AMRESCO, INC,
                1997 STOCK OPTION AND AWARD PLAN
         (Amended and Restated as of February 24, 1998)


ARTICLE 1.     Establishment, Purpose and Duration

     1.1   Establishment of the Plan.  AMRESCO, INC., a  Delaware
corporation  (hereinafter  referred  to  as  "AMRESCO"),   hereby
establishes  a  stock option and award plan to be  known  as  the
"AMRESCO, INC. 1997 Stock Option and Award Plan" (the "Plan"), as
set  forth  in  this  document.  The Plan permits  the  grant  of
Nonqualified Stock Options, Incentive Stock Options,  Performance
Shares and Restricted Stock.

     The  effective  date  of  the Plan  is  May  28,  1997  (the
"Effective Date") and the Plan shall remain in effect as provided
in Section 1.3.

     1.2   Purpose of the Plan.  The purpose of the  Plan  is  to
secure  for  AMRESCO  and its stockholders the  benefits  of  the
incentive  inherent  in  stock  ownership  in  AMRESCO   by   key
employees,   directors  and  other  persons   who   are   largely
responsible  for  its future growth and continued  success.   The
Plan  promotes the success and enhances the value of  AMRESCO  by
linking  the  personal  interests of  Participants  to  those  of
AMRESCO's  stockholders, and by providing  Participants  with  an
incentive for outstanding performance.

     The   Plan  is  further intended to provide  flexibility  to
AMRESCO  in  its  ability  to motivate, attract  and  retain  the
services  of  Participants  upon  whose  judgment,  interest  and
special  effort  the successful conduct of its operation  largely
depends.

     1.3   Duration of the Plan.  The Plan shall commence on  the
Effective  Date and shall remain in effect, subject to the  right
of  the Board of Directors to amend or terminate the Plan at  any
time  pursuant to Article 13, until the day prior  to  the  tenth
(10th) anniversary of the Effective Date.

ARTICLE 2.     Definitions

     Whenever  used  herein, the following terms shall  have  the
meanings  set forth below and, when the meaning is intended,  the
initial letter of the word is capitalized:

     (a)   "Award" means, individually or collectively,  a  grant
under  this  Plan of Nonqualified Stock Options, Incentive  Stock
Options, Performance Shares or Restricted Stock.

     (b)   "Award Agreement" means an agreement entered  into  by
each  Participant  and  AMRESCO,  setting  forth  the  terms  and
provisions   applicable   to  Awards  granted   to   Participants
hereunder.

     (c)  "Beneficial Owner" or "Beneficial Ownership" shall have
the  meaning  ascribed to such term in Rule 13d-3 of the  General
Rules and Regulations under the Exchange Act.

     (d)   "Board"  or "Board of Directors" means  the  board  of
directors of AMRESCO.

     (e)  "Cause" means: (i) willful misconduct on the part of  a
Participant  that is materially detrimental to AMRESCO;  or  (ii)
the  indictment of a Participant for the commission of a  felony.
The  existence  of  "Cause" under either (i)  or  (ii)  shall  be
determined  by the Committee.  Notwithstanding the foregoing,  if
the Participant has entered into an employment agreement that  is
binding  as  of the date of employment termination, and  if  such
employment agreement defines "Cause" and/or provides a  means  of
determining whether "Cause" exists, the definition of "Cause" and
the  means of determining whether "Cause" exists provided for  in
the  employment  agreement shall apply  to  the  Participant  for
purposes hereof.

     (f)   "Change  in Control" shall be deemed to have  occurred
if:

          (i)    An  acquisition  by  any  Person  of  Beneficial
     Ownership  of  the Shares then outstanding ("AMRESCO  Common
     Stock Outstanding") or the voting securities of AMRESCO then
     outstanding  entitled to vote generally in the  election  of
     directors   ("AMRESCO   Voting   Securities   Outstanding");
     provided  such  acquisition  of Beneficial  Ownership  would
     result  in  the  Person's beneficially  owning  (within  the
     meaning  of  Rule 13d-3 promulgated under the Exchange  Act)
     twenty-five  percent (25%) or more of AMRESCO  Common  Stock
     Outstanding  or  twenty-five percent (25%) or  more  of  the
     combined   voting   power  of  AMRESCO   Voting   Securities
     Outstanding; and provided further, that immediately prior to
     such  acquisition such Person was not a direct  or  indirect
     Beneficial  Owner of twenty-five percent (25%)  or  more  of
     AMRESCO  Common  Stock  Outstanding or  twenty-five  percent
     (25%) or more of the combined voting power of AMRESCO Voting
     Securities Outstanding, as the case may be; or

          (ii)  The approval of the stockholders of AMRESCO of  a
     reorganization, merger, consolidation, complete  liquidation
     or dissolution of AMRESCO, the sale or disposition of all or
     substantially  all  of  the assets  of  AMRESCO  or  similar
     corporate  transaction (in each case  referred  to  in  this
     Section   2(f)   as  a  "Corporate  Transaction")   or,   if
     consummation  of such Corporate Transaction is  subject,  at
     the time of such approval by stockholders, to the consent of
     any government or governmental agency, the obtaining of such
     consent (either explicitly or implicitly); or

          (iii)     A change in the composition of the Board such
     that   the  individuals  who,  as  of  the  Effective  Date,
     constitute  the  Board  (such  Board  shall  be  hereinafter
     referred  to as the "Incumbent Board") cease for any  reason
     to  constitute  at least a majority of the Board;  provided,
     however,  for  purposes  of  this  Section  2(f),  that  any
     individual  who becomes a member of the Board subsequent  to
     the   Effective  Date  whose  election,  or  nomination  for
     election by AMRESCO's stockholders, was approved by  a  vote
     of  at least a majority of those individuals who are members
     of  the  Board  and who were also members of  the  Incumbent
     Board  (or deemed to be such pursuant to this proviso) shall
     be considered as though such individual were a member of the
     Incumbent  Board;  but,  provided, further,  that  any  such
     individual  whose initial assumption of office occurs  as  a
     result  of  either an actual or threatened election  contest
     (as  such  terms  are used in Rule 14a-11 of Regulation  14A
     promulgated under the Exchange Act, including any  successor
     to  such Rule) or other actual or threatened solicitation of
     proxies  or consents by or on behalf of a Person other  than
     the  Board  shall not be so considered as a  member  of  the
     Incumbent Board.

Notwithstanding the provisions set forth in subparagraphs (i) and
(ii)  of this Section 2(f), the following shall not constitute  a
Change  in  Control for purposes hereof:  (1) any acquisition  of
shares  of  common  stock of AMRESCO by,  or  consummation  of  a
Corporate Transaction with, any Subsidiary or an employee benefit
plan (or related trust) sponsored or maintained by AMRESCO or  an
affiliate;  or (2) any acquisition of shares of common  stock  of
AMRESCO,  or  consummation of a Corporate Transaction,  following
which more than fifty percent (50%) of the shares of common stock
then   outstanding  of  the  corporation  resulting   from   such
acquisition or Corporate Transaction and more than fifty  percent
(50%) of the combined voting power of the voting securities  then
outstanding of such corporation entitled to vote generally in the
election  of  directors, is then beneficially owned, directly  or
indirectly,  by  all or substantially all of the individuals  and
entities  who  were  Beneficial Owners of  AMRESCO  Common  Stock
Outstanding    and   AMRESCO   Voting   Securities   Outstanding,
respectively, immediately prior to such acquisition or  Corporate
Transaction  in  substantially  the  same  proportions  as  their
ownership,  immediately  prior to such acquisition  or  Corporate
Transaction,  of  AMRESCO  Common Stock Outstanding  and  AMRESCO
Voting Securities Outstanding, as the case may be.

     (g)   "Code"  means the Internal Revenue Code  of  1986,  as
amended from time to time.

     (h)   "Committee" means the committee appointed by the Board
to  administer  the  Plan with respect to grants  of  Awards,  as
specified in Article 3.

     (i)   "Director" means any individual who is a member of the
Board of Directors.

     (j)   "Disability" shall have the meaning ascribed  to  such
term  in  the  AMRESCO  long-term disability  plan  covering  the
Participant, or in the absence of such plan, a meaning consistent
with Section 22(e)(3) of the Code.

     (k)   "Employee" means any full-time, salaried  employee  of
AMRESCO, or AMRESCO's Subsidiaries.

     (l)   "Exchange  Act" means the Securities Exchange  Act  of
1934, as amended from time to time, or any successor act thereto.

     (m)  "Fair Market Value" shall be determined as follows:

          (i)   If, on the relevant date, the Shares, are  traded
     on  a  national or regional securities exchange  or  on  The
     Nasdaq  Stock Market ("Nasdaq") and closing sale prices  for
     the  Shares  are  customarily quoted, on the  basis  of  the
     closing sale price on the principal such securities exchange
     on  which the Shares may then be traded or, if there  is  no
     such  sale  on  the relevant date, then on  the  immediately
     preceding day on which a sale was reported;

          (ii)  If,  on  the relevant date, the  Shares  are  not
     listed  on any securities exchange or traded on Nasdaq,  but
     nevertheless  are  publicly traded and  reported  on  Nasdaq
     without closing sale prices for the Shares being customarily
     quoted, on the basis of the mean between the closing bid and
     asked  quotations in such other over-the-counter  market  as
     reported  by  Nasdaq; but, if there are  no  bid  and  asked
     quotations  in  the over-the-counter market as  reported  by
     Nasdaq  on that date, then the mean between the closing  bid
     and  asked  quotations  in  the over-the-counter  market  as
     reported by Nasdaq on the immediately preceding day such bid
     and asked prices were quoted; and

     (iii)      If,  on  the relevant date, the  Shares  are  not
     publicly traded as described in (i) or (ii), on the basis of
     the good faith determination of the Committee.

     (n)   "Final Award" means the actual award earned  during  a
performance  period  by  a  Participant,  as  determined  by  the
Committee  at  the  end  of the performance  period  pursuant  to
Article 7.

     (o)  "Incentive Payment Date" means the seventy-fifth (75th)
day following the last day of the performance period during which
the  Final Award under Article 7 was earned, or such earlier date
upon which Final Awards are paid to Participants.

     (p)   "Incentive Stock Option" or "ISO" means an  option  to
purchase Shares granted under Article 6 which is designated as an
Incentive  Stock Option and is intended to meet the  requirements
of Section 422 of the Code.

     (q)   "Insider" shall mean a Person who is, on the  relevant
date,  a director, officer or ten percent (10%) beneficial  owner
of  any  class of AMRESCO's equity securities that is  registered
pursuant to Section 12 of the Exchange Act, all as defined  under
Section 16 of the Exchange Act.

     (r)   "Named Executive Officer" means a Participant who,  as
of  the  date of vesting and/or payout of an Award is one of  the
group  of  "covered  employees," as defined  in  the  regulations
promulgated under Code Section 162(m), or any successor statute.

     (s)   "Nonqualified Stock Option" or "NQSO" means an  option
to  purchase Shares granted under Article 6 which is not intended
to meet, or does not meet, the requirements of Code Section 422.

     (t)    "Option"  means  an  Incentive  Stock  Option  or   a
Nonqualified Stock Option.

     (u)  "Option Price" means the price at which a Share may  be
purchased  by a Participant pursuant to an Option, as  determined
by the Committee.

     (v)   "Participant"  means an Employee,  director  or  other
Person who has been granted an Award which is outstanding.

     (w)   "Performance  Share" means  an  Award  granted  to  an
Employee, as described in Article 7.

     (x)   "Person" shall have the meaning ascribed to such  term
in  Section 3(a)(9) of the Exchange Act and used in Section 13(d)
and  14(d)  thereof,  including a "group" as defined  in  Section
13(d) thereof.

     (y)   "Plan  Year" shall mean, for purposes  of  Article  7,
AMRESCO's  fiscal  year which coincides with each  calendar  year
during the term hereof.

     (z)   "Retirement" shall have the meaning ascribed  to  such
term  in the AMRESCO, INC.  Retirement Savings and Profit Sharing
Plan and Trust.

     (aa)  "Restricted Stock" means an Award of restricted Shares
granted  in accordance with the terms of Article 8 and the  other
provisions hereof.

     (ab) "Shares" means the shares of AMRESCO common stock,  par
value $0.05 per share.

     (ac)  "Subsidiary" means any corporation, partnership, joint
venture  or  other entity in which AMRESCO has  a  fifty  percent
(50%) or greater voting interest.


ARTICLE 3.     Administration

     3.1   The Committee.  The Plan shall be administered by  the
Stock  Option and Bonus Committee of the Board, or by  any  other
Committee appointed by the Board consisting of not less than  two
(2)  Directors who are "non-employee directors" under Rule  16b-3
or  any successor thereto under the Exchange Act.  The members of
the  Committee shall be appointed from time to time by, and shall
serve at the discretion of, the Board of Directors.

     The  Committee  shall  be comprised solely  of  non-employee
directors  who  are eligible to administer the Plan  pursuant  to
Rule 16b-3(b)(3) or any successor thereto under the Exchange Act.
However,  if for any reason any member of the Committee does  not
qualify  to  administer the Plan, as contemplated  by  Rule  16b-
3(b)(3) of the Exchange Act, the Board of Directors may appoint a
new Committee member who complies with Rule 16b-3(b)(3).

     3.2   Authority of the Committee.  Subject to the provisions
hereof,  the  Committee  shall have  full  power  to  select  the
Employees  and other Persons who are responsible for  the  future
growth   and  success  of  AMRESCO,  who  may  include,   without
limitation,   consultants,  independent  contractors   or   other
providers  of  services to AMRESCO, who shall participate  herein
(who  may change from year to year); determine the size and types
of  Awards;  determine the terms and conditions of  Awards  in  a
manner consistent herewith (including vesting provisions and  the
duration of the Awards); construe and interpret the Plan and  any
agreement or instrument entered into hereunder; establish,  amend
or waive rules and regulations for the Plan's administration; and
(subject  to  the provisions of Article 13) amend the  terms  and
conditions of any outstanding Award to the extent such terms  and
conditions are within the discretion of the Committee as provided
herein,  including  to establish different terms  and  conditions
relating to the effect of the termination of employment or  other
service to AMRESCO.  Further, the Committee shall make all  other
determinations  which  may  be necessary  or  advisable  for  the
administration  hereof.  As permitted by law, the  Committee  may
delegate its authority hereunder.

     3.3   Decisions  Binding.  All determinations and  decisions
made  by the Committee pursuant to the provisions hereof and  all
related  orders  and  resolutions of the Board  shall  be  final,
conclusive  and  binding on all Persons, including  AMRESCO,  the
stockholders,  Employees,  Participants  and  their  estates  and
beneficiaries.


ARTICLE 4. Shares Subject to the Plan

     4.1  Number of Shares.  Subject to adjustment as provided in
Section  4.3, the total number of Shares available for  grant  of
Awards shall be an aggregate of three million (3,000,000).  These
Shares  may,  in the discretion of AMRESCO, be either  authorized
but  unissued Shares or shares held as treasury shares, including
Shares purchased by AMRESCO.

     The   following  rules  shall  apply  for  purposes  of  the
determination  of  the  number  of  Shares  available  for  grant
hereunder;

          (a)   The grant of an option or Restricted Stock  shall
     reduce  the  Shares  available for grant  hereunder  by  the
     number of shares subject to such Award.

          (b)   The  Committee shall in each case  determine  the
     appropriate  number of Shares to deduct from the  authorized
     pool in connection with the grant of Performance Shares.

          (c)   While  an Option, Restricted Stock or Performance
     Share  is  outstanding,  it shall  be  counted  against  the
     authorized pool of Shares, regardless of its vested status.

          (d)   In  the  event an Award is paid in  the  form  of
     Shares  or derivatives of Shares, the authorized pool  shall
     be reduced by the number of Shares or Share derivatives paid
     to the Participant, as determined by the Committee.

          (e)   To  the extent that an Award is settled  in  cash
     rather  than in Shares, the authorized Share pool  shall  be
     credited  with the appropriate number of Shares  represented
     by  the  cash settlement of the Award, as determined at  the
     sole  discretion of the Committee (subject to the limitation
     set forth in Section 4.2).

     4.2   Lapsed  Awards.  If any Award is canceled, terminates,
expires  or  lapses for any reason, any Shares  subject  to  such
Award  shall  again  be  available for the  grant  of  an  Award.
However,  in  the  event that prior to the Award's  cancellation,
termination, expiration or lapse, the holder of the Award at  any
time received one (1) or more "benefits of ownership" pursuant to
such Award (as defined by the Securities and Exchange Commission,
pursuant to any rule or interpretation promulgated under  Section
16  of  the Exchange Act), the Shares subject to such Award shall
not be made available for regrant hereunder.

     4.3   Adjustments in Authorized Shares.  In the event of any
change in corporate capitalization, such as a stock split,  or  a
corporate   transaction,  such  as  any  merger,   consolidation,
separation, including a spin-off, or other distribution of  stock
or  property of AMRESCO, any reorganization (whether or not  such
reorganization comes within the definition of such term  in  Code
Section  368) or any partial or complete liquidation of  AMRESCO,
such  adjustment shall be made in the number and class of  Shares
which may be delivered hereunder, and in the number and class  of
and/or  price of Shares subject to outstanding Awards, as may  be
determined  to be appropriate and equitable by the Committee,  in
its  sole  discretion,  to  prevent dilution  or  enlargement  of
rights;  provided, however, that the number of Shares subject  to
any  Award shall always be a whole number and the Committee shall
make  such adjustments as are necessary to insure Awards of whole
Shares.

ARTICLE 5.  Eligibility and Participation

     Any   key  Employee  or  Director  of  AMRESCO,  or  of  any
Subsidiary, including any such Employee who is also a director of
AMRESCO,  or  of  any Subsidiary, or any other Person,  including
consultants, independent contractors or other service  providers,
whose  judgment,  initiative and efforts  contribute  or  may  be
expected  to  contribute materially to the successful performance
of  AMRESCO  or  any Subsidiary shall be eligible to  receive  an
Award.  In determining the Employees and other Persons to whom an
Award  shall  be granted and the number of Shares  which  may  be
granted  pursuant to that Award, the Committee  shall  take  into
account  the  duties of the respective Person, their present  and
potential  contributions  to  the  success  of  AMRESCO  or   any
Subsidiary,  and such other factors as the Committee  shall  deem
relevant in connection with accomplishing the purpose hereof.

ARTICLE 6.  Stock Options

     6.1  Grant of Options.

     (a)  Eligible Persons other than Outside Directors.  Subject
to  the  terms and provisions hereof, Options may be  granted  to
Employees or other Persons at any time and from time to  time  as
shall  be determined by the Committee.  The Committee shall  have
discretion in determining the number of Shares subject to Options
granted to each Participant; provided, however, that in the  case
of  any  ISO,  only an Employee may receive such  grant  and  the
aggregate  Fair Market Value (determined at the time such  Option
is  granted) of the Shares to which ISOs are exercisable for  the
first  time  by the Optionee during any calendar year  (hereunder
and  under all other Incentive Stock Option Plans of AMRESCO  and
any  Subsidiary)  shall not exceed $100,000.  The  Committee  may
grant a Participant ISOs, NQSOs or a combination thereof, and may
vary such Awards among Participants.

     The maximum number of Options that a Named Executive Officer
can  be  granted  hereunder during any  twelve  month  period  is
300,000.

     (b)    Outside  Directors.    Subject  to  the   terms   and
provisions hereof, Options shall be granted to Outside  Directors
as follows:

          (i)   Each Outside Director elected or appointed to the
     Board  for the first time after February 25, 1997  shall  be
     granted  an  NQSO to purchase 15,000 Shares on the  date  of
     such election or appointment; and

          (ii)  Each Outside Director upon his or her re-election
     at  the first meeting of the stockholders to elect Directors
     following  the expiration of the Triennial Period  shall  be
     granted an NQSO to purchase 15,000 Shares.

Each  such Option shall have an Option Price equal to one hundred
percent (100%) of the Fair Market Value of a Share on the date of
grant,  shall have a term of ten (10) years and shall vest twenty
percent  (20%) on the date of grant and (20%) on each anniversary
thereof.   For purposes of this Section 6.1(b), the term "Outside
Director" shall mean any Director that is not an employee of  the
Company  or any Subsidiary.  Further, the term "Triennial Period"
shall  mean, in respect of any Outside Director, the  three  year
period beginning on the date of the last grant of Options to such
Outside  Director under Section 6.1(b), and ending three calendar
years thereafter.

     6.2   Award Agreement.  Each Option grant shall be evidenced
by  an  Award Agreement that shall specify the Option Price,  the
duration of the Option, the number of Shares to which the  Option
pertains  and  such  other  provisions  as  the  Committee  shall
determine.  The Award Agreement shall further specify whether the
Award  is  intended to be an ISO or an NQSO.  Any portion  of  an
Option that is not designated as an ISO or otherwise fails or  is
not  qualified to be treated as an ISO (even if designated as  an
ISO) shall be a NQSO.

     6.3   Option Price.  The Option Price for each grant  of  an
ISO shall be not less than one hundred percent (100%) of the Fair
Market  Value of a Share on the date the ISO is granted.   In  no
event,  however, shall any Participant, who at the time he  would
otherwise  be  granted  an Option owns  (within  the  meaning  of
Section 424(d) of the Code) stock of AMRESCO possessing more than
ten  percent  (10%)  of the total combined voting  power  of  all
classes of stock of AMRESCO be eligible to receive an ISO  at  an
Option Price less than one hundred ten percent (110%) of the Fair
Market  Value  of  a Share on the date the ISO is  granted.   The
price at which each Share covered by each NQSO shall be purchased
by  an Optionee shall be established by the Committee in its sole
discretion.

     6.4   Duration of Options.  Each Option shall expire at such
time  as  the  Committee shall determine at the  time  of  grant;
provided, however, that no Option shall be exercisable later than
the  tenth  (10th)  anniversary  date  of  its  grant;  provided,
further, however, that any ISO granted to any Participant who  at
such time owns (within the meaning of Section 424(d) of the Code)
stock  of AMRESCO possessing more than ten percent (10%)  of  the
total  combined voting power of all classes of stock in  AMRESCO,
shall  be  exercisable not later than the fifth (5th) anniversary
date of its grant.

     6.5   Exercise of Options.  Options shall be exercisable  at
such times and be subject to such restrictions and conditions the
Committee shall in each instance approve, which need not  be  the
same  for  each grant or each Participant.  Each Option shall  be
exercisable for such number of Shares and at such time or  times,
including  periodic  installments, as may be  determined  by  the
Committee at the time of the grant.  Except as otherwise provided
in  the  Award  Agreement and Article 12, the right  to  purchase
Shares  that  are exercisable in periodic installments  shall  be
cumulative  so  that when the right to purchase  any  Shares  has
accrued, such Shares or any part thereof may be purchased at  any
time  thereafter  until  the expiration  or  termination  of  the
Option.

     6.6  Payment.  Options shall be exercised by the delivery of
a written notice of exercise to AMRESCO, setting forth the number
of  Shares  with respect to which the Option is to be  exercised,
accompanied  by  full payment for the Shares.  The  Option  Price
upon  exercise of any Option shall be payable to AMRESCO in  full
either:  (a)  in  cash, or (b) if approved by the  Committee,  by
tendering  previously acquired Shares having  an  aggregate  Fair
Market  Value  at the time of exercise equal to the total  Option
Price,  or  (c)  by a combination of (a) and (b).  The  Committee
also  may  allow  cashless exercises as permitted  under  Federal
Reserve  Board's  Regulation T, subject to applicable  securities
law  restrictions,  or  by any other means  which  the  Committee
determines   to  be  consistent  with  the  Plan's  purpose   and
applicable law.

     As   soon   as  practicable  after  receipt  of  a   written
notification of exercise and full payment, AMRESCO shall  deliver
to the Participant, in the Participant's name, Share certificates
in an
appropriate  amount  based upon the number  of  Shares  purchased
under the Option(s).

     6.7   Termination of Employment Due to Death or  Disability.
Unless otherwise provided by the Committee in an Award Agreement,
the following rules shall apply in the event of the Participant's
termination  of  employment  due to death  or  Disability.   With
respect  to  a  Participant  that is a non-employee  director  of
AMRESCO or is otherwise not an Employee, the following references
to  employment shall be deemed to be references to service  as  a
director  or  in  such  other capacity as is  determined  by  the
Committee:

          (a)    Termination  by  Death.   In   the   event   the
     Participant  dies while actively employed,  all  outstanding
     Options  granted to that Participant shall immediately  vest
     and  shall  remain exercisable at any time  prior  to  their
     expiration  date,  or for two (2) years after  the  date  of
     death, whichever period is shorter, by (i) such Person(s) as
     shall have been named as the Participant's beneficiary, (ii)
     such  Person(s) that have acquired the Participant's  rights
     under  such  Options by will or by the laws of  descent  and
     distribution,    (iii)   the   Participant's    estate    or
     representative  of the Participant's estate  or  (iv)  by  a
     transferee  of the Option who has acquired the Option  in  a
     transaction that is permitted by Section 6.9.
          (b)   Termination  by Disability.   In  the  event  the
     employment  of  a  Participant is terminated  by  reason  of
     Disability,   all  outstanding  Options  granted   to   that
     Participant  shall  immediately vest  as  of  the  date  the
     Committee  determines the definition of Disability  to  have
     been  satisfied  and shall remain exercisable  at  any  time
     prior  to  their expiration date, or for one (1) year  after
     the  date  that  the Committee determines the definition  of
     Disability  to  have  been satisfied,  whichever  period  is
     shorter,  by  the Participant's duly appointed  guardian  or
     other legal representative.

          (c)   Employment Termination Followed by Death.  In the
     event  that a Participant's employment terminates by  reason
     of Disability, and within the exercise period following such
     termination   the  Participant  dies,  then  the   remaining
     exercise  period for outstanding Options shall  be  one  (1)
     year following death.  Such Options shall be exercisable  by
     the Persons specified in subsection (a) above.

     6.8   Termination of Employment for Other Reasons.   If  the
employment of a Participant shall terminate for any reason  other
than  the reasons set forth in Section 6.7, all Options  held  by
the Participant which are not vested as of the effective date  of
employment termination immediately shall be forfeited to  AMRESCO
(and  shall  once  again become available for  grant  hereunder).
However,  the Committee, in its sole discretion, shall  have  the
right  to  immediately vest all or any portion of  such  Options,
subject  to  such terms as the Committee, in its sole discretion,
deems appropriate.

     In  the  event  an  Employee's employment is  terminated  by
AMRESCO  for  Cause,  or an Employee voluntarily  terminates  his
employment, the rights under any then vested outstanding  Options
shall  terminate immediately upon such termination of employment.
If  the  Employee's employment is terminated by  AMRESCO  without
Cause,  any  Options vested as of the date of  termination  shall
remain exercisable at any time prior to their expiration date  or
for three (3) months after his date of termination of employment,
whichever period is shorter.

     6.9  Limited Transferability.  A Participant may transfer an
Option to members of his or her Immediate Family, to one or  more
trusts  for the benefit of such Immediate Family members,  or  to
one  or more partnerships where such Immediate Family members are
the  only  partners, if (i) the Award Agreement  evidencing  such
Option expressly provides that the Option may be transferred  and
(ii)  the Participant does not receive any consideration  in  any
form  whatsoever  for  said  transfer  thereof.  Any  Option   so
transferred  shall continue to be subject to the same  terms  and
conditions  in the hands of the transferee as were applicable  to
said  Option  immediately  prior to the  transfer  thereof.   Any
reference  in  any such Award Agreement to the employment  by  or
performance  of  services for AMRESCO by  the  Participant  shall
continue  to  refer  to the employment of or performance  by  the
transferring Participant.  For purpose hereof, "Immediate Family"
shall  mean  the  Participant and the Participant's  spouse,  and
their  respective ancestors and descendants.  Any Option that  is
granted  pursuant to any Award Agreement that did  not  initially
expressly allow the transfer of said Option and that has not been
amended  to  expressly  permit  such  transfer,  shall   not   be
transferable by the Participant otherwise than by will or by  the
laws  of  descent and distribution and such Option thus shall  be
exercisable  during  the  Participant's  lifetime  only  by   the
Participant.

ARTICLE 7.  Performance Shares

     7.1   Grant  of  Performance Shares.  Subject to  the  terms
hereof,  Performance Shares may be granted to eligible  Employees
at  any time and from time to time for no consideration, as shall
be  determined  by  the  Committee.   The  Committee  shall  have
complete  discretion  in determining the  number  of  Performance
Shares  granted  to  each  Participant; provided,  however,  that
unless  and  until  AMRESCO's stockholders  vote  to  change  the
maximum  number of Performance Shares that may be earned  by  any
one Named Executive Officer (subject to the terms of Article 13),
none  of  the Named Executive Officers may earn more  than  three
hundred thousand (300,000) Performance Shares with respect to any
performance period.

     7.2   Value  of Performance Shares.  Each Performance  Share
shall  have a value equal to the Fair Market Value of a Share  on
the  date  the Performance Share is earned.  The Committee  shall
set  performance goals in its discretion which, depending on  the
extent  to  which  they  are met, will determine  the  number  of
Performance Shares that will be earned by the Participants.   The
time  period during which the performance goals must be met shall
be  called a "performance period." Performance periods shall,  in
all  cases,  equal  or  exceed two  (2)  years  in  length.   The
performance  goals shall be established at the beginning  of  the
performance period (or within such time period as is permitted by
Code Section 162(m)).

     Unless  and until AMRESCO's stockholders vote to change  the
general  performance measures (subject to the  terms  of  Article
13),  the  attainment  of  which shall determine  the  number  of
Performance Shares earned hereunder, the Committee will  use  one
or  more  of  the following performance measures for purposes  of
grants  to  Named  Executive Officers: total shareholder  return,
return on assets, return on equity, earnings per share and  ratio
of  operating overhead to operating revenue.  Each Plan Year, the
Committee,  in  its  sole  discretion,  may  select   among   the
performance  measures specified in this Section 7.2 and  set  the
relative  weights  to  be  given to  such  performance  measures.
However,  in the case of Participants who are not Named Executive
Officers, the Committee may approve performance measures that are
not  specified in this Section 7.2 without obtaining  stockholder
approval of such measures.

     In  the  event  that applicable tax and/or  securities  laws
(including,  but not limited to, Code Section 162(m) and  Section
16  of the Exchange Act) change to permit Committee discretion to
alter   the  governing  performance  measures  without  obtaining
stockholder  approval of such changes, the Committee  shall  have
sole   discretion   to  make  such  changes   without   obtaining
stockholder approval.

     7.3   Earning  of Performance Shares.  After the  applicable
performance  period has ended, the Committee  shall  certify  the
extent  to  which  the established performance  goals  have  been
achieved.  Subsequently, each holder of Performance Shares  shall
be entitled to receive payout on the number of Performance Shares
earned  by  the  Participant over the performance period,  to  be
determined as a function of the extent to which the corresponding
performance goals have been achieved.  The Committee may, in  its
sole  discretion, decrease the amount of a Final Award  otherwise
payable  to  a  Participant under this Article 7.  The  Committee
shall  have no discretion, however, to increase the amount  of  a
Final  Award otherwise payable to a Named Executive Officer under
this Article 7.

     7.4   Form  and  Timing  of Payment of  Performance  Shares.
Payment  of earned Performance Shares shall be made, in a  single
lump  sum,  promptly  but in no event later  than  the  Incentive
Payment  Date.   The Committee, in its sole discretion,  may  pay
earned Performance Shares in the form of cash or in Shares (or in
a  combination  thereof)  which have, as  of  the  close  of  the
applicable  performance period, an aggregate  Fair  Market  Value
equal to the value of the earned Performance Shares.

     7.5   Termination of Employment Due to Death, Disability  or
at  the  Request  of AMRESCO Without Cause.   In  the  event  the
employment  of  a Participant is terminated by reason  of  death,
Disability  or  by  AMRESCO without Cause  during  a  performance
period,  the  Participant shall receive a  prorated  payout  with
respect to the Performance Shares.  The prorated payout shall  be
determined by the Committee, in its sole discretion, and shall be
based  upon  the  length of time that the  Participant  held  the
Performance  Shares  during  the performance  period,  and  shall
further  be  adjusted based on the achievement of the established
performance goals at the time of his termination.

     Payment  of earned Performance Shares shall be made  at  the
same time payments are made to Participants who did not terminate
employment during the applicable performance period.

     7.6   Termination of Employment for Other Reasons.   In  the
event  that a Participant's employment terminates for any  reason
other   than  those  reasons  set  forth  in  Section  7.5,   all
Performance  Shares  shall be forfeited  by  the  Participant  to
AMRESCO.

     7.7   Nontransferability.   Unless  the  Committee  provides
otherwise in the Award Agreement, Performance Shares may  not  be
sold,  transferred, pledged, assigned or otherwise  alienated  or
hypothecated,  other than by will or by the laws of  descent  and
distribution.  Further, a Participant's Performance Shares rights
hereunder shall be exercisable during the Participant's  lifetime
only    by   the   Participant   or   the   Participant's   legal
representative.

ARTICLE 8.  Restricted Stock

     8.1   Grants.   The Committee may from time to time  in  its
discretion grant Restricted Stock to Employees and may  determine
the  number of Shares of Restricted Stock to be granted  and  the
terms and conditions of, and the amount of payment, if any, to be
made  by  the Employee for, such Restricted Stock.   A  grant  of
Restricted Stock may require the Employee to pay for such  Shares
of  Restricted  Stock, but the Committee may  establish  a  price
below  Fair  Market Value at which the Employee can purchase  the
Shares of Restricted Stock.  Each grant of Restricted Stock  will
be   evidenced  by  an  Award  Agreement  containing  terms   and
conditions  not  inconsistent herewith  as  the  Committee  shall
determine  to  be  appropriate  in  its  sole  discretion.   Such
Restricted  Stock  shall be granted subject to  the  restrictions
prescribed pursuant hereto and the Award Agreement.

     8.2   Restricted Period; Lapse of Restrictions.  At the time
a  grant  of  Restricted  Stock  is  made,  the  Committee  shall
establish  a period or periods of time (the "Restricted  Period")
applicable  to  such grant which, unless the Committee  otherwise
provides,  shall not be less than one (1) year.  Subject  to  the
other  provisions of this Article 8, at the end of the Restricted
Period  all  restrictions shall lapse and  the  Restricted  Stock
shall vest in the Participant.  At the time a grant is made,  the
Committee  may, in its discretion, prescribe conditions  for  the
incremental  lapse  of restrictions during the Restricted  Period
and  for  the  lapse  or  termination of  restrictions  upon  the
occurrence of other conditions in addition to or other  than  the
expiration  of the Restricted Period with respect to all  or  any
portion  of the Restricted Stock.  Such conditions may, but  need
not,  include  without limitation, (a) the death,  Disability  or
Retirement of the Employee to whom Restricted Stock is granted or
(b)  the  occurrence of a Change in Control.  The  Committee  may
also,  in  its  discretion, shorten or terminate  the  Restricted
Period,  or waive any conditions for the lapse or termination  of
restrictions with respect to all or any portion of the Restricted
Stock at any time after the date the grant is made.

     8.3  Rights of Holder; Limitations Thereon.  Upon a grant of
Restricted   Stock,   a  stock  certificate   (or   certificates)
representing the number of Shares of Restricted Stock granted  to
the Employee shall be registered in the Employee's name and shall
be  held in custody by AMRESCO or a bank selected by AMRESCO  for
the   Employee's  account.   Following  such  registration,   the
Employee shall have the rights and privileges of a stockholder as
to   such  Restricted  Stock,  including  the  right  to  receive
dividends  and  to vote such Restricted Stock, except  that,  the
right  to  receive cash dividends shall be the right  to  receive
such  dividends  either  in  cash  currently  or  by  payment  in
Restricted  Stock, as the Committee shall determine,  and  except
further that, the following restrictions shall apply:

          (a)  The Employee shall not be entitled to delivery  of
     a  certificate  until the expiration or termination  of  the
     Restricted  Period  for  the  Shares  represented  by   such
     certificate  and  the  satisfaction of  any  and  all  other
     conditions prescribed by the Committee;

          (b)   None  of  the Shares of Restricted Stock  may  be
     sold,   transferred,   assigned,   pledged,   or   otherwise
     encumbered  or disposed of during the Restricted Period  and
     until  the  satisfaction  of any and  all  other  conditions
     prescribed by the Committee; and

          (c)   All  of the Shares of Restricted Stock that  have
     not  vested shall be forfeited and all right of the Employee
     to  such  Restricted Stock shall terminate  without  further
     obligation  on the part of AMRESCO unless the  Employee  has
     remained  a  full-time employee of AMRESCO  or  any  of  its
     Subsidiaries  until  the expiration or  termination  of  the
     Restricted Period and the satisfaction of any and all  other
     conditions  prescribed by the Committee applicable  to  such
     Restricted  Stock.  Upon the forfeiture  of  any  Shares  of
     Restricted Stock, such forfeited Shares shall be transferred
     to  AMRESCO  without  further action by  the  Employee,  and
     shall,  in  accordance with Section 4.2, again be  available
     for grant hereunder.

     With  respect  to  any  Shares  received  as  a  result   of
adjustments  under  Section  4.3 and  any  Shares  received  with
respect  to  cash  dividends declared on  Restricted  Stock,  the
Participant  shall  have the same rights and privileges,  and  be
subject  to  the  same restrictions, as are  set  forth  in  this
Article 8.

     8.4   Delivery of Unrestricted Shares.  Upon the  expiration
or  termination  of  the  Restricted Period  for  any  Shares  of
Restricted  Stock  and  the satisfaction of  any  and  all  other
conditions   prescribed  by  the  Committee,   the   restrictions
applicable  to  such Restricted Stock shall  lapse  and  a  stock
certificate  for  the number of Shares of Restricted  Stock  with
respect to which the restrictions have lapsed shall be delivered,
free  of all such restrictions except any that may be imposed  by
law, to the holder of the Restricted Stock.  AMRESCO shall not be
required  to deliver any fractional Share but will pay,  in  lieu
thereof,  the  Fair Market Value (determined as of the  date  the
restrictions  lapse)  of  such fractional  share  to  the  holder
thereof.   Prior  to  or  concurrently with  the  delivery  of  a
certificate for Restricted Stock, the holder shall be required to
pay  an amount necessary to satisfy any applicable federal, state
and local tax requirements as set out in Article 14.

     8.5   Nonassignability  of  Restricted  Stock.   Unless  the
Committee provides otherwise in the Award Agreement, no grant of,
nor  any  right  or  interest  of a  Participant  in  or  to  any
Restricted  Stock,  or  in any instrument  evidencing  any  grant
hereunder, may be assigned, encumbered or transferred except,  in
the  event of the death of a Participant, by will or the laws  of
descent and distribution.

ARTICLE 9. Beneficiary Designation

     Each Participant hereunder may, from time to time, name  any
beneficiary  or  beneficiaries (who may be named contingently  or
successively) to whom any benefit hereunder is to be paid in case
of  his or her death before he or she receives any or all of such
benefit.    Each   such  designation  shall  revoke   all   prior
designations  by  the  same  Participant,  shall  be  in  a  form
prescribed by AMRESCO and shall be effective only when  filed  by
the   Participant,   in   writing,  with   AMRESCO   during   the
Participant's lifetime.  In the absence of any such  designation,
benefits  remaining unpaid at the Participant's  death  shall  be
paid to the Participant's estate.

     The spouse of a married Participant domiciled in a community
property jurisdiction shall
join  in  any  designation of beneficiary or beneficiaries  other
than the spouse.

ARTICLE 10. Deferrals

     The  Committee may permit a Participant to defer to  another
plan or program such Participant's receipt of the payment of cash
or  the  delivery of Shares that would otherwise be due  to  such
Participant  by  virtue  of  the  exercise  of  an  Option,   the
satisfaction  of  any  requirements  or  goals  with  respect  to
Performance  Shares or the vesting of Restricted Stock.   If  any
such  deferral  election is required or permitted, the  Committee
shall, in its sole discretion, establish rules and procedures for
such payment deferrals.

ARTICLE 11.  Rights of Employees

     11.1  Employment.   Nothing herein shall interfere  with  or
limit  in  any  way  the  right of AMRESCO  or  a  Subsidiary  to
terminate  any Participant's employment or engagement by  AMRESCO
at  any  time,  nor  confer  upon any Participant  any  right  to
continue  in  the employ or service of AMRESCO or  a  Subsidiary.
For  purpose  hereof,  transfer of employment  of  a  Participant
between  AMRESCO  and  any  one of its Subsidiaries  (or  between
Subsidiaries) shall not be deemed a termination of employment.

     11.2    Participation.  No Employee shall have the right  to
be selected to receive an
Award,  or, having been so selected, to be selected to receive  a
future Award.

 ARTICLE 12.  Change in Control

     Upon  the  occurrence  of a Change  in  Control,  except  as
provided in the Award Agreement
or  unless  otherwise specifically prohibited  by  the  terms  of
Article 17.

          (a)     Any  and  all  Options granted hereunder  shall
     become fully vested and immediately exercisable;

          (b)  The target payout opportunity attainable under all
     outstanding  Performance Shares shall be deem to  have  been
     fully earned for the entire performance period(s) as of  the
     effective  date  of the Change in Control,  and  all  earned
     Performance  Shares  shall be paid out  in  accordance  with
     Section   7.4  to  Participants  within  thirty  (30)   days
     following the effective date of the Change in Control;

          (c)   All  restrictions on a grant of Restricted  Stock
     shall lapse and such Restricted Stock shall be delivered  to
     the Participant in accordance with Section 8.4; and

          (d)   Subject to Article 13, the Committee  shall  have
     the  authority  to make any modifications to the  Awards  as
     determined  by  the Committee to be appropriate  before  the
     effective date of the Change in Control.

ARTICLE 13.  Amendment, Modification and Termination

     13.1 Amendment Modification and Termination.  The Board may,
at  any  time  and  from time to time, alter, amend,  suspend  or
terminate the Plan in whole or in part.

     13.2  Awards Previously Granted.  No termination,  amendment
or modification hereof shall adversely affect in any material way
any  Award  previously  granted hereunder,  without  the  written
consent  of  the Participant holding such Award.  The  Committee,
with  the written consent of the Participant holding such  Award,
shall  have the authority to cancel Awards outstanding and  grant
replacement Awards therefor.

     13.3 Compliance With Code Section 162(m).  At all times when
the Committee determines that compliance with Code Section 162(m)
is desired, all Awards shall comply with the requirements of Code
Section 162(m).  In addition, in the event that changes are  made
to Code Section 162(m) to permit greater flexibility with respect
to  any  Award  or  Awards, the Committee may,  subject  to  this
Article 13, make any adjustments it deems appropriate.

ARTICLE 14.  Withholding

     14.1 Tax Withholding.  AMRESCO shall have the power and  the
right to deduct or withhold, or require a Participant to remit to
AMRESCO, an amount sufficient to satisfy federal, state and local
taxes  (including the Participant's FICA obligation) required  by
law  to be withheld with respect to any taxable event arising  in
connection with an Award.

     14.2   Share   Withholding.   With  respect  to  withholding
required upon the exercise of Options, or upon any other  taxable
event  as  a result of Awards granted hereunder which are  to  be
paid  in the form of Shares, a Participant may elect, subject  to
the  approval  of  the  Committee,  to  satisfy  the  withholding
requirement,  in  whole  or in part, by having  AMRESCO  withhold
Shares  having a Fair Market Value on the date the tax is  to  be
determined  equal to the minimum statutory total tax which  could
be   imposed  on  the  transaction.   All  elections   shall   be
irrevocable,  made  in  writing, signed by the  Participant,  and
elections  by Insiders shall additionally comply with  all  legal
requirements   applicable   to  Shares   transactions   by   such
Participants.

ARTICLE 15.  Indemnification

     Each  person  who  is or shall have been  a  member  of  the
Committee,  or the Board, shall be indemnified and held  harmless
by  AMRESCO against and from any loss, cost, liability or expense
that may be imposed upon or reasonably incurred by him or her  in
connection  with  or resulting from any claim,  action,  suit  or
proceeding to which he or she may be party or in which he or  she
may  be involved by reason of any action taken or failure to  act
hereunder and against and from any and all amounts paid by him or
her  in  settlement thereof, with AMRESCO's approval, or paid  by
him  in satisfaction of any judgment in any such action, suit  or
proceeding  against  him,  provided  he  shall  give  AMRESCO  an
opportunity,  at its own expense, to handle and defend  the  same
before  he undertakes to handle and defend it on his own  behalf.
The  foregoing right of indemnification shall be in  addition  to
any other rights of indemnification to which such persons may  be
entitled under AMRESCO's Certificate of Incorporation or  Bylaws,
as  a matter of law, or otherwise, or any power that AMRESCO  may
have to indemnify them or hold them harmless.

ARTICLE 16.  Successors

     All  obligations  of  AMRESCO  hereunder,  with  respect  to
Awards, shall be binding on any successor to AMRESCO, whether the
existence of such successor is the result of a direct or indirect
purchase,   merger,  consolidation  or  otherwise,  of   all   or
substantially all of the business and/or assets of AMRESCO.

ARTICLE 17.  Legal Construction

     17.1 Gender and Number.  Except where otherwise indicated by
the  context,  any masculine term used herein also shall  include
the  feminine;  the  plural shall include the  singular  and  the
singular shall include the plural.

     17.2  Severability.  In the event any provision hereof shall
be  held  illegal  or invalid for any reason, the  illegality  or
invalidity shall not affect the remaining parts hereof,  and  the
Plan shall be construed and enforced as if the illegal or invalid
provision had not been included.

     17.3  Requirements of Law.  The granting of Awards  and  the
issuance  of  Shares  under the Plan  shall  be  subject  to  all
applicable laws, rules and regulations, and to such approvals  by
any governmental agencies or national securities exchanges as may
be required.

     17.4 Regulatory Approvals and Listing.  AMRESCO shall not be
required  to  issue  any certificate or certificates  for  Shares
hereunder   prior  to  (i)  obtaining  any  approval   from   any
governmental  agency  which  AMRESCO shall,  in  its  discretion,
determine  to  be necessary or advisable, (ii) the  admission  of
such  Shares  to listing on any national securities  exchange  or
Nasdaq  on  which AMRESCO's Shares may be listed  and  (iii)  the
completion  of  any registration or other qualification  of  such
Shares under any state or federal law or ruling or regulations of
any   governmental  body  which  AMRESCO  shall,  in   its   sole
discretion, determine to be necessary or advisable.

     Notwithstanding  any other provision set  forth  herein,  if
required by the then-current Section 16 of the Exchange Act,  any
"derivative  security":  or  "equity security"  offered  pursuant
hereto to any Insider may not be sold or transferred for at least
six  (6) months after the date of grant of such Award.  The terms
"equity  security"  and  "derivative  security"  shall  have  the
meanings  ascribed to them in the then-current Rule  16(a)  under
the Exchange Act.

     17.5  Securities Law Compliance.  With respect to  Insiders,
transactions hereunder are intended to comply with all applicable
conditions  of  Rule 16b-3 or its successors under  the  Exchange
Act.   To  the  extent any provisions hereof  or  action  by  the
Committee  fails to so comply, it shall be deemed null and  void,
to  the  extent  permitted  by law and deemed  advisable  by  the
Committee.

     17.6     Governing  Law.   To the extent  not  preempted  by
federal  law,  the Plan, and all agreements hereunder,  shall  be
construed in accordance with and governed by the laws of the
State of Delaware.