in cash as
Cash Compensation (the "cash retainer"), and the other 50% of the annual
retainer shall be the equity component of the retainer, payable in shares of
Common Stock as the Required Share Amount.  The cash retainer for each Plan
Year shall be payable in installments as of the last day of each plan quarter
of the Plan Year in arrears.  An Outside Director must be serving as an Outside
Director on the last day of the plan quarter in order to earn his cash retainer
for such plan quarter; provided, however, that an Outside Director serving in
such capacity on such day who has served in such capacity for less than the
entire plan quarter shall have his cash retainer for such plan quarter
pro-rated based on his number of days of service as an Outside Director during
such plan quarter.  An Outside Director must be serving as an Outside Director
on the last day of the Plan Year in order to earn his Required Share Amount for
such year; provided, however, that an Outside Director serving in such capacity
on such day who has served in such capacity for less than the entire Plan Year
shall have his Required Share Amount for such Plan Year pro-rated based on his
number of days of service as an Outside Director during such Plan Year.

         (b)     Voluntary Share Amount.  For any Plan Year, an Outside
Director may elect to have up to 100% of his cash retainer earned for such Plan
Year and any other Cash Compensation earned by him for such Plan Year for his
services as a director of the Company, which amounts have not been deferred by
the Outside Director pursuant to the provisions of Section 8 hereof
(collectively referred to herein as his Voluntary Share Amount), applied to the
purchase of shares of Common Stock pursuant to the provisions of Section 6(c)
hereof.  An Outside Director must notify the Company in writing of such
election prior to the first day of the Plan Year for which the election is made
(or prior to such later date as may be approved by the Compensation Committee);
provided, however, that a newly elected Outside Director (within the meaning of
Section 5(b) hereof) may make such an election prior to the commencement of
such Outside Director's initial Term of Office with respect to Cash
Compensation earned by him





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in the balance of the Plan Year of his initial election to the Board of
Directors.  Unless otherwise determined by the Compensation Committee, a
separate election must be made for each Plan Year.  An election made pursuant
to this Section 6(b) for a Plan Year shall be irrevocable from and after the
first day of such Plan Year; provided, however, that an election made pursuant
to this Section 6(b) during a Plan Year for the remaining portion of such Plan
Year shall be irrevocable from and after the date the election is made.  Such
elections shall be on a form prescribed for this purpose by the Compensation
Committee.

         (c)     Issuance of Shares.  Promptly following the end of each Plan
Year, the Company shall, subject to the further provisions of this Section 6,
issue to each Outside Director, effective as of the last day of such Plan Year:

                 (A)      a number of whole shares of Common Stock determined
         by dividing (x) the Required Share Amount earned by such Outside
         Director for such Plan Year by (y)  the Average Share Price of the
         Common Stock for such Plan Year or, if such Outside Director did not
         serve as an Outside Director during the entire Plan Year, for that
         portion of the Plan Year during which he served in that capacity (for
         purposes of calculating such Average Share Price, the Outside Director
         shall always be deemed to have served in that capacity for at least
         the last plan quarter of the Plan Year),

                                      and

                 (B)      a number of whole shares of Common Stock determined
         by dividing (x) such Outside Director's Voluntary Share Amount, if
         any, for such Plan Year by (y) the Average Share Price of the Common
         Stock for such Plan Year or, if such Outside Director did not serve as
         an Outside Director during the entire Plan Year, for that portion of
         the Plan Year during which he served in that capacity (for purposes of
         calculating such Average Share Price, the Outside Director shall
         always be deemed to have served in that capacity for at least the last
         plan quarter of the Plan Year).  The issuance of shares of Common
         Stock to the Outside Director pursuant to clause (A) above and the
         issuance of shares of Common Stock to the Outside Director pursuant to
         clause (B) above shall each be deemed to be a separate Share Award
         made to the Outside Director.

No fractional shares of Common Stock shall be issued by the Company pursuant to
this Section 6(c), and no cash payment or other adjustment shall be made in
respect of any such fractional share that would otherwise be issuable.

         (d)     Eligibility.  An Outside Director must be serving as an
Outside Director on the last day of the Plan Year in order to be eligible to
receive shares of Common Stock pursuant to Section 6(c) hereof in respect of
his Required Share Amount and Voluntary Share Amount, if any, for such Plan
Year.  Any Outside Director who becomes ineligible to receive shares of Common
Stock in respect of his Voluntary Share Amount for a Plan Year because his
service as an Outside Director terminated prior to the last day of such Plan
Year shall be paid any earned amounts of such Voluntary Share Amount in cash,
without interest, as promptly as practicable following the date of such
termination of service, and the election made by such





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Outside Director with respect to such Voluntary Share Amount pursuant to
Section 6(b) hereof shall be null and void effective as of the date of such
termination of service.

         (e)     Form of Share Awards.  Each Share Award made to an Outside
Director with respect to his Required Share Amount for a Plan Year pursuant to
Section 6(c) hereof shall be made either (i) all in Restricted Shares or (ii)
all in Shares, and each Share Award made to an Outside Director with respect to
his Voluntary Share Amount, if any, for a Plan Year pursuant to Section 6(c)
hereof shall be made either (i) all in Restricted Shares or (ii) all in
Unrestricted Shares, in each case as shall be designated by the Outside
Director by notice in writing delivered to the Company prior to the first day
of such Plan Year; provided, however, that a newly elected Outside Director
(within the meaning of Section 5(b) hereof) may make such designations prior to
the commencement of such Outside Director's initial Term of Office with respect
to his Required Share Amount and Voluntary Share Amount, if any, earned by him
in the balance of the Plan Year of his initial election to the Board of
Directors.  Unless otherwise determined by the Compensation Committee, a
separate designation must be made for each Plan Year.  A designation made
pursuant to this Section 6(e) for a Plan Year shall be irrevocable from and
after the first day of such Plan Year; provided, however, that a designation
made pursuant to this Section 6(e) during a Plan Year for the remaining portion
of such Plan Year shall be irrevocable from and after the date the designation
is made.  Such designations shall be on a form prescribed for this purpose by
the Compensation Committee.  If no such designation is made with respect to a
Share Award made under this Section 6, such award shall be made all in Shares
(in the case of an award with respect to a Required Share Amount) or all in
Unrestricted Shares (in the case of an award with respect to a Voluntary Share
Amount).

         (f)     Effectiveness.  The provisions of this Section 6 shall be
effective for Required Share Amounts and Cash Compensation earned by Outside
Directors on and after July 1, 1996.

         SECTION 7.       RESTRICTIONS ON RESTRICTED SHARES.

         (a)     Restricted Period.  (i)  All Restricted Shares issued to an
Outside Director pursuant to the Plan shall be subject to a restricted period,
which shall commence on the effective date of issuance of such Restricted
Shares and end on April 30 of the calendar year in which the Outside Director's
then current Term of Office is scheduled to expire (the "Initial Restricted
Period").  The term "Restricted Period", as hereinafter used, means (A) the
Initial Restricted Period and (B) the Initial Restricted Period as it may be
extended pursuant to the following provisions of this Section 7(a)(i).  Each
Outside Director to whom Restricted Shares have been issued shall have the
right to extend the Restricted Period applicable to such Restricted Shares so
that such Restricted Period ends on April 30 of the calendar year in which the
Outside Director's next succeeding Term of Office (assuming for this purpose
that he continues to serve as a director of the Company) would be scheduled to
expire, provided that such Outside Director notifies the Company in writing of
such extension on or prior to April 30 of the calendar year immediately
preceding the calendar year of expiration of the then current Restricted
Period.  Subject to the foregoing provisions of this Section 7(a)(i), such
right to extend the Restricted Period may be exercised on any one or more
occasions.  An election to extend the Restricted Period shall be irrevocable.





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         (ii)    Notwithstanding the foregoing provisions of Section 7(a)(i)
hereof:

                 (A)      With respect to (x) Restricted Shares issued pursuant
         to Section 5(b) or 6(c) hereof to an Outside Director whose then
         current Term of Office is scheduled to expire in the calendar year of
         the effective date of issuance of such shares, (y) Restricted Shares
         issued pursuant to Section 5(b) hereof on or after November 1 of a
         calendar year, but prior to the end of such calendar year, to an
         Outside Director whose then current Term of Office is scheduled to
         expire in the calendar year next following the calendar year of the
         effective date of issuance of such shares and (z) Restricted Shares
         issued pursuant to Section 9(b) hereof to an Outside Director whose
         then current Term of Office is scheduled to expire in the calendar
         year next following the calendar year of the effective date of
         issuance of such shares, the Initial Restricted Period of such shares
         shall end on April 30 of the calendar year in which the Outside
         Director's next succeeding Term of Office (assuming for this purpose
         that he continues to serve as a director of the Company) would be
         scheduled to expire.

                 (B)      With respect to (x) Restricted Shares issued pursuant
         to Section 5(a) or 5(c) hereof to an Outside Director whose then
         current Term of Office is scheduled to expire in the calendar year
         next following the calendar year of the effective date of issuance of
         such shares and (y) Restricted Shares issued pursuant to Section 5(b)
         hereof on or after April 30 of a calendar year, but prior to November
         1 of such calendar year, to an Outside Director whose then current
         Term of Office is scheduled to expire in the calendar year next
         following the calendar year of the effective date of issuance of such
         shares, the Initial Restricted Period of such shares shall end on
         either (1) April 30 of the calendar year in which the Outside
         Director's then current Term of Office is scheduled to expire or (2)
         April 30 of the calendar year in which the Outside Director's next
         succeeding Term of Office (assuming for this purpose that he continues
         to serve as a director of the Company) would be scheduled to expire,
         as shall be designated by the Outside Director by notice in writing
         delivered to the Company on or prior to the effective date of issuance
         of such shares.  If no such designation is made, the Initial
         Restricted Period of such shares shall end on the date specified in
         clause (1) of the preceding sentence.  All such designations shall be
         irrevocable on and after the effective date of issuance of such
         shares.

         (b)     Forfeiture.  Restricted Shares issued to an Outside Director
pursuant to the Plan shall be forfeited to the Company at no cost to the
Company if the Outside Director's service as a director of the Company
terminates prior to the expiration or termination of the Restricted Period
applicable to such shares; provided, however, that the Restricted Shares shall
become fully vested and the Restricted Period applicable thereto shall
terminate upon (i) the Outside Director's termination of service as a director
of the Company during the Restricted Period due to death, Disability (as
defined in Section 7(h) hereof), or a Permitted Event (as defined in Section
7(h) hereof) or (ii) the occurrence of a Corporate Change (as defined in
Section 7(h) hereof) during the Restricted Period.  Unless and until Restricted
Shares are delivered to the Outside Director upon vesting, the Restricted
Shares shall not be sold, assigned, transferred, discounted, exchanged,
pledged, or otherwise encumbered or disposed of by the Outside Director in any
manner.





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         (c)     Stock Certificates.  The Company shall issue, in the name of
each Outside Director to whom Restricted Shares have become issuable pursuant
to the Plan (or, at the option of the Company, in the name of a nominee of the
Company), stock certificates representing the total number of Restricted Shares
to be issued to the Outside Director, as soon as reasonably practicable after
the effective date of issuance of such shares.  The Company or its agent, at
the direction of the Compensation Committee, shall hold such certificates,
together with stock powers and any other instrument of transfer reasonably
requested by the Company duly endorsed in blank, for the Outside Director's
benefit until such time as the Restricted Shares represented by such
certificates are forfeited to the Company or the restrictions thereon
terminate.

         (d)     Rights as Stockholder.  Upon the issuance of a certificate
representing Restricted Shares to or on behalf of an Outside Director, the
Outside Director shall become the owner thereof for all purposes and shall have
all rights as a stockholder, including voting rights and the right to receive
dividends and distributions, with respect to such shares, subject to the
restrictions of the Plan and any restrictions imposed by law.  If the Company
shall pay or declare a dividend or make a distribution of any kind, whether due
to a reorganization, recapitalization, or otherwise, with respect to the shares
of Common Stock constituting the Restricted Shares, then the Company shall pay
or make such dividend or other distribution with respect to the Restricted
Shares; provided, however, that the cash, stock or other securities, and other
property constituting such dividend or other distribution shall be held by the
Company subject to the restrictions applicable to the Restricted Shares until
the Restricted Shares with respect to which such dividend or other distribution
was paid or made are either vested or forfeited.  If any Restricted Shares with
respect to which such dividend or distribution was paid or made do not vest but
instead are forfeited pursuant to the provisions hereof, then the Outside
Director shall not be entitled to receive such dividend or distribution with
respect to such forfeited shares and such dividend or distribution with respect
to such forfeited shares shall likewise be forfeited and automatically
transferred to and reacquired by the Company.  If any Restricted Shares with
respect to which such dividend or distribution was paid or made become vested
pursuant to the provisions hereof, then the Outside Director shall be entitled
to receive such dividend or distribution with respect to such vested shares,
without interest, and such dividend or distribution with respect to such vested
shares shall likewise be delivered to the Outside Director.

         (e)     Adjustments.  If any of the following events shall occur at
any time while Restricted Shares are outstanding and prior to the vesting or
forfeiture thereof, the following adjustments shall be made in the number of
shares of Common Stock then constituting such Restricted Shares, as
appropriate:

                 (i)      If the Company pays a dividend on its outstanding
         shares of Common Stock in shares of Common Stock or subdivides its
         outstanding shares of Common Stock into a greater number of shares of
         Common Stock, the number of shares of Common Stock then constituting
         the Restricted Shares shall be proportionately increased.  Conversely,
         if the outstanding shares of Common Stock are combined into a smaller
         number of shares of Common Stock, the number of shares of Common Stock
         then constituting the Restricted Shares shall be proportionately
         reduced.  An adjustment made pursuant to this Section 7(e)(i) shall
         become effective as of the record date in the case





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<PAGE>   11
         of a dividend and shall become effective immediately after the
         effective date in the case of a subdivision or combination.

                 (ii)     In case of any recapitalization or reclassification
         of the Common Stock, or any merger or consolidation of the Company
         with or into one or more other corporations, or any sale of all or
         substantially all the assets of the Company, as a result of which the
         holders of Common Stock receive other stock, securities, or property
         in lieu of or in addition to, but on account of, their shares of
         Common Stock, (A) such other stock, securities, or property allocable
         (as provided in clause (B) below) to the shares of Common Stock then
         constituting the Restricted Shares shall be paid and delivered with
         respect to such Restricted Shares, subject to the same restrictions
         applicable to such Restricted Shares, and (B) the Company shall make
         or cause to be made lawful and adequate provision whereby, upon the
         vesting of the Restricted Shares after the record date for the
         determination of the holders of Common Stock entitled to receive such
         other stock, securities, or property, the Outside Director shall
         receive, in lieu of or in addition to the Restricted Shares that have
         vested, as the case may be, the shares of stock, securities, or
         property that would have been allocable to such Restricted Shares had
         such shares vested immediately prior to such record date.  The
         subdivision or combination of shares of Common Stock at any time
         outstanding into a greater or smaller number of shares of Common Stock
         shall not be deemed to be a recapitalization or reclassification of
         the Common Stock for the purposes of this Section 7(e)(ii).

         (f)     Termination of Restrictions.  Upon the expiration or
termination of the Restricted Period applicable to Restricted Shares, the
restrictions applicable to the Restricted Shares that have not theretofore been
forfeited shall terminate, and as soon as practicable thereafter, a stock
certificate for the number of Restricted Shares with respect to which the
restrictions have terminated, together with any dividends or other
distributions with respect to such shares then being held by the Company
pursuant to the provisions of this Section 7, shall be delivered, free of all
such restrictions, to the Outside Director or his beneficiary or estate, as the
case may be.

         (g)     Restricted Share Agreements.  Each recipient of a Share Award
relating to Restricted Shares made pursuant to the Plan shall, as a condition
precedent to the issuance of the Restricted Shares to or on behalf of such
person, enter into an agreement with the Company, in such form as the
Compensation Committee shall prescribe and which is consistent with the
provisions of the Plan, setting forth or incorporating the restrictions, terms,
and conditions of the Share Award.  In the event of any inconsistency between
the provisions of the Plan and any such agreement, the provisions of the Plan
shall govern.

         (h)     Certain Definitions.  For purposes of this Section 7, the
following terms shall have the indicated meanings:

         Disability:  The "Disability" of an Outside Director shall be deemed
to have occurred if the Outside Director shall become unable to continue the
proper performance of his duties as a director of the Company on a full-time
basis as a result of his physical or mental incapacity.





                                      -10-
<PAGE>   12
         Permitted Event:  A "Permitted Event" shall be deemed to have occurred
if:  (i) the Outside Director shall have resigned as a director of the Company
because the Outside Director is unable to continue the proper performance of
his duties as a director of the Company as a result of an injury or illness
affecting a member of the Outside Director's immediate family and such
inability is likely to exist for a period of six months or more; (ii) the
Outside Director shall have retired as a director of the Company because he has
reached the mandatory retirement age for directors of the Company as
established by Company policy; (iii) the Outside Director, after being
nominated by the Board of Directors, shall not be re-elected by the
stockholders of the Company in an election of directors; or (iv) the Outside
Director's directorship shall have ceased at the end of his term because such
Outside Director was not nominated for re-election as a director of the Company
in connection with an election of directors.

         Corporate Change:  A "Corporate Change" shall be deemed to have
occurred upon (i) the dissolution or liquidation of the Company; (ii) a
reorganization, merger, or consolidation of the Company with one or more
corporations (other than a merger or consolidation effecting a reincorporation
of the Company in another state or any other merger or consolidation in which
the shareholders of the surviving corporation and their proportionate interests
therein immediately after the merger or consolidation are substantially
identical to the shareholders of the Company and their proportionate interests
therein immediately prior to the merger or consolidation); (iii) the sale of
all or substantially all of the assets of the Company; or (iv) the occurrence
of a Change in Control.  A "Change in Control" shall be deemed to have occurred
for purposes of this definition if (a) individuals who were directors of the
Company immediately prior to a Control Transaction shall cease, within two
years of such Control Transaction, to constitute a majority of the Board of
Directors of the Company (or of the Board of Directors of any successor to the
Company or to a company which has acquired all or substantially all of its
assets) or (b) any entity, person, or Group acquires shares of the Company in a
transaction or series of transactions that result in such entity, person, or
Group directly or indirectly owning beneficially 50% or more of the outstanding
shares of Common Stock of the Company.  As used herein, "Control Transaction"
shall be (a) any tender offer for or acquisition of capital stock of the
Company, (b) any merger or consolidation of the Company, (c) any contested
election of directors of the Company, or (d) any combination of the foregoing,
any one of which results in a change in voting power sufficient to elect a
majority of the Board of Directors of the Company.  As used herein, "Group"
shall mean persons who act "in concert" as described in Sections 13(d)(3)
and/or 14(d)(2) of the Securities Exchange Act of 1934, as amended.

         SECTION 8.       DEFERRAL OF CASH COMPENSATION.  Outside Directors
shall have the right to defer the receipt of their Cash Compensation in
accordance with the following provisions of this Section 8.

         (a)     Election to Defer.  An Outside Director may elect to defer the
receipt of all or a portion of his Cash Compensation (other than his Voluntary
Share Amount) for a Plan Year in accordance with the provisions of this Section
8 by filing a written election to defer with the Compensation Committee.  Such
election shall be made on a form or forms prescribed for this purpose by the
Compensation Committee.  Such election must include the following:  (i) the
percentage of Cash Compensation to be deferred; (ii) an irrevocable election of
a method of payment as provided in Section 8(e) hereof; and (iii) a designation
of beneficiary as provided





                                      -11-
<PAGE>   13
in Section 8(f) hereof.  Except as provided in Section 8(c) hereof, a deferral
election shall apply only to Cash Compensation to be earned in the Plan Year
next following the Plan Year in which the election is made.  An election to
defer made under this Section 8 shall be irrevocable.  For purposes of the
Plan, the term "Participant" means an Outside Director who has elected to defer
the receipt of his Cash Compensation in accordance with the provisions of this
Section 8.

         (b)     Amount of Deferral.  The amount of Cash Compensation to be
deferred in any Plan Year shall be designated by the Outside Director as a
percentage of his Cash Compensation in integral multiples of 5%, but shall not
be less than 10%.

         (c)     Time of Election.  Except as otherwise determined by the
Compensation Committee, an election to defer Cash Compensation hereunder must
be received by the Compensation Committee prior to the commencement of the Plan
Year in which the Cash Compensation is earned; provided, however, that a newly
elected Outside Director (within the meaning of Section 5(b) hereof) may make a
deferral election prior to the commencement of such Outside Director's initial
Term of Office with respect to Cash Compensation earned by him in the balance
of the Plan Year of his initial election to the Board of Directors.  Unless
otherwise determined by the Compensation Committee, a separate deferral
election must be made for each Plan Year.  A deferral election by an Outside
Director with respect to Cash Compensation in a given year will not preclude a
different action by the Outside Director with respect to Cash Compensation in
subsequent years.

         (d)     Deferred Compensation Accounts.  Cash Compensation deferred by
a Participant pursuant to this Section 8 shall be credited to an account
("Deferred Compensation Account") established by the Company for such
Participant.  Cash Units (as defined below) in an amount equal to the deferred
Cash Compensation shall be credited to the Participant's Deferred Compensation
Account at the time the deferred Cash Compensation would otherwise have been
paid had no election to defer been made.  As additional deferred compensation
for Participants with Cash Units credited to their Deferred Compensation
Accounts, the Company shall credit a Participant's Deferred Compensation
Account on a quarterly basis with an Interest Equivalent (as defined below).
The amounts credited to a Participant's Deferred Compensation Account in
accordance with this Section 8(d) shall represent the total amount of the
Company's liability to the Participant for the payment of deferred compensation
under this Section 8.  For purposes of this Section 8, (i) a "Cash Unit" means
the entry in a Deferred Compensation Account of a credit equal to One Dollar
and (ii) an "Interest Equivalent" means the entry in a Deferred Compensation
Account of an interest credit with respect to a Cash Unit, the interest factor
being equal to the quarterly rate of return generated under the Stable Value
Fund of the Company's Capital Accumulation Plan (or such successor or other
fund within the Capital Accumulation Plan as the Compensation Committee may
approve).

         (e)     Payment of Deferred Compensation.  All payments of a
Participant's Deferred Compensation Account shall be made at, or shall commence
on, the first day of the calendar year selected by the Participant in
accordance with the provisions of Section 8(a) hereof and this Section 8(e).
The date on which payment will commence must be designated by the Outside
Director.  The Outside Director may elect to defer the receipt of his Cash
Compensation to:  (a) the first day of any calendar year that is at least one
year after the calendar year in which





                                      -12-
<PAGE>   14
the Cash Compensation is earned; or (b) the first day of the calendar year
following (i) the calendar year he retires as a director of the Company; (ii)
the calendar year his membership on the Board of Directors terminates; or (iii)
the calendar year of his death.  The benefit commencement date may not be later
than the third calendar year following the attainment of mandatory retirement
age for directors of the Company.  Upon the death of a Participant prior to the
final payment of all amounts credited to his Deferred Compensation Account, the
balance of the Deferred Compensation Account shall be paid in accordance with
the provisions of Section 8(f) hereof commencing on the first day of the
calendar year following the year of death.  A Participant shall have the option
of selecting either a single payment schedule or a series of annual
installments (not exceeding ten), provided such election is irrevocable and
made at the date of deferral.  A Participant shall receive in cash all deferred
compensation credited to his Deferred Compensation Account.

         (f)     Designation of Beneficiary.  Each Participant shall name a
beneficiary to receive any payments due him at the time of his death, with the
right to change such beneficiary at any time.  In case of a failure to
designate a beneficiary or the death of the designated beneficiary without a
designated successor, such payments shall be made to the person or persons
designated as beneficiary in the designation most recently filed by the
Participant under the Directors Group Life Insurance Plan of the Company, or if
no such designation has been made or the Participant is not participating in
such plan, then to the surviving spouse of a deceased Participant, or, if there
is no surviving spouse, the children of the Participant in equal shares (the
share of any child who predeceases the Participant to go in equal shares to the
issue of such deceased child), or if there is no surviving spouse, children, or
issue of such children, the estate of the Participant.  No designation of
beneficiary shall be valid unless in writing signed by the Participant, dated
and filed with the Compensation Committee.  Upon the Participant's death, any
balance in his Deferred Compensation Account shall be payable under the method
and form elected by the Participant or in such other manner as the Compensation
Committee may determine in its sole discretion.

         (g)     Source of Payments.  All payments of deferred compensation
under this Section 8 shall be made in cash from the general funds of the
Company, and the Company shall be under no obligation to segregate any assets
in connection with the maintenance of a Deferred Compensation Account.  Nothing
contained in the Plan and no action taken pursuant to the Plan shall create or
be construed to create a trust of any kind in favor of a Participant or any
other person or a fiduciary relationship between the Company and a Participant.
Title to the beneficial ownership of any assets, whether cash or investments,
that the Company may designate to pay the amounts credited to Deferred
Compensation Accounts shall at all times remain in the Company, and
Participants shall have no property interest whatsoever in any specific assets
of the Company.  A Participant's interest in his Deferred Compensation Account
shall be limited to the right to receive payments pursuant to the terms of the
Plan, and such right shall be no greater than the right of any other unsecured
general creditor of the Company.

         (h)     Effectiveness.  Except as otherwise provided in Section 9
hereof, the provisions of this Section 8 shall be effective for Cash
Compensation earned by Outside Directors on and after July 1, 1996.





                                      -13-
<PAGE>   15
         SECTION 9.       TERMINATION OF DIRECTORS' DEFERRED COMPENSATION PLAN.

         (a)     Termination; Transfer of Units.  Effective as of July 1, 1996,
the Oryx Energy Company Directors' Deferred Compensation Plan, as amended and
restated effective September 7, 1995 (the "Deferred Compensation Plan"), shall
terminate, and all cash units and share units credited as of such date to an
Outside Director's deferred compensation account thereunder shall automatically
be transferred and credited to a Deferred Compensation Account established for
such Outside Director under Section 8 hereof.  Thereafter, except as provided
in Section 9(b) hereof, such cash units shall be governed by the provisions of
Section 8 hereof to the same extent as if they had originally been credited as
Cash Units under the Plan.  Such cash units are herein referred to as "Subject
Cash Units".

         (b)     Conversion of Subject Cash Units.  Each Outside Director with
Subject Cash Units credited to his Deferred Compensation Account under the Plan
may elect to have up to 100% of the Subject Cash Units credited to his account
as of July 1, 1996 applied to the purchase of Restricted Shares in accordance
with the provisions of this Section 9(b) effective as of July 1, 1996; provided
that the Outside Director must notify the Company in writing of such election
on or prior to July 1, 1996, which election will be irrevocable on and after
such date.  Such election shall be on a form prescribed for this purpose by the
Compensation Committee.  Promptly following, and effective as of, July 1, 1996,
the Company shall, subject to the further provisions of this Section 9(b),
issue to each Outside Director who has made an election to purchase Restricted
Shares pursuant to this Section 9(b) a number of whole Restricted Shares
determined by dividing (x) the amount of the Subject Cash Units that the
Outside Director elected to have applied to the purchase of Restricted Shares
by (y) the Fair Market Value of the Common Stock on July 1, 1996.  No
fractional shares of Common Stock shall be issued by the Company pursuant to
this Section 9(b), and no cash payment or other adjustment shall be made in
respect of any such fractional share that would otherwise be issuable.  An
Outside Director must be serving as an Outside Director on July 1, 1996 in
order to be eligible to receive Restricted Shares pursuant to this Section
9(b).  An election made pursuant to this Section 9(b) by an Outside Director
who becomes ineligible to receive Restricted Shares pursuant to this Section
9(b) because his service as an Outside Director terminated prior to July 1,
1996 shall be null and void effective as of the date of such termination of
service.  Any Subject Cash Units (or portion thereof) not converted into
Restricted Shares pursuant to this Section 9(b) shall remain subject to the
provisions of Section 8 hereof.

         (c)     Share Units.  An Outside Director with share units credited to
his Deferred Compensation Account under the Plan shall continue to hold such
units subject to the terms and conditions that were in effect with respect
thereto under the Deferred Compensation Plan immediately prior to its
termination.  The Board of Directors may, in its discretion, grant to such
Outside Director the right to convert such share units into shares of Common
Stock under the Plan on such terms and conditions as the Board of Directors may
prescribe.





                                      -14-
<PAGE>   16
         SECTION 10.      RESTRICTIONS ON TRANSFER OF SHARES.  No Shares issued
to an Outside Director pursuant to the Plan shall be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of by the Outside
Director, other than by will or pursuant to the laws of descent and
distribution, until six months have elapsed from the effective date of issuance
of such Shares.  The Company shall hold the certificates representing such
Shares for the Outside Director's benefit until such time as the restrictions
on transfer of such Shares set forth in the preceding sentence have lapsed.
All securities received by an Outside Director on account of his Shares as a
result of an event described in Section 7(e)(i) or (ii) hereof shall be deemed
to be Shares for purposes of this Section 10 and shall be restricted as to
transfer pursuant to the provisions of this Section 10 to the same extent and
for the same period as if such securities were the original Shares with respect
to which they were issued.  Subject to the restrictions of this Section 10, an
Outside Director shall have all rights as a stockholder, including voting
rights and the right to receive dividends and distributions, with respect to
his Shares.

         SECTION 11.      FREEZE OF NON-EMPLOYEE DIRECTORS RETIREMENT PLAN.
Effective as of July 1, 1996, the Non-Employee Directors Retirement Plan of
the Company (the "Retirement Plan") shall be "frozen" such that (i) no
directors of the Company newly elected to the Board of Directors after such
date shall be entitled to participate therein, (ii) the retirement benefit
under the Retirement Plan for all Outside Directors serving on the Board of
Directors as of such date shall be fixed from and after such date as that
amount which the Outside Director would have been entitled to receive under the
Retirement Plan had he retired as a director of the Company effective as of
such date (disregarding for this purpose the Retirement Plan's years of service
eligibility requirement), and (iii) no future benefits under the Retirement
Plan shall accrue from and after July 1, 1996.  The Board of Directors may, in
its discretion, provide for the discharge of the Company's obligations with
respect to such frozen retirement benefits on such terms and conditions as the
Board of Directors may prescribe, which may include the grant to Outside
Directors of the right to exchange such frozen retirement benefits for shares
of Common Stock under the Plan (which may be Shares, Restricted Shares or
Unrestricted Shares) or other securities or cash, or a combination thereof.

         SECTION 12.      PLAN AMENDMENT, MODIFICATION, AND TERMINATION.  The
Board of Directors may at any time suspend, terminate, amend, or modify the
Plan; provided, however, that no amendment or modification of the Plan shall
become effective without the approval of such amendment or modification by the
stockholders of the Company if the Company, on the advice of counsel,
determines that stockholder approval is necessary or desirable; and provided
further that the provisions of the Plan governing (a) the Share Awards to be
made pursuant to Section 5 hereof and the Share Awards to be made pursuant to
Section 6(c) hereof in respect of Required Share Amounts, (b) the number of
shares of Common Stock to be issued under such awards, (c) the time at which
such awards are to be made, and (d) the duration and nature of the restrictions
applicable to such awards, shall not be amended more than once every six
months, other than to comport with changes in the Internal Revenue Code of
1986, the Employee Retirement Income Security Act of 1974, or the rules
promulgated thereunder.  No suspension, termination, amendment, or modification
of the Plan shall in any manner adversely affect any Share Award theretofore
made under the Plan or the rights of a Participant with respect to amounts
theretofore credited to his Deferred Compensation Account under the Plan,
without the consent of the recipient of such award or such Participant.  All
Restricted Shares issued prior to any termination of the Plan that have not
theretofore vested or been forfeited shall continue to be subject to the terms
of the Plan.





                                      -15-
<PAGE>   17
         SECTION 13.      PLAN EFFECTIVENESS.  The Plan shall be submitted for
approval by the stockholders of the Company at the 1996 annual meeting of
stockholders.  The Plan shall become effective on the date of its approval by
the holders of a majority of the shares of Common Stock present, or
represented, and entitled to vote at such annual meeting.  If the Plan is not
so approved, the Plan shall terminate and all actions hereunder shall be null
and void.

         SECTION 14.      GENERAL PROVISIONS.

         (a)     No Continuing Right as Director.  Neither the adoption or
operation of the Plan, nor the Plan itself or any document describing or
relating to the Plan, or any part hereof, shall confer upon any Outside
Director any right to continue as a director of the Company or any subsidiary
of the Company.

         (b)     Nonalienation of Benefits.  No Outside Director or Participant
shall have the right to sell, assign, transfer, or otherwise convey or encumber
in whole or in part the right to receive any award or payment under the Plan,
except in accordance with the express provisions hereof.

         (c)     Binding Effect.  The obligations of the Company under the Plan
shall be binding upon any successor corporation or organization resulting from
the merger, consolidation, or other reorganization of the Company, or upon any
successor corporation or organization succeeding to all or substantially all of
the assets and business of the Company.  The terms and conditions of the Plan
shall be binding upon each Outside Director and any other recipient of
Restricted Shares hereunder and each such person's heirs, legatees,
distributees, and legal representatives.

         (d)     Severability.  If any provision of the Plan or any agreement
hereunder is held to be illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining provisions of the Plan or such
agreement, as the case may be, but such provision shall be fully severable and
the Plan or such agreement, as the case may be, shall be construed and enforced
as if the illegal or invalid provision had never been included herein or
therein.

         (e)     Expenses.  All expenses incident to the administration,
protection, or termination of the Plan, including, but not limited to, legal
and accounting fees, shall be paid by the Company.

         (f)     Notices.  Whenever any notice is required or permitted under
the Plan or any agreement hereunder, such notice must be in writing and
personally delivered or sent by mail.  Any notice required or permitted to be
delivered hereunder or under an agreement shall be deemed to be delivered on
the date on which it is personally delivered, or on the third business day
after it is deposited in the United States mail, certified or registered,
postage prepaid, addressed to the person who is to receive it at the address
that such person has theretofore specified by written notice delivered in
accordance herewith.  The Company or an Outside Director may change, at any
time and from time to time, by written notice to the other, the





                                      -16-
<PAGE>   18
address that it or he had theretofore specified for receiving notices.  Until
such address is changed in accordance herewith, notices hereunder or under an
agreement shall be delivered or sent (i) to the Outside Director at his address
as set forth in the records of the Company or (ii) to the Company or the
Compensation Committee at the principal executive offices of the Company
clearly marked "Attention: President".

         (g)     No Restriction of Corporate Action.  Nothing contained in the
Plan shall be construed to prevent the Company or any subsidiary thereof from
taking any corporate action that is deemed by the Company or such subsidiary to
be appropriate or in its best interest, whether or not such action would have
an adverse effect on the Plan or any Share Award made or to be made under the
Plan.  No Outside Director or other person shall have any claim against the
Company or any subsidiary thereof as a result of such action.

         (h)     Governing Law.  The provisions of the Plan, and all agreements
hereunder, shall be governed by and construed in accordance with the laws of
the State of Texas.

         (i)     Miscellaneous.  Headings are given to the sections and
subsections of the Plan solely as a convenience to facilitate reference.  Such
headings shall not be deemed in any way material or relevant to the
construction of the Plan or any provisions hereof.  The use of the masculine
gender shall also include within its meaning the feminine.  Wherever the
context of the Plan dictates, the use of the singular shall also include within
its meaning the plural, and vice versa.





                                      -17-