<PAGE>

                                                                    EXHIBIT 10.1

                             BOIS D'ARC ENERGY, LLC
                            LONG-TERM INCENTIVE PLAN
                            (AS AMENDED AND RESTATED)

                                   I. GENERAL

      1.    Purpose. The BOIS D'ARC ENERGY, LLC Long-term Incentive Plan (the
"Plan") has been established by BOIS D'ARC ENERGY, LLC, a Nevada limited
liability company (the "Company") to:

            (a)   attract and retain key executive and managerial employees;

            (b)   motivate participating employees, by means of appropriate
                  incentive, to achieve long-range goals;

            (c)   attract and retain well-qualified individuals to serve as
                  members of the Company's Board of Managers, and as independent
                  contractors and consultants;

            (d)   provide incentive compensation opportunities which are
                  competitive with those of other limited liability companies;
                  and

            (e)   further identify Participants' interests with those of the
                  Company's other stockholders through compensation alternatives
                  based on the Company's Units;

and thereby promote the Long-term financial interest of the Company and its
Subsidiaries, including the growth in value of the Company's equity and
enhancement of long-term returns.

      2.    Effective Date. The Plan is effective as of July 16, 2004, and its
            term shall extend until June 30, 2014.

      3.    Definitions. The following definitions are applicable to the Plan.

      "Act" shall mean the Nevada Limited Liability Company Act (Nev. Rev.
Stat. Section 86.011, et seq.) and any successor statute, as amended from time
to time.

      "Board" means the Board of Managers or Board of Directors of the Company.

      "Code" means the Internal Revenue Code of 1986, as amended.

      "Committee" means the Compensation Committee of the Board.

      "Disability" means the inability of a Participant, by reason of a physical
or mental impairment, to engage in any substantial gainful activity, of which
the Board shall be the sole judge.

      "Effective Date" means July 16, 2004.

<PAGE>

      "Fair Market Value" of any Unit means (i) if the Unit is listed on a
national securities exchange, the closing price on the Unit on a given date;
(ii) if the Unit is traded on an exchange or market in which prices are reported
on a bid and asked price, the average of the mean between the bid and asked
price for the Unit on a given date; and (iii) if the Unit is not listed on a
national securities exchange nor traded on the over-the-counter market, such
value as the Board, in good faith, shall determine.

      "Non-employee Manager" means each member of the Board who is not a
full-time employee of the Company.

      "Option Date" means, with respect to any Option, the date on which the
Option is awarded under the Plan.

      "Participant" means (i) any employee of the Company or any Subsidiary who
is selected by the Board or Committee to participate in the Plan; (ii) any
Non-employee Manager, to the extent provided in paragraph I.5(b) and (c), and
(iii) any consultant or independent contractor selected by the Board or
Committee to participate in the Plan.

      "Performance Unit" shall have the meaning ascribed to it in Part IV.

      "Permitted Transferees" means members of the immediate family of the
Participant, trusts for the benefit of such immediate family members, and
partnerships in which substantially all of the interests are held by the
Participant and members of his or her immediate family. An immediate family
member shall mean any descendant (children, grandchildren and more remote
descendants), including step-children and relationships arising from legal
adoption, and any spouse of a Participant or a Participant's descendant.

      "Related Company" means any corporation during any period in which it is a
Subsidiary, or during any period in which it directly or indirectly owns 50% or
more of the total combined voting power of all classes of stock of the Company
that are entitled to vote.

      "Restricted Period" has the meaning ascribed to it in Part III.

      "Restricted Unit" has the meaning ascribed to it in Part III.

      "Retirement" means (i) termination of employment in accordance with the
retirement procedures set by the Company from time to time; (ii) an employee's
termination of employment or a Non-employee Manager's ceasing to serve as a
member of the Board because of Disability; or (iii) an employee's termination of
employment, a Non-employee Manager's ceasing to serve as a member of the Board,
or a consultant's or independent contractor's ceasing to provide services to the
Company voluntarily with the consent of the Company (of which the Board shall be
the sole judge).

      "Unit" means the Company's Class B and Class C limited liability company
units, and any class of shares into which such Units may be exchanged at the
time of any conversion to a C corporation (whether through merger,
reorganization or otherwise).

                                      -2-
<PAGE>

      "Option" means the right of a Participant to purchase Class B Units
pursuant to a Non-Qualified Option awarded pursuant to the provisions of the
Plan.

      "Subsidiary" means any corporation during any period of which 50% or more
of the total combined voting power of all classes of stock entitled to vote is
owned, directly or indirectly, by the Company.

      "Transfer Restriction Agreement" means that certain Agreement among the
Unitholders of the Company, providing for rights of first refusal and transfer
restrictions.

      4.    Administration. The authority to manage and control the operation
and administration of the Plan shall be vested in the Board. Subject to the
provisions of the Plan, the Board will have authority to select employees,
consultants and independent contractors to receive awards of Options, Restricted
Units and/or Performance Units, to determine the time or times of receipt, to
determine the types of awards and the number and Class of Units covered by the
awards, to establish the terms, conditions, performance criteria, restrictions,
and other provisions of such awards, to determine the number and value of
Performance Units awarded and earned, and to cancel or suspend awards. In making
such award determinations, the Board may take into account the nature of
services rendered by the employee, consultant or independent contractor, his or
her present and potential contribution to the Company's success and such other
factors as the Board deems relevant. The Board is authorized to interpret the
Plan, to establish, amend, and rescind any rules and regulations relating to the
Plan, to determine the terms and provisions of any agreements made pursuant to
the Plan, and to make all other determinations that may be necessary or
advisable for the administration of the Plan. The Board may, from time to time,
delegate its authority to manage and control the operation and administration of
the Plan to the Committee. In such case, all references herein to the "Board"
shall be deemed to refer to the "Committee."

      A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by all members of the Committee, shall be the acts of
the Committee, unless provisions to the contrary are embodied in the Company's
Bylaws or resolutions duly adopted by the Board. All actions taken and decisions
and determinations made by the Board or the Committee pursuant to the Plan shall
be binding and conclusive on all persons interested in the Plan. No member of
the Board or the Committee shall be liable for any action or determination taken
or made in good faith with respect to the Plan.

                                      -3-
<PAGE>

      5.    Participation. (a) Employees, Consultants and Independent
Contractors. Upon the Effective Date, the Company's employees shall be awarded
(i) Non-Qualified Options for Class B Units and (ii) Restricted Class C Units,
all as set forth on Schedule A to the Plan, subject to vesting over five (5)
years, 20% per year (unless his service terminates during such period by reason
of Retirement, death or Disability, when the awards shall become 100% vested).
Thereafter, the Board shall determine and designate, from time to time, the key
executives and managerial employees, consultants or independent contractors of
the Company and/or its Subsidiaries who may receive awards under the Plan. In
the discretion of the Board, an eligible employee, consultant or independent
contractor may be awarded Options, Restricted Units or Performance Units or any
combination thereof, and more than one award may be granted to a Participant.
Except as otherwise agreed to by the Company and the Participant, any award
under the Plan shall not affect any previous award to the Participant under the
Plan or any other plan maintained by the Company or its Subsidiaries.

            (b) Non-employee Managers. Each Non-employee Manager (other than the
Chairman of the Board of Managers) shall be granted without further action by
the Board a Non-Qualified Option to purchase 5,000 Class B Units at the close of
business of each annual meeting of the unitholders of the Company. An individual
who is first elected and commences serving as a Non-employee Manager shall also
be granted without further action by the Board a Non-Qualified Option for 5,000
Class B Units on the date of such election as a Manager.

      The Non-Qualified Options shall be fully vested and exercisable by each
Non-employee Manager after the Manager has completed twelve (12) continuous
months of service as a member of the Board after the Option Date (unless his
service terminates during such period by reason of Retirement, death or
Disability, when the awards shall become 100% vested). The term of each
Non-Qualified Option shall be five (5) years from the Option Date, and the
exercise price shall be 100% of the Fair Market Value of the Units as of the
Option Date. The full purchase price of each Unit purchased upon exercise of a
Non-Qualified Option shall be paid in the manner set forth in Article III,
paragraph 3 hereof. All outstanding options become 100% vested and exercisable
if service as a member of the Board terminates by reason of death, Disability or
Retirement.

            (c) Chairman of the Board of Managers. At the Effective Date, the
Chairman of the Board of Managers shall receive an award of 500,000
Non-Qualified Options for Class B Units, and 500,000 Restricted Class C Units.
The awards shall become vested over five (5) years, 20% per year (unless his
service terminates during such period by reason of Retirement, death or
Disability, when the awards shall become 100% vested).

      6.    Units Subject to the Plan. (a) Awards to the Chairman, Employees,
Consultants and Independent Contractors. Subject to the provisions of paragraph
I.10, the number of Units available under the Plan for awards to the Chairman of
the Board of Managers, employees, consultants and independent contractors shall
not exceed 3,089,887 Class B Units and 6,179,775 Class C Units, in the
aggregate. In addition, the aggregate number of Units for which awards may be
granted shall be increased, if necessary, as of the first day of each fiscal
year commencing January 1, 2005, so that the number of Units available under
this Plan shall be no less than eleven percent (11%) of the number of Units
outstanding as of the close of business on the last day of the preceding fiscal
year. (Any increase in the aggregate number of Units shall be allocated 50% to
Class B Units and 50% to Class C Units.) If, for any reason, any award under the
Plan

                                      -4-
<PAGE>

otherwise distributable in Units, or any portion of the award, shall expire,
terminate or be forfeited or canceled, or be settled in cash pursuant to the
terms of the Plan and, therefore, any such Units are no longer distributable
under the award, such Units shall again be available for award under the Plan.

      (b)   Class C Units. Unless otherwise provided in a Participant's Award
Agreement, a Class C Unit will not entitle such Participant to receive an
allocation of an initial capital account. As a result, an award of Class C Units
generally shall constitute an award of a "profits interest" in the Company
(i.e., there will be no capital account with respect to such Class C Units
attributed to the Participant at the time of issuance other than the amount, if
any, paid by a Participant in connection with the issuance of such Class C
Units).

      (c)   Awards to Non-Employee Managers. Subject to the provisions of
paragraph I.10, the number of Units available under the Plan for awards to
Non-employee Managers (other than the Chairman) shall not exceed three hundred
fifty thousand (350,000) Class B Units . If, for any reason, any Option award to
a Non-employee Manager under the Plan or any portion of such award, shall
expire, terminate or be forfeited or canceled, or be settled in cash pursuant to
the terms of the Plan and, therefore, any such Units are no longer distributable
under the award, such Units shall again be available for award to Non-employee
Managers under the Plan.

      7.    Compliance With Applicable Laws and Withholding of Taxes.
Notwithstanding any other provision of the Plan, the Company shall have no
liability to issue any Units under the Plan unless such issuance would comply
with all applicable laws and the applicable requirements of any securities
exchange or similar authority. Prior to the issuance of any Units under the
Plan, the Company may require a written statement that the recipient is
acquiring the Units for investment and not for the purpose or with the intention
of distributing as amended, the Units. All awards and payments under the Plan to
employees are subject to withholding of all applicable taxes, which withholding
obligations may be satisfied, with the consent of the Board, through the
surrender of Units which the Participant already owns, or to which a Participant
is otherwise entitled under the Plan.

      Upon termination of the Restricted Period with respect to an award of
Restricted Units (or such earlier time, if any, as an election is made by the
Participant under Code Section 83(b), or any successor provisions thereto, to
include the value of such Units in taxable income), the Company shall have the
right to require the Participant to pay to the Company the amount of taxes that
the Company is required to withhold with respect to such Units or, in lieu
thereof, to retain or sell without notice a sufficient number of Units held by
it to cover the amount required to be withheld. The Company shall have the right
to deduct from all distributions paid with respect to a Restricted Unit award
the amount of taxes that the Company is required to withhold with respect to
such distribution payments, if any.

      8.    Transferability. Performance Units, and, during the period of
restriction, Restricted Units awarded under the Plan are not transferable except
as designated by the Participant by will or by the laws of descent and
distribution. If expressly permitted by the terms of the Option agreement,
Non-Qualified Options may be transferred by a Participant to Permitted
Transferees, provided that there is not any consideration for the transfer. Upon
receipt of a Unit, each unitholder shall be required to execute and become a
party to the Transfer Restriction Agreement.

      9.    Employment and Unitholder Status. The Plan does not constitute a
contract of employment, and selection as a Participant will not give any
employee the right to be retained in the

                                      -5-
<PAGE>

employ of the Company or any Subsidiary. The Plan does not constitute or serve
as evidence of an agreement or understanding, express or implied, that the
Company will retain a consultant, independent contractor or Manager for any
period of time. Subject to the provisions of paragraph IV.3(a), no award under
the Plan shall confer upon the holder thereof any right as a unitholder prior to
the date on which he fulfills all service requirements and other conditions for
receipt of Units. If the redistribution of Units is restricted pursuant to
paragraph I.8, certificates representing such Units may bear a legend referring
to such restrictions.

      10.   Adjustments to Number and Kind of Securities Subject to the Plan. In
the event of any change in the outstanding Units of the Company by reason of any
recapitalization, merger, consolidation, combination, exchange of shares, an
initial public offering of securities by the Company, or other similar change,
the aggregate number of Units with respect to which awards may be made under the
Plan, the terms and the number of Units under any outstanding Options,
Performance Units, or Restricted Units, and the purchase price of a Unit under
Options, may be equitably adjusted by the Board in its sole discretion. In
addition, the Board may, in its sole discretion, make appropriate adjustment as
to the kind of shares or other securities deliverable with respect to
outstanding awards under the Plan.

      11.   Agreement With Company; Market Stand-Off. At the time of any awards
under the Plan, the Board will require a Participant (i) to enter into an
agreement with the Company in a form specified by the Board, agreeing to the
terms and conditions of the Plan and to such additional terms and conditions,
not inconsistent with the Plan, as the Board may, in its sole discretion,
prescribe, and (ii) to the extent the award consists of Units actually granted
to a Participant, to execute an addendum or joinder agreement pursuant to which
the Participant agrees to be bound by the terms and conditions of the Operating
Agreement of the Company, as amended, as a member of the Company. For such
period and on such terms as the managing underwriter may request in connection
with the public offering of Company securities, the Participants shall not (x)
offer, pledge, sell, contract to sell, sell any portion or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
Company shares or any securities convertible into or exercisable or exchangeable
for Company shares (including, without limitation, shares of common stock or
securities convertible into or exercisable or exchangeable for common stock
which may be deemed to be beneficially owned by the Participant in accordance
with the rules and regulations of the Securities and Exchange Commission)
(collectively, "Company Securities") or (y) enter into any swap or other
arrangement that transfers all or a portion of the economic consequences
associated with the ownership of any Company Securities (regardless of whether
any of the transactions described in clause (x) or (y) is to be settled by the
delivery of Company Securities, in cash or otherwise), provided that the Company
notifies the Participant of the applicability of the lock-up. The Participant
shall enter into an agreement acknowledging the lock-up if requested by the
Company or such underwriter.

      12.   Amendment and Termination of Plan. The Board may at any time and in
any way amend, suspend or terminate the Plan. No amendment, suspension or
termination of the Plan shall alter or impair any Option, Restricted Unit or
Performance Unit previously awarded under the Plan without the consent of the
holder thereof.

                                      -6-
<PAGE>

      13.   Business Combinations. For the purposes of the Plan, a "Change in
Control" shall mean:

            (a)   during any period of two consecutive years, individuals who at
                  the beginning of such period constituted the Board cease for
                  any reason to constitute a majority thereof (unless the
                  election, or nomination for election by holders of the
                  Company's units or stock ("Company Equity"), of such member of
                  the Board was approved by a vote of at least two-thirds (2/3)
                  of the members of the Board then still in office who either
                  were members of the Board at the beginning of such period or
                  whose election or nomination for election was previously so
                  approved);

            (b)   a person, other than an "Excluded Person" as defined herein,
                  including a "group" as defined in Paragraph 13(d)(3) of the
                  Securities Exchange Act of 1934, becomes the beneficial owner
                  of shares of any class of the Company Equity having 25% or
                  more of the total number of votes that may be cast for the
                  election of members of the Board; or

            (c)   consummation of a merger or other business combination of the
                  Company with or into another corporation pursuant to which the
                  Company does not survive or survives only as a subsidiary of
                  another entity, the sale or other disposition of all or
                  substantially all of the assets of the Company to another
                  person or entity, or any combination of the foregoing;

      provided, however, that a Change in Control will not include (A) any
      Financing Transaction (as defined in the Operating Agreement of the
      Company dated as of July 16, 2004) and any transaction entered into in
      connection therewith, (B) any reorganization, merger, consolidation, sale,
      lease, exchange or similar transaction which involves solely the Company
      and one or more entities wholly-owned, directly or indirectly, by the
      Company immediately prior to such event, or (C) the consummation of any
      transaction or series of integrated transactions immediately following
      which the record holders of the voting Company Equity immediately prior to
      such transaction or series of transactions continue to hold 50% or more of
      the voting Company Equity of (i) any entity that owns, directly or
      indirectly, the Company Equity, (ii) any entity with which the Company has
      merged, or (iii) any entity that owns an entity with which the Company has
      merged. For purposes hereof, (i) an "Excluded Person" shall mean an
      original member of the Company or their affiliates, and (ii) a person will
      be deemed to be the beneficial owner of any voting securities of the
      Company which it would be considered to beneficially own under Securities
      and Exchange Commission Rule 13d-3 (or any similar or superseding statute
      or rule from time to time in effect). In the event of a Change in Control,
      all outstanding Options and Restricted Units will automatically become
      fully exercisable and/or vested, and Performance Units may be paid out in
      such manner and amounts as determined by the Committee.

                            II. NON-QUALIFIED OPTIONS

      1.    Definition. The award of a Non-Qualified Option under the Plan
entitles the Participant to purchase Class B Units at a price fixed at the time
the option is awarded, subject to the following terms of this Part II.

                                      -7-
<PAGE>

      2.    Eligibility. The Board shall designate the Participants to whom
Non-Qualified Options are to be awarded under the Plan and shall determine the
number of Units to be awarded to each of them. No Non-employee Manager shall be
eligible to receive an award of a Non-Qualified Option except to the extent
granted pursuant to the formula set forth in Paragraph I.5(b) above.

      3.    Price. The purchase price of a Unit under each Non-Qualified Option
shall be determined by the Board; provided, however, that in no event shall such
price be less than 25% of the Fair Market Value of a Unit as of the Option Date.
The full purchase price of each Unit purchased upon the exercise of any
Non-Qualified Option shall be paid in cash at the time of such exercise. Units
acquired pursuant to the exercise of a Non-Qualified Option shall be subject to
such conditions, restrictions and contingencies as the Board may establish in
the award agreement.

      4.    Exercise. No Non-Qualified Option may be exercised by a Participant
after the Expiration Date applicable to that option. Unless otherwise specified
herein, each Option shall become and be exercisable at such time or times and
during such period or periods, in full or in such installments as may be
determined by the Board at the Option Date.

      5.    Option Expiration Date. The "Expiration Date" with respect to a
Non-Qualified Option or any portion thereof awarded to a Participant under the
Plan means the earliest of:

      (a)   the date of the liquidation or dissolution of the Company in
            accordance with Section 17.7 of the Operating Agreement of the
            Company dated as of July 16, 2004, in which case all outstanding
            Options shall be cancelled without payment of consideration to the
            holders thereof;

      (b)   the date established by the Board at the time of the award or set
            forth in paragraph I.5(b), as applicable;

      (c)   the date that is three months after the employee Participant's
            employment with the Company and all Subsidiaries or the consultant,
            independent contractor or Non-employee Manager Participant's service
            is terminated for reasons other than Retirement or death; or

      (d)   the date that is three years after the date the employee
            Participant's employment with the Company and all Subsidiaries or
            the consultant, independent contractor or Non-employee Manager
            Participant's service is terminated by reason of Retirement or
            death.

                              III. RESTRICTED UNITS

      1.    Definition. Restricted Unit awards are grants of Class C Units to
Participants, the vesting of which is subject to a required period of employment
and any other conditions established by the Board or by the terms of this Plan.

      2.    Eligibility. The Board shall designate the Participants to whom
Restricted Units are to be awarded and the number of Units that are subject to
the award.

                                      -8-
<PAGE>

      3.    Terms and Conditions of Awards. All Restricted Units awarded to
Participants under the Plan shall be subject to the following terms and
conditions and to such other terms and conditions, not inconsistent with the
Plan, as shall be prescribed by the Board in its sole discretion and as shall be
contained in the agreement referred to in paragraph I.11.

      (a)   Restricted Units awarded to Participants may not be sold, assigned,
            transferred, pledged or otherwise encumbered, except as hereinafter
            provided, for a period of ten years or such shorter period as the
            Board may determine, but no less than three years, after the time of
            the award of such Units (the "Restricted Period"). Such restrictions
            shall lapse as to the Restricted Units in accordance with the
            time(s) and number(s) of Units as to which the Restricted Period
            expires, as set forth in the Agreement with the Participant. Except
            for such restrictions, the Participant as owner of such Units shall
            have all the rights of a unitholder, including but not limited to
            the right to receive all distributions on such Units.

      (b)   The Board may in its discretion, at any time after the date of the
            award of Restricted Units, adjust the length of the Restricted
            Period to account for individual circumstances of a Participant or
            group of Participants, but in no case shall the length of the
            Restricted Period be less than one year.

      (c)   The grant of a Restricted Class C Unit to a Participant will not
            entitle such Participant to receive an allocation of an initial
            capital account. As a result, an award of Restricted Class C Units
            generally shall constitute an award of a "profits interest" in the
            Company (i.e., there will be no capital account with respect to such
            Class C Units attributed to the Participant at the time of issuance
            other than the amount, if any, paid by Participant in connection
            with the issuance of such Restricted Class C Units). Class C Units
            shall have no voting, approval, disapproval, or any other
            decision-making rights except as required under the Act.

      (d)   Except as otherwise determined by the Board in its sole discretion,
            a Participant whose employment or service with the Company and all
            Subsidiaries terminates prior to the end of the Restricted Period
            for any reason shall forfeit all Restricted Units remaining subject
            to any outstanding Restricted Unit award which have not then vested
            in accordance with the agreement entered into under paragraph I.11.

      (e)   Each certificate issued in respect of Restricted Units awarded under
            the Plan shall be registered in the name of the Participant and, at
            the discretion of the Board, each such certificate may be deposited
            with the Company or in a bank designated by the Board. Each such
            certificate shall bear the following (or a similar) legend:

            "The transferability of this certificate and the Units represented
            hereby are subject to the terms and conditions (including
            forfeiture) contained in the BOIS D'ARC ENERGY, LLC Long-term
            Incentive Plan and an agreement entered into between the registered
            owner and BOIS D'ARC ENERGY, LLC. A copy of such plan and agreement
            is on file in the office of the Secretary of BOIS D'ARC ENERGY, LLC,
            600 Travis, Suite 6275, Houston, TX 77022, or if the Company changes
            its principal office, at the address of such new principal office."

                                      -9-
<PAGE>

      (g)   As the Restricted Period for Restricted Units expires and such
            restrictions lapse, such Restricted Units shall be held by a
            Participant (or his or her legal representative, beneficiary or
            heir) free of all restrictions imposed by the Plan and the award
            agreement. Such Units shall nevertheless continue to be subject to
            any restriction imposed under applicable securities laws, and the
            unitholder shall be required to execute and become a party to the
            Transfer Restriction Agreement.

      (h)   Upon the liquidation or dissolution of the Company pursuant to
            Section 17.7 of the Operating Agreement of the Company dated as of
            July 16, 2004, the holders of any outstanding Class C Units shall be
            required to sell such Units to the Company for a total purchase
            price of one dollar ($1).

                    IV. DEFERRED UNITS AND PERFORMANCE UNITS

      1.    Definition. A "Deferred Unit" Award is the grant of a right to
receive Units in the future. Performance Units are awards to Participants who
may receive value for the Units at the end of a Performance Period. The number
of Units earned, and value received for them, will be contingent on the degree
to which the performance measures established at the time of the initial award
are met. The term "Performance Units" as used in Parts I through IV of the Plan
shall be deemed to include both Deferred Units and Performance Units.

      2.    Eligibility. The Board shall designate the Participants to whom
Deferred Units or Performance Units are to be awarded, and the number and Class
of Units to be the subject of such awards. No Non-employee Manager shall be
eligible to receive an award of a Performance Unit.

      3.    Terms and Conditions of Awards. For each Participant, the Board will
determine the timing of awards; the number and Class of Deferred Units or
Performance Units awarded; the value of Performance Units; which may be stated
either in cash or in Units; the performance measures used for determining
whether the Performance Units are earned; the performance period during which
the performance measures will apply; the relationship between the level of
achievement of the performance measures and the degree to which Performance
Units are earned; whether, during or after the performance period, any revision
to the performance measures or performance period should be made to reflect
significant events or changes that occur during the performance period; the
number of earned Performance Units that will be paid in cash and/or Units.; and
whether any distributions or distribution equivalents will be paid on Deferred
Units, either currently or on a deferred basis.

      4.    Payment. The Board will compare the actual performance to the
performance measures established for the performance period and determine the
number of Performance Units to be paid and their value. Payment for Performance
Units earned shall be wholly in cash, wholly in Units or in a combination of the
two, in a lump sum or installments, and subject to vesting requirements and such
other conditions as the Board shall determine. The Board will determine the
number of earned Units to be paid in cash and the number to be paid in Units.
For Performance Units awarded in Units, one Unit will be paid for each Unit
earned, or cash will be paid for each Unit earned equal to either (a) the Fair
Market Value of a Unit at the end of the Performance Period or (b) the Fair
Market Value of a Unit averaged for a number of days determined by the Board.
For Performance Units awarded in cash, the value of each Unit earned will be
paid in its initial cash value, or Units will be distributed based on the cash
value of the Units earned divided by (a) the Fair Market Value of a Unit at the
end of the Performance Period or (b) the Fair Market Value of

                                      -10-
<PAGE>

a Unit averaged for a number of days determined by the Board.

      5.    Retirement, Death or Termination. A Participant whose employment or
service with the Company and all Subsidiaries terminates during a performance
period because of Retirement or death shall be entitled to the prorated value of
earned Performance Units, issued with respect to that performance period, at the
conclusion of the performance period based on the ratio of the months of
employment or service during the period to the total months of the performance
period. If a Participant's employment or service with the Company and all
Subsidiaries terminates during a performance period for any reason other than
Retirement or death, the Performance Units issued with respect to that
performance period will be forfeited on the date such Participant's employment
or service terminates. Notwithstanding the foregoing provisions of this Part IV,
if a Participant's employment or service with the Company and all Subsidiaries
terminates before the end of the Performance Period with respect to any
Performance Units awarded to him, the Board may determine that the Participant
will be entitled to receive all or any portion of the Units that he or she would
otherwise receive, and may accelerate the determination and payment of the value
of such Units or make such other adjustments as the Board, in its sole
discretion, deems desirable.

                                      -11-