Document:

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                                                                   EXHIBIT 10.14

                              EIGHTH AMENDMENT TO
                 FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

     THIS EIGHTH AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") dated as of the 30th day of May, 2001, by and among PLAINS
 ---------
RESOURCES INC., a Delaware corporation (the "Company"), FIRST UNION NATIONAL
                                             -------
BANK (assignee of ING (U.S.) Capital LLC, successor in interest to ING (U.S.)
Capital Corporation), as Agent ("Agent"), and the Lenders named herein.
                                 -----

                             W I T N E S S E T H:

     WHEREAS,  the Company, Agent and Lenders entered into that certain Fourth
Amended and Restated Credit Agreement dated as of May 22, 1998, as amended by a
First Amendment to Fourth Amended and Restated Credit Agreement dated November
17, 1998, a Second Amendment to Fourth Amended and Restated Credit Agreement
dated March 15, 1999, a Third Amendment to Fourth Amended and Restated Credit
Agreement dated June 21, 1999, a Fourth Amendment to Fourth Amended and Restated
Credit Agreement dated September 15, 1999, a Fifth Amendment to Fourth Amended
and Restated Credit Agreement dated December 1, 1999, a Limited Waiver and
Consent dated as of January 28, 2000, a Sixth Amendment to Fourth Amended and
Restated Credit Agreement dated as of June 12, 2000 and a Seventh Amendment to
Fourth Amended and Restated Credit Agreement dated as of October 11, 2000 (as
amended, the "Original Agreement") for the purposes and consideration therein
              ------------------
expressed, pursuant to which Lenders became obligated to make and made loans to
the Company as therein provided; and

     WHEREAS, the Company, Agent and Lenders desire to amend the Original
Agreement for the purposes described herein;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the Original Agreement, in consideration
of the loans which may hereafter be made by Lenders to the Company, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto do hereby agree as follows:

                   ARTICLE I. -- Definitions and References
                                 --------------------------

     (S) 1.1.  Terms Defined in the Original Agreement.  Unless the context
               ---------------------------------------
otherwise requires or unless otherwise expressly defined herein, the terms
defined in the Original Agreement shall have the same meanings whenever used in
this Amendment.

     (S) 1.2.  Other Defined Terms.  Unless the context otherwise requires, the
               -------------------
following terms when used in this Amendment shall have the meanings assigned to
them in this (S) 1.2.

               "Amendment" means this Eighth Amendment to Fourth Amended and
                ---------
     Restated Credit Agreement.

                                       1
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               "Amendment Documents" means this Amendment.
                -------------------

               "Credit Agreement" means the Original Agreement as amended
                ----------------
                hereby.

                           ARTICLE II. -- Amendments
                                          ----------

     (S) 2.1.  Definitions.  (a) The definitions of "PAAI Transfer" and
               -----------
"Revolving Credit Termination Date" set forth in Section 1.01 of the Original
Agreement are hereby amended in their entirety to read as follows:

     "PAAI Transfer" shall mean the occurrence of any of the following:
      -------------

     (i)   The Company, either directly or indirectly, shall cease to be the
           legal and beneficial owner of 100% of the outstanding capital stock
           of PAAI or 100% of the outstanding limited liability company
           interests of PAAI LLC.

     (ii)  PAAI shall cease to be the legal and beneficial owner of 75% or more
           of the ownership interests (including all securities which are
           convertible into ownership interests) of Plains All American GP LLC
           owned by PAAI immediately following the consummation of the PAAI Sale
           Transaction.

     (iii) The Company or any of its Subsidiaries, PAAI or PAAI LLC, or any
           successor (by conversion, merger or otherwise) of any of them, or any
           combination of the foregoing Persons, either directly or indirectly,
           shall cease to be the legal and beneficial owner of 75% or more in
           the aggregate of the number of limited partner units of the MLP owned
           either directly or indirectly by the Company or any of its
           Subsidiaries, PAAI, PAAI LLC or each successor (by conversion, merger
           or otherwise) of each of them, or any combination of the foregoing
           Persons, in the aggregate immediately following the consummation of
           the PAAI Sale Transaction.

          "Revolving Credit Termination Date" shall mean the earlier of (a) July
           ---------------------------------
     1, 2003 and (b) the date on which the Commitment is reduced to zero or
     terminated pursuant to Section 2.03 hereof.

     (b)  The following definition of "PAAI Sale Transaction" is hereby added to
Section 1.1 of the Original Agreement immediately following the definition of
"PAAI", to read as follows:

          "PAAI Sale Transaction" means those transactions generally set forth
     in the Company's Form 8-K filed with the Securities and Exchange Commission
     on May 10, 2001 whereby the Company, PAAI and PAAI, LLC have entered into
     one or more agreements providing in part for the sale and transfer by PAAI
     of a portion of its general partner interests in the MLP and by PAAI LLC of
     certain of its subordinated interests in the MLP, together with all other
     transfers contemplated in connection therewith.

                                       2
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     (S) 2.2.  Repayment of Term Loans.  Section 3.01(b) of the Original
               -----------------------
Agreement is hereby amended in its entirety to read as follows:

               (b) The Company will repay the principal of the Term Loans in
     eight installments payable on each Quarterly Date beginning October 1,
     2003, with the final installment being due and payable on or before July 1,
     2005. Each such installment shall be equal to one-eighth of the original
     principal amount of the Term Loans as of the Revolving Credit Termination
     Date. In any event all unpaid principal and interest shall be due and
     payable in full on the final maturity of July 1, 2005. As set forth in
     Section 2.07(c), all optional and mandatory prepayments made on the Term
     Loans shall be applied to the scheduled installments in inverse order of
     their maturity.

     (S) 2.3.  Investments -- Stock Repurchases. Clause (c) of Section 8.11 of
               --------------------------------
the Original Agreement, excluding the proviso at the end thereof, is hereby
amended to read as follows:

     (c)  one or more Dividend Payments in cash, all such cash payments made on
     and after June 1, 2001 not to exceed $60,000,000 in the aggregate, to
     purchase, redeem, retire or otherwise acquire or effect the conversion of
     any shares of any one or more classes of stock of the Company,

     (S) 2.4.  Waiver re: Value Assurance to Purchasers of the MLP's
               -----------------------------------------------------
Subordinated Units. In connection with the PAAI Sale Transaction, the Company
------------------
may agree to make certain payments to the purchasers of the subordinated units
issued by the MLP sold thereby in an annual amount equal to $1.85 per such sold
subordinated unit minus the aggregate amount of all distributions per such sold
subordinated unit made by the MLP during such period. Such agreement, and
payments made pursuant thereto, may violate Section 8.35(b) of the Credit
Agreement, which would constitute an Event of Default under Section 9(d).
Lenders hereby consent to such agreement by the Company and any payments made in
connection therewith, and waive any violation of Section 8.35(b) or any Event of
Default caused thereby, provided, in no event shall such aggregate amount paid
                        --------
by the Company to such holders with respect to any fiscal year exceed
$10,020,000.

     (S) 2.5.  Consent re: Affiliate Transition Agreements.  In connection with
               -------------------------------------------
the PAAI Sale Transaction, the Company and/or its Subsidiaries may enter into
transitional agreements with Unrestricted Subsidiaries with respect to certain
management and operational matters, and such transactions with such Unrestricted
Subsidiaries may violate Section 8.35(b) of the Credit Agreement, which would
constitute an Event of Default under Section 9(d) of the Credit Agreement .
Lenders hereby consent to the Company and/or its Subsidiaries entry into such
transitional agreements with such Unrestricted Subsidiaries and waive any
violation of Section 8.35(b) or Event of Default caused thereby; provided, such
                                                                 --------
transitional agreements shall be on terms which are no less favorable to the
Company or such Subsidiary than those which would have been obtainable at the
time in arm's-length transactions with Persons other than such Unrestricted
Subsidiaries.

     (S) 2.6.  Conversion of Series H Preferred; Retirement of Series F
               --------------------------------------------------------
Preferred.  In connection with the PAAI Sale Transaction, the Company may (i)
---------
convert certain outstanding

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shares of the Company's Series H Convertible Preferred Stock into common stock
of the Company, and (ii) receive and retire certain outstanding shares of the
Company's Series F Cumulative Convertible Preferred Stock, in each case without
cash payment by the Company to the holders thereof. In addition, the Company may
convert certain additional outstanding shares of the Company's Series F
Cumulative Convertible Preferred Stock into common stock of the Company, subject
to a cash payment by the Company to such holders in an amount with respect to
dividends accruing thereon until the consummation of the PAAI Sale Transaction.
Lenders hereby confirm that the conversion of such Series H Preferred Stock and
Series F Cumulative Convertible Preferred Stock, and the retirement of such
additional Series F Cumulative Convertible Preferred Stock, but not any cash
payment by the Company to any holder of such Series F Cumulative Convertible
Preferred Stock in exchange therefor, will not constitute a Dividend Payment.
Furthermore, Lenders hereby consent to the cash payment by the Company to such
holders of such Series F Cumulative Convertible Preferred Stock to effect such
conversion thereof, and waive any Event of Default related thereto, provided,
                                                                    --------
the aggregate amount of all such payments shall not exceed $1,700,000 in the
aggregate.

     (S) 2.7.  New Borrowing Base -- PAAI Transfer.  The consummation of the
               -----------------------------------
PAAI Sale Transaction will constitute a PAAI Transfer and entitle Lenders to a
redetermination of the Borrowing Base pursuant to Section 2.08.  Pursuant to
Section 2.08 of the Credit Agreement, Agent hereby notifies the Company that
Supermajority Lenders have redetermined the Borrowing Base as $225,000,000,
effective for the period beginning on and including the date hereof and
continuing until but not including the next date as of which the Borrowing Base
is redetermined. Lenders hereby waive their right to redetermine the Borrowing
Base upon the consummation of the PAAI Sale Transaction and resultant  PAAI
Transfer.

                  ARTICLE III. -- Conditions of Effectiveness
                                  ---------------------------

     (S) 3.1.  Effective Date.  This Amendment shall become effective
               --------------
contemporaneous with the consummation of the PAAI Sale Transaction when and only
when (i) Agent shall have received, at Agent's office, a counterpart of this
Amendment executed and delivered by the Company and each Lender, and (ii) Agent
shall have additionally received all of the following documents, each document
(unless otherwise indicated) being dated the date of receipt thereof by Agent,
duly authorized, executed and delivered, and in form and substance satisfactory
to Agent:

               (A) Officer's Certificate. A certificate of a duly authorized
                   ---------------------
     officer of the Company to the effect that all of the representations and
     warranties set forth in Article IV hereof are true and correct at and as of
     the date thereof.

               (B) Supporting Documents.  Such supporting documents as Agent may
                   --------------------
     reasonably request.

                 ARTICLE IV. -- Representations and Warranties
                                ------------------------------

     (S) 4.1.  Representations and Warranties of the Company.  In order to
               ---------------------------------------------
induce Agent and Lenders to enter into this Amendment, the Company represents
and warrants to Agent and Lenders that:

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          (a) The representations and warranties contained in Section 7 of the
     Original Agreement, are true and correct at and as of the time of the
     effectiveness hereof, except to the extent that such representation or
     warranty was made as of a specific date or updated, modified or
     supplemented as of a subsequent date with the consent of Majority Lenders[,
     subject to, in regard to the penultimate sentence of Section 7.02, the
     Unauthorized Trading Losses, as referred to in the Company's annual report
     on Form 10-K for the year ended December 31, 1999.]  No Default has
     occurred and is continuing.

          (b) The Company and the Subsidiaries are duly authorized to execute
     and deliver this Amendment and the other Amendment Documents to the extent
     a party thereto, and the Company is and will continue to be duly authorized
     to borrow and perform its obligations under the Credit Agreement.  The
     Company and the Subsidiaries have duly taken all corporate action necessary
     to authorize the execution and delivery of this Amendment and the other
     Amendment Documents, to the extent a party thereto, and to authorize the
     performance of their respective obligations thereunder.

          (c) The execution and delivery by the Company and the Subsidiaries of
     this Amendment and the other Amendment Documents, to the extent a party
     thereto, the performance by the Company and the Subsidiaries of their
     respective obligations hereunder and thereunder, and the consummation of
     the transactions contemplated hereby and thereby, do not and will not
     conflict with any provision of law, statute, rule or regulation or of the
     certificate or articles of incorporation and bylaws of the Company or any
     Subsidiary, or of any material agreement, judgment, license, order or
     permit applicable to or binding upon the Company or any Subsidiary, or
     result in the creation of any lien, charge or encumbrance upon any assets
     or properties of the Company or any Subsidiary, except in favor of Agent
     for the benefit of Lenders.  Except for those which have been duly
     obtained, no consent, approval, authorization or order of any court or
     governmental authority or third party is required in connection with the
     execution and delivery by the Company or any Subsidiary of this Amendment
     or any other Amendment Document, to the extent a party thereto, or to
     consummate the transactions contemplated hereby and thereby.

          (d) When this Amendment and the other Amendment Documents have been
     duly executed and delivered, each of the Basic Documents, as amended by
     this Amendment and the other Amendment Documents, will be a legal and
     binding instrument and agreement of the Company and the Subsidiaries, to
     the extent a party thereto, enforceable in accordance with its terms,
     (subject, as to enforcement of remedies, to applicable bankruptcy,
     insolvency and similar laws applicable to creditors' rights generally and
     to general principles of equity).

                          ARTICLE V. -- Miscellaneous
                                        -------------

     (S) 5.1.  Ratification of Agreements.  The Original Agreement, as hereby
               --------------------------
amended, is hereby ratified and confirmed in all respects.  The Basic Documents,
as they may be amended or affected by this Amendment and/or the other Amendment
Documents, are hereby ratified and confirmed in all respects.  Any reference to
the Credit Agreement in any Basic Document shall

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be deemed to refer to this Amendment also. The execution, delivery and
effectiveness of this Amendment and the other Amendment Documents shall not,
except as expressly provided herein or therein, operate as a waiver of any
right, power or remedy of Agent or any Lender under the Credit Agreement or any
other Basic Document nor constitute a waiver of any provision of the Credit
Agreement or any other Basic Document.

     (S) 5.2.  Ratification of Security Documents.  The Company, Agent and
               ----------------------------------
Lenders each acknowledge and agree that any and all indebtedness, liabilities or
obligations arising under or in connection with the Notes are Obligations and is
secured indebtedness under, and is secured by, each and every Security Document
to which the Company is a party.  The Company hereby re-pledges, re-grants and
re-assigns a security interest in and lien on every asset of the Company
described as collateral in any Security Document.

     (S) 5.3.  Survival of Agreements.  All representations, warranties,
               ----------------------
covenants and agreements of the Company herein and in the other Amendment
Documents shall survive the execution and delivery of this Amendment and the
other Amendment Documents and the performance hereof and thereof, including
without limitation the making or granting of each Loan, and shall further
survive until all of the Obligations are paid in full.  All statements and
agreements contained in any certificate or instrument delivered by the Company
or any Subsidiary hereunder, under the other Amendment Documents or under the
Credit Agreement to Agent or any Lender shall be deemed to constitute
representations and warranties by, or agreements and covenants of, the Company
under this Amendment and under the Credit Agreement.

     (S) 5.4.  Basic Documents.  This Amendment and each of the other Amendment
               ---------------
Documents is a Basic Document, and all provisions in the Credit Agreement
pertaining to Basic Documents apply hereto and thereto.

     (S) 5.5.  GOVERNING LAW.  THIS AMENDMENT AND THE OTHER AMENDMENT DOCUMENTS
     --------  ----------------------------------------------------------------
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
------------------------------------------------------------------------------
NEW YORK AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA IN ALL
-----------------------------------------------------------------------
RESPECTS, INCLUDING CONSTRUCTION, VALIDITY AND PERFORMANCE.
-----------------------------------------------------------

     (S) 5.6.  Counterparts.  This Amendment and each of the other Amendment
               ------------
Documents may be separately executed in counterparts and by the different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to constitute one and the same Amendment or Amendment Document, as the
case may be.

     IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.

                              PLAINS RESOURCES INC.

                              By:___________________________________________
                                 Name:
                                 Title:

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                              FIRST UNION NATIONAL BANK,
                              as Agent, LC Issuer and a Lender

                              By: /s/ Robert R. Wetteroff
                                 ____________________________________________
                                 Robert R. Wetteroff, Senior Vice President

                              FLEET NATIONAL BANK
                              (f/k/a BankBoston, N.A.), Lender

                              By: /s/ Terrence Ronan
                                 ____________________________________________
                                 Terrence Ronan, Managing Director

                              BANK OF AMERICA, N.A., Lender

                              By:____________________________________________
                                 Name:
                                 Title:

                              WELLS FARGO BANK (TEXAS),
                              NATIONAL ASSOCIATION, Lender

                              By:____________________________________________
                                 Name:
                                 Title:

                              THE CHASE MANHATTAN BANK
                              (successor to Chase Bank of Texas, N.A.), Lender

                              By:____________________________________________
                                 Name:
                                 Title:

                              COMERICA BANK-TEXAS, Lender

                              By:____________________________________________
                                 Name:
                                 Title:

                                       7
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                              FORTIS CAPITAL CORP.
                              (f/k/a MeesPierson Capital Corp.), Lender

                              By:____________________________________________
                                 Name:
                                 Title:

                              By:____________________________________________
                                 Name:
                                 Title:

                              BANK OF SCOTLAND, Lender

                              By:____________________________________________
                                 Name:
                                 Title:

                              U.S. BANK NATIONAL ASSOCIATION, Lender

                              By:____________________________________________
                                 Name:
                                 Title:

                              HIBERNIA NATIONAL BANK, Lender

                              By:____________________________________________
                                 Name:
                                 Title:

                              GENERAL ELECTRIC CAPITAL CORPORATION, Lender

                              By:____________________________________________
                                 Name:
                                 Title:

                              BANK ONE, NA (MAIN OFFICE CHICAGO), Lender

                              By:____________________________________________
                                 Name:
                                 Title:

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                             CONSENT AND AGREEMENT
                             ---------------------

     Each of the undersigned Subsidiary Guarantors hereby consents to the
provisions of this Amendment and the transactions contemplated herein and hereby
(i) acknowledges and agrees that any and all indebtedness, liabilities or
obligations arising under or in connection with the Notes are Obligations and
are secured indebtedness under, and are secured by, each and every Security
Document to which it is a party, (ii) re-pledges, re-grants and re-assigns a
security interest in and lien on all of its assets described as collateral in
any Security Document, (iii) ratifies and confirms its Amended and Restated
Guaranty dated May 22, 1998 made by it for the benefit of Agent and Lenders, and
(iv) expressly acknowledges and agrees that such Subsidiary Guarantor guarantees
all indebtedness, liabilities and obligations arising under or in connection
with the Notes pursuant to the terms of such Amended and Restated Guaranty, and
agrees that its obligations and covenants thereunder are unimpaired hereby and
shall remain in full force and effect.

                         PLAINS RESOURCES INTERNATIONAL INC.
                         STOCKER RESOURCES, INC.
                         PLAINS ILLINOIS INC.

                         By: /s/ Phil Kramer
                            ____________________________________________
                            Phil Kramer, Executive Vice President

                         STOCKER RESOURCES, L.P.

                         By:  Stocker Resources, Inc.,
                              its General Partner

                              By: /s/ Phil Kramer
                                 _______________________________________
                                 Phil Kramer, Executive Vice President

                                       9
<PAGE>

     The undersigned Subsidiary Guarantor hereby consents to the provisions of
this Amendment and the transactions contemplated herein and hereby (i)
acknowledges and agrees that any and all indebtedness, liabilities or
obligations arising under or in connection with the Notes are Obligations and
are secured indebtedness under, and are secured by, each and every Security
Document to which it is a party, (ii) re-pledges, re-grants and re-assigns a
security interest in and lien on all of its assets described as collateral in
any Security Document, (iii) ratifies and confirms its Guaranty dated July 1,
1999 made by it for the benefit of Agent and Lenders, and (iv) expressly
acknowledges and agrees that such Subsidiary Guarantor guarantees all
indebtedness, liabilities and obligations arising under or in connection with
the Notes pursuant to the terms of such Guaranty, and agrees that its
obligations and covenants thereunder are unimpaired hereby and shall remain in
full force and effect.

                         ARGUELLO INC.

                         By:____________________________________________
                              Name:
                              Title:

                                       10<PAGE>

                                                                  EXHIBIT 10.15

                             PLAINS RESOURCES INC.

                           2001 STOCK INCENTIVE PLAN

                           (As Adopted May 7, 2001)

1. Purpose.

   The purpose of this Plan is to strengthen Plains Resources Inc., a Delaware
corporation (the "Company"), by providing an incentive to its employees,
officers, consultants and directors and thereby encouraging them to devote
their abilities and industry to the success of the Company's business
enterprise. It is intended that this purpose be achieved by extending to
employees (including future employees who have received a formal written offer
of employment), officers, consultants and directors of the Company and its
Subsidiaries and Affiliates an added long-term incentive for high levels of
performance and unusual efforts through the grant of Incentive Stock Options,
Nonqualified Stock Options, Performance Units and Performance Shares, Share
Awards and Restricted Stock (as each term is herein defined).

2. Definitions.

   For purposes of the Plan:

     2.1 "Adjusted Fair Market Value" means, in the event of a Change in
  Control, the greater of (a) the highest price per Share paid to holders of
  the Shares in any transaction (or series of transactions) constituting or
  resulting in a Change in Control or (b) the highest Fair Market Value of a
  Share during the ninety (90) day period ending on the date of a Change in
  Control.

     2.2 "Affiliate" means any entity, directly or indirectly, controlled by,
  controlling or under common control with the Company or any corporation or
  other entity acquiring, directly or indirectly, all or substantially all
  the assets and business of the Company, whether by operation of law or
  otherwise.

     2.3 "Agreement" means the written agreement between the Company and an
  Optionee or Grantee evidencing the grant of an Option or Award and setting
  forth the terms and conditions thereof.

     2.4 "Award" means a grant of Restricted Stock, a Performance Award, a
  Share Award or any or all of them.

     2.5 "Board" means the Board of Directors of the Company.

     2.6 "Cause" means:

       (a) for purposes of Section 6.4, the commission of an act of fraud
    or intentional misrepresentation or an act of embezzlement,
    misappropriation or conversion of assets or opportunities of the
    Company or any of its Subsidiaries; and

       (b) in the case of an Optionee or Grantee whose employment with the
    Company, Subsidiary or Affiliate is subject to the terms of an
    employment agreement between such Optionee or Grantee and the Company,
    Subsidiary or Affiliate, which employment agreement includes a
    definition of "Cause", the term "Cause" as used in this Plan or any
    Agreement shall have the meaning set forth in such employment agreement
    during the period that such employment agreement remains in effect; and

       (c) in all other cases, (i) intentional failure to perform
    reasonably assigned duties, (ii) dishonesty or willful misconduct in
    the performance of duties, (iii) involvement in a transaction in
    connection with the performance of duties to the Company or any of its
    Subsidiaries or Affiliates which transaction is adverse to the
    interests of the Company or any of its Subsidiaries or Affiliates and
    which is engaged in for personal profit or (iv) willful violation of
    any law, rule or regulation in connection with the performance of
    duties (other than traffic violations or similar minor offenses)
    provided, however, that following a Change in Control clause (i) of
    this Section 2.6(c) shall not constitute "Cause."

                                       1
<PAGE>

     2.7 "Change in Capitalization" means any increase or reduction in the
  number of Shares, or any change (including, but not limited to, in the case
  of a spin-off, dividend or other distribution in respect of Shares, a
  change in value) in the Shares or exchange of Shares for a different number
  or kind of shares or other securities of the Company or another
  corporation, by reason of a reclassification, recapitalization, merger,
  consolidation, reorganization, spin-off, split-up, issuance of warrants or
  rights or debentures, stock dividend, stock split or reverse stock split,
  cash dividend, property dividend, combination or exchange of shares,
  repurchase of shares, change in corporate structure or otherwise.

     2.8 A "Change in Control" shall mean the occurrence of any of the
  following:

       (a) The "acquisition" by any "Person" (as the term person is used
    for purposes of Section 13(d) or 14(d) of the Securities Exchange Act
    of 1934, as amended (the "1934 Act")) of "Beneficial Ownership" (within
    the meaning of Rule 13d-3 promulgated under the 1934 Act) of any
    securities of the Company which generally entitles the holder thereof
    to vote for the election of directors of the Company (the "Voting
    Securities") which, when added to the Voting Securities then
    "Beneficially Owned" by such Person, would result in such Person either
    "Beneficially Owning" fifty percent (50%) or more of the combined
    voting power of the Company's then outstanding Voting Securities or
    having the ability to elect fifty percent (50%) or more of the
    Company's directors; provided, however, that for purposes of this
    paragraph (a) of Section 2.8, a Person shall not be deemed to have made
    an acquisition of Voting Securities if such Person; (i) becomes the
    Beneficial Owner of more than the permitted percentage of Voting
    Securities solely as a result of open market acquisition of Voting
    Securities by the Company which, by reducing the number of Voting
    Securities outstanding, increases the proportional number of shares
    Beneficially Owned by such Person; (ii) is the Company or any
    corporation or other Person of which a majority of its voting power or
    its equity securities or equity interest is owned directly or
    indirectly by the Company (a "Controlled Entity"); (iii) acquires
    Voting Securities in connection with a "Non-Control Transaction" (as
    defined in paragraph (c) of this Section 2.8); or (iv) becomes the
    Beneficial Owner of more than the permitted percentage of Voting
    Securities as a result of a transaction approved by a majority of the
    Incumbent Board (as defined in paragraph (b) below); or

       (b) The individuals who, as of the Effective Date, are members of
    the Board (the "Incumbent Board"), cease for any reason to constitute
    at least a majority of the Board; provided, however, that if either the
    election of any new director or the nomination for election of any new
    director by the Company's stockholders was approved by a vote of at
    least a majority of the Incumbent Board, such new director shall be
    considered as a member of the Incumbent Board; provided further,
    however, that no individual shall be considered a member of the
    Incumbent Board if such individual initially assumed office as a result
    of either an actual or threatened "Election Contest" (as described in
    Rule 14a-11 promulgated under the 1934 Act) or other actual or
    threatened solicitation of proxies or consents by or on behalf of a
    Person other than the Board (a "Proxy Contest") including by reason of
    any agreement intended to avoid or settle any Election Contest or Proxy
    Contest; or

       (c) The consummation of a merger, consolidation or reorganization
    involving the Company (a "Business Combination"), unless (i) the
    stockholders of the Company, immediately before the Business
    Combination, own, directly or indirectly immediately following the
    Business Combination, at least fifty percent (50%) of the combined
    voting power of the outstanding voting securities of the corporation
    resulting from the Business Combination (the "Surviving Corporation")
    in substantially the same proportion as their ownership of the Voting
    Securities immediately before the Business Combination, and (ii) the
    individuals who were members of the Incumbent Board immediately prior
    to the execution of the agreement providing for the Business
    Combination constitute at least a majority of the members of the Board
    of Directors of the Surviving Corporation, and (iii) no Person (other
    than (x) the Company or any Controlled Entity, (y) a trustee or other
    fiduciary holding securities under one or more employee benefit plans
    or arrangements (or any trust forming a part thereof) maintained by the
    Company, the Surviving Corporation or any Controlled Entity, or (z) any
    Person who, immediately prior to the Business Combination, had
    Beneficial Ownership of fifty percent (50%) or more of the

                                       2
<PAGE>

    then outstanding Voting Securities) has Beneficial Ownership of fifty
    percent (50%) or more of the combined voting power of the Surviving
    Corporation's then outstanding voting securities (a Business
    Combination described in clauses (i), (ii) and (iii) of this paragraph
    shall be referred to as a "Non-Control Transaction");

       (d) A complete liquidation or dissolution of the Company; or

       (e) The sale or other disposition of all or substantially all of the
    assets of the Company to any Person (other than a transfer to a
    Controlled Entity).

   Notwithstanding the foregoing, if Optionee's or Grantee's employment is
terminated and Optionee or Grantee reasonably demonstrates that such
termination (x) was at the request of a third party who has indicated an
intention or has taken steps reasonably calculated to effect a Change in
Control and who effectuates a Change in Control or (y) otherwise occurred in
connection with, or in anticipation of, a Change in Control which actually
occurs, then for all purposes hereof, the date of a Change in Control with
respect to Optionee or Grantee shall mean the date immediately prior to the
date of such termination of employment.

   A Change in Control shall not be deemed to occur solely because fifty
percent (50%) or more of the then outstanding Voting Securities is
Beneficially Owned by (x) a trustee or other fiduciary holding securities
under one or more employee benefit plans or arrangements (or any trust forming
a part thereof) maintained by the Company or any Controlled Entity or (y) any
corporation which, immediately prior to its acquisition of such interest, is
owned directly or indirectly by the stockholders of the Company in
substantially the same proportion as their ownership of stock in the Company
immediately prior to such acquisition.

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

     2.10 "Committee" means a committee, as described in Section 3.1,
  appointed by the Board from time to time to administer the Plan and to
  perform the functions set forth herein.

     2.11 "Company" means Plains Resources Inc.

     2.12 "Director" means a director of the Company.

     2.13 "Disability" means:

       (a) in the case of an Optionee or Grantee whose employment with the
    Company or a Subsidiary is subject to the terms of an employment
    agreement between such Optionee or Grantee and the Company or
    Subsidiary, which employment agreement includes a definition of
    "Disability", the term "Disability" as used in this Plan or any
    Agreement shall have the meaning set forth in such employment agreement
    during the period that such employment agreement remains in effect; or

       (b) the term "Disability" as used in the Company's long-term
    disability plan, if any; or

       (c) in all other cases, the term "Disability" as used in this Plan
    or any Agreement shall mean a physical or mental infirmity which
    impairs the Optionee's or Grantee's ability to perform substantially
    his or her duties for a period of one hundred eighty (180) consecutive
    days.

     2.14 "Division" means any of the operating units or divisions of the
  Company designated as a Division by the Committee.

     2.15 "Eligible Director" means a director of the Company who is not an
  employee of the Company or any Subsidiary or Affiliate.

     2.16 "Eligible Individual" means any of the following individuals who is
  designated by the Committee as eligible to receive Options or Awards
  subject to the conditions set forth herein: (a) any director (other than an
  Eligible Director), officer or employee of the Company, Subsidiary or
  Affiliate, (b) any individual to whom the Company or a Subsidiary has
  extended a formal, written offer of employment, or (c) any consultant or
  advisor of the Company, Subsidiary or Affiliate.

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

                                       3
<PAGE>

     2.18 "Fair Market Value" on any date means the closing sales prices of
  the Shares (i) on the day before such date, or (ii) on such date if an
  Agreement so provides, on the principal national securities exchange on
  which such Shares are listed or admitted to trading, or, if such Shares are
  not so listed or admitted to trading, the average of the per Share closing
  bid price and per Share closing asked price on such date as quoted on the
  National Association of Securities Dealers Automated Quotation System or
  such other market in which such prices are regularly quoted, or, if there
  have been no published bid or asked quotations with respect to Shares on
  such date, the Fair Market Value shall be the value established by the
  Board in good faith and, in the case of an Incentive Stock Option, in
  accordance with Section 422 of the Code.

     2.19 "Formula Option" means an Option granted pursuant to Section 6.

     2.20 "Grantee" means a person to whom an Award has been granted under
  the Plan.

     2.21 "Incentive Stock Option" means an Option satisfying the
  requirements of Section 422 of the Code and designated by the Committee as
  an Incentive Stock Option.

     2.22 "Nonemployee Director" means a director of the Company who is a
  "nonemployee director" within the meaning of Rule 16b-3 promulgated under
  the Exchange Act.

     2.23 "Nonqualified Stock Option" means an Option which is not an
  Incentive Stock Option.

     2.24 "Option" means a Nonqualified Stock Option, an Incentive Stock
  Option, a Formula Option, or any or all of them.

     2.25 "Optionee" means a person to whom an Option has been granted under
  the Plan.

     2.26 "Outside Director" means a director of the Company who is an
  "outside director" within the meaning of Section 162(m) of the Code and the
  regulations promulgated thereunder.

     2.27 "Parent" means any corporation which is a parent corporation
  (within the meaning of Section 424(e) of the Code) with respect to the
  Company.

     2.28 "Performance Awards" means Performance Units, Performance Shares or
  either or both of them.

     2.29 "Performance-Based Compensation" means any Option or Award that is
  intended to constitute "performance based compensation" within the meaning
  of Section 162(m)(4)(C) of the Code and the regulations promulgated
  thereunder.

     2.30 "Performance Cycle" means the time period specified by the
  Committee at the time Performance Awards are granted during which the
  performance of the Company, or a Subsidiary Affiliate or Division will be
  measured.

     2.31 "Performance Objectives" has the meaning set forth in Section 9.

     2.32 "Performance Shares" means Shares issued or transferred to an
  Eligible Individual under Section 9.

     2.33 "Performance Units" means Performance Units granted to an Eligible
  Individual under Section 9.

     2.34 "Plan" means the Plains Resources Inc. 2001 Stock Incentive Plan,
  as amended and restated from time to time.

     2.35 "Retained Distribution" means any securities or other property
  (other than regular cash dividends) distributed by the Company in respect
  of Restricted Stock during any Restricted Period.

     2.36 "Restricted Period" means the period designated by the Committee
  during which Restricted Stock may not be sold, assigned, pledged or
  otherwise encumbered.

     2.37 "Restricted Stock" means Shares issued or transferred to an
  Eligible Individual pursuant to Section 8.

                                       4
<PAGE>

     2.38 "Share Award" means an Award of Shares granted pursuant to Section
  10.

     2.39 "Shares" means the common stock, par value $.10 per share, of the
  Company and any other securities into which such shares are changed or for
  which such shares are exchanged.

     2.40 "Subsidiary" means (i) except as provided in subsection (ii) below,
  any corporation which is a subsidiary corporation within the meaning of
  Section 424(f) of the Code with respect to the Company, and (ii) in
  relation to the eligibility to receive Options or Awards other than
  Incentive Stock Options and continued employment for purposes of Options
  and Awards (unless the Committee determines otherwise), any entity, whether
  or not incorporated, in which the Company directly or indirectly owns 50%
  or more of the outstanding equity or other ownership interests.

     2.41 "Successor Corporation" means a corporation, or a parent or
  subsidiary thereof within the meaning of Section 424(a) of the Code, which
  issues or assumes a stock option in a transaction to which Section 424(a)
  of the Code applies or a spun-off entity resulting from a transaction
  described in Section 355 of the Code.

     2.42 "Ten-Percent Stockholder" means an Eligible Individual, who, at the
  time an Incentive Stock Option is to be granted to him or her, owns (within
  the meaning of Section 422(b)(6) of the Code) stock possessing more than
  ten percent (10%) of the total combined voting power of all classes of
  stock of the Company, or of a Parent, Subsidiary or Affiliate.

3. Administration.

   3.1 The Plan shall be administered by the Committee, which shall hold
meetings at such times as may be necessary for the proper administration of
the Plan. The Committee shall keep minutes of its meetings. A quorum shall
consist of not fewer than two (2) members of the Committee and a majority of a
quorum may authorize any action. Any decision or determination reduced to
writing and signed by a majority of all of the members of the Committee shall
be as fully effective as if made by a majority vote at a meeting duly called
and held. The Committee shall consist of one (1) or more Directors and may
consist of the entire Board. If the Committee consists of less than the entire
Board, then with respect to any Option or Award to an individual who is
subject to Section 16 of the Exchange Act, the Committee shall consist of at
least two (2) Directors each of whom shall be a Nonemployee Director and to
the extent necessary for any award under the Plan to qualify as performance-
based compensation for the purposes of Section 162(m) of the Code, the
Committee shall consist of at least two (2) Directors each of whom shall be an
Outside Director. For purposes of the preceding sentence, if one or more
members of the Committee is not a Nonemployee Director and an Outside Director
but recuses himself or herself or abstains from voting with respect to a
particular action taken by the Committee, then the Committee, with respect to
that action, shall be deemed to consist only of the members of the Committee
who have not recused themselves or abstained from voting. Subject to
applicable law, the Committee may delegate its authority under the Plan to any
other person or persons.

   3.2 No member of the Committee shall be liable for any action, failure to
act, determination or interpretation made in good faith with respect to this
Plan or any transaction hereunder. The Company hereby agrees to indemnify each
member of the Committee for all costs and expenses and, to the extent
permitted by applicable law, any liability incurred in connection with
defending against, responding to, negotiating for the settlement of or
otherwise dealing with any claim, cause of action or dispute of any kind
arising in connection with any actions in administering this Plan or in
authorizing or denying authorization to any transaction hereunder.

   3.3 Subject to the express terms and conditions set forth herein, the
Committee shall have the power from time to time to:

       (a) determine those Eligible Individuals to whom Options shall be
    granted under the Plan and the number of such Options to be granted and
    to prescribe the terms and conditions (which need not be identical) of
    each such Option, including the exercise price per Share, the vesting
    schedule and the

                                       5
<PAGE>

    duration of each Option, and make any amendment or modification to any
    Option Agreement consistent with the terms of the Plan;

       (b) select those Eligible Individuals to whom Awards shall be
    granted under the Plan and to determine the number of Shares in respect
    of which each Award is granted, the terms and conditions (which need
    not be identical) of each such Award, and make any amendment or
    modification to any Award Agreement consistent with the terms of the
    Plan;

       (c) to construe and interpret the Plan and the Options and Awards
    granted hereunder and to establish, amend and revoke rules and
    regulations for the administration of the Plan, including, but not
    limited to, correcting any defect or supplying any omission, or
    reconciling any inconsistency in the Plan or in any Agreement, in the
    manner and to the extent it shall deem necessary or advisable,
    including so that the Plan and the operation of the Plan complies with
    Rule 16b-3 under the Exchange Act, the Code to the extent applicable
    and other applicable law, and otherwise to make the Plan fully
    effective. All decisions and determinations by the Committee in the
    exercise of this power shall be final, binding and conclusive upon the
    Company, its Subsidiaries, the Optionees and Grantees, and all other
    persons having any interest therein;

       (d) to determine the duration and purposes for leaves of absence
    which may be granted to an Optionee or Grantee on an individual basis
    without constituting a termination of employment or service for
    purposes of the Plan;

       (e) to exercise its discretion with respect to the powers and rights
    granted to it as set forth in the Plan; and

       (f) generally, to exercise such powers and to perform such acts as
    are deemed necessary or advisable to promote the best interests of the
    Company with respect to the Plan.

4. Stock Subject to the Plan; Grant Limitations.

   4.1 The maximum number of Shares that may be made the subject of Options
and Awards granted under the Plan is 4,000,000; provided, however, that in the
aggregate, not more than 1,000,000 of the allotted Shares may be made the
subject of Restricted Stock Awards under Section 8 of the Plan (other than
shares of Restricted Stock made in settlement of Performance Units pursuant to
Section 9.1(b)). The maximum number of Shares that may be the subject of
Options and Awards granted to an Eligible Individual in any one calendar year
period may not exceed 1,000,000 Shares. The maximum dollar amount of cash or
the Fair Market Value of Shares that any Eligible Individual may receive in
any calendar year in respect of Performance Units denominated in dollars may
not exceed $1,000,000. The Company shall reserve for the purposes of the Plan,
out of its authorized but unissued Shares or out of Shares held in the
Company's treasury, or partly out of each, such number of Shares as shall be
determined by the Board.

   4.2 Upon the granting of an Option or an Award, the number of Shares
available under Section 4.1 for the granting of further Options and Awards
shall be reduced as follows:

       (a) In connection with the granting of an Option or an Award (other
    than the granting of a Performance Unit denominated in dollars), the
    number of Shares shall be reduced by the number of Shares in respect of
    which the Option or Award is granted or denominated; provided, however,
    that if any Option is exercised by tendering Shares, either actually or
    by attestation, to the Company as full or partial payment of the
    exercise price, the maximum number of Shares available under Section
    4.1 shall be increased by the number of Shares so tendered.

       (b) In connection with the granting of a Performance Unit
    denominated in dollars, the number of Shares shall be reduced by an
    amount equal to the quotient of (i) the dollar amount in which the
    Performance Unit is denominated, divided by (ii) the Fair Market Value
    of a Share on the date the Performance Unit is granted.

                                       6
<PAGE>

   4.3 Whenever any outstanding Option or Award or portion thereof expires, is
canceled, is settled in cash (including the settlement of tax withholding
obligations using Shares) or is otherwise terminated for any reason without
having been exercised or payment having been made in respect of the entire
Option or Award, the Shares allocable to the expired, canceled, settled or
otherwise terminated portion of the Option or Award may again be the subject
of Options or Awards granted hereunder.

   4.4 In no event may more than 3,000,000 Shares be issued upon the exercise
of Incentive Stock Options granted under the Plan.

5. Option Grants for Eligible Individuals.

   5.1 Authority of Committee. Subject to the provisions of the Plan, the
Committee shall have full and final authority to select those Eligible
Individuals who will receive Options, and the terms and conditions of the
grant to such Eligible Individuals shall be set forth in an Agreement.
Incentive Stock Options may be granted only to Eligible Individuals who are
employees of the Company or any Subsidiary or Affiliate.

   5.2 Exercise Price. The purchase price or the manner in which the exercise
price is to be determined for Shares under each Option shall be determined by
the Committee and set forth in the Agreement; provided, however, that the
exercise price per Share under each Option shall not be less than 100% of the
Fair Market Value of a Share on the date the Option is granted (110% in the
case of an Incentive Stock Option granted to a Ten-Percent Stockholder).

   5.3 Maximum Duration. Options granted hereunder shall be for such term as
the Committee shall determine, provided that an Incentive Stock Option shall
not be exercisable after the expiration of ten (10) years from the date it is
granted (five (5) years in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder) and a Nonqualified Stock Option shall not be
exercisable after the expiration of ten (10) years from the date it is
granted; provided, however, that unless the Committee provides otherwise an
Option (other than an Incentive Stock Option) may, upon the death of the
Optionee prior to the expiration of the Option, be exercised for up to one (1)
year following the date of the Optionee's death even if such period extends
beyond ten (10) years from the date the Option is granted. The Committee may,
subsequent to the granting of any Option, extend the term thereof, but in no
event shall the term as so extended exceed the maximum term provided for in
the preceding sentence.

   5.4 Vesting. Subject to Section 7.4, each Option shall become exercisable
in such installments (which need not be equal) and at such times as may be
designated by the Committee and set forth in the Agreement. To the extent not
exercised, installments shall accumulate and be exercisable, in whole or in
part, at any time after becoming exercisable, but not later than the date the
Option expires. The Committee may accelerate the exercisability of any Option
or portion thereof at any time.

   5.5 Deferred Delivery of Option Shares. The Committee may, in its
discretion, permit Optionees to elect to defer the issuance of Shares upon the
exercise of one or more Nonqualified Stock Options granted pursuant to the
Plan. The terms and conditions of such deferral shall be determined at the
time of the grant of the Option or thereafter and shall be set forth in the
Agreement evidencing the Option.

   5.6 Limitations on Incentive Stock Options. To the extent that the
aggregate Fair Market Value (determined as of the date of the grant) of Shares
with respect to which Incentive Stock Options granted under the Plan and
"incentive stock options" (within the meaning of Section 422 of the Code)
granted under all other plans of the Company or its Subsidiaries (in either
case determined without regard to this Section 5.6) are exercisable by an
Optionee for the first time during any calendar year exceeds $100,000, such
Incentive Stock Options shall be treated as Nonqualified Stock Options. In
applying the limitation in the preceding sentence in the case of multiple
Option grants, Options which were intended to be Incentive Stock Options shall
be treated as Nonqualified Stock Options according to the order in which they
were granted such that the most recently granted Options are first treated as
Nonqualified Stock Options.

                                       7
<PAGE>

6. Option Grants for Nonemployee Directors.

   6.1 Grant. Formula Options shall be granted (i) to Eligible Directors who
become members of the Board after the Effective Date upon election or
appointment and (ii) to all Eligible Directors who are members of the Board as
follows:

       (a) Initial Grant. Each Eligible Director who becomes a Director
    after the Effective Date, shall, upon becoming a Director, be granted a
    Formula Option in respect of 10,000 Shares multiplied by a fraction,
    the numerator of which is twelve (12) less the number of months that
    have elapsed since the last day of the month in which the annual
    meeting of the stockholders of the Company occurred and the denominator
    of which is twelve (12).

       (b) Annual Grant. Each Eligible Director shall be granted a Formula
    Option in respect of 10,000 Shares on the first business day after the
    annual meeting of the stockholders of the Company in each year that the
    Plan is in effect provided that the Eligible Director is a Director on
    such date.

   All Formula Options shall be evidenced by an Agreement containing such
other terms and conditions not inconsistent with the provisions of this Plan
as determined by the Board; provided, however, that such terms shall not vary
the price, amount or timing of Formula Options provided under this Section 6,
including provisions dealing with vesting, forfeiture and termination of such
Formula Options.

   6.2 Purchase Price. The purchase price for Shares under each Formula Option
shall be equal to 100% of the Fair Market Value of such Shares on the date the
Formula Option is granted.

   6.3 Vesting. Each Formula Option shall be fully vested and exercisable as
of the date of grant; provided, however, that the Optionee continues to serve
as a Director as of such date; provided, further, however, that if a Director
dies prior to such date and while a Director, the Formula Option shall become
fully vested and exercisable with respect to 100% of the Shares that otherwise
would have vested on that date.

   6.4 Duration. Subject to Section 7.4, each Formula Option shall terminate
on the date which is the fifth anniversary of the date of grant (or if later,
the first anniversary of the date of the Director's death if such death occurs
prior to such tenth anniversary), unless terminated earlier as follows:

       (a) If an Optionee's service as a Director terminates for any reason
    other than Disability, death or Cause, the Optionee may for a period of
    three (3) months after such termination exercise his or her Option to
    the extent, and only to the extent, that such Option or portion thereof
    was vested and exercisable as of the date the Optionee's service as a
    Director terminated, after which time the Option shall automatically
    terminate in full.

       (b) If an Optionee's service as a Director terminates by reason of
    the Optionee's resignation or removal from the Board due to Disability,
    the Optionee may, for a period of one (1) year after such termination,
    exercise his or her Option to the extent, and only to the extent, that
    such Option or portion thereof was vested and exercisable, as of the
    date the Optionee's service as Director terminated, after which time
    the Option shall automatically terminate in full.

       (c) If an Optionee's service as a Director terminates for Cause, the
    Option granted to the Optionee hereunder shall immediately terminate in
    full and no rights thereunder may be exercised.

       (d) If an Optionee dies while a Director or within three (3) months
    after termination of service as a Director as described in clause (a)
    of this Section 6.4 or within twelve (12) months after termination of
    service as a Director as described in clause (b) of this Section 6.4,
    the Option granted to the Optionee may be exercised at any time within
    twelve (12) months after the Optionee's death by the person or persons
    to whom such rights under the Option shall pass by will, or by the laws
    of descent or distribution, after which time the Option shall terminate
    in full; provided, however, that an Option may be exercised to the
    extent, and only to the extent, that the Option or portion thereof was
    exercisable on the date of death or earlier termination of the
    Optionee's services as a Director.

                                       8
<PAGE>

7. Terms and Conditions Applicable to All Options.

   7.1 Non-Transferability. No Option shall be transferable by the Optionee
otherwise than by will or by the laws of descent and distribution or, in the
case of an Option other than an Incentive Stock Option, pursuant to a domestic
relations order (within the meaning of Rule 16a-12 promulgated under the
Exchange Act), and an Option shall be exercisable during the lifetime of such
Optionee only by the Optionee or his or her guardian or legal representative.
Notwithstanding the foregoing, the Committee may set forth in the Agreement
evidencing an Option (other than an Incentive Stock Option) at the time of
grant or thereafter, that the Option may be transferred to members of the
Optionee's immediate family, to trusts solely for the benefit of such
immediate family members and to partnerships in which such family members
and/or trusts are the only partners, and for purposes of this Plan, a
transferee of an Option shall be deemed to be the Optionee. For this purpose,
immediate family means the Optionee's spouse, parents, children, stepchildren
and grandchildren and the spouses of such parents, children, stepchildren and
grandchildren. The terms of an Option shall be final, binding and conclusive
upon the beneficiaries, executors, administrators, heirs and successors of the
Optionee.

   7.2 Method of Exercise. The exercise of an Option shall be made only by a
written notice delivered in person or by mail or telecopy to the Secretary of
the Company at the Company's principal executive office, specifying the number
of Shares to be exercised and, to the extent applicable, accompanied by
payment therefor and otherwise in accordance with the Agreement pursuant to
which the Option was granted. The exercise price for any Shares purchased
pursuant to the exercise of an Option shall be paid, in either of the
following forms (or any combination thereof): (a) cash or (b) the transfer,
either actually or by attestation, to the Company of Shares that have been
held by the Optionee for at least six (6) months (or such lesser period as may
be permitted by the Committee) prior to the exercise of the Option, such
transfer to be upon such terms and conditions as determined by the Committee
or (c) a combination of cash and the transfer of Shares; provided, however,
that the Committee may determine that the exercise price shall be paid only in
cash. In addition, Options may be exercised through a registered broker-dealer
pursuant to such cashless exercise procedures which are, from time to time,
deemed acceptable by the Committee. Any Shares transferred to the Company as
payment of the exercise price under an Option shall be valued at their Fair
Market Value on the day preceding the date of exercise of such Option. If
requested by the Committee, the Optionee shall deliver the Agreement
evidencing the Option to the Secretary of the Company who shall endorse
thereon a notation of such exercise and return such Agreement to the Optionee.
No fractional Shares (or cash in lieu thereof) shall be issued upon exercise
of an Option and the number of Shares that may be purchased upon exercise
shall be rounded to the nearest number of whole Shares.

   7.3 Rights of Optionees. No Optionee shall be deemed for any purpose to be
the owner of any Shares subject to any Option unless and until (a) the Option
shall have been exercised pursuant to the terms thereof, (b) the Company shall
have issued and delivered Shares to the Optionee, and (c) the Optionee's name
shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares, subject to such terms and
conditions as may be set forth in the applicable Agreement.

   7.4 Effect of Change in Control. In the event of a Change in Control, all
Options outstanding on the date of such Change in Control shall become
immediately and fully exercisable. In addition, to the extent set forth in an
Agreement evidencing the grant of an Option, an Optionee will be permitted to
surrender to the Company for cancellation within ninety (90) days after such
Change in Control any Option or portion of an Option to the extent not yet
exercised and the Optionee will be entitled to receive a cash payment in an
amount equal to the excess, if any, of (a) (i) in the case of a Nonqualified
Stock Option, the greater of (A) the Fair Market Value, on the date preceding
the date of surrender, of the Shares subject to the Option or portion thereof
surrendered or (B) the Adjusted Fair Market Value of the Shares subject to the
Option or portion thereof surrendered or (ii) in the case of an Incentive
Stock Option, the Fair Market Value, on the date preceding the date of
surrender, of the Shares subject to the Option or portion thereof surrendered,
over (b) the aggregate exercise price for such Shares under the Option or
portion thereof surrendered. In the event an Optionee's employment with, or
service as a Director of, the Company and its Subsidiaries terminates
following a Change in Control, each Option held by the Optionee that was
exercisable as of the date of termination of the Optionee's employment or
service shall,

                                       9
<PAGE>

notwithstanding any shorter period set forth in the Agreement evidencing the
Option, remain exercisable for a period ending not before the earlier of (x)
the first anniversary of the termination of the Optionee's employment or
service or (y) the expiration of the stated term of the Option.

8. Restricted Stock.

   8.1 Grant. The Committee may grant Awards to Eligible Individuals of
Restricted Stock, which shall be evidenced by an Agreement between the Company
and the Grantee. Each Agreement shall contain such restrictions, terms and
conditions as the Committee may, in its discretion, determine and (without
limiting the generality of the foregoing) such Agreements may require that an
appropriate legend be placed on Share certificates. Awards of Restricted Stock
shall be subject to the terms and provisions set forth below in this
Section 8.

   8.2 Rights of Grantee. Shares of Restricted Stock granted pursuant to an
Award hereunder shall be issued in the name of the Grantee as soon as
reasonably practicable after the Award is granted provided that the Grantee
has executed an Agreement evidencing the Award, the appropriate blank stock
powers and, in the discretion of the Committee, an escrow agreement and any
other documents which the Committee may require as a condition to the issuance
of such Shares. If a Grantee shall fail to execute the Agreement evidencing a
Restricted Stock Award, or any documents which the Committee may require
within the time period prescribed by the Committee at the time the Award is
granted, the Award shall be null and void. At the discretion of the Committee,
Shares issued in connection with a Restricted Stock Award shall be deposited
together with the stock powers with an escrow agent (which may be the Company)
designated by the Committee. Unless the Committee determines otherwise and as
set forth in the Agreement, upon delivery of the Shares to the escrow agent,
the Grantee shall have all of the rights of a stockholder with respect to such
Shares, including the right to vote the Shares and to receive all dividends or
other distributions paid or made with respect to the Shares (other than
Retained Distributions). The Company shall retain custody of all Retained
Distributions made or declared with respect to the Restricted Stock and such
Retained Distributions shall be subject to the same restrictions on terms and
conditions as are applicable to the Restricted Stock

   8.3 Non-transferability. Until all restrictions upon the Shares of
Restricted Stock awarded to a Grantee shall have lapsed in the manner set
forth in Section 8.4, such Shares and Retained Distribution shall not be sold,
transferred or otherwise disposed of and shall not be pledged or otherwise
hypothecated.

   8.4 Lapse of Restrictions.

   (a) Generally. Restrictions upon Shares of Restricted Stock awarded
hereunder shall lapse at such time or times and on such terms and conditions
as the Committee may determine (the "Restricted Period"). The Agreement
evidencing the Award shall set forth any such restrictions.

   (b) Effect of Change in Control. Unless the Committee shall determine
otherwise at the time of the grant of an Award of Restricted Stock, the
restrictions upon Shares of Restricted Stock shall lapse upon a Change in
Control. The Agreement evidencing the Award shall set forth any such
provisions.

   8.5 Treatment of Dividends. At the time an Award of Shares of Restricted
Stock is granted, the Committee may, in its discretion, determine that the
payment to the Grantee of dividends, or a specified portion thereof, declared
or paid on such Shares by the Company shall be (a) deferred until the lapsing
of the restrictions imposed upon such Shares and (b) held by the Company for
the account of the Grantee until such time. In the event that dividends are to
be deferred, the Committee shall determine whether such dividends are to be
reinvested in Shares (which shall be held as additional Shares of Restricted
Stock) or held in cash. If deferred dividends are to be held in cash, there
may be credited at the end of each year (or portion thereof) interest on the
amount of the account at the beginning of the year at a rate per annum as the
Committee, in its discretion, may determine. Payment of deferred dividends in
respect of Shares of Restricted Stock (whether held in cash or as additional
Shares of Restricted Stock), together with interest accrued thereon, if any,
shall be made upon the

                                      10
<PAGE>

lapsing of restrictions imposed on the Shares in respect of which the deferred
dividends were paid, and any dividends deferred (together with any interest
accrued thereon) in respect of any Shares of Restricted Stock shall be
forfeited upon the forfeiture of such Shares.

   8.6 Delivery of Shares. Upon the lapse of the restrictions on Shares of
Restricted Stock, the Committee shall cause a stock certificate to be
delivered to the Grantee with respect to such Shares, free of all restrictions
hereunder.

9. Performance Awards.

   9.1 Performance Units. The Committee, in its discretion, may grant Awards
of Performance Units to Eligible Individuals, the terms and conditions of
which shall be set forth in an Agreement between the Company and the Grantee.
Performance Units may be denominated in Shares or a specified dollar amount
and, contingent upon the attainment of specified Performance Objectives within
the Performance Cycle, represent the right to receive payment as provided in
Section 9.3(c) of (i) in the case of Share-denominated Performance Units, the
Fair Market Value of a Share on the date the Performance Unit was granted, the
date the Performance Unit became vested or any other date specified by the
Committee, (ii) in the case of dollar-denominated Performance Units, the
specified dollar amount or (iii) a percentage (which may be more than 100%) of
the amount described in clause (i) or (ii) depending on the level of
Performance Objective attainment; provided, however, that, the Committee may
at the time a Performance Unit is granted specify a maximum amount payable in
respect of a vested Performance Unit. Each Agreement shall specify the number
of Performance Units to which it relates, the Performance Objectives which
must be satisfied in order for the Performance Units to vest and the
Performance Cycle within which such Performance Objectives must be satisfied.

   (a) Vesting and Forfeiture. Subject to Sections 9.3(c) and 9.4, a Grantee
shall become vested with respect to the Performance Units to the extent that
the Performance Objectives set forth in the Agreement are satisfied for the
Performance Cycle.

   (b) Payment of Awards. Subject to Section 9.3(c), payment to Grantees in
respect of vested Performance Units shall be made as soon as practicable after
the last day of the Performance Cycle to which such Award relates unless the
Agreement evidencing the Award provides for the deferral of payment, in which
event the terms and conditions of the deferral shall be set forth in the
Agreement. Subject to Section 9.4, such payments may be made entirely in
Shares valued at their Fair Market Value, entirely in cash, or in such
combination of Shares and cash as the Committee in its discretion shall
determine at any time prior to such payment; provided, however, that if the
Committee in its discretion determines to make such payment entirely or
partially in Shares of Restricted Stock, the Committee must determine the
extent to which such payment will be in Shares of Restricted Stock and the
terms of such Restricted Stock at the time the Award is granted.

   9.2 Performance Shares. The Committee, in its discretion, may grant Awards
of Performance Shares to Eligible Individuals, the terms and conditions of
which shall be set forth in an Agreement between the Company and the Grantee.
Each Agreement may require that an appropriate legend be placed on Share
certificates. Awards of Performance Shares shall be subject to the following
terms and provisions:

       (a) Rights of Grantee. The Committee shall provide at the time an
    Award of Performance Shares is made the time or times at which the
    actual Shares represented by such Award shall be issued in the name of
    the Grantee; provided, however, that no Performance Shares shall be
    issued until the Grantee has executed an Agreement evidencing the
    Award, the appropriate blank stock powers and, in the discretion of the
    Committee, an escrow agreement and any other documents which the
    Committee may require as a condition to the issuance of such
    Performance Shares. If a Grantee shall fail to execute the Agreement
    evidencing an Award of Performance Shares, the appropriate blank stock
    powers and, in the discretion of the Committee, an escrow agreement and
    any other documents which the Committee may require within the time
    period prescribed by the Committee at the time the Award is granted,
    the Award shall be null and void. At the discretion of the Committee,
    Shares issued in connection with an Award of Performance Shares shall
    be deposited together with the stock powers

                                      11
<PAGE>

    with an escrow agent (which may be the Company) designated by the
    Committee. Except as restricted by the terms of the Agreement, upon
    delivery of the Shares to the escrow agent, the Grantee shall have, in
    the discretion of the Committee, all of the rights of a stockholder
    with respect to such Shares, including the right to vote the Shares and
    to receive all dividends or other distributions paid or made with
    respect to the Shares.

       (b) Non-transferability. Until any restrictions upon the Performance
    Shares awarded to a Grantee shall have lapsed in the manner set forth
    in Sections 9.2(c) or 9.4, such Performance Shares shall not be sold,
    transferred or otherwise disposed of and shall not be pledged or
    otherwise hypothecated, nor shall they be delivered to the Grantee. The
    Committee may also impose such other restrictions and conditions on the
    Performance Shares, if any, as it deems appropriate.

       (c) Lapse of Restrictions. Subject to Sections 9.3(c) and 9.4,
    restrictions upon Performance Shares awarded hereunder shall lapse and
    such Performance Shares shall become vested at such time or times and
    on such terms, conditions and satisfaction of Performance Objectives as
    the Committee may, in its discretion, determine at the time an Award is
    granted.

       (d) Treatment of Dividends. At the time the Award of Performance
    Shares is granted, the Committee may, in its discretion, determine that
    the payment to the Grantee of dividends, or a specified portion
    thereof, declared or paid on Shares represented by such Award which
    have been issued by the Company to the Grantee shall be (i) deferred
    until the lapsing of the restrictions imposed upon such Performance
    Shares and (ii) held by the Company for the account of the Grantee
    until such time. In the event that dividends are to be deferred, the
    Committee shall determine whether such dividends are to be reinvested
    in shares of Stock (which shall be held as additional Performance
    Shares) or held in cash. If deferred dividends are to be held in cash,
    there may be credited at the end of each year (or portion thereof)
    interest on the amount of the account at the beginning of the year at a
    rate per annum as the Committee, in its discretion, may determine.
    Payment of deferred dividends in respect of Performance Shares (whether
    held in cash or in additional Performance Shares), together with
    interest accrued thereon, if any, shall be made upon the lapsing of
    restrictions imposed on the Performance Shares in respect of which the
    deferred dividends were paid, and any dividends deferred (together with
    any interest accrued thereon) in respect of any Performance Shares
    shall be forfeited upon the forfeiture of such Performance Shares.

       (e) Delivery of Shares. Upon the lapse of the restrictions on
    Performance Shares awarded hereunder, the Committee shall cause a stock
    certificate to be delivered to the Grantee with respect to such Shares,
    free of all restrictions hereunder.

   9.3 Performance Objectives

   (a) Establishment. Performance Objectives for Performance Awards may be
expressed in terms of (i) revenue, (ii) net income, (iii) operating income;
(iv) earnings per Share, (v) Share price, (vi) pre-tax profits, (vii) net
earnings, (viii) return on equity or assets, (ix) sales, (x) market share,
(xi) total Shareholder return, (xii) total Shareholder return relative to
peers or (xiii) any combination of the foregoing. Performance Objectives may
be in respect of the performance of the Company, any of its Subsidiaries or
Affiliates, any of its Divisions or segments or any combination thereof.
Performance Objectives may be absolute or relative (to prior performance of
the Company or to the performance of one or more other entities or external
indices) and may be expressed in terms of a progression within a specified
range. The Performance Objectives with respect to a Performance Cycle shall be
established in writing by the Committee by the earlier of (x) the date on
which a quarter of the Performance Cycle has elapsed or (y) the date which is
ninety (90) days after the commencement of the Performance Cycle, and in any
event while the performance relating to the Performance Objectives remain
substantially uncertain.

   (b) Effect of Certain Events. At the time of the granting of a Performance
Award, or at any time thereafter, in either case to the extent permitted under
Section 162(m) of the Code and the regulations thereunder without adversely
affecting the treatment of the Performance Award as Performance-Based
Compensation, the

                                      12
<PAGE>

Committee may provide for the manner in which performance will be measured
against the Performance Objectives (or may adjust the Performance Objectives),
include or exclude items to measure specific objectives, such as losses from
discontinued operations, extraordinary, unusual or nonrecurring gains and
losses, the cumulative effect of accounting changes, acquisitions or
divestitures or other corporate transactions, core process redesigns,
structural changes/outsourcing, and foreign exchange impacts.

   (c) Determination of Performance. Prior to the vesting, payment, settlement
or lapsing of any restrictions with respect to any Performance Award that is
intended to constitute Performance-Based Compensation made to a Grantee who is
subject to Section 162(m) of the Code, the Committee shall certify in writing
that the applicable Performance Objectives have been satisfied to the extent
necessary for such Award to qualify as Performance Based Compensation.

   9.4 Effect of Change in Control. In the event of a Change in Control,
unless otherwise determined by the Committee and set forth in the Agreement
evidencing the Award:

       (a) With respect to Performance Units, the Grantee shall (i) become
    vested in all outstanding of the Performance Units as if all
    Performance Objectives had been satisfied at the maximum level and (ii)
    be entitled to receive in respect of all Performance Units which become
    vested as a result of a Change in Control a cash payment within ten
    (10) days after such Change in Control.

       (b) With respect to Performance Shares, all restrictions shall lapse
    immediately on all outstanding Performance Shares as if all Performance
    Objectives had been satisfied at the maximum level.

       (c) The Agreements evidencing Performance Shares and Performance
    Units shall provide for the treatment of such Awards (or portions
    thereof), if any, which do not become vested as the result of a Change
    in Control, including, but not limited to, provisions for the
    adjustment of applicable Performance Objectives.

   9.5 Non-transferability. Until the vesting of Performance Units or the
lapsing of any restrictions on Performance Shares, as the case may be, such
Performance Units or Performance Shares shall not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise hypothecated.

10. Other Share Based Awards.

   The Committee may grant a Share Award to any Eligible Individual on such
terms and conditions as the Committee may determine in its sole discretion.
Share Awards may be made as additional compensation for services rendered by
the Eligible Individual or may be in lieu of cash or other compensation to
which the Eligible Individual is entitled from the Company.

11. Effect of a Termination of Employment.

   The Agreement evidencing the grant of each Option and each Award shall set
forth the terms and conditions applicable to such Option or Award upon a
termination or change in the status of the employment of the Optionee or
Grantee by the Company, or a Subsidiary, Affiliate or Division (including a
termination or change by reason of the sale of a Subsidiary, Affiliate or
Division), which, except for Formula Options, shall be as the Committee may,
in its discretion, determine at the time the Option or Award is granted or
thereafter.

12. Adjustment Upon Changes in Capitalization.

   (a) In the event of a Change in Capitalization, the Committee shall
conclusively determine the appropriate adjustments, if any, to (i) the maximum
number, exercise price and class of Shares or other stock or securities with
respect to which Options or Awards may be granted under the Plan, (ii) the
maximum number, exercise price and class of Shares or other stock or
securities that may be issued upon exercise of Incentive Stock Options, (iii)
the maximum number, exercise price and class of Shares or other stock or
securities with respect to which

                                      13
<PAGE>

Options or Awards may be granted to any Eligible Individual in any one
calendar year period, (iv) the number, exercise price and class of Shares or
other stock or securities which are subject to outstanding Options or Awards
granted under the Plan, (v) the number, exercise price and class of Shares or
other securities in respect of which Formula Options are to be granted under
Section 6 and (vi) the Performance Objectives.

   (b) Any such adjustment in the Shares or other stock or securities (i)
subject to outstanding Incentive Stock Options (including any adjustments in
the exercise price) shall be made in such manner as not to constitute a
modification as defined by Section 424(h)(3) of the Code and only to the
extent otherwise permitted by Sections 422 and 424 of the Code or (ii) subject
to outstanding Options or Awards that are intended to qualify as Performance-
Based Compensation shall be made in such a manner as not to adversely affect
the treatment of the Options or Awards as Performance-Based Compensation.

   (c) If, by reason of a Change in Capitalization, a Grantee of an Award
shall be entitled to, or an Optionee shall be entitled to exercise an Option
with respect to, new, additional or different shares of stock or securities of
the Company or any other corporation, such new, additional or different shares
shall thereupon be subject to all of the conditions, restrictions and
performance criteria which were applicable to the Shares subject to the Award
or Option, as the case may be, prior to such Change in Capitalization.

13. Effect of Certain Transactions.

   Subject to Sections 7.4, 8.4(b) and 9.4 or as otherwise provided in an
Agreement, in the event of (a) the liquidation or dissolution of the Company
or (b) a merger or consolidation of the Company (a "Transaction"), the Plan
and the Options and Awards issued hereunder shall continue in effect in
accordance with their respective terms, except that following a Transaction
either (i) each outstanding Option or Award shall be treated as provided for
in the agreement entered into in connection with the Transaction or (ii) if
not so provided in such agreement, each Optionee and Grantee shall be entitled
to receive in respect of each Share subject to any outstanding Options or
Awards, as the case may be, upon exercise of any Option or payment or transfer
in respect of any Award, the same number and kind of stock, securities, cash,
property or other consideration that each holder of a Share was entitled to
receive in the Transaction in respect of a Share; provided, however, that such
stock, securities, cash, property, or other consideration shall remain subject
to all of the conditions, restrictions and performance criteria which were
applicable to the Options and Awards prior to such Transaction. The treatment
of any Option or Award as provided in this Section 13 shall be conclusively
presumed to be appropriate for purposes of Section 9.

14. Interpretation.

   Following the required registration of any equity security of the Company
pursuant to Section 12 of the Exchange Act:

       (a) The Plan is intended to comply with Rule 16b-3 promulgated under
    the Exchange Act and the Committee shall interpret and administer the
    provisions of the Plan or any Agreement in a manner consistent
    therewith. Any provisions inconsistent with such Rule shall be
    inoperative and shall not affect the validity of the Plan.

       (b) Unless otherwise expressly stated in the relevant Agreement,
    each Option, and Performance Award granted under the Plan is intended
    to be Performance-Based Compensation. The Committee shall be entitled
    to exercise any discretion otherwise authorized hereunder with respect
    to such Options or Awards even if the ability to exercise such
    discretion or the exercise of such discretion itself would cause the
    compensation attributable to such Options or Awards to fail to qualify
    as Performance-Based Compensation.

15. Termination and Amendment of the Plan or Modification of Options and
Awards.

   15.1 Plan Amendment or Termination. The Plan shall terminate on the day
preceding the tenth anniversary of the date of its adoption by the Board and
no Option or Award may be granted thereafter. The

                                      14
<PAGE>

Board may sooner terminate the Plan and the Board may at any time and from
time to time amend, modify or suspend the Plan; provided, however, that:

       (a) no such amendment, modification, suspension or termination shall
    impair or adversely alter any Options or Awards theretofore granted
    under the Plan, except with the consent of the Optionee or Grantee, nor
    shall any amendment, modification, suspension or termination deprive
    any Optionee or Grantee of any Shares which he or she may have acquired
    through or as a result of the Plan; and

       (b) to the extent necessary under any applicable law, regulation or
    exchange requirement, no amendment shall be effective unless approved
    by the stockholders of the Company in accordance with applicable law,
    regulation or exchange requirement.

   15.2 Modification of Options and Awards. No modification of an Option or
Award shall adversely alter or impair any rights or obligations under the
Option or Award without the consent of the Optionee or Grantee, as the case
may be.

16. Non-Exclusivity of the Plan.

   The adoption of the Plan by the Board shall not be construed as amending,
modifying or rescinding any previously approved incentive arrangement or as
creating any limitations on the power of the Board to adopt such other
incentive arrangements as it may deem desirable, including, without
limitation, the granting of stock options otherwise than under the Plan, and
such arrangements may be either applicable generally or only in specific
cases.

17. Limitation of Liability.

   As illustrative of the limitations of liability of the Company, but not
intended to be exhaustive thereof, nothing in the Plan shall be construed to:

       (a) give any person any right to be granted an Option or Award other
    than at the sole discretion of the Committee;

       (b) give any person any rights whatsoever with respect to Shares
    except as specifically provided in the Plan;

       (c) limit in any way the right of the Company or any Subsidiary or
    Affiliate to terminate the employment of any person at any time; or

       (d) be evidence of any agreement or understanding, expressed or
    implied, that the Company will employ any person at any particular rate
    of compensation or for any particular period of time.

18. Regulations and Other Approvals; Governing Law.

   18.1 Except as to matters of federal law, the Plan and the rights of all
persons claiming hereunder shall be construed and determined in accordance
with the laws of the State of Delaware without giving effect to conflicts of
laws principles thereof.

   18.2 The obligation of the Company to sell or deliver Shares with respect
to Options and Awards granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.

   18.3 The Board may make such changes as may be necessary or appropriate to
comply with the rules and regulations of any government authority, or to
obtain for Eligible Individuals granted Incentive Stock Options the tax
benefits under the applicable provisions of the Code and regulations
promulgated thereunder.

                                      15
<PAGE>

   18.4 Each Option and Award is subject to the requirement that, if at any
time the Committee determines, in its discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Option or
Award or the issuance of Shares, no Options or Awards shall be granted or
payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Committee.

   18.5 Notwithstanding anything contained in the Plan or any Agreement to the
contrary, in the event that the disposition of Shares acquired pursuant to the
Plan is not covered by a then current registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), and is not
otherwise exempt from such registration, such Shares shall be restricted
against transfer to the extent required by the Securities Act and Rule 144 or
other regulations thereunder. The Committee may require any individual
receiving Shares pursuant to an Option or Award granted under the Plan, as a
condition precedent to receipt of such Shares, to represent and warrant to the
Company in writing that the Shares acquired by such individual are acquired
without a view to any distribution thereof and will not be sold or transferred
other than pursuant to an effective registration thereof under said Act or
pursuant to an exemption applicable under the Securities Act or the rules and
regulations promulgated thereunder. The certificates evidencing any of such
Shares shall be appropriately amended or have an appropriate legend placed
thereon to reflect their status as restricted securities as aforesaid.

19. Miscellaneous.

   19.1 Multiple Agreements. The terms of each Option or Award may differ from
other Options or Awards granted under the Plan at the same time, or at some
other time. The Committee may also grant more than one Option or Award to a
given Eligible Individual during the term of the Plan, either in addition to,
or in substitution for, one or more Options or Awards previously granted to
that Eligible Individual.

   19.2 Withholding of Taxes.

   (a) At such times as an Optionee or Grantee recognizes taxable income in
connection with the receipt of Shares or cash hereunder (a "Taxable Event"),
the Optionee or Grantee shall pay to the Company an amount equal to the
federal, state and local income taxes and other amounts as may be required by
law to be withheld by the Company in connection with the Taxable Event (the
"Withholding Taxes") prior to the issuance, or release from escrow, of such
Shares or the payment of such cash. The Company shall have the right to deduct
from any payment of cash to an Optionee or Grantee an amount equal to the
Withholding Taxes in satisfaction of the obligation to pay Withholding Taxes.
The Committee may provide in the Agreement at the time of grant, or at any
time thereafter, that the Optionee or Grantee, in satisfaction of the
obligation to pay Withholding Taxes to the Company, may elect to have withheld
a portion of the Shares then issuable to him or her having an aggregate Fair
Market Value equal to the Withholding Taxes.

   (b) If an Optionee makes a disposition, within the meaning of Section
424(c) of the Code and regulations promulgated thereunder, of any Share or
Shares issued to such Optionee pursuant to the exercise of an Incentive Stock
Option within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date of
transfer of such Share or Shares to the Optionee pursuant to such exercise,
the Optionee shall, within ten (10) days of such disposition, notify the
Company thereof, by delivery of written notice to the Company at its principal
executive office.

   19.3 Effective Date. The effective date of this Plan shall be as determined
by the Board, subject only to the approval by the affirmative vote of the
holders of a majority of the securities of the Company present, or
represented, and entitled to vote at a meeting of stockholders duly held in
accordance with the applicable laws of the State of Delaware within twelve
(12) months of the adoption of the Plan by the Board.

                                      16

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