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                                                                    EXHIBIT 10.1

                     MONSANTO 2000 MANAGEMENT INCENTIVE PLAN

1. PURPOSES

The Monsanto 2000 Management Incentive Plan is designed to:

     o    focus management on business performance that creates stockholder
          value;

     o    encourage innovative approaches to the business of the Company;

     o    reward for results;

     o    encourage ownership of Monsanto common stock by management; and

     o    encourage taking higher risks with an opportunity for higher reward.

2.  DEFINITIONS

2.1.  "1933 Act" shall have the meaning set forth in Section 12.14(a).

2.2.  "Adjustment Notice" shall have the meaning set forth in Section 6.2.

2.3.  "Affiliate" means (i) any entity that is an Associated Company of the
Company or a Subsidiary of the Company, and (ii) at a time when Pharmacia
beneficially owns a majority of the then-outstanding Shares, Pharmacia and any
entity that is an Associated Company of Pharmacia or a Subsidiary of Pharmacia.

2.4.  "Associated Company" of the Company or Pharmacia means any corporation,
partnership, joint venture, limited liability company, or other entity or
enterprise, of which the Company or Pharmacia, as applicable, owns or controls,
directly or indirectly, 10% or more of the outstanding shares of stock normally
entitled to vote for the election of directors, or of comparable equity
participation and voting power, other than a Subsidiary of the Company or
Pharmacia, as applicable.

2.5.  "Award" means any Option, Stock Appreciation Right, Restricted Share,
unrestricted Share, dividend equivalent unit or other award granted under this
Incentive Plan.

2.6.  "Award Certificate" means a written document, in such form as the
Committee may from time to time prescribe, setting forth the terms and
conditions of an Award.

2.7.  "Board" means the board of directors of the Company.

2.8.  "Board People Committee" means the People Committee of the Board or such
other committee consisting of two or more members of the Board as may be
appointed by the Board to administer this Incentive Plan pursuant to Section
4.1.

2.9.  "Change of Control" means a Monsanto Change of Control or a Pharmacia
Change of Control.

2.10.  "Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
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2.11.  "Committee" means the Board People Committee, or its permitted delegate.

2.12.  "Company" means Monsanto Company, a Delaware corporation incorporated
February 9, 2000 (originally under the name Monsanto Ag Company), and any
successors thereto.

2.13.  "Covered Employee" means a Participant designated prior to or at the time
of the grant of an Award by the Committee as an individual who is or may be a
"covered employee" of the Company within the meaning of Section 162(m)(3) of the
Code, in the year in which the Company is expected to be entitled to a federal
income tax deduction with respect to the Award.

2.14.  "Director Plan" means the Monsanto Company Non-Employee Director Equity
Incentive Compensation Plan.

2.15.  "Disability" means a physical or mental disability that causes a
Participant to be considered disabled under the terms of the disability income
plan applicable to such Participant, whether or not such Participant actually
receives such disability benefits, or, in the event that there is no disability
income plan applicable to such Participant, as determined by the Committee.

2.16.  "Effective Date" has the meaning set forth in Section 3.

2.17.  "Eligible Participant" means any member of the Board and any employee of
the Company or an Affiliate.

2.18.  "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor thereto.

2.19.  "Exercise Price" means the price at which a Participant may purchase a
Share covered by an Option, or the price with respect to which the Stock
Appreciation Right Fair Market Value of a Stock Appreciation Right is
determined, as applicable.

2.20.  "Fair Market Value" means, with respect to any given date on or before
the date of the initial public offering of the Shares, the fair market value of
a Share as determined by the Committee, and with respect to any given date after
the date of the initial public offering of the Shares, the average of the
highest and lowest per-share sales prices for the Shares during normal business
hours on the New York Stock Exchange for the immediately preceding date, or if
the Shares were not traded on the New York Stock Exchange on such date, then on
the next preceding date on which the Shares were traded, all as reported by such
source as the Committee may select.

2.21.  "Grant Date" means the date as of which the Committee determines that a
grant of an Award shall be effective.

2.22.  "Incentive Option" means an Option that is designated as an Incentive
Option and that meets the requirements of Section 422 of the Code for "incentive
stock options."

2.23.  "Incentive Plan" means the Monsanto 2000 Management Incentive Plan set
forth herein.

2.24.  "Monsanto Change of Control" means the happening of any of the events
described in subsections (a) through (d) below, if immediately following such
event, Pharmacia does not beneficially own a majority of the then-outstanding
Shares:

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(a)  the acquisition by any Person of beneficial ownership (within the meaning
     of Rule 13d-3 promulgated under the Exchange Act) of either (i) the
     Requisite Common Percentage (as defined herein) of the then-outstanding
     shares of common stock of the Company (the "Outstanding Company Common
     Stock") or (ii) the Requisite Voting Percentage (as defined herein) of the
     combined voting power of the then-outstanding voting securities of the
     Company entitled to vote generally in the election of directors (the
     "Outstanding Company Voting Securities"); provided, that for purposes of
     this subsection (a), the following acquisitions shall not constitute a
     Change of Control:  (A) any acquisition directly from the Company; (B) any
     acquisition by the Company or a Subsidiary of the Company; (C) any
     acquisition by any employee benefit plan (or related trust) sponsored or
     maintained by the Company or a Subsidiary of the Company; or (D) any
     acquisition by any corporation pursuant to a transaction that complies with
     clauses (i), (ii) and (iii) of subsection (c) of this definition;

(b)  individuals who, as of the date of the initial public offering of the
     common stock of the Company, constitute the Board (the "Incumbent Board"),
     cease for any reason to constitute at least a majority of the Board;
     provided, that any individual becoming a director subsequent to the date
     hereof whose election, or nomination for election by the Company's
     stockholders, was approved by a vote of at least a majority of the
     directors then comprising the Incumbent Board shall be considered as though
     such individual were a member of the Incumbent Board, but excluding, for
     this purpose, any such individual whose initial assumption of office occurs
     as a result of an actual or threatened election contest with respect to the
     election or removal of directors or other actual or threatened solicitation
     of proxies or consents by or on behalf of a Person other than the Board;

(c)  consummation by the Company of a reorganization, merger or consolidation or
     sale or other disposition of all or substantially all of the assets of the
     Company or the acquisition of assets or stock of another corporation (a
     "Business Combination"), in each case, unless, following such Business
     Combination, (i) all or substantially all of the individuals and entities
     who were the beneficial owners, respectively, of the Outstanding Company
     Common Stock and Outstanding Company Voting Securities immediately prior to
     such Business Combination beneficially own, directly or indirectly, more
     than 60% of, respectively, the then-outstanding shares of common stock and
     the combined voting power of the then-outstanding voting securities
     entitled to vote generally in the election of directors, as the case may
     be, of the corporation resulting from such Business Combination (including
     without limitation a corporation that as a result of such transaction owns
     the Company or all or substantially all of the Company's assets either
     directly or through one or more subsidiaries) in substantially the same
     proportions as their ownership, immediately prior to such Business
     Combination of the Outstanding Company Common Stock and Outstanding Company
     Voting Securities, as the case may be, (ii) no Person (excluding the
     Company, a Subsidiary of the Company, any corporation resulting from a
     Business Combination or any employee benefit plan (or related trust)
     thereof) beneficially owns, directly or indirectly, the Requisite Common
     Percentage of the then-outstanding shares of common stock of the
     corporation resulting from such Business Combination or the Requisite
     Voting Percentage of the combined voting power of the then-outstanding
     voting securities entitled to vote generally in the election of directors
     of such corporation, except to the extent that such ownership existed prior
     to the Business Combination and (iii) at least a majority of the members of
     the board of directors of the corporation resulting from such Business
     Combination were members of the Incumbent Board at the time of the
     execution of the initial agreement, or of the action of the Board,
     providing for such Business Combination; or

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(d)  approval by the stockholders of the Company of a complete liquidation or
     dissolution of the Company.

2.25.  "Monsanto Leadership Team" means those individuals who are, immediately
before a Pharmacia Change of Control, members of the Monsanto Leadership Team or
any successor group thereto.

2.26.  "Non-Qualified Option" means an Option that is not intended to be treated
as an Incentive Option or an Option that does not meet the requirements of
Section 422 of the Code for "incentive stock options."

2.27.  "Option" means a right granted under this Incentive Plan to a Participant
to purchase a Share at a specified price for a specified period of time.

2.28.  "Participant" means an Eligible Participant to whom an Award has been
granted pursuant to this Incentive Plan; provided, that in the case of the death
or legal incapacity of a Participant, the term "Participant" shall refer to a
beneficiary designated pursuant to Section 10.4 or Section 12.1 or the guardian
or legal representative of the Participant acting in a fiduciary capacity on
behalf of such Participant under state law and court supervision or comparable
office and supervision under applicable foreign law.

2.29.  "Performance Objective" means a performance objective adopted by the
Committee pursuant to this Incentive Plan for Participants who have received
Awards.  If the Committee determines that a change in the business, operations,
corporate structure or capital structure of the Company, or the manner in which
it conducts its business, or other events or circumstances render the
Performance Objectives to be unsuitable, the Committee may modify such
Performance Objectives or the related minimum acceptable level of achievement,
in whole or in part, as the Committee deems appropriate.

2.30.  "Pharmacia" means Pharmacia Corporation, a Delaware corporation, and any
successor thereto.

2.31.  "Pharmacia Change of Control" means the happening of any of the events
described in subsections (a) through (d) below, if immediately following such
event, Pharmacia beneficially owns a majority of the then-outstanding Shares:

(a)  the acquisition by any individual, entity or group (within the meaning of
     Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of
     beneficial ownership (within the meaning of Rule 13d-3 promulgated under
     the Exchange Act) of 20 percent or more of either (i) the then-outstanding
     shares of common stock of Pharmacia (the "Outstanding Pharmacia Common
     Stock") or (ii) the combined voting power of the then-outstanding voting
     securities of Pharmacia entitled to vote generally in the election of
     directors (the "Outstanding Pharmacia Voting Securities"); provided, that
     for purposes of this subsection (a), the following acquisitions shall not
     constitute a Change of Control:  (A) any acquisition directly from
     Pharmacia; (B) any acquisition by the Company, Pharmacia, or a Subsidiary
     of either of them; (C) any acquisition by any employee benefit plan (or
     related trust) sponsored or maintained by the Company, Pharmacia, or a
     Subsidiary of either of them; or (D) any acquisition by any corporation
     pursuant to a transaction that complies with clauses (i), (ii) and (iii) of
     subsection (c) of this definition;

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(b)  individuals who, as of the date of the initial public offering of the
     Shares, constitute the Board of Directors of Pharmacia (the "Incumbent
     Pharmacia Board"), cease for any reason to constitute at least a majority
     of the Pharmacia Board; provided, that any individual becoming a director
     subsequent to the date hereof whose election, or nomination for election by
     Pharmacia's stockholders, was approved by a vote of at least a majority of
     the directors then comprising the Incumbent Pharmacia Board shall be
     considered as though such individual were a member of the Incumbent
     Pharmacia Board, but excluding, for this purpose, any such individual whose
     initial assumption of office occurs as a result of an actual or threatened
     election contest with respect to the election or removal of directors or
     other actual or threatened solicitation of proxies or consents by or on
     behalf of a Person other than the Board of Directors of Pharmacia;

(c)  consummation of a reorganization, merger or consolidation or sale or other
     disposition of all or substantially all of the assets of Pharmacia or the
     acquisition of assets or stock of another corporation (a "Pharmacia
     Business Combination"), in each case, unless, following such Pharmacia
     Business Combination, (i) all or substantially all of the individuals and
     entities who were the beneficial owners, respectively, of the Outstanding
     Pharmacia Common Stock and Outstanding Pharmacia Voting Securities
     immediately prior to such Pharmacia Business Combination beneficially own,
     directly or indirectly, more than 60% of, respectively, the then-
     outstanding shares of common stock and the combined voting power of the
     then-outstanding voting securities entitled to vote generally in the
     election of directors, as the case may be, of the corporation resulting
     from such Pharmacia Business Combination (including without limitation a
     corporation that as a result of such transaction owns Pharmacia or all or
     substantially all of Pharmacia's assets either directly or through one or
     more subsidiaries) in substantially the same proportions as their
     ownership, immediately prior to such Pharmacia Business Combination of the
     Outstanding Pharmacia Common Stock and Outstanding Pharmacia Voting
     Securities, as the case may be, (ii) no Person (excluding the Company,
     Pharmacia, a Subsidiary of either of them, any corporation resulting from
     such Pharmacia Business Combination or any employee benefit plan (or
     related trust) thereof) beneficially owns, directly or indirectly, 20% or
     more of, respectively, the then-outstanding shares of common stock of the
     corporation resulting from such Pharmacia Business Combination or the
     combined voting power of the then-outstanding voting securities of such
     corporation except to the extent that such ownership existed prior to the
     Pharmacia Business Combination and (iii) at least a majority of the members
     of the board of directors of the corporation resulting from such Pharmacia
     Business Combination were members of the Incumbent Pharmacia Board at the
     time of the execution of the initial agreement, or of the action of the
     Board of Directors of Pharmacia, providing for such Pharmacia Business
     Combination; or

(d)  approval by the stockholders of Pharmacia of a complete liquidation or
     dissolution of Pharmacia.

2.32.  "Qualified Performance-Based Award" means an Award designated as such by
the Committee at the time of grant, based upon a determination that (i) the
recipient is a Covered Employee and (ii) the Committee wishes such Award to
qualify for the Section 162(m) Exemption, and made subject to performance goals
satisfying the requirements for the Section 162(m) Exemption.

2.33.  "Reporting Person" means a person subject to the reporting requirements
of Section 16(a) of the Exchange Act with respect to Shares.

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2.34.  "Requisite Common Percentage" means, as of any given time, a percentage
equal to or greater than the higher of (i) 20 percent and (ii) the percentage of
the then-outstanding Shares then beneficially owned by Pharmacia.

2.35.  "Requisite Voting Percentage" means, as of any given time, a percentage
equal to or greater than the higher of (i) 20 percent and (ii) the percentage of
the voting power of the then-outstanding voting securities of the Company
entitled to vote generally in the election of directors then beneficially owned
by Pharmacia.

2.36.  "Restricted Shares" means Shares that are granted or delivered subject to
restrictions in accordance with Section 10.3.

2.37.  "Retirement" means a Participant's Termination of Service on or after the
date on which the Participant attains age 50.

2.38.  "Second Trigger" shall be considered to have occurred (i) with respect to
all Participants if, during the one-year period immediately following a
Pharmacia Change of Control, one of the following occurs:  (A) more than half of
the members of the Monsanto Leadership Team experience a Termination without
Cause or a Termination for Good Reason; (B) the headquarters of the Company is
relocated by more than 35 miles from its location immediately before the
Pharmacia Change of Control, or a plan to effect such a relocation is publicly
announced; (C) it is publicly announced that Pharmacia intends to take steps
that will result in its ceasing to beneficially own a majority of the then-
outstanding Shares or that would otherwise result in a Monsanto Change of
Control, and such steps have not previously been approved by a majority of the
members of the Monsanto Leadership Team; and (ii) with respect to a given
Participant if, during the period of one year immediately following a Pharmacia
Change of Control, or the Participant experiences a Termination without Cause,
or a Termination for Good Reason.

2.39.  "Section."  Unless otherwise indicated, all "Section" references are to
sections of this Incentive Plan.

2.40.  "Section 162(m) Exemption" means the exemption from the limitation on
deductibility imposed by Section 162(m) of the Code that is set forth in Section
162(m)(4)(C) of the Code.

2.41.  "Shares" means shares of Company common stock.  If there has been an
adjustment or substitution pursuant to Section 6, the term "Shares" shall also
include any shares of stock or other securities that are substituted for Shares
or into which the Shares are adjusted pursuant thereto.

2.42.  "Stock Appreciation Right" means a right described in Section 9.

2.43.  "Stock Appreciation Right Fair Market Value" means the excess of (i) the
Fair Market Value of a Share on the date of exercise of a Stock Appreciation
Right, over (ii) the Exercise Price of the Stock Appreciation Right.

2.44.  "Subsidiary" of the Company or Pharmacia means any corporation,
partnership, joint venture, limited liability company, or other entity or
enterprise of which the Company or Pharmacia, as applicable, owns or controls,
directly or indirectly, 50% or more of the outstanding shares of stock normally
entitled to vote for the election of directors, or of comparable equity
participation and voting power.

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2.45.  "Termination for Cause" of a Participant or any other individual means a
Termination of Service for "cause," "just cause," "misbehavior," or any similar
term, as defined in any unexpired employment agreement between the Participant
or other individual and the Company or an Affiliate, as the case may be
(including without limitation any employment agreement the effectiveness of
which has been triggered by a change of control as defined therein), or, in the
absence of such an agreement, or if such agreement exists but does not define
any such term, an involuntary Termination of Service of the Participant or other
individual on account of the Participant's or other individual's engaging in (i)
any willful or intentional neglect in performing his duties, including, but not
limited to, fraud, misappropriation or embezzlement involving property of the
Company or an Affiliate, or (ii) any other intentional wrongful act that may
impair the goodwill or business of the Company or an Affiliate, or that may
cause damage to any of their businesses.

2.46.  "Termination without Cause" of a Participant or any other individual
means a Termination of Service that is involuntary on the part of the
Participant or other individual, other than a Termination for Cause or as a
result of the Participant's death or Disability.

2.47.  "Termination for Good Reason" with respect to a Participant means the
Participant's Termination of Service for "good reason," "just cause," "material
breach by the employer" or any similar term, as defined in any unexpired
employment agreement between the Participant and the Company or an Affiliate, as
the case may be (including without limitation any employment agreement the
effectiveness of which has been triggered by a change of control as defined
therein), or, in the absence of such an agreement, or if such agreement exists
but does not define any such term, the Participant's Termination of Service by
action of the Participant following:  (i) any change affecting the position of
the Participant (whether resulting from a transfer of the Participant to another
position, a change in the Company's business, or any other event) such that the
Participant no longer has a position substantially equivalent to the
Participant's position immediately before the Pharmacia Change of Control for
which the Participant is qualified by education, training and experience; (ii) a
decrease in the Participant's salary; (iii) a material decrease in the
Participant's opportunity to earn annual and long-term incentive compensation as
compared to the opportunities provided to the Participant before the Pharmacia
Change of Control; (iv) a material decrease in the aggregate value of the
Participant's employee benefits and fringe benefits as compared to those
provided to the Participant before the Pharmacia Change of Control; or (v) a
requirement that the Participant relocate his or her place of employment by more
than 35 miles.

2.48.  "Termination of Service" of a Participant or any other individual occurs
when the Participant or other individual is no longer either an employee of the
Company or any of the Affiliates (including without limitation because the
entity that employs the Participant or other individual has ceased to be an
Affiliate), or a member of the Board.

3.  EFFECTIVE DATE OF THIS INCENTIVE PLAN

The effective date (the "Effective Date") of this Incentive Plan is August 29,
2000, the first date as of which this Incentive Plan had been both adopted by
the Board and approved by Pharmacia as the Company's sole stockholder.

4.  ADMINISTRATION

4.1.  Delegation.  This Incentive Plan shall be administered by the Board People
Committee except to the extent the Board People Committee delegates
administration pursuant to this

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paragraph. The Board People Committee may delegate all or a portion of the
administration of this Incentive Plan to one or more committees, and may
authorize further delegation by the committees to senior managers of the
Company, its Subsidiaries, or Pharmacia; provided, that determinations regarding
the timing, pricing, amount and terms of any Award to a Reporting Person shall
be made only by the Board People Committee; and provided, further, that no such
delegation may be made that would cause Awards or other transactions under this
Incentive Plan to cease to be exempt from Section 16(b) of the Exchange Act or
cause an Award designated as a Qualified Performance-Based Award not to qualify
for, or to cease to qualify for, the Section 162(m) Exemption; and provided,
finally, that no delegation may be made of the powers granted to the Board
People Committee under Section 12.16. Any such delegation may be revoked by the
Committee at any time.

4.2.  Scope of Authority.  The Committee shall have full power and authority to
administer and interpret this Incentive Plan and to adopt such rules,
regulations, agreements, guidelines and instruments for the administration of
this Incentive Plan as the Committee deems necessary or advisable.  The
Committee's powers include, but are not limited to (subject to the specific
limitations described herein), the authority to determine the employees to be
granted Awards under this Incentive Plan; to determine the size and applicable
terms and conditions of grants to be made to such employees; to determine the
time when Awards will be granted; to determine the terms and conditions of any
grant, including, without limitation, the Exercise Price, any vesting condition,
restriction or limitation (which may contain Performance Objectives relating to
the performance of the Participant, the Company or an Affiliate) and any
acceleration of vesting or waiver of forfeiture regarding any grant and the
Shares relating thereto; to determine whether a resignation was voluntary and
whether a Termination of Service was a Termination for Cause; and to modify,
amend or adjust the terms and conditions of any grant made to a Participant, at
any time, provided, that the Committee may not reduce the Exercise Price of, or
cancel and regrant, any outstanding Option or Stock Appreciation Right.

4.3.  Actions and Interpretations.  The Committee's interpretations of this
Incentive Plan and of Award Certificates, and all actions taken and
determinations made by the Committee concerning any matter arising under or with
respect to this Incentive Plan or any Awards granted hereunder, shall be in its
sole discretion and final, binding and conclusive on all interested parties,
including the Company, an Affiliate, stockholders of any of those entities, and
all former, present and future employees thereof.  The Committee may, with
respect to all questions of accounting, rely conclusively upon any determination
made by the internal accountants of the Company.

4.4.  Board Authority.  Any authority granted to the Committee may also be
exercised by the Board, except to the extent that the grant or exercise of such
authority would cause any Qualified Performance-Based Award to cease to qualify
for the Section 162(m) Exemption.  To the extent that any permitted action taken
by the Board conflicts with action taken by the Committee, the Board action
shall control.

4.5.  Award Certificates.  Each Award shall be evidenced by an Award
Certificate.

5.  SHARES AUTHORIZED

5.1.  Total Number.  The total number of Shares that may be delivered pursuant
to Awards under this Incentive Plan shall not exceed the number of Shares that
equals 8.85% of the outstanding Shares immediately after the initial public
offering of the Shares.  Awards of Options, Restricted Stock and Deferred Stock
under the Director Plan shall automatically be granted under this Incentive Plan
as and when provided for in the Director Plan.

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5.2.  Individual Limit.  The total number of Shares for which Awards may be
granted under this Incentive Plan to any one Eligible Participant shall not
exceed, in any three-year period, 15% of the total number of Shares for which
Awards may be made under this Incentive Plan.

5.3.  Source of Shares.  The Shares that may be delivered pursuant to Awards
granted under this Incentive Plan may be authorized but unissued Shares not
reserved for any other purposes or Shares held in or acquired for the treasury
of the Company, or both.

5.4.  Forfeitures, Etc.  If any Award is forfeited, any Option (and the related
Stock Appreciation Right, if any) or any Stock Appreciation Right not related to
an Option terminates, expires or lapses without being exercised, or any Stock
Appreciation Right is exercised for cash, the Shares subject to such Awards that
are, as a result, not delivered to the Participant shall again be available for
delivery in connection with Awards.  If the Exercise Price of any Option is
satisfied by delivering Shares to the Company (by either actual delivery or by
attestation), only the number of Shares issued net of the Shares delivered or
attested to shall be deemed delivered for purposes of determining the maximum
number of Shares available for delivery pursuant to Awards other than Incentive
Options under this Incentive Plan.  To the extent any Shares subject to an Award
are not delivered to a Participant because such Shares are used to satisfy an
applicable tax withholding obligation, such Shares shall not be deemed to have
been delivered for purposes of determining the maximum number of Shares
available for delivery under this Incentive Plan.

6.  SHARE ADJUSTMENTS

6.1.  Adjustments.  In the event of any change in corporate capitalization such
as a stock split, any corporate transaction such as a merger, consolidation,
separation, spin-off, or other distribution of stock or property of the Company,
any reorganization (whether or not such reorganization comes within the
definition of reorganization in Section 368 of the Code), or any partial or
complete liquidation of the Company, then notwithstanding any other provision of
this Incentive Plan, the Committee or Board may make such substitution or
adjustments in the aggregate number and kind of shares reserved for delivery
pursuant to Awards under this Incentive Plan, in the limitations set forth in
Section 5, in the number and kind of shares subject to outstanding Awards, in
the Exercise Price of outstanding Options and Stock Appreciation Rights, and/or
such other equitable substitution or adjustments as it may determine to be
appropriate; provided, that the number of shares subject to any Award shall
always be a whole number and that no adjustment will be permissible hereunder to
the extent it would cause any Qualified Performance-Based Award to fail to
qualify for the Section 162(m) Exemption.

6.2.  Adjustment Notices.  Notice of any adjustment or substitution pursuant to
this Section 6 (the "Adjustment Notice") shall be given by the Company to each
Participant holding an affected Award; provided, that such adjustment or
substitution shall be effective and binding for all purposes of this Incentive
Plan whether or not an Adjustment Notice is given.  An Adjustment Notice may be
given by making it generally available to Participants via a newsletter or other
written employee communication, whether such communication is made available on
paper or electronically.  Adjustment Notices, when given, shall be considered to
be part of the Award Certificate for each affected Award.

7.  AWARDS OF OPTIONS AND STOCK APPRECIATION RIGHTS

7.1.  Grants.  Options and Stock Appreciation Rights may be granted at such time
or times determined by the Committee following the Effective Date to any
Eligible Participant, except that Incentive Options may not be granted to
Eligible Participants who are not employees of a parent or

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subsidiary corporation, as defined in Sections 424(e) and (f), respectively, of
the Code, with respect to the Company. Each Option and each Stock Appreciation
Right shall be granted subject to such terms and conditions, if any, not
inconsistent with this Incentive Plan, as shall be determined by the Committee
and set forth in the applicable Award Certificate, including any provisions as
to continued employment or continued service as consideration for the grant or
exercise of such Option or Stock Appreciation Right, provisions as to
performance conditions, and any provisions that may be advisable to comply with
applicable laws, regulations or the rulings of any governmental authority.

7.2.  Consideration.  The Committee may offer Eligible Participants the
opportunity to elect to receive an Option or Stock Appreciation Right in lieu of
a salary increase or a bonus, or may offer Eligible Participants the opportunity
to purchase Options or Stock Appreciation Rights for cash or such other
consideration as the Committee determines.

7.3.  Exercise of Options or Stock Appreciation Rights.  An Option or Stock
Appreciation Right, or portion thereof, may be exercised during the period
beginning on the date when it first becomes exercisable in accordance with its
terms, and ending upon the expiration of its term or, if sooner, when it is
forfeited as a result of a Termination of Service or otherwise in accordance
with the terms and conditions of the Option or Stock Appreciation Right.  The
term of an Option or Stock Appreciation Right shall expire on such date, not
later than the tenth anniversary of the Grant Date, as set forth in the
applicable Award Certificate.  The exercise of all or a portion of a Stock
Appreciation Right granted with a related Option shall result in the forfeiture
of all or a corresponding portion of the related Option and vice versa.  To
exercise an Option or Stock Appreciation Right, a Participant shall give notice
to the Company or its agent, specifying the number of Shares with respect to
which the Option or Stock Appreciation Right is being exercised, and otherwise
complying with such procedures as the Committee may from time to time establish.

7.4.  Effect of Termination of Service.  Unless otherwise set forth in the
applicable Award Certificate, the effect of a Participant's Termination of
Service on any Option or Stock Appreciation Right then held by the Participant,
to the extent it has not previously expired or been exercised, shall be as
follows:

(a)  Before Vesting has Commenced.  If such Termination of Service occurs before
     any portion of the Option or Stock Appreciation Right has become
     exercisable, the Participant shall forfeit such Option or Stock
     Appreciation Right;

(b)  After Vesting has Commenced.  If such Termination of Service occurs after
     the Option or Stock Appreciation Right has become exercisable in whole or
     in part:

     (i)  Voluntary Resignation. As a result of the Participant's voluntary
          resignation, such Option or Stock Appreciation Right shall be
          exercisable for a period of 90 days following such Termination of
          Service, to the extent it is exercisable immediately before such
          Termination of Service, and shall then be forfeited to the extent not
          exercised;

     (ii) Termination for Cause. In a Termination for Cause, the Participant
          shall forfeit such Option or Stock Appreciation Right;

     (iii) Retirement. By reason of the Participant's Retirement, such Option or
          Stock Appreciation Right shall be exercisable for a period of five
          years following such

                                      -10-
<PAGE>

          Termination of Service, to the extent it is exercisable immediately
          before such Termination of Service, and shall then be forfeited to the
          extent not exercised; and

     (iv) Other Involuntary Termination. In the case of any other Termination of
          Service (including by reason of death or Disability), such Option or
          Stock Appreciation Right shall be exercisable for a period of one year
          following such Termination of Service, to the extent it is exercisable
          immediately before such Termination of Service, and shall then be
          forfeited to the extent not exercised.

(c)  Limitation.  Notwithstanding the foregoing, in no event shall an Option or
     Stock Appreciation Right be exercisable after the expiration of its term.

7.5.  No Obligation to Exercise Option or Stock Appreciation Right.  The
granting of an Option or Stock Appreciation Right shall impose no obligation
upon the Participant or upon a beneficiary of a Participant to exercise such
Option or Stock Appreciation Right.

8.  OPTIONS

8.1.  Exercise Price.  The per-Share Exercise Price of an Option shall be
established by the Committee in connection with the grant thereof, but shall not
be less than 100% of the Fair Market Value of a Share on the Grant Date.  No
exercise of an Option shall be effective before payment of the Exercise Price
therefor.

8.2.  Method of Payment.  The Exercise Price for Shares purchased upon exercise
of an Option shall be paid upon such terms as shall be set forth in the
applicable Award Certificate.  Without limiting the foregoing, the Committee may
establish payment terms for the exercise of Options that permit the Participant
to deliver Shares (or other evidence of ownership of Shares satisfactory to the
Company), including, at the Committee's option, Restricted Shares, with a Fair
Market Value equal to the Exercise Price as payment; provided, that any such
Shares have been owned by the Participant for at least six months free of any
restrictions and without being subject to forfeiture.  The payment terms for an
Incentive Option must be established in connection with the grant thereof.

9.  STOCK APPRECIATION RIGHTS

9.1.  Nature of Right.  A Stock Appreciation Right shall entitle its holder to
receive, upon exercise, a payment in cash or Shares having an aggregate value
equal to the Stock Appreciation Right Fair Market Value.  A Stock Appreciation
Right may be granted either (i) with a related Option at the time the Option is
originally granted or, in the case of a Non-Qualified Option, thereafter, or
(ii) without a related Option.

9.2.  Exercise Price.  The Exercise Price per Share of a Stock Appreciation
Right that has a related Option shall equal the Exercise Price per Share of the
related Option.  The Exercise Price per Share of a Stock Appreciation Right that
does not have a related Option shall be established in connection with the grant
thereof, but shall not be less than 100% of the Fair Market Value of a Share on
the Grant Date.

9.3.  Terms and Conditions.  Except as expressly provided herein, each Stock
Appreciation Right that is granted hereunder shall be subject to the terms and
conditions specified in the applicable Award Certificate.  A Stock Appreciation
Right that is granted with a related Option shall be subject to the same terms
and conditions as the Option, shall be exercisable only to the extent its

                                      -11-
<PAGE>

related Option is exercisable, and shall terminate or be forfeited and cease to
be exercisable when the term of the related Option expires or the related Option
is forfeited.

9.4.  Form of Payment.  The Committee shall determine, in each case, whether the
payment to a Participant upon exercise of a Stock Appreciation Right will be in
the form of all cash, all Shares (which may be Restricted Shares) or any
combination thereof.  If payment is to be made in Shares, the number of Shares
shall be equal to the value of the Stock Appreciation Right, divided by the
Stock Appreciation Right Fair Market Value of Shares on the date of exercise.

9.5.  Proceeds.  The Committee shall determine the timing of any payment made in
cash, Shares or a combination thereof upon exercise of a Stock Appreciation
Right hereunder, whether in a lump sum, in annual installments or otherwise
deferred, and the Committee shall determine whether such payments may bear
interest or dividend equivalents pursuant to Section 11.

10.  BONUS SHARES AND RESTRICTED SHARES

10.1.  Awards.  An Award of Shares or Restricted Shares may be made at such time
or times determined by the Committee following the Effective Date to any person
who is an Eligible Participant.  The terms and conditions of payment of any
Award, including, without limitation, what part of such Award shall be paid in
unrestricted Shares or Restricted Shares, the time or times of payment of any
Award, and the time or times of the lapse of the restrictions on Restricted
Shares shall be set forth in the applicable Award Certificate.

10.2.  Shares.  For the purpose of determining the number of Shares to be used
in payment of an Award denominated in cash but payable in whole or in part in
Shares or Restricted Shares, the cash value of the Award to be so paid shall be
divided by the Fair Market Value of a Share on the date of the determination of
the amount of the Award by the Committee, or, if the Committee so directs, the
date immediately preceding the date the Award is paid.

10.3.  Restricted Shares.  An Award of Restricted Shares shall be delivered to
the Participant at the time of grant either by book-entry registration or by
delivering to the Participant, or a custodian or escrow agent (including without
limitation the Company or one or more of its employees) designated by the
Committee, a certificate or certificates for such Restricted Shares, registered
in the name of such Participant.  Except to the extent otherwise provided in the
applicable Award Certificate, the Participant shall have all of the rights of a
stockholder with respect to such Restricted Shares.

10.4.  Terms and Conditions.  Restricted Shares shall be subject to such terms
and conditions, and to such restrictions against sale, transfer or other
disposition, as may be set forth in the applicable Award Certificate.  Unless
otherwise set forth in the applicable Award Certificate, new, additional or
different Shares or other securities resulting from any adjustment to or
substitution for Restricted Shares pursuant to Section 6 shall be subject to the
same terms, conditions, and restrictions as the Restricted Shares prior to such
adjustment or substitution.  The Committee may remove, modify or accelerate the
removal of forfeiture conditions and other restrictions on any Restricted Shares
in the event of hardship or Disability of the Participant while employed (or
while providing services as a director), in connection with the Participant's
Termination of Service or relocation to another country, or for such other
reasons as the Committee may deem appropriate, except to the extent that such
action would cause a Qualified Performance-Based Award to cease to qualify for
the Section 162(m) Exemption.  In the event of the death of a Participant
following the transfer of Restricted Shares to him or her, the legal
representative of the Participant, the beneficiary designated in writing by the
Participant during his or her lifetime, or the person

                                      -12-
<PAGE>

receiving such Shares under the Participant's will or under the laws of descent
and distribution shall take such Shares subject to the same restrictions,
conditions and provisions in effect at the time of the Participant's death, to
the extent applicable, unless otherwise set forth in the applicable Award
Certificate.

11.  DIVIDENDS, DIVIDEND EQUIVALENTS AND INTEREST EQUIVALENTS

11.1.  No Cash Dividends.  No cash dividends shall be paid on Shares that have
been awarded but not registered or delivered.  The applicable Award Certificate
may provide for the payment of dividend equivalents with respect to any Option,
Stock Appreciation Right or other Award pursuant to which Shares are or may
become deliverable in the future, equal in value to the cash dividends that
would have been paid with respect to each Share subject to such Award, if it had
been outstanding during the period between the date of the Award and the time
each such Share is delivered or the Award is forfeited as to such Share.
"Dividend equivalents" may be:

(a)  paid in cash or Shares, either from time to time prior to or at the time of
     the delivery of such Shares, or upon expiration of the Option or Stock
     Appreciation Right, if it shall not have been fully exercised (except that
     payment of the dividend equivalents on Incentive Options may not be made
     prior to exercise); or

(b)  converted into contingently credited Shares (with respect to which dividend
     equivalents shall accrue) in such manner, at such value, and deliverable at
     such time or times as may be set forth in the applicable Award Certificate.

11.2.  Interest Equivalents.  The applicable Award Certificate may provide for
payment of interest equivalents (i) on any portion of any Award payable at a
future time in cash, and (ii) on dividend equivalents that are payable at a
future time in cash.

11.3.  Restricted Shares.  The applicable Award Certificate may provide that
dividends paid on Restricted Shares shall, during the applicable restricted
period, be held by the Company to be paid upon the lapse of restrictions or to
be forfeited upon forfeiture of the Shares.

12.  MISCELLANEOUS PROVISIONS

12.1.  Non-Transferability.  During a Participant's lifetime, his or her Options
and Stock Appreciation Rights shall be exercisable only by the Participant.  No
Awards shall be transferable other than by will or the laws of descent and
distribution; no Awards shall be subject, in whole or in part, to attachment,
execution or levy of any kind; and any purported transfer in violation hereof
shall be null and void.  Without limiting the generality of the foregoing, no
domestic relations order purporting to authorize a transfer of an Award shall be
recognized as valid.  The Committee may establish such procedures as it deems
appropriate for a Participant to designate a beneficiary to whom any amounts
payable or Shares deliverable in the event of, or following, the Participant's
death, may be provided.

12.2.  No Right to Continued Employment or Service.  Nothing contained in this
Incentive Plan, any Award Certificate or any booklet or document describing or
referring to this Incentive Plan shall be deemed to confer on any Eligible
Participant the right to continue as an employee or director of the Company or
an Affiliate, whether for the duration of a Participant's Award vesting schedule
or otherwise, or affect the right of the Company or an Affiliate to terminate
the employment or service of any such person for any reason.

                                      -13-
<PAGE>

12.3.  Governing Law; Construction.  This Incentive Plan and any actions taken
hereunder shall be governed by, and construed in accordance with, the laws of
the State of Delaware, without regard to the application of the conflicts of
laws provisions thereof.  Titles and headings to Sections are for purposes of
reference only, and shall in no way limit, define or otherwise affect the
meaning or interpretation of this Incentive Plan.

12.4.  Certain Tax Matters.  Notwithstanding any other provision of this
Incentive Plan, the Committee may make such provisions and take such steps as it
may deem necessary or appropriate for the withholding of any taxes that the
Company is required by any law or regulation of any governmental authority,
whether federal, state or local, domestic or foreign, to withhold in connection
with the grant or exercise of any Option or otherwise in connection with any
Option, any Stock Appreciation Right or the exercise thereof, or otherwise in
connection with any Award, including without limitation the withholding of cash
or Shares that would be paid or delivered pursuant to such exercise or Award or
any other exercise or Award under this Incentive Plan until the Participant
reimburses the Company for the amount the Company is required to withhold with
respect to such taxes, or cancelling any portion of such Award or any other
Award under this Incentive Plan in an amount sufficient to reimburse the Company
for the minimum amount it is required to so withhold, or selling any property
contingently credited by the Company for the purpose of paying such Award or any
other Award under this Incentive Plan, in order to withhold or reimburse the
Company for the minimum amount it is required to so withhold.  In addition, the
Committee may establish appropriate procedures to ensure that it receives prompt
notice of any event that may make available to the Company or any Affiliate any
tax deduction in connection with an Award.

12.5.  Foreign Participants.  In order to facilitate the granting of Awards to
Eligible Participants who are foreign nationals or who are employed outside of
the United States of America, the Committee may provide for such special terms
and conditions, including without limitation substitutes for Awards, as the
Committee may consider necessary or appropriate to accommodate differences in
local law, tax policy or custom.  The Committee may approve any supplements to,
or amendments, restatements or alternative versions of this Incentive Plan as it
may consider necessary or appropriate for the purposes of this Section 12.5
without thereby affecting the terms of this Incentive Plan as in effect for any
other purpose, and the Secretary or other appropriate officer of the Company may
certify any such documents as having been approved and adopted pursuant to
properly delegated authority; provided, that no such supplements, amendments,
restatements or alternative versions shall include any provisions that are
inconsistent with the spirit of this Incentive Plan, as then in effect.
Participants subject to the laws of a foreign jurisdiction may request copies
of, or the right to view, any materials that are required to be provided by the
Company pursuant to the laws of such jurisdiction.

12.6.  No Rights as a Stockholder.  No Participant shall have any rights as a
stockholder with respect to any Shares to be delivered pursuant to an Award
prior to the date that the Participant is recorded as the holder of such Shares
on the records of the Company and such Shares are delivered to such Participant
by book-entry registration or delivery of a certificate or certificates therefor
to the Participant, or to a custodian or escrow agent designated by the
Committee (which may include, without limitation, the Company or one or more of
its employees).

12.7.  No Right to Award.  No employee or other person shall have any claim or
right to be granted an Award under this Incentive Plan.  Having received an
Award under this Incentive Plan shall not give a Participant or other person any
right to receive any other Award under this Incentive Plan.  A Participant shall
have no rights or interests in any Award, except as set forth herein and in the
applicable Award Certificate.

                                      -14-
<PAGE>

12.8.  Unfunded Plan.  It is presently intended that this Incentive Plan shall
be unfunded.  Except for reserving a sufficient number of authorized Shares, to
the extent required by law to meet the requirements of this Incentive Plan, the
Company shall not be required to establish any special or separate fund or to
make any other segregation of assets to assure the delivery of Shares relating
to Awards granted pursuant to this Incentive Plan.

12.9.  Exclusion from Pension and other Benefit Plan Computation.  Except to the
extent otherwise required by applicable law, by exercise of an Option or Stock
Appreciation Right or receipt of another type of Award, (i) each Participant
shall be deemed to have agreed that such Award is special incentive compensation
that will not be taken into account, in any manner, as salary, compensation or
bonus in determining the amount of any payment under any pension, retirement or
other employee benefit plan of the Company or an Affiliate, and (ii) each
beneficiary of a deceased Participant shall be deemed to have agreed that such
Award will not affect the amount of any life insurance coverage, if any,
provided by the Company or an Affiliate on the life of the Participant that is
payable to the beneficiary under any life insurance plan covering employees or
directors of the Company or an Affiliate.

12.10.  Notice.  Except as otherwise provided in this Incentive Plan, all
notices or other communications required or permitted to be given under this
Incentive Plan to the Company shall be in writing and shall be deemed to have
been duly given if delivered personally or mailed, postage pre-paid, as follows:
(i) if to the Company, at its principal business address to the attention of the
Secretary; and (ii) if to any Participant, at the last address of the
Participant known to the sender at the time the notice or other communication is
sent.

12.11.  Inurement of Rights and Obligations.  The rights and obligations under
this Incentive Plan and any related documents shall inure to the benefit of, and
shall be binding upon, the Company, its successors and assigns, and the
Participants and their beneficiaries.

12.12.  Costs and Expenses of This Incentive Plan.  Except as otherwise provided
herein, the costs and expenses of administering this Incentive Plan shall be
borne by the Company, and shall not be charged to any Award nor to any
Participant receiving an Award.  Costs and expenses associated with the
redemption or exercise of any Award under this Incentive Plan, including, but
not limited to, commissions charged by any agent of the Company, may be charged
to the Participant.

12.13.  No Limitation on Rights of the Company

(a)  The grant of any Award shall not in any way affect the right or power of
     the Company to make adjustments, reclassifications, or changes in its
     capital or business structure or to merge, consolidate, dissolve,
     liquidate, sell or transfer all or any part of its business or assets.
     Further, this Incentive Plan shall not restrict the authority of the
     Company, for proper corporate purposes, to grant or assume Awards, other
     than under this Incentive Plan, to or with respect to any other person.

(b)  If the Committee so directs, the Company may issue or transfer Shares to an
     Affiliate, for such lawful consideration as the Committee may specify, upon
     the condition or understanding that the Affiliate will transfer such Shares
     to a Participant in accordance with the terms of an Award granted to such
     Participant and specified by the Committee pursuant to the provisions of
     this Incentive Plan.  All Shares issued pursuant to Awards that are
     forfeited shall revert to the Company upon such forfeiture.

                                      -15-
<PAGE>

12.14.  Legal Requirements

(a)  Restrictions on Resale.  Notwithstanding any other provision of this
     Incentive Plan, no Participant who acquires Shares pursuant to this
     Incentive Plan may, during any period of time that such Participant is an
     affiliate of the Company (within the meaning of the rules and regulations
     of the Securities and Exchange Commission under the Securities Act of 1933,
     as amended (the "1933 Act")), sell such Shares, unless such offer and sale
     is made (i) pursuant to an effective registration statement under the 1933
     Act, which is current and includes the Shares to be sold, or (ii) pursuant
     to an appropriate exemption from the registration requirement of the 1933
     Act, such as that set forth in Rule 144 promulgated under the 1933 Act.

(b)  Registration, Listing and Qualification of Shares.  Notwithstanding any
     other provision of this Incentive Plan, if at any time the Committee shall
     determine that the registration, listing or qualification of the Shares
     covered by an Award upon any securities exchange or under any foreign,
     federal, state or local law or practice, or the consent or approval of any
     governmental regulatory body, is necessary or desirable as a condition of,
     or in connection with, the granting of such Award or the purchase or
     receipt of Shares thereunder, no Shares may be purchased, delivered or
     received pursuant to such Award unless and until such registration,
     listing, qualification, consent or approval shall have been effected or
     obtained free of any condition not acceptable to the Committee.  Any
     Participant receiving or purchasing Shares pursuant to an Award shall make
     such representations and agreements and furnish such information as the
     Committee may request to assure compliance with the foregoing or any other
     applicable legal requirements.  The Company shall not be required to issue
     or deliver any certificate or certificates for Shares under this Incentive
     Plan prior to the Committee's determination that all related requirements
     have been fulfilled.  The Company shall in no event be obligated to
     register any securities pursuant to the 1933 Act or applicable state or
     foreign law or to take any other action in order to cause the issuance and
     delivery of such certificates to comply with any such law, regulation or
     requirement.

12.15.  Fractional Shares.  The Company shall not be required to issue any
fractional Shares pursuant to this Incentive Plan.  The Committee may provide
for the elimination of fractions or for the settlement thereof in cash.

12.16.  Amendment or Termination

(a)  The Board People Committee may, from time to time, amend or modify this
     Incentive Plan or any outstanding Awards, including, without limitation, to
     authorize the Committee to make Awards payable in other securities or other
     forms of property of a kind to be determined by the Committee, and such
     other amendments as may be necessary or desirable to implement such Awards,
     or terminate this Incentive Plan or any provision thereof; provided, that
     no amendments or modifications to this Incentive Plan shall, without the
     prior approval of the stockholders normally entitled to vote for the
     election of directors of the Company, permit the Company to decrease the
     Exercise Price of any outstanding Option or Stock Appreciation Right; and
     provided, further, that amendments to Section 5.1 shall require the
     approval of the Board.

(b)  No amendment to or termination of this Incentive Plan or any provision
     hereof, and no amendment to or cancellation of any outstanding Award shall,
     without the written consent of the affected Participant, adversely affect
     any outstanding Award.

                                      -16-
<PAGE>

(c)  Notwithstanding the above provisions, the Board People Committee shall have
     authority to amend outstanding Awards and this Incentive Plan to take into
     account changes in law and tax and accounting rules as well as other
     developments, and to grant Awards that qualify for beneficial treatment
     under such rules, without stockholder approval and without the consent of
     affected Participants.

12.17.  Change of Control

(a)  The provisions of this Section 12.17(a) shall apply notwithstanding any
     provision of this Incentive Plan other than Sections 12.4, 12.14, and
     12.17(b), unless the Committee determines otherwise at the time of grant.
     Upon the occurrence of a Monsanto Change of Control, (i) any Awards
     outstanding as of the date of such Change of Control, and that are not then
     vested, shall become fully vested, (ii) all then-outstanding Options and
     Stock Appreciation Rights shall be exercisable, and (iii) any restrictions
     or other conditions applicable to any outstanding Awards shall lapse, and
     such Awards shall become free of all restrictions and conditions.  In
     addition, upon the occurrence of a Second Trigger after a Pharmacia Change
     of Control with respect to a Participant, (i) any Awards held by such
     Participant that are outstanding as of the date of such Second Trigger, and
     that are not then vested, shall become fully vested, (ii) all then-
     outstanding Options and Stock Appreciation Rights held by such Participant
     shall be exercisable, and (iii) any restrictions or other conditions
     applicable to any outstanding Awards held by such Participant shall lapse,
     and such Awards shall become free of all restrictions and conditions.

(b)  With respect to Awards held by a Participant who is also a Participant in
     the Monsanto Company Excess Parachute Tax Indemnity Plan (the "Indemnity
     Plan") or any comparable or successor plan at the time of a Change of
     Control, the vesting and lapse of restrictions and conditions provided for
     in Section 12.17(a) shall not occur as a result of that Change of Control,
     to the extent that the provisions of Section 4(b) of the Indemnity Plan (or
     any comparable provision of such comparable or successor plan) require that
     such vesting and lapse not occur.

                                      -17-<PAGE>

                                                                 Exhibit 4.2(a)
===============================================================================

                            EARTHWATCH INCORPORATED

                                --------------

                      FIRST SUPPLEMENTAL INDENTURE TO THE

                        AMENDED AND RESTATED INDENTURE

                           Dated as of July 7, 1999

                                --------------

                             THE BANK OF NEW YORK
                                    Trustee

                                --------------

                    12-1/2% Senior Discount Notes due 2005

===============================================================================
<PAGE>

          This First Supplemental Amended and Restated Indenture (the
"Supplemental Indenture"), dated as of July 7, 1999, between EarthWatch
Incorporated, a corporation organized under the laws of the State of Delaware,
and the Bank of New York, as Trustee (the "Trustee").

                            RECITALS OF THE COMPANY

          Whereas, pursuant to Section 9.2 of the Amended and Restated Senior
Notes Indenture dated April 8, 1999, between the Company and the Trustee (the
"Indenture"), relating to the 12 1/2% Senior Notes due 2005, the Company seeks
to amend the provisions related to certain defined terms and other matters
provided for below to allow for the issuance of additional senior notes;

          Whereas, all things necessary to make this Supplemental Indenture a
valid supplement to the Indenture according to the terms of this Supplemental
Indenture and the Indenture have been done;

          NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Company and the Trustee mutually covenant and agree as follows:

                                  ARTICLE ONE
                                 DEFINED TERMS

          Section 1.1. Defined Terms.  All capitalized terms used herein without
definition shall have the meaning ascribed thereto in the Indenture, except as
amended hereby. The words "herein," "hereof" and "hereby" and other words of
similar import used in this Supplemental Indenture refer to this Supplemental
Indenture as a whole and not to any particular section of the Supplemental
Indenture.

                                  ARTICLE TWO
                                   AMENDMENT

          Section 2.1. Definitions.  The following definitions in Section 1.01
of the Indenture are hereby amended as follows:

          (a) The definition of "Permitted Specified Indebtedness" in Section
1.01 of the Indenture is hereby deleted in its entirety and replaced with the
following:

     "'Permitted Specified Indebtedness' means one or more issues of
     Indebtedness in the form of notes or a bank loan facility resulting in
     aggregate net proceeds to the Company not to exceed $130,000,000, after any
     amounts paid in respect of any underwriting discounts and commissions,
     fees, expenses and other costs payable by the Company and associated with
     such issuance of such notes or creation of such bank loan facility, as the
     case may be, incurred after the Closing
<PAGE>

                                       2

     Date and so specified as Permitted Specified Indebtedness by the Company at
     the time of incurrence pursuant to an officers' certificate delivered to
     the Trustee under the Indenture; which Indebtedness (i) shall be equal in
     priority of payment or subordinate in right of payment with the Notes, (ii)
     shall not be secured by any collateral other than the Collateral and/or any
     prefunded interest advanced in connection with such Indebtedness, (iii)
     shall be an obligation of the Company only and not any Subsidiary of the
     Company and (iv) shall share in the Collateral in the manner specified in
     the Security Documents."

          (b) The definition of "Permitted Specified Indebtedness Insurance
Amount" in Section 1.01 of the Indenture is hereby deleted in its entirety and
replaced with the following:

     "'Permitted Specified Indebtedness Insurance Amount' means the sum of
     (i) the aggregate original principal amount of all Permitted Specified
     Indebtedness and (ii) the aggregate of any original issue discount or
     interest in respect of all Permitted Specified Indebtedness accrued from
     the period commencing on the issue date(s) thereof through the earlier of
     June 30, 2000 and the date of the first intentional ignition of the launch
     vehicle for the First QuickBird Satellite."

          (c) The definition of "Security Documents" in Section 1.01 of the
Indenture is hereby deleted in its entirety and replaced with the following:

     "'Security Document' means (1) the Pledge Agreement, dated as of
     July 7, 1999, among the Company, the Collateral Trustee and The Bank of New
     York, as securities intermediary, under which the Company will pledge to
     the Collateral Trustee certain United States Treasury Securities purchased
     with a portion of the net proceeds of the issuance of the Permitted
     Specified Indebtedness to secure payment from time to time of premiums in
     respect of the First QuickBird Launch Insurance and (2) the Amended and
     Restated Collateral Pledge and Security Agreement dated as of July 7, 1999,
     as amended, made by the Company in favor of the Collateral Trustee pursuant
     to which Company shall grant to the Collateral Trustee a Lien in the
     Collateral and pursuant to which any proceeds of the Collateral shall be
     allocated in order to (A) provide on a pari passu basis for (i) the
     original principal amount of the Notes on the Issue Date and the original
     issue discount and interest accrued for the period from the Issue Date
     through the earlier of June 30, 2000 and the date that the First QuickBird
     Satellite is launched, all as more specifically provided therein and (ii)
     the original principal amount of the Permitted Specified Indebtedness and
     original issue discount or interest accrued for the period from the issue
     date(s) thereof through the earlier of June 30, 2000 and the date that the
     First QuickBird Satellite is launched, all as more specifically provided
     therein and (B) provide for the residual payment to the Company after the
     required priority payments in respect of the Notes and
<PAGE>

                                       3

     the Permitted Specified Indebtedness, all as more specifically provided
     therein, as such Agreement may be amended, restated, supplemented or
     otherwise modified from time to time."

          (d) The definition of "Specified Date" in Section 1.01 of the
Indenture is hereby deleted in its entirety and replaced with the following:

     "'Specified Date' means (i) any Payment Date with respect to an Offer to
     Purchase pursuant to Section 4.6, (ii) any Payment Date with respect to an
     Offer to Purchase pursuant to Section 4.16, (iii) any Redemption Date with
     respect to an optional redemption pursuant to Section 3.1 or (iv) any date
     on which the Notes are due and payable after an Event of Default."

          Section 2.2.  New Defined Term.  The Indenture is hereby amended by
adding the following defined term to Section 1.01 of the Indenture thereto in
the appropriate alphabetical order:

     "'Insurance Proceeds Payment Amount' means the amount of proceeds, if any,
     received by the Collateral Trustee under First QuickBird Launch Insurance."

          Section 2.3.  Amendment to Article Four.  The Indenture is hereby
amended by adding to Article Four the following as Section 4.16 of the
Indenture.

          "Section 4.16.  Repurchase of Notes upon an Insurance Proceeds
     Payment.  The Company must commence, within 30 days of receipt by the
     Collateral Trustee of any proceeds under the First Quickbird Launch
     Insurance, and must thereafter consummate an Offer to Purchase the Notes
     then outstanding, and an offer to purchase the Permitted Specified
     Indebtedness then outstanding, on a pro rata basis in an aggregate amount
     equal to the Insurance Proceeds Payment Amount not previously subject to an
     Offer to Purchase under this Section 4.16 at a purchase price for the Notes
     and the Permitted Specified Indebtedness equal to 100% of the accreted
     value thereof on the relevant payment date, plus accrued and unpaid
     interest, if any, to such payment date. If the aggregate purchase price of
     the Notes and the Permitted Specified Indebtedness tendered in connection
     with such offers to purchase is less than the Insurance Proceeds Payment
     Amount, the remaining Insurance Proceeds Payment Amount shall be paid over
     to the Company and may be used for general corporate purposes."

          Section 2.4.  Amendment to Section 6.1.  Section 6.1 of the Indenture
is hereby amended by:

<PAGE>

                                       4

          (a)  deleting clause (c) in its entirety and replacing it with the
               following:

     "(c) the failure to make or consummate an Offer to Purchase in accordance
      with Section 4.6 or Section 4.16 hereof;"

          (b)  deleting clause (i) in its entirety and replacing it with the
               following:

          "(i) with respect to the First QuickBird Satellite, there shall occur
     (1) the loss of more than 15% of such satellite's capacity or (2) any other
     event that permits or requires the payment of proceeds of the First
     QuickBird Launch Insurance by an insurance company thereunder and, in
     either such case, the proceeds of the First QuickBird Launch Insurance are
     not paid over to the Collateral Trustee within 90 days of demand being made
     under the applicable First QuickBird Launch Insurance policy."

          Section 2.5.  Amendment to Section 8.2.  The Indenture is hereby
amended by deleting the sentence prior to clause (a) of Section 8.2 in its
entirety and replacing it with the following:

          "Section 8.2.  Defeasance of Certain Obligations.  The Company may
     omit to comply with any term, provision or condition set forth in Sections
     4.2 through 4.12, 4.14 and 4.16 (except for any covenant otherwise required
     by the TIA), and clauses (c), (d), (e) and (f) of Section 6.1 shall be
     deemed not to be Events of Default, in each case with respect to the
     outstanding Notes if:"

          Section 2.6.  Amendment to Section 10.1.  The Indenture is hereby
amended by deleting clause (a) of Section 10.1 in its entirety and replacing it
with the following:

          "(a) The Company shall enter into the Security Documents (in the form
     attached hereto as Exhibit F) and comply with the terms and provisions
     thereof. The purpose of the Security Documents is to provide the Trustee
     with an interest in the First QuickBird Launch Insurance and any and all
     proceeds thereof which will be shared, pari passu, with the interest
     therein of the holders of Permitted Specified Indebtedness as provided in
     the Security Documents. It is the intent that (i) the interest of the
     Trustee (through the Collateral Trustee) in such First QuickBird Launch
     Insurance not be less than an amount sufficient to provide for the
     aggregate original principal amount of the Notes and original issue
     discount or interest accrued on the Notes for the period from the issue
     date(s) through the earlier of June 30, 2000 and the date of the first
     intentional ignition of the launch vehicle for the First QuickBird
     Satellite, and (ii) the aggregate interest of the Collateral Trustee in
     such First QuickBird Launch Insurance not be less than the sum of (x) the
     amount provided in clause (i) of this sentence plus (y) the
<PAGE>

                                       5

     Permitted Specified Indebtedness Insurance Amount. The Trustee and the
     Collateral Trustee is authorized to enter into such modifications,
     amendments and supplements to the Security Documents for the purpose of
     effectively securing any issues of Permitted Specified Indebtedness on a
     pari passu basis with the Notes as provided in this Section 10.1."

                                 ARTICLE THREE
                                 MISCELLANEOUS

          Section 3.1.  Governing Law.  This Supplemental Indenture shall be
governed by and construed in accordance with the laws of the State of New York.

          Section 3.2.  Severability Clause.  In case any provision in this
Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby and such provision shall be ineffective only to the
extent of such invalidity, illegality or unenforceability.

          Section 3.3.  Entire Agreement.  This Supplemental Indenture is
intended by the parties to be a final expression of their agreement in respect
of the subject matter contained herein and, together with the Indenture,
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

          Section 3.4.  Ratification; Supplemental Indentures Part of Indenture.
Except as expressly amended hereby, the Indenture is in all respects ratified
and confirmed and all the terms, conditions and provisions thereof shall remain
in full force and effect. This Supplemental Indenture shall form a part of the
Indenture for all purposes, and every Holder heretofore or hereafter
authenticated and delivered shall be bound hereby. The Trustee makes no
representation or warranty as to the validity or sufficiency of this
Supplemental Indenture.

          Section 3.5.  Effectiveness.  This Supplemental Indenture shall become
effective upon due execution.

          Section 3.6.  Counterparts.  The parties hereto may sign one or more
copies of this Supplemental Indenture in counterparts, all of which together
shall constitute one and the same agreement.

          Section 3.7.  Headings.  The headings of the Articles and the sections
in this Supplemental Indenture are for convenience of reference only and shall
not be deemed to alter or affect the meaning or interpretation of any provisions
hereof.
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.

                               EARTHWATCH INCORPORATED

                               By: /s/ Herbert T. Satterlee
                                   -----------------------------
                                   Name:  Herbert T. Satterlee
                                   Title: Chief Executive Officer,
                                          President and Director

                               THE BANK OF NEW YORK, as Collateral
                                   Agent

                               By: /s/ Walter N. Gitlin
                                   -----------------------------
                                   Name:  Walter N. Gitlin
                                   Title: Vice President

                                   Address for notice:
                                   101 Barclay Street, Floor 21 West
                                   New York, New York 10286
                                   Telecopier No: (212) 815-5915
                                   Attention: Corporate Trust Trustee
                                   Administration

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