Document:

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                                                                  EXHIBIT 10.1.8

                                PLEDGE AGREEMENT

                  THIS PLEDGE AGREEMENT (this "AGREEMENT"), dated as of June 29,
2001, is made by PATTERSON-UTI ENERGY, INC., a Delaware corporation ("PARENT"),
PATTERSON (GP) LLC, a Delaware limited liability company ("PATTERSON GP"),
PATTERSON (LP) LLC, a Delaware limited liability company ("PATTERSON LP"),
PATTERSON-UTI DRILLING COMPANY LP, LLLP, a Delaware limited liability limited
partnership ("PUDC"), and PATTERSON (GP2) LLC, a Delaware limited liability
company ("PATTERSON GP2") (Parent, Patterson GP, Patterson LP, PUDC and
Patterson GP2 are referred to herein individually as "PLEDGOR" and collectively
as the "PLEDGORS") in favor of THE CIT GROUP/BUSINESS CREDIT, INC., a New York
corporation having an office located at 1211 Avenue of the Americas, New York,
New York 10026 ("CITBC"), as Agent, pledgee, assignee and secured party (in any
and all such capacities and together with any successors in such capacities,
"AGENT") for the benefit of the Lenders (as defined below).

                                    RECITALS:

         A. The ownership interests owned by each Pledgor which are being
pledged hereunder are as follows: (1) Parent owns all of the issued and
outstanding capital stock of UTICO, Inc., a Delaware corporation ("Holding") and
a 100% membership interest in Patterson LP and Patterson GP; (2) Patterson LP
owns a 99% limited partnership interest in PUDC, LONE STAR MUD LP, LLLP, a
Delaware limited liability limited partnership, ("LSM"), AMBAR DRILLING FLUIDS
LP, LLLP, a Delaware limited liability limited partnership ("ADF"), patterson
petroleum lp, lllp, a Delaware limited liability limited partnership ("PPLP"),
and patterson petroleum trading company lp, lllp, a Delaware limited liability
limited partnership ("PPTC"); (3) Patterson GP owns a 1% general partnership
interest in PUDC, LSM, ADF, PPLP and PPTC; (4) PUDC owns a 99% limited
partnership interest in PATTERSON-UTI DRILLING COMPANY SOUTH LP, LLLP, a
Delaware limited liability limited partnership ("PUDCS") and PATTERSON-UTI
DRILLING COMPANY WEST LP, LLLP, a Delaware limited liability limited partnership
("PUDCW") and a 100% membership interest in PATTERSON GP2; and (5) Patterson GP2
owns a 1% general partnership interest in PUDCS and PUDCW.

         B. Each Pledgor is the legal, record and beneficial owner of the
Pledged Collateral (as defined below) pledged by it pursuant to this Agreement.

         C. UTI Drilling, L.P., a Texas limited partnership ("UTI"), Universal
Well Services, Inc., a Delaware corporation ("UWSI"), UTI Management Services,
L.P., a Texas limited partnership ("UTIMS"), Norton Drilling l.p., a Delaware
limited partnership, successor in interest by merger to Norton Drilling Company
("NDLP"), Suits Drilling Company, an Oklahoma corporation ("SDC"), PUDC, PUDCS,
PUDCW, LSM,

                                                            UTI-PLEDGE AGREEMENT

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and ADF (collectively, the "Borrowers") have entered into the Loan and Security
Agreement dated as of November 22, 1999 (as amended and modified or supplemented
from time to time, the "Loan Agreement") with Agent and the Lenders named
therein and from time to time parties thereto (collectively, the "Lenders"),
pursuant to which, among other things, the Lenders have agreed to provide
certain credit accommodations to or for the benefit of the Borrowers and each
Pledgor has agreed to be liable to the Agent and the Lenders in respect of such
credit accommodations. Capitalized terms used herein and not defined shall have
the meaning assigned to such terms in the Loan Agreement.

         D. Each of the Pledgors has represented to the Agent and the Lenders
that each Pledgor will receive substantial benefit from the performance of the
Loan Agreement, and each Pledgor has agreed to grant to the Agent, liens and
security interests in the Pledged Collateral owned by it to secure the Secured
Obligations (as hereinafter defined).

         E. It is a condition to the obligations of the Lenders to continue to
make the Loans under the Loan Agreement and to issue Letters of Credit that the
Pledgors execute and deliver the applicable Loan Documents, including this
Agreement.

                                   AGREEMENT:

         NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor and Agent hereby agree as follows:

Section 1. Pledge. As collateral security for the payment and performance when
due of all of the Secured Obligations, each Pledgor, jointly and severally,
hereby pledges, assigns, transfers and grants to Agent for its benefit and the
benefit of the Lenders, a continuing first priority security interest in and to
all of the right, title and interest of such Pledgor in, to and under the
following property, whether now existing or hereafter acquired (collectively,
the "PLEDGED COLLATERAL"):

                  (a) all of the issued and outstanding shares of capital stock
         of Holding described on Schedule A hereto (the "PLEDGED STOCK") (which
         are and shall, subject to Section 4(b) hereof, remain at all times
         until this Agreement terminates, certificated shares), including the
         certificates representing the Pledged Stock and any interest of Parent
         in the entries on the books of any financial intermediary pertaining to
         the Pledged Stock;

                  (b) all additional shares of capital stock of any issuer of
         the Pledged Stock from time to time acquired by any Pledgor in any
         manner (which are and shall, subject to Section 4(b) hereof, remain at
         all times until this Agreement terminates, certificated shares) (which
         shares shall, upon acquisition, be deemed to be part of the Pledged
         Stock), including the certificates representing such additional shares
         and any interest of any Pledgor in the entries on the books of any
         financial intermediary pertaining to such additional shares;

                                                            UTI-PLEDGE AGREEMENT

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                  (c) all partnership interests in (i) PUDC, LSM, ADF, PPLP and
         PPTC owned by Patterson LP and Patterson GP, and (ii) PUDCW and PUDCS
         owned by PUDC and Patterson-GP2, together with all rights, privileges,
         authority and powers of such Pledgors in and to PUDC, LSM, ADF, PPLP,
         PPTC, PPDCW and PPDCS (collectively, the "Partnerships") or under the
         Agreements of Limited Partnership of the Partnerships (the "PARTNERSHIP
         AGREEMENTS") (collectively, the "INITIAL PLEDGED PARTNERSHIP
         INTERESTS"), and the certificates, instruments and agreements, if any,
         representing the Initial Pledged Partnership Interests;

                  (d) (i) all of the membership interests (1) of Patterson GP
                  and Patterson LP owned by Parent and (2) of Patterson GP2
                  owned by PUDC (the "Initial Pledged Membership Interests");

                  (ii) all limited liability company membership interests and
                  all other ownership interests in any issuer which such
                  Pledgors shall, from time to time, become entitled to receive
                  or shall receive pursuant to subsection (d)(iii) hereof, all
                  certificates, if any, representing any such membership
                  interests, all options and other rights, contractual or
                  otherwise, at any time existing with respect to such
                  membership interests, and all dividends, cash, instruments and
                  other property now or hereafter received, receivable or
                  otherwise distributed in respect of or in exchange for any or
                  all of such membership interests; and

                  (iii) all rights, privileges, authority and powers of such
                  Pledgors under all operating agreements, certificates, and
                  other agreements of Patterson GP, Patterson LP and Patterson
                  GP2 (being herein called the "LLC Agreements");

                  (e) all options, warrants, rights, agreements, additional
         partnership interests or other interests relating to any Borrower,
         Pledgor or any Guarantor (as defined in the Loan Agreement)
         (collectively, the "ADDITIONAL INTERESTS"; and, collectively with the
         Initial Pledged Partnership Interests and the Initial Pledged
         Membership Interests, the "PLEDGED INTEREST"; and, collectively with
         the Pledged Stock, the "PLEDGED SECURITIES") from time to time acquired
         by the Pledgor in any manner and the certificates, instruments and
         agreements, if any, representing the Additional Interests;

                  (f) all intercompany notes now owned or held by any Pledgor
         and from time to time acquired by any Pledgor in any way, including the
         intercompany notes described on Schedule B hereto (collectively, the
         "INTERCOMPANY NOTES") and all certificates or instruments evidencing
         such Intercompany Notes and all proceeds thereof, all accessions
         thereto and substitutions therefor;

                  (g) all dividends, cash, options, warrants, rights,
         instruments, distributions, returns of capital, income, profits and
         other property, interests or proceeds from time to time received,
         receivable or otherwise distributed to any Pledgor in respect of or in
         exchange for any or all of the Pledged Securities or Intercompany Notes
         (collectively, "DISTRIBUTIONS"); and

                                                            UTI-PLEDGE AGREEMENT

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                  (h) all proceeds (as defined under the Uniform Commercial Code
         as in effect in any relevant jurisdiction (the "CODE") or under other
         relevant law) of any of the foregoing, and in any event, including,
         without limitation, any and all (i) proceeds of any insurance (except
         liability insurance payments in which no Pledgor has any interest made
         to a Person exclusively entitled thereto and which is not a party to
         this Agreement), indemnity, warranty or guarantee payable to Agent or
         to any Pledgor from time to time with respect to any of the Pledged
         Collateral, (ii) payments (in any form whatsoever) made or due and
         payable to any Pledgor from time to time in connection with any
         requisition, confiscation, condemnation, seizure or forfeiture of all
         or any part of the Pledged Collateral by any governmental authority (or
         any person acting on behalf of a governmental authority), (iii)
         instruments representing obligations to pay amounts in respect of
         Pledged Securities or Intercompany Notes, (iv) products of the Pledged
         Collateral, and (v) other amounts from time to time paid or payable
         under or in connection with any of the Pledged Collateral.

                  Section 2. Secured Obligations. This Agreement is entered into
by each Pledgor in favor of Agent, for its benefit and the benefit of the
Lenders to secure the payment and performance in full when due, whether at
stated maturity, by acceleration or otherwise (including, without limitation,
the payment of interest and other amounts which would accrue and become due but
for the filing of a petition in bankruptcy or the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)) of:
(i) all "Obligations" of the Borrowers and/or any and every Pledgor now or
hereafter arising or incurred under or in respect of the Loan Agreement and/or
any other Loan Documents; (ii) all obligations of the Borrowers and any and
every Pledgor now or hereafter arising or incurred under or in respect of this
Agreement or any other Loan Document; and (iii) all interest, charges, fees,
costs, expenses, reimbursements, premiums, indemnities and other payments of any
kind or nature in respect of amounts or instruments referred to in any of
clauses (i) and (ii) (the obligations described in clauses (i) through (iii),
collectively, the "SECURED OBLIGATIONS").

                  Section 3. No Release. Nothing set forth in this Agreement
shall relieve any Pledgor from the performance of any term, covenant, condition
or agreement on such Pledgor's part to be performed or observed under or in
respect of any of the Pledged Collateral or from any liability to any Person
under or in respect of any of the Pledged Collateral or shall impose any
obligation on Agent or any Lender to perform or observe any such term, covenant,
condition or agreement on such Pledgor's part to be so performed or observed or
shall impose any liability on Agent or any Lender for any act or omission on the
part of any Pledgor relating thereto or for any breach of any representation or
warranty on the part of any Pledgor contained in this Agreement or any other
Loan Document or under or in respect of the Pledged Collateral or made in
connection herewith or therewith.

                  Section 4. Delivery of Pledged Collateral. (a) All
certificates, agreements, notes or instruments representing or evidencing the
Pledged Collateral, to the extent not previously delivered to Agent, shall
immediately upon receipt thereof by any Pledgor be delivered to and held by or
on behalf of Agent pursuant hereto except that stock certificates or other
evidence of Pledged Collateral relating to corporations incorporated outside of
the United States may be held by foreign counsel under an escrow arrangement
satisfactory to Agent. All Pledged

                                                            UTI-PLEDGE AGREEMENT

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Collateral shall be in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance reasonably satisfactory to Agent. Agent shall have the
right, at any time upon the occurrence of an Event of Default and without notice
to any Pledgor, to endorse, assign or otherwise transfer to or to register in
the name of Agent or any of its nominees any or all of the Pledged Collateral.
In addition, Agent shall have the right at any time to exchange certificates
representing or evidencing Pledged Collateral for certificates of smaller or
larger denominations.

                  (b) If the issuer of any Pledged Securities is organized in a
jurisdiction which does not permit the use of certificates to evidence equity or
partnership ownership, as the case may be, or if any of the Pledged Securities
are not evidenced by certificates of ownership or other evidence of partnership
interests, as the case may be, then the Pledgor that pledged such Pledged
Securities shall, to the extent permitted by applicable law, record such pledge
on the stock register or books of the issuer, execute any customary stock pledge
forms or other documents necessary or appropriate to complete the pledge and
give Agent the right to transfer such Pledged Securities under the terms hereof
and provide to Agent an opinion of counsel, in form and substance reasonably
satisfactory to Agent, confirming such pledge.

                  Section 5. Supplements; Further Assurances. (a) Each Pledgor
agrees that at any time and from time to time, at its sole cost and expense, it
shall promptly execute and deliver all further instruments and documents,
including, without limitation, supplemental or additional UCC-1 financing
statements, and take all further action that may be necessary or that Agent may
reasonably request, in order to perfect and protect the pledge, security
interest and Lien granted or purported to be granted hereby or to enable Agent
to exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral.

                  (b) Each Pledgor shall, upon obtaining any Pledged Securities
or Intercompany Notes of any Person, promptly (and in any event within five
Business Days) deliver to Agent a pledge amendment, duly executed by such
Pledgor, in substantially the form of Exhibit 1 hereto (each, a "PLEDGE
AMENDMENT"), in respect of the additional Pledged Securities or Intercompany
Notes which are to be pledged pursuant to this Agreement, and confirming the
attachment of the Lien hereby created on and in respect of such additional
Pledged Securities or Intercompany Notes. Each Pledgor hereby authorizes Agent
to attach each Pledge Amendment to this Agreement and agrees that all Pledged
Securities or Intercompany Notes listed on any Pledge Amendment delivered to
Agent shall for all purposes hereunder be considered Pledged Collateral.

                  Section 6. Representations, Warranties and Covenants. Each
Pledgor, jointly and severally, represents, warrants and covenants (as
applicable), after giving effect to the transactions contemplated by the Loan
Documents as follows (as to itself and each other Pledgor):

                  (a) No Liens. Such Pledgor is, and at the time of any delivery
         of any Pledged Collateral to Agent pursuant to Section 4 of this
         Agreement will be, the sole legal and beneficial owner of the Pledged
         Collateral pledged by it. All Pledged Collateral pledged by it is on
         the date hereof, and will be, so owned by such Pledgor free and clear
         of any Lien except for the Lien created by this Agreement and the
         Security Agreement.

                                                            UTI-PLEDGE AGREEMENT

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                  (b) No Consents, etc. No consent of any party (including,
         without limitation, stockholders or creditors of such Pledgor) and no
         consent, authorization, approval, or other action by, and no notice to
         or filing with, any Governmental Authority or regulatory body or other
         Person (other than those consents or approvals which have been obtained
         as of the date hereof) is required (i) for the execution, delivery or
         performance of this Agreement by such Pledgor or for the pledge by such
         Pledgor of the Pledged Collateral pursuant to this Agreement, (ii) for
         the exercise by Agent of the voting or other rights provided for in
         this Agreement (other than any such consent, approval or action
         required to be taken by the Agent), or (iii) for the exercise by Agent
         of the remedies in respect of the Pledged Collateral pursuant to this
         Agreement (other than any such consent, approval or action required to
         be taken by the Agent).

                  (c) Due Authorization and Issuance. All of the Pledged Shares
         pledged by it have been, and to the extent hereafter issued will be
         upon such issuance, duly authorized and validly issued and fully paid
         and nonassessable to the extent permitted by applicable law. Patterson
         GP, Patterson LP and Patterson GP2 have fully paid for their respective
         Initial Pledged Partnership Interests and there is no amount or other
         obligation on the part of such Pledgors owing in exchange for their
         Initial Pledged Partnership Interest or such Pledgors' status as
         partners of PUDC, LSM, ADF, PPLP, PPTC, PUDCW and PUDCS. Parent and
         PUDC have fully paid for their respective Initial Pledged Membership
         Interests and there is no amount or obligation on the part of such
         Pledgors owing in exchange for the Initial Pledged Membership Interests
         or such Pledgors' status as members of Patterson GP, Patterson LP and
         Patterson GP2.

                  (d) Chief Executive Office. Such Pledgors' chief executive
         offices are located at addresses set forth in Schedule 7(1) of the Loan
         Agreement and each Pledgor's state of organization is Delaware. No
         Pledgor shall move its chief executive office except to such new
         location as such Pledgor may establish in accordance with the last
         sentence of this Section 6(d). No Pledgor shall establish a new
         location for its chief executive office or shall it change its name
         until (i) it shall have given Agent not less than 30 days' prior
         written notice of its intention to do so, clearly describing such new
         location or name and providing such other information in connection
         therewith as Agent or any Secured Party may reasonably request, and
         (ii) with respect to such new location or name, such Pledgor shall have
         taken all action satisfactory to Agent to maintain the perfection and
         priority of the security interest in the Pledged Collateral intended to
         be granted hereby.

                  (e) Delivery of Pledged Collateral; Filings. Such Pledgor has
         delivered (or in the case of Pledged Securities acquired by such
         Pledgor after the date hereof, such Pledgor will have delivered) to
         Agent all certificates representing the Pledged Securities and
         Intercompany Notes intended to be pledged pursuant to this Agreement
         and has directed the Agent to file UCC-1 financing statements
         (evidencing the lien created by this Agreement) with the Secretary of
         State of the State of Texas and, with respect to Holding only, the
         State of Delaware (the States in which the respective chief executive
         offices of such Pledgors are located), and such delivery and pledge of
         the Pledged Collateral pursuant to this Agreement creates, upon proper
         filing, a valid and perfected first priority security interest in the
         Pledged Collateral securing the payment of the Secured Obligations

                                                            UTI-PLEDGE AGREEMENT

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         pursuant to the Code in effect in each applicable jurisdiction,
         including, without limitation, the State of Texas and, with respect to
         Holding only, the State of Delaware.

                  (f) Pledged Collateral. All information set forth herein,
         including the Schedules annexed hereto, relating to the Pledged
         Collateral pledged by it is accurate and complete in all respects.

                  (g) No Violations, etc. The pledge of the Pledged Collateral
         pledged by it pursuant to this Agreement does not violate Regulation U
         or X of the Federal Reserve Board.

                  (h) Ownership of Pledged Collateral. Except as otherwise
         permitted by the Loan Agreement, such Pledgor at all times will be the
         sole beneficial owner of the Pledged Collateral pledged by it.

                  (i) No Options, Warrants, etc. There are no options, warrants,
         calls, rights, commitments or agreements of any character to which such
         Pledgor is a party or by which it is bound obligating such Pledgor to
         issue, deliver or sell or cause to be issued, delivered or sold,
         additional Pledged Securities or obligating such Pledgor to grant,
         extend or enter into any such option, warrant, call, right, commitment
         or agreement. There are no voting trusts or other agreements or
         understandings to which such Pledgor is a party with respect to the
         voting of the capital stock of any issuer of the Pledged Securities
         pledged by it.

                  (j) Partnership Agreements and LLC Agreements. The Pledgors
         have delivered to Agent a true, correct and complete copy of the
         Partnership Agreements and the LCC Agreements. Each of the Partnership
         Agreements and LLC Agreements is in full force and effect, has not as
         of the date hereof, been amended or modified and there is no existing
         default by any party thereunder or any event which, with the giving of
         notice or passage of time or both, would constitute a default by any
         party thereunder. No person will terminate or agree to terminate the
         Partnership Agreements or the LLC Agreements or make any amendment or
         modification to the Partnership Agreements or the LLC Agreements which
         may have a Material Adverse Effect on the value of the Pledged
         Collateral. The Pledgors shall deliver to Agent as promptly as
         practicable following the execution thereof, certified copies or
         executed originals of each such amendment and modification concurrently
         with the delivery of such documents to the parties thereto.

                  Section 7. Voting Rights; Distributions; etc. (a) So long as
no Event of Default shall have occurred and be continuing:

         (i) each Pledgor shall be entitled to exercise any and all voting and
         other consensual rights pertaining to the Pledged Securities or any
         part thereof for any purpose not inconsistent with the terms or purpose
         of this Agreement or any other Loan Document; provided, however, that
         such Pledgor shall not in any event exercise such rights in any manner
         which could reasonably be expected to have a Material Adverse Effect on
         the value of the Pledged Collateral pledged by it or an adverse effect
         on the other rights and remedies provided to the Agent by this
         Agreement.

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         (ii) Subject to the terms of the Loan Agreement, each Pledgor shall be
         entitled to receive and retain, and to utilize free and clear of the
         Lien of this Agreement, any and all Distributions, but only if and to
         the extent made in accordance with the provisions of the Loan
         Documents; provided, however, that any and all such Distributions
         consisting of rights or interests in the form of securities shall be,
         and shall be forthwith delivered to Agent to hold as Pledged Collateral
         and shall, if received by any Pledgor, be received in trust for the
         benefit of Agent, be segregated from the other property or funds of
         such Pledgor, and be forthwith delivered to Agent as Pledged Collateral
         in the same form as so received (with any necessary endorsement).

         (iii) Agent shall be deemed without further action or formality to have
         granted to each Pledgor all necessary consents relating to voting
         rights and shall, if necessary, upon written request of any Pledgor and
         at such Pledgor's sole cost and expense, from time to time execute and
         deliver (or cause to be executed and delivered) to such Pledgor all
         such instruments as such Pledgor may reasonably request in order to
         permit such Pledgor to exercise the voting and other rights which it is
         entitled to exercise pursuant to Section 7(a)(i) hereof and to receive
         the Distributions which it is authorized to receive and retain pursuant
         to Section 7(a)(ii) hereof.

                  (b) Upon the occurrence and during the continuance of an Event
of Default:

         (i) All rights of each Pledgor to exercise the voting and other
         consensual rights it would otherwise be entitled to exercise pursuant
         to Section 7(a)(i) hereof without any action or the giving of any
         notice shall cease, and all such rights shall thereupon become vested
         in Agent (for so long as such Event of Default shall be continuing),
         which shall thereupon have the sole right to exercise such voting and
         other consensual rights.

         (ii) All rights of each Pledgor to receive Distributions which it would
         otherwise be authorized to receive and retain pursuant to Section
         7(a)(ii) hereof shall cease and all such rights shall thereupon become
         vested in Agent (for so long as such Event of Default shall be
         continuing), which shall thereupon have the sole right to receive and
         hold as Pledged Collateral such Distributions.

                  (c) Each Pledgor shall, at its sole cost and expense, from
time to time execute and deliver to Agent appropriate instruments as Agent may
reasonably request in order to permit Agent to exercise the voting and other
rights which it may be entitled to exercise pursuant to Section 7(b)(i) hereof
and to receive all Distributions which it may be entitled to receive under
Section 7(b)(ii) hereof.

                  (d) All Distributions which are received by any Pledgor
contrary to the provisions of Section 7(b)(ii) hereof shall be received in trust
for the benefit of Agent, shall be segregated from other funds of such Pledgor
and shall immediately be paid over to Agent as Pledged Collateral in the same
form as so received (with any necessary endorsement).

                  Section 8. Transfers and Other Liens; Additional Shares. (a)
No Pledgor shall (i) sell, convey, assign or otherwise dispose of, or grant any
option, right or warrant with respect

                                                            UTI-PLEDGE AGREEMENT

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to, any of the Pledged Collateral pledged by it except as permitted by the Loan
Agreement, (ii) create or permit to exist any Lien upon or with respect to any
Pledged Collateral pledged by it other than the Lien and security interest
granted to Agent under this Agreement and the Security Agreement, or (iii)
except as permitted by the Loan Agreement, permit the issuer of any Pledged
Securities pledged by it to merge, consolidate or change its legal form, unless
all of the outstanding capital stock, partnership interests or membership
interests (as applicable) of the surviving or resulting entity is, upon such
merger or consolidation, pledged hereunder and no cash, securities or other
property is distributed in respect of the outstanding shares, partnership or
membership interests (as applicable) of any other constituent entity.

                  (b) Each Pledgor shall (i) cause each issuer of the Pledged
Securities pledged by it not to issue any stock or other securities or equity,
partnership or membership interests in addition to or in substitution for the
Pledged Securities issued by such issuer, except to such Pledgor or other
Pledgors, (ii) pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all additional shares of capital stock or other
equity, partnership or membership securities of the issuer of the Pledged
Securities which are required to be pledged hereunder and (iii) deliver all
related stock or transfer powers requested by the Agent.

                  Section 9. Reasonable Care. Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equivalent to that which Agent, in its individual capacity,
accords its own property consisting of similar instruments or interests, it
being understood that neither Agent nor any of the Secured Parties shall have
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Pledged Collateral, whether or not Agent or any other Secured Party has or is
deemed to have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any Person with respect to any Pledged Collateral.

                  Section 10. Remedies Upon Default; Decisions Relating to
Exercise of Remedies. (a) If any Event of Default shall have occurred and be
continuing, Agent shall have the right, in addition to other rights and remedies
provided for herein or otherwise available to it to be exercised from time to
time, (i) to retain and apply the Distributions to the Secured Obligations as
provided in Section 11 hereof, (ii) to exercise any remedies set forth in any
Intercompany Notes (to the extent that a default has occurred thereunder) and
(iii) to exercise all the rights and remedies of a secured party under the Code
at the time of an event of default, and Agent may also in its sole discretion,
without notice except as specified below, sell the Pledged Collateral or any
part thereof (including, without limitation, any partial interest in the Pledged
Securities) in one or more parcels at public or private sale, at any exchange,
broker's board or at any of Agent's offices or elsewhere, for cash, on credit or
for future delivery, and at such price or prices and upon such other terms as
Agent may deem commercially reasonable, irrespective of the impact of any such
sales on the market price of the Pledged Collateral. Agent or any Lender or any
of their respective Affiliates may be the purchaser of any or all of the Pledged
Collateral at any such sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Pledged Collateral sold at such sale, to use and apply any of the Secured
Obligations owed to such Person as a credit on account of the purchase price of
any Pledged Collateral payable by such Person at such sale. Each purchaser at
any such sale shall

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acquire the property sold absolutely free from any claim or right on the part of
any Pledgor, and each Pledgor hereby waives, to the fullest extent permitted by
law, all rights of redemption, stay and/or appraisal which it now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted. Each Pledgor acknowledges and agrees that, to the extent
notice of sale shall be required by law, ten Business Days notice to such
Pledgor of the time and place of any public sale or the time after which any
private sale or other intended disposition is to take place shall constitute
reasonable notification of such matters. No notification need be given to a
Pledgor if it has signed, after the occurrence of an Event of Default, a
statement renouncing or modifying any right to notification of sale or other
intended disposition. Agent shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given. Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. Each Pledgor hereby waives, to the
fullest extent permitted by law, any claims against Agent arising by reason of
the fact that the price at which any Pledged Collateral may have been sold at
such a private sale was less than the price which might have been obtained at a
public sale, even if Agent accepts the first offer received and does not offer
such Pledged Collateral to more than one offeree.

                  (b) Each Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and applicable state securities laws, Agent may be compelled,
with respect to any sale of all or any part of the Pledged Collateral, to limit
purchasers to Persons who will agree, among other things, to acquire the Pledged
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Each Pledgor acknowledges that any such private
sales may be at prices and on terms less favorable to Agent than those
obtainable through a public sale without such restrictions (including, without
limitation, a public offering made pursuant to a registration statement under
the Securities Act), and, notwithstanding such circumstances, agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner and that Agent shall have no obligation to engage in public sales and no
obligation to delay the sale of any Pledged Collateral for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would agree to do so.

                  (c) If Agent determines to exercise its right hereunder to
sell any or all of the Pledged Collateral, upon written request, each Pledgor
shall from time to time furnish to Agent all such information as Agent may
request in order to determine the number of securities included in the Pledged
Collateral which may be sold by Agent as exempt transactions under the
Securities Act and the rules of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.

                  (d) In addition to any of the other rights and remedies
hereunder, Agent shall have the right to institute a proceeding seeking specific
performance in connection with any of the agreements or obligations hereunder.

                  (e) Notwithstanding any other provision of this Agreement to
the contrary, if, after giving effect to (i) any sale, transfer or other
disposition of any or all of the Pledged

                                                            UTI-PLEDGE AGREEMENT

                                       10
<PAGE>   11

Collateral pursuant hereto and after the application of the proceeds hereunder
to the Secured Obligations and (ii) the sale, transfer or other disposition of
any collateral pledged pursuant to any other Loan Document and the application
of such proceeds thereunder, any Secured Obligation remains unpaid or
unsatisfied, each Pledgor shall remain liable for the unpaid and unsatisfied
amount of such Secured Obligations for which such Pledgor is otherwise liable
pursuant to the Loan Agreement or otherwise.

                  Section 11. Application of Proceeds. All Distributions held
from time to time by Agent in accordance with the terms of this Agreement and
all proceeds received by Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Pledged Collateral pursuant to the
exercise by Agent of its remedies as a secured creditor as provided in Section
10 hereof shall be applied, together with any other sums then held by Agent
pursuant to this Agreement, promptly by Agent as follows:

                  FIRST, to the payment of all costs and expenses, fees,
         commissions and taxes of such sale, collection or other realization,
         including, without limitation, compensation to Agent and its agents and
         the reasonable fees and expenses of its counsel, and all expenses,
         liabilities and advances made or incurred by Agent in connection
         therewith, together with interest on each such amount at the highest
         rate then in effect under the Loan Agreement from and after the date
         such amount is due, owing or unpaid until paid in full;

                  SECOND, to the payment of all other costs and expenses of such
         sale, collection or other realization, including, without limitation,
         compensation to the Lenders and their agents and the reasonable fees
         and expenses of their counsel and all costs, liabilities and
         indebtedness made or incurred by the Lenders in connection therewith,
         together with interest on each such amount at the highest rate then in
         effect under the Loan Agreement from and after the date such amount is
         due, owing or unpaid until paid in full;

                  THIRD, to the indefeasible payment in full in cash of interest
         and all amounts other than principal under the Loan Agreement at any
         time and from time to time owing by any Pledgor under or in connection
         with the Loan Agreement, ratably according to the unpaid amounts
         thereof, without preference or priority of any kind among amounts so
         due and payable, together with interest on each such amount at the
         highest rate then in effect under the Loan Agreement from and after the
         date such amount is due, owing or unpaid until paid in full;

                  FOURTH, to the indefeasible payment in full in cash of
         principal at any time and from time to time owing by the Pledgors under
         or in connection with the Loan Agreement, ratably according to the
         unpaid amounts thereof, without preference or priority of any kind,
         among amounts so due and payable, together with interest on each such
         amount at the highest rate then in effect under the Loan Agreement from
         and after the date such amount is due, owing or unpaid until paid in
         full; and

                  FIFTH, the balance, if any, to the Person lawfully entitled
         thereto (including Pledgor or its successors or assigns).

                                                            UTI-PLEDGE AGREEMENT

                                       11
<PAGE>   12

                  Section 12. Expenses. Each Pledgor with respect to itself and
jointly and severally with respect to all other Pledgors, will upon demand pay
to Agent the amount of any and all expenses of Agent in connection with this
Agreement in accordance with Sections 7, Paragraph 13, Section 8, Paragraph 5
and Section 10, Paragraph 3 of the Loan Agreement. All amounts payable by any
Pledgor under this Section 12 shall be due upon demand and shall be part of the
Secured Obligations. Each Pledgor's obligations under this Section shall survive
the termination of this Agreement and the discharge of such Pledgor's other
obligations hereunder.

                  Section 13. No Waiver; Cumulative Remedies. (a) No failure on
the part of Agent to exercise, no course of dealing with respect to, and no
delay on the part of Agent in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein
provided are cumulative and are not exclusive of any remedies provided by law.

                  (b) In the event Agent shall have instituted any proceeding to
enforce any right, power or remedy under this Agreement by foreclosure, sale,
entry or otherwise, and such proceeding shall have been discontinued or
abandoned for any reason or shall have been determined adversely to Agent, then
and in every such case, each Pledgor, Agent and each holder of any of the
Secured Obligations shall, subject to any determination in such proceeding, be
restored to their respective former positions and rights hereunder with respect
to the Pledged Collateral, and all rights, remedies and powers of Agent and the
Secured Parties shall continue as if no such proceeding had been instituted.

                  Section 14. Agent. CITBC has been appointed as agent for
itself as a Lender and for the other Lenders pursuant to Section 13, Paragraph 1
of the Loan Agreement. CITBC, as a Lender for itself and the other Lenders
(under the Loan Agreement), hereby confirms and restates such appointment as if
set forth at length herein. The actions of Agent hereunder are subject to the
provisions of the Loan Agreement. Agent shall have the right hereunder to make
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking action (including, without limitation, the
release or substitution of Pledged Collateral), in accordance with this
Agreement and the Loan Agreement. Agent may resign and a successor Agent may be
appointed in the manner provided in the Loan Agreement. Upon the acceptance of
any appointment as Agent by a successor Agent, that successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent under this Agreement, and the retiring Agent
shall thereupon be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation, the provisions of this
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Agreement while it was Agent.

                  Section 15. Agent May Perform; Agent Appointed
Attorney-in-Fact. If any Pledgor shall fail to do any act or thing that it has
covenanted to do hereunder or any warranty on the part of any Pledgor contained
herein shall be breached, Agent may (but shall not be obligated to), upon notice
to any such Pledgor, do the same or cause it to be done or remedy any such
breach, and may expend funds for such purpose. Any and all amounts so expended
by Agent shall be paid by such Pledgor promptly upon demand therefor, with
interest at the highest rate then in

                                                            UTI-PLEDGE AGREEMENT

                                       12
<PAGE>   13

effect under the Loan Agreement during the period from and including the date on
which such funds were so expended to the date of repayment. Each Pledgor's
obligations under this Section 15 shall survive the termination of this
Agreement and the discharge of such Pledgor's other obligations under the Loan
Agreement and the other Loan Documents. Each Pledgor hereby appoints Agent its
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor, or otherwise, from time to time during the
continuance of an Event of Default or at any other time that such Pledgor has
failed, after notice from Agent, to take any action required to be taken by it
hereunder, in Agent's discretion to take any action and to execute any
instrument consistent with the terms of this Agreement and the Loan Agreement
which Agent may deem necessary or advisable to accomplish the purposes of this
Agreement. The foregoing grant of authority is a power of attorney coupled with
an interest and such appointment shall be irrevocable for the term of this
Agreement. Each Pledgor hereby ratifies, to the fullest extent permitted by law,
all that such attorney shall lawfully do or cause to be done by virtue hereof.

                  Section 16. Indemnity.

                  (a) INDEMNITY. EACH OF PLEDGORS WITH RESPECT TO ITSELF, AND
JOINTLY AND SEVERALLY WITH RESPECT TO THE OTHER PLEDGORS, AGREES TO INDEMNIFY,
PAY AND HOLD HARMLESS AGENT AND EACH OF THE LENDERS IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 7, PARAGRAPH 13 OF THE LOAN AGREEMENT. TO THE EXTENT THAT
THE UNDERTAKING TO INDEMNIFY, PAY AND HOLD HARMLESS SET FORTH IN THE PRECEDING
SENTENCE MAY BE UNENFORCEABLE BECAUSE IT IS VIOLATIVE OF ANY LAW OR PUBLIC
POLICY, EACH PLEDGOR SHALL CONTRIBUTE THE MAXIMUM PORTION WHICH IT IS PERMITTED
TO PAY AND SATISFY UNDER APPLICABLE LAW, TO THE PAYMENT AND SATISFACTION OF ALL
INDEMNIFIED LIABILITIES INCURRED BY THE INDEMNITEES OR ANY OF THEM.

                  (b) Survival. The obligations of each Pledgor contained in
this Section 16 shall survive the termination of this Agreement and the
discharge of such Pledgor's other obligations under this Agreement and the other
Loan Documents.

                  (c) Reimbursement. Any amounts paid by any indemnitee as to
which such indemnitee has the right to reimbursement shall constitute Secured
Obligations secured by the Pledged Collateral.

                  Section 17. Modification in Writing. No amendment,
modification, supplement, termination or waiver of or to any provision of this
Agreement, nor consent to any departure by any Pledgor therefrom, shall be
effective unless the same shall be done in accordance with the terms of this
Agreement and the Loan Agreement. Any amendment, modification or supplement of
or to any provision of this Agreement, any waiver of any provision of this
Agreement and any consent to any departure by any Pledgor from the terms of any
provision of this Agreement, shall be effective only in the specific instance
and for the specific purpose for which made or given. Except where notice is
specifically required by this Agreement, no notice to or demand on any

                                                            UTI-PLEDGE AGREEMENT

                                       13

<PAGE>   14

Pledgor in any case shall entitle such Pledgor to any other or further notice or
demand in similar or other circumstances.

                  Section 18. Termination; Release. When all the Secured
Obligations have been indefeasibly paid in full in cash and all of the Revolving
Loan Commitments of the Lenders to make any Loan or to issue (or cause a bank to
issue) any Letter of Credit under the Loan Agreement have expired, this
Agreement shall terminate. Upon termination of this Agreement or any release of
Pledged Collateral in accordance with the provisions of the Loan Agreement, the
Agent shall, upon the request and at the sole cost and expense of any Pledgor,
forthwith assign, transfer and deliver to such Pledgor, against receipt and
without recourse to or warranty by Agent, such of the Pledged Collateral pledged
by it to be released (in the case of a release) as may be in the possession of
Agent and as shall not have been sold or otherwise applied pursuant to the terms
hereof, and, with respect to any other Pledged Collateral, proper instruments
(including, without limitation, Uniform Commercial Code termination statements
on Form UCC-3) acknowledging the termination of this Agreement or the release of
such Pledged Collateral, as the case may be.

                  Section 19. Notices. All notices or other communications
herein required to be given shall be given at the address and in the manner
required in the Loan Agreement.

                  Section 20. Continuing Security Interest; Assignment. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (a) be binding upon each Pledgor, and its successors and assigns and
(b) inure, together with the rights and remedies of Agent hereunder, to the
benefit of Agent and the other Secured Parties and each of their respective
successors, transferees and assigns; no other Persons (including, without
limitation, any other creditor of any Pledgor) shall have any interest herein or
any right or benefit with respect hereto.

                  Section 21. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR PROPERTY ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK (INCLUDING, BUT NOT LIMITED TO, SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK).

                  Section 22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH
PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT. EACH PARTY HERETO HEREBY

                                                            UTI-PLEDGE AGREEMENT

                                       14
<PAGE>   15

IRREVOCABLY WAIVES TRIAL BY JURY, AND EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH
RESPECTIVE JURISDICTIONS.

                  Section 23. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

                  Section 24. Execution in Counterparts. This Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.

                  Section 25. Headings. The Section headings used in this
Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.

                  Section 26. Obligations Absolute. All obligations of each
Pledgor hereunder shall be absolute and unconditional irrespective of:

         (i) any bankruptcy, insolvency, reorganization, arrangement,
         readjustment, composition, liquidation or the like of any other
         Pledgor;

         (ii) any lack of validity or enforceability of the Loan Agreement, any
         other Loan Document, or any other agreement or instrument relating
         thereto;

         (iii) any change in the time, manner or place of payment of, or in any
         other term of, all or any of the Secured Obligations, or any other
         amendment or waiver of or any consent to any departure from the Loan
         Agreement, any other Loan Document, or any other agreement or
         instrument relating thereto;

         (iv) any exchange, release or non-perfection of any collateral or the
         pledge of any additional collateral or the failure to recover in
         respect thereof pursuant to any remedy or right of the Agent or any
         Lender contained in this Agreement, the Loan Agreement, or any release
         or amendment or waiver of or consent to any departure from any
         guarantee, for all or any of the Secured Obligations;

         (v) any exercise or non-exercise, or any waiver of any right, remedy,
         power or privilege under or in respect of this Agreement or any Loan
         Document except as specifically set forth in a waiver granted pursuant
         to the provisions of Section 17 hereof; or

                                                            UTI-PLEDGE AGREEMENT

                                       15
<PAGE>   16

         (vi) any other circumstances which might otherwise constitute a defense
         available to, or a discharge of, any Pledgor.

                  Section 27. Agent's Right to Sever Indebtedness. (a) Each
Pledgor acknowledges that (i) the Pledged Collateral does not constitute the
sole source of security for the payment and performance of the Secured
Obligations and that the Secured Obligations are also secured by other types of
property of such Pledgor and its Affiliates in other jurisdictions (all such
property, collectively, the "COLLATERAL"), (ii) the number of such jurisdictions
and the nature of the transaction of which this instrument is a part are such
that it would have been impracticable for the parties to allocate to each item
of Collateral a specific loan amount and to execute in respect of such item a
separate credit agreement and security agreement, and (iii) each Pledgor intends
that Agent have the same rights with respect to the Pledged Collateral, in any
judicial proceeding relating to the exercise of any right or remedy hereunder or
otherwise, that Agent would have had if each item of Collateral had been pledged
or encumbered pursuant to a separate credit agreement and security agreement. In
furtherance of such intent, each Pledgor agrees to the greatest extent permitted
by law that, from and after the occurrence of an Event of Default, Agent may at
its option, at any time and from time to time, by notice (an "ALLOCATION
NOTICE") to such Pledgor allocate a portion of the Secured Obligations (the
"ALLOCATED INDEBTEDNESS") to the Pledged Collateral pledged by it and sever from
the remaining Secured Obligations the Allocated Indebtedness. From and after the
giving of an Allocation Notice with respect to the Pledged Collateral, the
Secured Obligations hereunder shall be limited to the extent set forth in the
Allocation Notice and (as so limited) shall, for all purposes, be construed as a
separate credit obligation of such Pledgor unrelated to the other transactions
contemplated by the Loan Agreement. To the extent that the proceeds of any
judicial proceeding relating to the exercise of any right or remedy hereunder of
the Pledged Collateral shall exceed the Allocated Indebtedness, such proceeds
shall belong to such Pledgor and shall not be available hereunder to satisfy any
Secured Obligations of such Pledgor other than the Allocated Indebtedness. In
any action or proceeding to exercise any right or remedy under this Agreement
which is commenced after the giving by Agent of an Allocation Notice, the
Allocation Notice shall be conclusive proof of the limits of the Secured
Obligations hereby secured, and such Pledgor may introduce, by way of defense or
counterclaim, evidence thereof in any such action or proceeding. Notwithstanding
any provision of this Section 27, the proceeds received by the Agent pursuant to
this Agreement shall be applied by the Agent in accordance with the provisions
of Section 11 hereof.

                  (b) Each Pledgor hereby waives to the fullest extent permitted
by law the right to a discharge of any of the Secured Obligations under any
statute or rule of law now or hereafter in effect which provides that the
exercise of any particular right or remedy as provided for herein (by judicial
proceedings or otherwise) constitutes the exclusive means for satisfaction of
the Secured Obligations or which makes unavailable any further judgment or any
other right or remedy provided for herein because the Agent elected to proceed
with the exercise of such initial right or remedy or because of any failure by
Agent to comply with laws that prescribe conditions to the entitlement to such
subsequent judgment or the availability of such subsequent right or remedy. In
the event that, notwithstanding the foregoing waiver, any court shall for any
reason hold that such subsequent judgment or action is not available to Agent,
no Pledgor shall to the extent permitted by applicable law, (i) introduce in any
other jurisdiction any judgment so holding as a defense to enforcement against
such Pledgor of any remedy in the Loan Agreement or any

                                                            UTI-PLEDGE AGREEMENT

                                       16
<PAGE>   17

other Loan Document or (ii) seek to have such judgment recognized or entered in
any other jurisdiction, and any such judgment shall in all events be limited in
application only to the state or jurisdiction where rendered and only with
respect to the Collateral referred to in such judgment.

                  (c) In the event any instrument in addition to the Allocation
Notice is necessary to effectuate the provisions of this Section 27, including,
without limitation, any amendment to this Agreement, any substitute promissory
note or affidavit or certificate of any kind, each Pledgor agrees that it shall
execute and deliver any such instrument reasonably requested by the Agent so
long as such instrument is consistent with the terms of the Loan Documents.

                                                            UTI-PLEDGE AGREEMENT

                                       17
<PAGE>   18

         IN WITNESS WHEREOF, each Pledgor and the Agent have caused this
Agreement to be duly executed and delivered by their duly authorized officers as
of the date first above written.

PLEDGORS:

PATTERSON-UTI ENERGY, INC.

By:
   ------------------------------------------------
Name:
     ----------------------------------------------
Title:
      ---------------------------------------------

PATTERSON (LP) LLC

By:
   ------------------------------------------------
Name:
     ----------------------------------------------
Title:
      ---------------------------------------------

PATTERSON (GP) LLC

By:
   ------------------------------------------------
Name:
     ----------------------------------------------
Title:
      ---------------------------------------------

PATTERSON (GP2) LLC

By:
   ------------------------------------------------
Name:
     ----------------------------------------------
Title:
      ---------------------------------------------

 PATTERSON-UTI DRILLING COMPANY LP, LLLP

 By:     Patterson (GP) LLC, its general partner

         By:
              ------------------------------------------
         Name:
                ----------------------------------------
         Title:
                 ---------------------------------------

AGENT:

THE CIT GROUP/BUSINESS CREDIT, INC.

By:
     ------------------------------------------
Name:
       ----------------------------------------
Title:
        ---------------------------------------

                                                            UTI-PLEDGE AGREEMENT

<PAGE>   19

         The undersigned hereby each agrees that it will comply with
instructions originated by Pledgee without further consent by Pledgor. It is
intended that this undertaking by the undersigned confer control over the
Pledged Interests on Pledgee for purposes of perfecting Pledgee's security
interest in the Pledged Interests under the Code.

<Table>
<Caption>

PATTERSON (LP) LLC                                                   PATTERSON-UTI DRILLING COMPANY LP, LLLP

<S>                                                                  <C>
By:                                                                  By:  Patterson (GP) LLC, its general partner
   ----------------------------------------
Name:
     --------------------------------------
Title:                                                                         By:
      -------------------------------------                                       ----------------------------------
                                                                               Name:
                                                                                    --------------------------------
PATTERSON (GP) LLC                                                             Title:
                                                                                     -------------------------------
By:
   ----------------------------------------                           PATTERSON-UTI DRILLING COMPANY SOUTH LP, LLLP
Name:
     --------------------------------------                           By:  Patterson (GP2) LLC., its general partner
Title:
      -------------------------------------                                    By:
                                                                                  ----------------------------------
                                                                               Name:
PATTERSON (GP2) LLC                                                                 --------------------------------
                                                                               Title:
By:                                                                                   ------------------------------
   ----------------------------------------
Name:                                                                 PATTERSON-UTI DRILLING COMPANY WEST LP, LLLP
     --------------------------------------
Title:                                                                By:  Patterson (GP2) LLC, its general partner
      -------------------------------------

                                                                                By:
PATTERSON PETROLEUM LP, LLLP                                                       ---------------------------------
                                                                                Name:
By:  Patterson (GP) LLC, its general partner                                         -------------------------------
                                                                                Title:
          By:                                                                          -----------------------------
             ------------------------------
          Name:                                                        LONE STAR MUD LP, LLLP
               ----------------------------
          Title:                                                       By:  Patterson (GP) LLC, its general partner
                ---------------------------

                                                                                By:
PATTERSON PETROLEUM TRADING COMPANY LP,                                            ---------------------------------
LLLP                                                                            Name:
                                                                                     -------------------------------
 By: Patterson (GP) LLC, its general partner                                    Title:
                                                                                      ------------------------------
          By:
             ------------------------------
          Name:                                                        AMBAR DRILLING FLUIDS LP, LLLP
               ----------------------------
          Title:                                                       By:  Patterson (GP) LLC, its general partner
                ---------------------------

                                                                               By:
                                                                                  ---------------------------------
                                                                               Name:
                                                                                    -------------------------------
                                                                               Title:
                                                                                     ------------------------------

</TABLE>

                                                            UTI-PLEDGE AGREEMENT

<PAGE>   20

                                   SCHEDULE A

                               PLEDGED SECURITIES

UTICO, INC.:
         (1)  1,000 shares of common stock owned by Patterson-UTI Energy, Inc.

PATTERSON (GP) LLC:
         (1)  100% membership interest owned by Patterson-UTI Energy, Inc.

PATTERSON (LP) LLC:
         (1)  100% membership interest owned by Patterson-UTI Energy, Inc.

AMBAR DRILLING FLUIDS LP, LLLP
         (1)  1% General Partnership interest owned by Patterson (GP) LLC
         (2)  99%. Limited Partnership interest owned by Patterson (LP) LLC

LONE STAR MUD LP, LLLP
         (1)  1% General Partnership interest owned by Patterson (GP) LLC
         (2)  99% Limited Partnership interest owned by Patterson (LP) LLC

PATTERSON - UTI DRILLING COMPANY LP, LLLP
         (1)  1% General Partnership interest owned by Patterson (GP) LLC
         (2)  99%. Limited Partnership interest owned by Patterson (LP) LLC

PATTERSON PETROLEUM LP, LLLP
         (1)  1% General Partnership interest owned by Patterson (GP) LLC
         (2)  99%. Limited Partnership interest owned by Patterson (LP) LLC

PATTERSON PETROLEUM TRADING COMPANY, LP, LLLP
         (1)  1% General Partnership interest owned by Patterson (GP) LLC
         (2)  99%. Limited Partnership interest owned by Patterson (LP) LLC

PATTERSON (GP2) LLC
         (1)  100% membership interest owned by Patterson UTI Drilling Company
              LP, LLLP

PATTERSON - UTI DRILLING COMPANY SOUTH LP, LLLP

         (1)  1% General Partnership interest owned by Patterson (GP2) LLC
         (2)  99% Limited Partnership interest owned by Patterson - UTI Drilling
              Company LP, LLLP

PATTERSON UTI DRILLING COMPANY WEST LP, LLLP
         (1)  1% General Partnership interest owned by Patterson (GP2) LLC
         (2)  99% Limited Partnership interest owned by Patterson - UTI Drilling
              Company LP, LLLP

                                                            UTI-PLEDGE AGREEMENT

<PAGE>   21

                                   SCHEDULE B

                               INTERCOMPANY NOTES

                                     [None]

                                                            UTI-PLEDGE AGREEMENT

<PAGE>   22

                                    EXHIBIT 1

                                PLEDGE AMENDMENT

         This Pledge Amendment, dated , is delivered pursuant to Section 5 of
the Agreement referred to below. The undersigned hereby agrees that this Pledge
Amendment may be attached to the Pledge Agreement, dated as of June 29, 2001,
between the undersigned, certain other parties identified therein and THE CIT
GROUP/BUSINESS CREDIT, INC., as Agent (the "AGREEMENT"; capitalized terms used
herein and not defined have the meanings ascribed to them in the Agreement) and
that the Pledged Securities and/or Intercompany Notes listed on this Pledge
Amendment shall be deemed to be and shall become part of the Pledged Collateral
and shall secure all Secured Obligations.

                                        ---------------------------------------
                                        Pledgor

                                        By:
                                           ------------------------------------
                                           Name:
                                                -------------------------------
                                           Title:
                                                 ------------------------------

                                                            UTI-PLEDGE AGREEMENT<PAGE>   1
                                                                     EXHIBIT 4.1

                          THE WILLIAMS COMPANIES, INC.

                                 2001 STOCK PLAN

         SECTION 1. Purposes.

         1.01 Pursuant to that certain Agreement and Plan of Merger among The
Williams Companies, Inc., Resources Acquisition Corp and Barrett Resources
Corporation dated as of May 7, 2001 ("Merger Agreement") the Company agreed to
assume, effective at the Merger Date (as defined below) certain options granted
under certain option plans maintained prior to the Merger Date (as defined
below) by Barrett Resources Corporation, which options would become and
represent options ("Substitute Options") to purchase Shares (as defined below),
and to assume the Barrett Plans (as defined below), with the result that all the
obligations of Barrett Resources Corporation under the Barrett Plans would
become obligations of the Company following the Merger Date.

         The purpose of The Williams Companies, Inc. 2001 stock Option Plan (the
"Plan") as set forth herein, is to implement the provisions of the Merger
Agreement by amending and restating the Barrett Plans as the Plan to reflect
their assumption by the Company, and to provide for the grant of the Substitute
Options pursuant to the Merger Agreement.

         SECTION 2. Definitions; Construction.

         2.01 Definitions. In addition to the terms defined elsewhere in the
Plan, the following terms as used in the Plan shall have the following meanings
when used with initial capital letters:

                  2.01.1 "Affiliate" means any entity other than the Company in
         which the Company owns, directly or indirectly, at least twenty percent
         (20%) of the combined voting power of all classes of stock of such
         entity or at least twenty percent (20%) of the ownership interests in
         such entity.

                  2.01.2 "Barrett Award Agreement" means any written agreement,
         contract or other instrument or document evidencing a Barrett Option.

                  2.01.3 "Barrett Option" means an option (including an
         incentive stock option under Code Section 422) granted under a Barrett
         Plan, to the extent such option (after effectuation of the adjustment
         contemplated by Section 7.2(a) of the Merger Agreement) was outstanding
         immediately prior to the Merger Date.

                  2.01.4 "Barrett Plan" means any of the following plans as in
         effect immediately prior to the Merger Date: Barrett Resources
         Corporation 2000 Stock Option Plan; Barrett Resources Corporation 1999
         Stock Option Plan; Barrett Resources Corporation 1997 Stock Option
         Plan; Barrett Resources Corporation Non-Discretionary Stock Option Plan
         as Amended March 20, 1997; Barrett Resources Corporation 1994 Stock
         Option Plan, Plains Petroleum Company 1992 Stock Option Plan, Plains
         Petroleum Company 1989 Stock Option Plan, and Plains Petroleum Company
         1985 Stock Option Plan for Non-

<PAGE>   2

         Employee Directors. A copy of each Barrett Plan is respectively
         attached hereto as Exhibits A through H.

                  2.01.5 "Board means the Company's Board of Directors.

                  2.01.6 "CEO" means the Chief Executive Officer of the Company,
         as designated by the Board.

                  2.01.7 "Code" means the Internal Revenue Code of 1986, as
         amended from time to time.

                  2.01.8 "Company" means The Williams Companies, Inc. together
         with any successor thereto.

                  2.01.9 "Exchange Act" means the Securities Exchange Act of
         1934, as amended.

                  2.01.10 "Fair Market Value" means, as of any date, with
         respect to Shares at any time that Shares are listed on the New York
         Stock Exchange, the mean between the highest and lowest selling prices
         in the consolidated transaction reporting system as of that date or
         nearest preceding date on which a sale was reported; and, with respect
         to Shares at any time that Shares are not listed on the New York Stock
         Exchange, or property other than Shares, the Fair Market Value of such
         Shares or other property determined by such methods or procedures as
         shall be established from time to time by the CEO.

                  2.01.11 "Merger" means the merger among the Company, Resources
         Acquisition Corp., and Barrett Resources Corporation, as defined and
         described in the Merger Agreement.

                  2.01.12 "Merger Date" means the time at which the Merger
         becomes effective (defined in the Merger Agreement as the "Effective
         Time").

                  2.01.13 "Merger Agreement" means such term as defined in
         Section 1.01.

                  2.01.14 "Participant" means a Person holding a Replacement
         Option.

                  2.01.15 "Person" shall have the meaning assigned in the
         Exchange Act.

                  2.01.16 "Replacement Option" means a right, granted under
         Section 6.02 hereof, to purchase Shares at a specified price during
         specified time periods.

                  2.01.17 "Replacement Option Agreement" means the agreement
         evidencing a Replacement Option.

                  2.01.18 "Shares" means the common stock of the Company, $1.00
         par value, and such other securities of the Company as may be
         substituted for Shares pursuant to Section 8.01 hereof.

                                       2
<PAGE>   3

                  2.01.19 "Williams Grantee" means any Person who, immediately
         prior to the Merger Date, held a Barrett Option.

                  2.02 Construction. For purposes of the Plan, the following
         rules of construction shall apply:

                  2.02.1 The word "or" is disjunctive but not necessarily
         exclusive.

                  2.02.2 Words in the singular include the plural; words in the
         plural include the singular; and words in the neuter gender include the
         masculine and feminine genders and words in the masculine or feminine
         gender include the other and neuter genders.

         SECTION 3. Administration.

         3.01 The Plan shall be administered by the CEO or, if the Board so
designates, by a committee of the Board. (If the Board designates such a
committee, references in the Plan to the CEO shall be deemed to be references to
such committee.). The CEO shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Merger Agreement and the Plan, including but not limited to Section 6.02:

         (i)      to designate Participants;

         (ii)     to determine the type or types of Replacement Options to be
                  granted to each Participant;

         (iii)    to determine the number of Replacement Options to be granted,
                  the number of Shares to which a Replacement Option will
                  relate, the terms and conditions of any Replacement Option
                  (including, but not limited to, any exercise price, grant
                  price or purchase price, any limitation or restriction, any
                  schedule for lapse of limitations, forfeiture restrictions or
                  restrictions on exercisability or transferability, and
                  accelerations or waivers thereof, based in each case on such
                  considerations as the CEO shall determine), and all other
                  matters to be determined in connection with a Replacement
                  Option;

         (iv)     to determine whether, to what extent and under what
                  circumstances a Replacement Option may be settled in, or the
                  exercise price of a Replacement Option may be paid in, cash,
                  Shares, other Replacement Options or other property, or a
                  Replacement Option may be accelerated, vested, canceled,
                  forfeited, exchanged or surrendered;

         (v)      to determine whether, to what extent and under what
                  circumstances cash, Shares, other Replacement Options, other
                  property and other amounts payable with respect to a
                  Replacement Option shall be deferred either at the election of
                  the CEO or at the election of the Participant;

         (vi)     to prescribe the form of each Replacement Option Agreement,
                  which need not be identical for each Participant;

                                       3
<PAGE>   4

         (vii)    to adopt, amend, suspend, waive and rescind such rules and
                  regulations and appoint such agents as the CEO may deem
                  necessary or advisable to administer the Plan;

         (viii)   to correct any defect or supply any omissions or reconcile any
                  inconsistency; and to construe and interpret the Plan, the
                  rules and regulations, any Replacement Option Agreement or
                  other instrument entered into or relating to a Replacement
                  Option made under the Plan; including but not limited to the
                  authority to correct any defect, supply any omission and
                  reconcile any inconsistency between the Plan and the
                  applicable Barrett Plan and the Replacement Option Agreement
                  and the applicable Barrett Award Agreement; and

         (ix)     to make all other decisions and determinations as may be
                  required under the terms of the Plan or as the CEO may deem
                  necessary or advisable for the administration of the Plan.

         Any action of the CEO with respect to the Plan shall be final,
conclusive and binding on all Persons, including the Company, Affiliates,
Participants, any Person claiming any rights under the Plan from or through any
Participant, and stockholders. The express grant of any specific power to the
CEO, and the taking of any action by the CEO, shall not be construed as limiting
any power or authority of the CEO. The CEO may delegate to officers or managers
of the Company or of any Affiliate the authority, subject to such terms as the
CEO shall determine, to take such actions and perform such functions under the
Plan as the CEO may specify, including, but not limited to, administrative
functions. The CEO shall be entitled to, in good faith, rely or act upon any
report or other information furnished to it by any officer, manager or other
employee of the Company or any Affiliate, the Company's independent certified
public accountants, or any executive compensation consultant or other
professional retained by the Company to assist in the administration of the
Plan. Any and all powers, authorizations and discretions granted by the Plan to
the CEO (or delegated by the CEO) shall likewise be exercisable at any time by
the Board.

         SECTION 4. Shares Subject to the Plan.

         4.01 An aggregate number of Shares is hereby made available and is
reserved for delivery on account of the exercise of Replacement Options equal to
the number of Shares determined pursuant to the formulas set forth in Section
6.02 to be required to replace Barrett Options held by Williams Grantees as of
the Merger Date; provided that, subject to adjustment as provided in Section
8.01 hereof, the total number of Shares reserved and available for distribution
under the Plan shall not exceed 2,200,000 Shares.

         Any Shares distributed pursuant to a Replacement Option may consist, in
whole or in part, of authorized and unissued Shares or of treasury Shares,
including Shares repurchased by the Company for purposes of the Plan; provided,
however, that if, at the time Shares are to be distributed under the Plan to a
Participant (including upon exercise of a Replacement Option), the Shares are
listed on the New York Stock Exchange and such Participant is a "director" or
"officer" of the Company within the meaning of Sections 312.03 and 703.09 of the
Listed Company Manual of the New York Stock Exchange, such that the
Participant's acquisition of Stock originally issued by the Company would be
subject to the requirement of stockholder

                                       4
<PAGE>   5
approval under applicable Exchange rules, the Shares to be distributed to such
Participant shall consist only of treasury Shares then held by the Company. The
Company shall use its best efforts to obtain and have available, at any time
that the such treasury Shares are required to be distributed in connection with
a Replacement Option, a sufficient number of treasury Shares, not reserved for
other uses, to be able to make prompt delivery in connection with any such
Replacement Option.

         SECTION 5. Eligibility.

         5.01 Replacement Options may be granted only to Williams Grantees.

         SECTION 6. Specific Terms of Replacement Options.

         6.01 General. Subject to the terms of the Plan and any applicable
Replacement Option Agreement, Replacement Options shall be granted as provided
in this Section 6 to replace and in substitution for those opportunities and
benefits (under the Barrett Plans) of Williams Grantees. Immediately prior to
such grant, the Barrett Option it replaces shall terminate and be of no further
effect.

         6.02 Replacement Options. Effective as of immediately after the Merger
Date, the CEO shall grant Replacement Options to each Williams Grantee, on the
following terms and conditions:

         (i)      Exercise Price. The exercise price per Share of a Replacement
                  Option shall be the quotient obtained by dividing the exercise
                  price per share under the Barrett Option it replaces by 1.767,
                  with such quotient rounded up to the nearest one-tenth of one
                  cent, as determined by the CEO.

         (ii)     Number of Shares. The number of Shares subject to the
                  Replacement Option shall be the product of the number of
                  shares of common stock of Barrett Resources Corporation, par
                  value $0.01 per share subject to the Barrett Option it
                  replaces, multiplied by 1.767, with such product rounded to
                  the nearest full share, or if there shall not be a nearest
                  share, the next greater full share, as determined by the CEO.

         (iii)    Replacement Option Terms. Each Replacement Option shall have
                  substantially the same terms and conditions as the Barrett
                  Option it replaces (other than the exercise price and the
                  number of shares and the fact that it is exercisable for
                  Shares, but including but not limited to the remaining option
                  term, vesting, (including, if applicable, accelerated
                  vesting), conditions of exercisability), employment
                  requirements, directorship requirement, requirements for
                  acknowledgements and warranties from the Participant, sale
                  restrictions on the Shares, and the methods of and limits on
                  exercise of the Replacement Option), and not give the
                  Participant any additional benefits he or she did not have,
                  under the corresponding Barrett Option, as determined by the
                  CEO. Subject to the foregoing, the CEO shall determine the
                  time or times at which a Replacement Option may be exercised,
                  the methods by which such exercise price may be paid or deemed
                  to be paid, and the permitted form of such payment.

                                       5
<PAGE>   6

         (iv)     Grant of Replacement Incentive Stock Options. At the time of
                  the grant of any Replacement Option, the CEO shall, if such
                  Replacement Option replaces an incentive stock option granted
                  under a Barrett Plan ("ISO Replacement Option"), designate
                  that such Replacement Option shall be made subject to
                  additional restrictions to permit it to qualify insofar as
                  reasonably possible as an "incentive stock option" under the
                  requirements of Section 422 of the Code.

         SECTION 7. General Terms of Replacement Options.

         7.01 Limits on Transfer of Replacement Options, Beneficiaries. No right
or interest of a Participant in, or relating to, any Replacement Option shall be
pledged, encumbered or hypothecated to or in favor of any Person other than the
Company or an Affiliate, or shall be subject to any lien, obligation or
liability of such Participant to any Person other than the Company or an
Affiliate. Unless otherwise determined by the CEO or permitted under the
relevant Barrett Option, (consistent with Section 422 of the Code and the
requirements for registration of offers and sales of Shares under the Plan with
the Securities and Exchange Commission on a registration statement on Form S-8,
as then in effect, or such other such registration form as may then be
available), no Replacement Option shall be assignable or transferable by a
Participant otherwise than by will or the laws of descent and distribution;
provided, however, that, if so determined by the CEO, a Participant may, in the
manner established by the CEO, designate a beneficiary or beneficiaries to
exercise the rights of the Participant upon the death of the Participant. A
beneficiary, guardian, legal representative or other Person claiming any rights
under the Plan from or through any Participant shall be subject to all the terms
and conditions of the Plan and any Replacement Option Agreement applicable to
such Participant as well as any additional restrictions or limitations deemed
necessary or appropriate by the CEO. An ISO Replacement Option shall be
exercisable by the guardian, legal representative, beneficiary or other Person
only if a ruling from the Internal Revenue Service or an opinion of counsel is
obtained to the effect that neither the grant nor the exercise of such power is
violative of Section 422 of the Code. Any opinion of counsel must be acceptable
to the CEO both with respect to the counsel rendering the opinion and with
respect to the form of opinion.

         7.02 Registration and Listing Compliance. The Company shall have no
obligation to make any payment or distribute Shares with respect to any
Replacement Option in a transaction subject to the registration requirements of
the Securities Act of 1933, as amended, or any state securities laws or subject
to a listing requirement under any listing agreement between the Company and any
national securities exchange, and no Replacement Option shall confer upon any
Participant any rights to such delivery or distribution, until such laws and
contractual obligations of the Company have been complied within all material
respects. The Company shall have no obligation to register Shares or the resale
of the Shares under the Securities Act of 1933, and in the absence of such
registration the Shares may not be sold unless they are subject to an exemption
from registration from the Security Act of 1933.

         7.03 Stock Certificates. All certificates for Shares delivered under
the terms of the Plan shall be subject to such stop-transfer orders and other
restrictions as the CEO may deem advisable under federal or state securities
laws, rules and regulations thereunder, and the rules of any national securities
exchange or automated quotation system on which Shares are listed or quoted. The
CEO may cause a legend or legends to be placed on any such certificates to make

                                       6
<PAGE>   7

appropriate reference to such restrictions or any other restrictions or
limitations that may be applicable to Shares. In addition, during any period in
which Replacement Options or Shares are subject to restrictions or limitations
under the terms of the Plan or any Replacement Option Agreement, or during any
period during which delivery or receipt of a Replacement Option or Shares has
been deferred by the CEO or a Participant, the CEO may require any Participant
to enter into an agreement providing that certificates representing Shares
issuable or issued pursuant to a Replacement Option shall remain in the physical
custody of the Company or such other Person as the CEO may designate.

         SECTION 8. Adjustment Provisions.

         8.01 In the event that the CEO shall determine that any dividend or
other distribution (whether in the form of cash, Shares, other securities or
other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, exchange of Shares or other securities of the Company, or other
similar corporate transactions or event affects the Shares such that an
adjustment is determined by the CEO to be appropriate in order to prevent
dilution or enlargement of Participants' rights under the Plan, then the CEO
shall, in such manner as it may deem equitable, adjust any or all of (i) the
number and kind of Shares which may thereafter be issued in connection with
Replacement Options; (ii) the number and kind of Shares issued or issuable in
respect of outstanding Replacement Options; and (iii) the exercise price, grant
price or purchase price relating to any Replacement Option or, if deemed
appropriate, make provisions for a cash payment with respect to any outstanding
Replacement Option. In addition, the CEO is authorized to make adjustments in
the terms and conditions of, and the criteria in, Replacement Options in
recognition of unusual or nonrecurring event (including, without limitation,
events described in the preceding sentence) affecting the Company or any
Affiliate or the financial statements of the Company or any Affiliate, or in
response to changes in applicable laws, regulations or accounting principles.

         SECTION 9. Amendments to and Termination of the Plan.

         9.01 The Board may amend, alter, suspend, discontinue or terminate the
Plan without the consent of stockholders or Participants; provided, however,
that, without the consent of a Participant, no amendment, alteration,
suspension, discontinuation or termination of the Plan may materially and
adversely affect the rights of such Participant under any Replacement Option
theretofore granted to him. The CEO may waive any conditions or rights under,
amend any terms of, or amend, alter, suspend, discontinue or terminate any
Replacement Option theretofore granted, prospectively or retrospectively;
provided, however, that, without the consent of a Participant, no amendment,
alteration, suspension, discontinuation or termination of any Replacement Option
may materially and adversely affect the rights of such Participant under any
Replacement Option theretofore granted to him.

         Unless earlier terminated by the Board, the Plan shall terminate on the
earlier of (1) the tenth (10th) anniversary of the effective date (set forth in
Section 11.01) or (2) when no Shares remain reserved and available for issuance
and the Company has no further obligation with respect to any Replacement Option
granted under the Plan.

                                       7
<PAGE>   8

         SECTION 10. General Provisions.

         10.01 No Rights to Replacement Options; No Stockholder Rights. Except
as set forth in the Merger Agreement or in Section 6.02 of the Plan, no Williams
Grantee, Participant, director, or employee shall have any claim to be granted
any Replacement Option under the Plan, and there is no obligation for uniformity
of treatment of Williams Grantees, Participants, directors and employees, except
as provided in any other compensation arrangement. No Replacement Option shall
confer on any Participant any of the rights of a stockholder of the Company
unless and until Shares are in fact issued to such Participant in connection
with such Replacement Option.

         10.02 Withholding. The Company or any Affiliate is authorized to
withhold from any Replacement Option granted or any payment due under the Plan,
including from a distribution of Shares, amounts of withholding taxes due with
respect to a Replacement Option, its exercise or any payment thereunder, and to
take such other action as the CEO may deem necessary or advisable to enable the
Company and Participants to satisfy obligations for the payment of such taxes.
This authority shall include authority to withhold or receive Shares,
Replacement Options or other property and to make cash payments in respect
thereof in satisfaction of such tax obligations. In no event shall the
repurchase of Shares for tax withholding exceed the number required to satisfy
the employer's minimum statutory withholding requirements.

         10.03 No Right to Employment. Nothing contained in the Plan or any
Replacement Option Agreement shall confer, and no grant of a Replacement Option
shall be construed as conferring, upon any Williams Grantee Participant any
right continue in the service of the Company or any Affiliate or to interfere in
any way with the right of the Company or any Affiliate to terminate his
employment at any time or increase or decrease his compensation from the rate in
existence at the time of granting of a Replacement Option, except as provided in
any other compensation arrangement.

         10.04 Unfunded Status of Replacement Options; Creation of Trusts. The
Plan is intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a Participant
pursuant to a Replacement Option, nothing contained in the Plan or any
Replacement Option shall give any such Participant any rights that are greater
than those of a general creditor of the Company; provided, however, that the CEO
may authorize the creation of trusts or make other arrangements to meet the
Company's obligations under the Plan to deliver cash, Shares or other property
pursuant to any Replacement Option; which trusts or other arrangements shall be
consistent with the "unfunded" status of the Plan unless the CEO otherwise
determines.

         10.05 No Limit on Other Compensatory Arrangements. Nothing contained in
the Plan shall prevent the Company or any Affiliate from adopting other or
additional compensation arrangements (which relate to Replacement Options under
the Plan), and such arrangements may be either generally applicable or
applicable only in specific cases. Notwithstanding anything in the Plan to the
contrary, the terms of each Replacement Option shall be construed so as to be
consistent with such other arrangements in effect at the time of the Replacement
Option.

         10.06 No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Replacement Option. The CEO shall
determine whether cash, other

                                       8
<PAGE>   9
Replacement Options or other property shall be issued or paid in lieu of
fractional Shares or any rights thereto shall be forfeited or otherwise
eliminated.

         10.07 Governing Law. The validity, interpretation, construction and
effect of the Plan and any rules and regulations relating to the Plan shall be
governed by the laws of the State of Delaware (without regard to the conflicts
of laws thereof), and applicable federal law.

         10.08 Severability. If any provision of the Plan is or becomes or is
deemed invalid, illegal or unenforceable in any jurisdiction, or would
disqualify the Plan or any Replacement Option under any law deemed applicable by
the CEO, such provision shall be construed or deemed amended to conform to
applicable laws or if it cannot be construed or deemed amended without, in the
determination of the CEO, materially altering the intent of the Plan, it shall
be deleted and the remainder of the Plan shall remain in full force and effect;
provided, however, that, unless otherwise determined by the CEO, the provision
shall not be construed or deemed amended or deleted with respect to any
Participant whose rights and obligations under the Plan are not subject to the
law of such jurisdiction or the law deemed applicable by the CEO.

         SECTION 11. Effective Date.

         11.01 The Plan was approved by the Board on July 22, 2001 and became
effective on that date.

                                       THE WILLIAMS COMPANIES, INC.

                                       By: /s/ Michael P. Johnson
                                           --------------------------------
                                           Sr. Vice President,
                                           Human Resources & Administration

                                       9
<PAGE>   10

                                    EXHIBIT A

                          THE WILLIAMS COMPANIES, INC.
                                 2001 STOCK PLAN

              BARRETT RESOURCES CORPORATION 2000 STOCK OPTION PLAN

(filed as Exhibit 4.1 to Barrett Resources Corp.'s Registration Statement on
Form S-8 filed May 9, 2000)
<PAGE>   11

                                    EXHIBIT B

                          THE WILLIAMS COMPANIES, INC.
                                 2001 STOCK PLAN

              BARRETT RESOURCES CORPORATION 1999 STOCK OPTION PLAN

(filed as Exhibit 99.1 to Barrett Resources Corp.'s Proxy Statement dated
March 25, 1999)

<PAGE>   12
                                    EXHIBIT C

                          THE WILLIAMS COMPANIES, INC.
                                 2001 STOCK PLAN

              BARRETT RESOURCES CORPORATION 1997 STOCK OPTION PLAN

              (filed as Exhibit 99.1 to Barrett Resources Corp.'s
                     Proxy Statement dated April 24, 1997)

<PAGE>   13

                                    EXHIBIT D

                          THE WILLIAMS COMPANIES, INC.
                                 2001 STOCK PLAN

  BARRETT RESOURCES CORPORATION NON-DISCRETIONARY STOCK OPTION PLAN AS AMENDED
                                 MARCH 20, 1997

              (filed as Exhibit 99.2 to Barrett Resources Corp.'s
                     Proxy Statement dated April 24, 1997)

<PAGE>   14

                                    EXHIBIT E

                          THE WILLIAMS COMPANIES, INC.
                                 2001 STOCK PLAN

              BARRETT RESOURCES CORPORATION 1994 STOCK OPTION PLAN

                 (filed as an Exhibit to Barrett Resources Corp.'s
            Registration Statement on Form S-8 filed March 15, 1995)
<PAGE>   15
                                    EXHIBIT F

                          THE WILLIAMS COMPANIES, INC.
                                 2001 STOCK PLAN

                 PLAINS PETROLEUM COMPANY 1992 STOCK OPTION PLAN

                    (filed as an Exhibit to Plains Petroleum
                      Company's Registration Statement on
                        Form S-8 filed November 16, 1992)
<PAGE>   16
                                    EXHIBIT G

                          THE WILLIAMS COMPANIES, INC.
                                 2001 STOCK PLAN

                 PLAINS PETROLEUM COMPANY 1989 STOCK OPTION PLAN

                    (filed as an Exhibit to Plains Petroleum
                        Company's Registration Statement
                       on Form S-8 filed August 11, 1989)
<PAGE>   17
                                    EXHIBIT H

                          THE WILLIAMS COMPANIES, INC.
                                 2001 STOCK PLAN

   PLAINS PETROLEUM COMPANY 1985 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

   (filed as an Exhibit to Plains Petroleum Company's Registration Statement
                       on Form 10 filed August 21, 1985)

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