Document:

RESTRICTED STOCK AGREEMENT

         THIS AGREEMENT, made as of this ____ day of _________________, ____, by
and between  Southwestern  Energy  Company,  a corporation  (the  "Company") and
_______________________ (the "Grantee").

                                   WITNESSETH:

         WHEREAS,  the Grantee is now  serving as an officer or key  employee of
the  Company and the Company  desires to afford the Grantee the  opportunity  to
acquire,  or enlarge,  the Grantee's  stock ownership in the Company so that the
Grantee may have a direct proprietary interest in the Company's success;

         NOW, THEREFORE,  in consideration of the covenants and agreement herein
contained, the parties hereto hereby agree as follows:

1.       Grant of Restricted Stock

         The  Company  hereby  grants to the  Grantee,  subject to the terms and
conditions  herein set forth, the right to receive from the Company _____ shares
of  Restricted  Stock ($.10 par value) of the Company to be issued from treasury
shares  separate  and apart  from the  Southwestern  Energy  Company  1993 Stock
Incentive Plan.

2.       Definitions

         a.       "Change in Control"  shall mean the  occurrence of  any of the
                  following:

                           (i) any  "person"  (as such term is used in  Sections
                  13(d) and 14(d) of the Exchange  Act, an  "Acquiring  Person")
                  becomes  the  "beneficial  owner"  (as such term is defined in
                  Rule 13d-3  promulgated  under the Exchange Act),  directly or
                  indirectly,  of securities of the Company  representing 20% or
                  more  of the  combined  voting  power  of the  Company's  then
                  outstanding  securities,  excluding any employee  benefit plan
                  sponsored or maintained by the Company (or any trustee of such
                  plan acting as trustee);

                           (ii) the Company's  stockholders approve an agreement
                  to merge or consolidate  the Company with another  corporation
                  (other than a  corporation  50% or more of which is controlled
                  by, or is under common control with, the Company);

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                           (iii) any individual who is nominated by the Board of
                  Directors  for  election to the Board of Directors on any date
                  fails to be so elected as a direct or  indirect  result of any
                  proxy fight or contested election for positions on the Board;

                           (iv) a "change in control" of the Company of a nature
                  that would be required to be reported in response to Item 6(e)
                  of  Schedule  14A of  Regulation  14A  promulgated  under  the
                  Exchange Act occurs; or

                           (v) a majority  of the Board  determines  in its sole
                  and  absolute  discretion  that  there  has been a  Change  in
                  Control  of the  Company  or that  there  will be a Change  in
                  Control  of  the  Company  upon  the   occurrence  of  certain
                  specified events and such events occur.

         b.       "Committee" shall mean the Compensation Committee of the Board
                  of Directors or such other committee as the Board of Directors
                  shall  appoint  from  time  to time to  administer  the  Plan;
                  provided,  however,  that the  Committee  shall  at all  times
                  consist  of two or  more  persons,  each of  whom  shall  be a
                  "disinterested  person"  within  the  meaning  of  Rule  16b-3
                  promulgated under Section 16 of the Exchange Act.

         c.       "Company" shall mean Southwestern Energy Company,  an Arkansas
                  corporation, and each of its Subsidiaries.

         d.       "Company Stock" shall mean the common stock of the Company.

         e.       "Exchange Act" shall mean the Securities Exchange Act of 1934,
                  as amended.

         f.       "Issue Date" shall mean the date  established by the Committee
                  on which certificates  representing shares of Restricted Stock
                  shall be issued by the Company pursuant to the terms hereof.

         g.       "Person"  shall  mean a  "person,"  as such  term is  used  in
                  Sections 13(d) and 14(d) of the Exchange Act.

         h.       "Restricted  Stock" shall mean a share of Company  Stock which
                  is granted  pursuant to the terms  hereof and which is subject
                  to the  restrictions  set  forth  herein  for so  long as such
                  restrictions continue to apply to such share.

         i.       "Securities Act"  shall mean  the Securities  Act of  1933, as
                  amended.

         j.       "Vesting  Date"   shall  mean  the  date  established  by  the
                  Committee on  which a  share of  Restricted  Stock or  Phantom
                  Stock may vest.

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3.       Term and Restrictions

         (a)  Issue Date and Vesting Date

         The Issue Date of the Restricted  Stock granted  hereunder shall be the
effective date of this agreement.  Except as provided in Sections 3(c) and 3(f),
stock certificates representing the shares of Restricted Stock granted hereunder
shall be issued in accordance  with Section 3(d) hereof.  Such shares shall vest
ratably  over a three year period from the date  hereof (the  "Vesting  Dates").
Except as provided in Sections 3(c) and 3(f),  and provided that all  conditions
to the vesting of a share of Restricted  Stock imposed  pursuant to Section 3(b)
hereof are satisfied,  upon the occurrence of the Vesting Date with respect to a
share of Restricted Stock, such share shall vest and the restrictions of Section
3(c) hereof shall cease to apply to such share.

         (b)  Conditions to Vesting

         Except for  continuation  of employment with the Company as provided in
Section 3(f)  hereof,  there are no  conditions  to the vesting of the shares of
Restricted Stock granted hereunder.

         (c)  Restrictions on Transfer Prior to Vesting

         Prior to the  vesting of a share of  Restricted  Stock,  no transfer of
Grantee's rights with respect to such share,  whether  voluntary or involuntary,
by operation of law or otherwise, shall vest the transferee with any interest or
right in or with  respect to such  share,  but  immediately  upon any attempt to
transfer such rights,  such share, and all of the rights related thereto,  shall
be forfeited by the Grantee, and the transfer shall be of no force or effect.

         (d)  Issuance of Certificates

         (1) Except as  provided  in Sections  3(c) or 3(f)  hereof,  reasonably
promptly  after the Issue Date with respect to shares of Restricted  Stock,  the
Company shall cause to be issued a stock certificate,  registered in the name of
the Grantee to whom such shares were granted,  evidencing such shares; provided,
that the Company shall not cause to be issued such a stock certificate unless it
has  received a stock power duly  endorsed in blank with respect to such shares.
Each such stock certificates shall bear the following legend:

                  The  transferability  of this  certificate  and the  shares of
                  stock  represented  hereby are  subject  to the  restrictions,
                  terms and  conditions  (including  forfeiture  provisions  and
                  restrictions  against  transfer)  contained  in  an  Agreement
                  entered into between the  registered  owner of such shares and
                  Southwestern  Energy  Company.  A copy of the  Agreement is on
                  file in the office of the  Secretary  of  Southwestern  Energy
                  Company, 1083 Sain Street, Fayetteville, Arkansas 72703.

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Such legend shall not be removed  from the  certificate  evidencing  such shares
until such shares vest pursuant to the terms hereof.

         (2)  Each  certificate  issued  pursuant  to  Section  3(d)(1)  hereof,
together  with the stock  powers  relating  to the  shares of  Restricted  Stock
evidenced  by  such  certificate,  shall  be  deposited  by the  Company  with a
custodian  designated by the Company.  The Company shall cause such custodian to
issue to the Grantee a receipt  evidencing the certificates held by it which are
registered in the name of the Grantee.

         (e)  Consequences Upon Vesting

         Upon the vesting of a share of Restricted  Stock  pursuant to the terms
hereof,  the  restrictions  of Section  3(c) hereof shall cease to apply to such
share.  Reasonably  promptly after a share of Restricted Stock vests pursuant to
the terms  hereof,  the Company  shall cause to be issued and  delivered  to the
Grantee,  a certificate  evidencing such share,  free of the legend set forth in
Section 3(d)(1) hereof,  together with any other property of the Grantee held by
the custodian pursuant to Section 4(b) hereof.

         (f)  Effect of Termination of Employment

         In the event that the  employment of the Grantee with the Company shall
terminate for any reason prior to the vesting of shares of the Restricted Stock,
all shares of Restricted  Stock granted to the Grantee  hereunder which have not
vested as of the date of such termination shall immediately be forfeited.

         (g)  Effect of Change in Control

         Upon the  occurrence  of a Change in Control,  all shares of Restricted
Stock granted  hereunder which have not theretofore  vested, or been canceled or
forfeited  pursuant to any provision  hereof or of the Plan,  shall  immediately
vest.

4.       Adjustment Upon Changes in Company Stock

         (a)  Outstanding Restricted Stock

         Unless the Committee in its absolute discretion  otherwise  determines,
any securities or other property (including  dividends paid in cash) received by
Grantee with respect to a share of Restricted Stock, the Issue Date with respect
to which occurs prior to such event,  but which has not vested as of the date of
such event,  as a result of any  dividend,  stock  split,  reverse  stock split,
recapitalization,  merger,  consolidation,  combination,  exchange  of shares or
otherwise will not vest until such share of Restricted Stock vests, and shall be
promptly deposited with the custodian

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<PAGE>

designated  pursuant to Paragraph 3(d)(2) hereof.  The Committee has  determined
that the right to receive cash dividends paid on the shares of  Restricted Stock
shall vest on the Issue Date.

         The  Committee  may, in its  absolute  discretion,  adjust the grant of
shares of  Restricted  Stock  made  hereunder,  provided  the Issue Date has not
occurred as of the date of the  occurrence  of any of the following  events,  to
reflect any  dividend,  stock  split,  reverse  stock  split,  recapitalization,
merger,  consolidation,  combination,  exchange  of shares or similar  corporate
change as the  Committee  may deem  appropriate  to prevent the  enlargement  or
dilution of rights of Grantee under the grant.

         (b)  No Other Rights

         Except as expressly  provided herein,  the Grantee shall have no rights
by reason of any subdivision or  consolidation  of shares of stock of any class,
the payment of any dividend, any increase or decrease in the number of shares of
stock of any class or any dissolution,  liquidation,  merger or consolidation of
the Company or any other  corporation.  Except as expressly  provided herein, no
issuance  by the  Company  of  shares  of  stock  of any  class,  or  securities
convertible into shares of stock of any class,  shall affect,  and no adjustment
by reason thereof shall be made with respect to, the number of shares of Company
Stock subject to the Restricted Stock granted hereunder.

5.       Rights as a Shareholder

         The Grantee shall have no rights as a  stockholder  with respect to any
shares of Company Stock covered by or relating to the  Restricted  Stock granted
hereunder until the date of the issuance of a stock  certificate with respect to
such shares.  Except as  otherwise  expressly  provided in Section 4 hereof,  no
adjustment to the  Restricted  Stock shall be made for dividends or other rights
for which the record date  occurs  prior to the date such stock  certificate  is
issued.

6.       No Special Employment Rights; No Right To Restricted Stock

         Nothing  contained  herein  shall  confer  upon  Grantee any right with
respect to continuation of his employment by the Company or interfere in any way
with the right of the Company,  subject to the terms of any separate  employment
agreement  to the  contrary,  at any time to  terminate  such  employment  or to
increase or decrease the  compensation  of Grantee from the rate in existence on
the date hereof.  The grant of the  Restricted  Stock  hereunder  shall  neither
require or prevent the granting of any subsequent Restricted Stock to Grantee or
any other person.

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<PAGE>

7.       Securities Matters

         (a) The Company shall be under no obligation to effect the registration
pursuant to the Securities Act of any interests in the Plan or this Agreement or
any  shares  of  Company  Stock to be  issued  hereunder  or to  effect  similar
compliance  under  any  state  laws.  Notwithstanding  anything  herein  to  the
contrary,  the Company shall not be obligated to cause to be issued or delivered
any certificates  evidencing  shares of Company Stock pursuant to this Agreement
unless and until the Company is advised by its  counsel  that the  issuance  and
delivery  of such  certificates  is in  compliance  with  all  applicable  laws,
regulations of governmental authority and the requirements of the New York Stock
Exchange and any other securities  exchange on which shares of Company Stock are
traded.  The Committee may require,  as a condition of the issuance and delivery
of certificates evidencing shares of Company Stock pursuant to the terms hereof,
that the recipient of shares make such agreements and representations,  and that
such  certificates  bear such legends as the Committee,  in its sole discretion,
deems necessary or desirable.

8.       Withholding Taxes

         (a)  Cash Remittance

         Whenever  shares of Company Stock are to be issued upon the  occurrence
of the Issue Date or the Vesting Date and whenever dividends are paid in respect
of non-vested  shares of restricted  stock,  the Company shall have the right to
require  the  Grantee to remit to the  Company in cash an amount  sufficient  to
satisfy  federal,  state  and  local  withholding  tax  requirements,   if  any,
attributable  to such  occurrence  prior to the delivery of any  certificate  or
certificates for such shares.

         (b)  Stock Remittance

         Subject to Section 8(d) hereof, at the election of the Grantee, subject
to the approval of the Committee,  when shares of Company Stock are to be issued
upon the  occurrence  of the  Issue  Date or the  Vesting  Date,  in lieu of the
remittance  required  by Section  8(a)  hereof,  the  Grantee  may tender to the
Company a number of shares of Company Stock determined by such Grantee, the Fair
Market  Value  of which  at the  tender  date  the  Committee  determines  to be
sufficient to satisfy the federal, state and local withholding tax requirements,
if any,  attributable  to such  exercise  and not  greater  than  the  Grantee's
estimated total federal,  state and local tax  obligations  associated with such
exercise.

         (c)  Stock Withholding

         The Company  shall have the right,  when shares of Company Stock are to
be issued upon the  occurrence of the Issue Date or the Vesting Date, in lieu of
requiring the remittance  required by Section 8(a) hereof,  to withhold a number
of such  shares,  the  Fair  Market  Value of  which  at

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<PAGE>

the exercise  date the  Committee  determines  to be  sufficient to  satisfy the
federal, state and local  withholding tax  requirements, if any, attributable to
such occurrence and is not greater  than the Grantee's estimated  total federal,
state and local tax obligations associated with such exercise.

         (d)  Timing and Method of Elections

         Notwithstanding  any other provisions hereof, if the Grantee is subject
to Section  16(b) of the  Exchange  Act,  the Grantee may not make the  election
described in Section 8(b) hereof prior to the expiration of six months after the
date of this  Agreement,  except in the event of the death or  Disability of the
Grantee.  If the Grantee is subject to Section  16(b) of the  Exchange  Act, the
Grantee  may not make such  election  other than (i)  during  the 10-day  window
period  beginning on the third  business day  following  the date of release for
publication of the Company's  quarterly and annual  summary  statements of sales
and earnings and ending on the twelfth  business day following such date or (ii)
at least six months prior to the date such election is made. Such election shall
be  irrevocable  and shall be made by the  delivery to the  Company's  principal
office,  to the attention of its  Secretary,  of a written  notice signed by the
Grantee.

9.       Transfers Upon Death

         No  transfer  by will or the laws of descent  and  distribution  of the
Restricted  Stock  granted  hereunder,  shall be  effective  to bind the Company
unless the Committee  shall have been  furnished with (a) written notice thereof
and with a copy of the will  and/or  such  evidence  as the  Committee  may deem
necessary to establish  the validity of the transfer and (b) an agreement by the
transferee to comply with all the terms and  conditions of this  Agreement  that
are or  would  have  been  applicable  to the  Grantee  and to be  bound  by the
acknowledgments  made  by the  Grantee  in  connection  with  the  grant  of the
Restricted Stock.

10.      Failure to Comply

         In addition  to the  remedies of the  Company  elsewhere  provided  for
herein,  failure by the Grantee (or beneficiary) to comply with any of the terms
and conditions of this Agreement, unless such failure is remedied by the Grantee
(or  beneficiary)  within ten days after having been notified of such failure by
the  Committee,  shall be grounds for the  cancellation  and  forfeiture  of the
Restricted  Stock,  in  whole  or in  part  as the  Committee,  in its  absolute
discretion, may determine.

11.      Applicable Law

         Except to the extent  preempted by any  applicable  federal  law,  this
Agreement will be construed and  administered in accordance with the laws of the
State of Arkansas, without reference to the principles of conflicts of law.

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<PAGE>

12.      Notices

         Any notice  hereunder  to the  Company  shall be addressed to it at its
office,  P. O. Box 1408,  Fayetteville,  AR 72702-1408:   Attention:  Secretary,
and any  notice  hereunder  to   Grantee  shall  be  addressed  to  the  Grantee
at  __________________________________________.  Either party  may designate  at
any time hereafter in writing some other address.

         IN  WITNESS  WHEREOF,  Southwestern  Energy  Company  has  caused  this
Agreement to be executed by its undersigned  duly  authorized  officer as of the
____ day of ____________, ____.

                                       SOUTHWESTERN ENERGY COMPANY

ATTEST:   (Seal)                       By: _____________________________________
                                           President and Chief Executive Officer

By: _______________________________
        Senior Vice President

                                           _____________________________________
                                                        (Grantee)

                                       8SOUTHWESTERN ENERGY COMPANY

                           NON-QUALIFIED STOCK OPTION

                                       AND

                  LIMITED STOCK APPRECIATION RIGHT CERTIFICATE

                               (Not Transferable)

                THIS CERTIFIES,  that SOUTHWESTERN  ENERGY COMPANY,  an Arkansas
corporation (the "Company"), has, as of the ___ day of __________, ____, granted
to  _____________________________  (the  "Grantee"),  (1) a Non-Qualified  Stock
Option to purchase _____ shares (the "Optioned  Shares") of the Company's Common
Stock ($.10 par value)  ("Company  Stock") and (2) a Limited Stock  Appreciation
Right (the  "LSAR")  with  respect to _____  shares of Company  Stock (the "LSAR
Shares"),  in each case, on the terms and  conditions of the NQO/LSAR  Terms and
Conditions attached hereto and made a part hereof ("T & C").

                This Non-Qualified Stock Option and LSAR is granted separate and
apart from the  Southwestern  Energy Company 1993 Stock  Incentive Plan, and any
shares  issued to Grantee  upon  exercise  of this  option  shall be issued from
treasury shares.

                This  Non-Qualified  Stock Option and LSAR shall be  exercisable
only in accordance with the provisions of this Certificate and the T & C.

                The exercise price of the Optioned  Shares and LSAR Shares shall
be $_____ per share.

                The  exercise  of this  LSAR  with  respect  to a number of LSAR
Shares  shall  cause  the   immediate  and   automatic   cancellation   of  this
Non-Qualified  Stock Option with respect to an equal number of Optioned  Shares.
The  exercise  of  this   Non-Qualified   Stock  Option,  or  the  cancellation,
termination  or  expiration  of this  Non-Qualified  Stock  Option  (other  than
pursuant to Section  4(b)(2) of the T & C), with respect to a number of Optioned
Shares,  shall  cause the  cancellation  of this LSAR with  respect  to an equal
number of LSAR Shares.

                This  Non-Qualified  Stock  Option and LSAR is not  transferable
except by will or the laws of descent and distribution.

                This Non-Qualified Stock Option and LSAR shall be exercisable in
whole or in part;  provided,  that no partial exercise shall be for an aggregate
exercise price of less than $1,000.  The partial exercise of this  Non-Qualified
Stock Option or LSAR shall not cause the expiration, termination or cancellation
of the remaining portion hereof.

                This  Non-Qualified  Stock Option and LSAR shall be exercised by
delivering  notice to the Company's  principal  office,  to the attention of its
Secretary, no less than one

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business  day in advanc of the  effective  date of the proposed  exercise.  Such
notice shall be  accompanied  by this  Certificate,  shall specify the number of
Optioned  Shares  and/or LSAR Shares  with  respect to which this  Non-Qualified
Stock Option and LSAR is being  exercised and the effective date of the proposed
exercise  and shall be signed by the  Grantee.  The  Grantee may  withdraw  such
notice  at any  time  prior  to the  close  of  business  on  the  business  day
immediately preceding the effective date of the proposed exercise.

                Payment for Optioned Shares  purchased upon the exercise of this
Non-Qualified  Stock Option shall be made on the effective date of such exercise
in accordance with the T & C.

                THIS  NON-QUALIFIED  STOCK OPTION SHALL FIRST BECOME EXERCISABLE
WITH RESPECT TO THE FOLLOWING  PERCENTAGE OF THE TOTAL SHARES  SUBJECT HERETO ON
THE FOLLOWING DATES:

=======================================  =======================================

                                           First Date on Which Such Percentage
      Percentage of Total Shares           of Total Shares Becomes Exercisable
=======================================  =======================================

=======================================  =======================================

=======================================  =======================================

=======================================  =======================================

                THIS NON-QUALIFIED STOCK OPTION SHALL BECOME FULLY VESTED AT THE
EARLIER OF ____________ ____, ____ OR UPON GRANTEE'S RETIREMENT PROVIDED GRANTEE
HAS  REACHED  NORMAL  RETIREMENT  AGE  (SIXTY-FIVE  (65)),  AS  DEFINED  IN  THE
SOUTHWESTERN ENERGY COMPANY PENSION PLAN. PROVIDED, HOWEVER, UPON THE OCCURRENCE
OF A CHANGE  IN  CONTROL,  IF AND TO THE  EXTENT IT STILL IS  OUTSTANDING,  THIS
NON-QUALIFIED  STOCK OPTION SHALL BECOME FULLY AND  IMMEDIATELY  EXERCISABLE AND
SHALL REMAIN  EXERCISABLE  UNTIL ITS  EXPIRATION,  TERMINATION  OR  CANCELLATION
PURSUANT TO THE T & C.

                THIS LSAR SHALL BE EXERCISABLE ONLY DURING THE PERIOD COMMENCING
ON THE FIRST DAY FOLLOWING THE OCCURRENCE OF A CHANGE IN CONTROL AND TERMINATING
ON THE EXPIRATION OF SIXTY DAYS AFTER SUCH DATE; PROVIDED, THAT IF GRANTEE IS OR
MAY BE SUBJECT TO THE  PROVISIONS  OF SECTION  16(b) OF THE  EXCHANGE ACT AND AN
LSAR BECOMES  EXERCISABLE  PRIOR TO THE  EXPIRATION OF SIX MONTHS  FOLLOWING THE
DATE ON WHICH IT IS GRANTED,  THEN THE

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<PAGE>

LSAR SHALL ALSO BE  EXERCISABLE  DURING THE PERIOD  COMMENCING  ON THE FIRST DAY
IMMEDIATELY FOLLOWING THE EXPIRATION OF SUCH SIX MONTH PERIOD AND TERMINATING ON
THE EXPIRATION OF SIXTY DAYS FOLLOWING SUCH DATE.

                THIS  NON-QUALIFIED  STOCK  OPTION AND LSAR SHALL  EXPIRE AND BE
VOID AND SHALL NOT BE  EXERCISABLE  AFTER THE  EXPIRATION OF TEN (10) YEARS FROM
THE DATE AS OF WHICH IT WAS  GRANTED  AND MAY BE  EXERCISED  ONLY IN THE  MANNER
PROVIDED IN THE T & C. THIS NON-QUALIFIED STOCK OPTION AND LSAR SHALL BE SUBJECT
TO EARLIER TERMINATION, EXPIRATION OR CANCELLATION AS PROVIDED IN THE T & C.

                IN WITNESS  WHEREOF,  the Company has issued this  Non-Qualified
Stock Option and Limited Stock Appreciation Right Certificate by its undersigned
duly authorized officer as of the ____ day of ___________, ____.

                                       SOUTHWESTERN ENERGY COMPANY

ATTEST:   (Seal)                       By: _____________________________________
                                           President and Chief Executive Officer

By: _______________________________
        Senior Vice President

                                           _____________________________________
                                                         (Grantee)

                                       3
<PAGE>

                          NQO/LSAR TERMS AND CONDITIONS

1.       Definitions

         As used herein, the following  definitions apply to the terms indicated
         below:

                  (a) "Cause," when used in connection  with the  termination of
         the Grantee's  employment with the Company,  shall mean the termination
         of the  Grantee's  employment  by the  Company  on  account  of (i) the
         willful and continued  failure by the Grantee  substantially to perform
         his duties and  obligations to the Company (other than any such failure
         resulting  from his  incapacity  due to physical or mental  illness) or
         (ii)  the  willful  engaging  by the  Grantee  in  misconduct  which is
         materially injurious to the Company. For purposes of this Section 1(a),
         no act,  or failure to act,  on a  Grantee's  part shall be  considered
         "willful"  unless  done,  or omitted to be done,  by the Grantee in bad
         faith and without  reasonable belief that his action or omission was in
         the best interests of the Company.

                  (b) "Change in Control"  shall  mean the  occurrence of any of
         the following:

                           (i) any  "person"  (as such term is used in  Sections
                  13(d) and 14(d) of the Exchange Act, and  "Acquiring  Person")
                  becomes  the  "beneficial  owner"  (as such term is defined in
                  Rule 13d-3  promulgated  under the Exchange Act),  directly or
                  indirectly,  of securities of the Company  representing 20% or
                  more  of the  combined  voting  power  of the  Company's  then
                  outstanding  securities,  excluding any employee  benefit plan
                  sponsored or maintained by the Company (or any trustee of such
                  plan acting as trustee);

                           (ii) the Company's  stockholders approve an agreement
                  to merge or consolidate  the Company with another  corporation
                  (other than a  corporation  50% or more of which is controlled
                  by, or is under common control with, the Company);

                           (iii) any individual who is nominated by the Board of
                  Directors  for  election to the Board of Directors on any date
                  fails to be so elected as a direct or  indirect  result of any
                  proxy fight or contested election for positions on the Board;

                           (iv) a "change in control" of the Company of a nature
                  that would be required to be reported in response to Item 6(e)
                  of  Schedule  14A of  Regulation  14A  promulgated  under  the
                  Exchange Act occurs; or

                           (v) a majority  of the Board  determines  in its sole
                  and  absolute  discretion  that  there  has been a  Change  in
                  Control  of the  Company  or that  there  will be a Change  in
                  Control  of  the  Company  upon  the   occurrence  of  certain
                  specified events and such events occur.

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<PAGE>

                  (c) "Code" shall mean the Internal Revenue Code of 1986.

                  (d) "Committee"  shall mean the Compensation  Committee of the
         Board of  Directors  or such other  committee as the Board of Directors
         shall appoint from time to time to administer this agreement  provided,
         however,  that the Committee  shall at all times consist of two or more
         persons,  each of whom  shall be a  "disinterested  person"  within the
         meaning of Rule 16b-3 promulgated under Section 16 of the Exchange Act.

                  (e)  "Company"  shall mean  Southwestern  Energy  Company,  an
         Arkansas corporation, and each of its Subsidiaries.

                  (f) "Company  Stock"  shall  mean  the  common  stock  of  the
         Company.

                  (g)  "Disability"  shall mean any physical or mental condition
         that would  qualify a  participant  for a disability  benefit under the
         long-term  disability  plan maintained by the Company and applicable to
         him.

                  (h) "Exchange Act"  shall mean the  Securities Exchange Act of
         1934, as amended.

                  (i) the "Fair Market  Value" of a share of Company  Stock with
         respect  to any  day  shall  be (i)  the  closing  sales  price  on the
         immediately  preceding  business  day of a share  of  Company  Stock as
         reported  on the  principal  securities  exchange  on which  shares  of
         Company  Stock are then listed or admitted to trading or (ii) if not so
         reported,  the  average  of the  closing  bid  and  ask  prices  on the
         immediately   preceding  business  day  as  reported  on  the  National
         Association of Securities  Dealers Automated  Quotation System of (iii)
         if  not  so  reported,  as  furnished  by any  member  of the  National
         Association of Securities Dealers,  Inc. selected by the committee.  In
         the event  that the price of a share of Company  Stock  shall not be so
         reported,  the Fair Market  Value of a share of Company  Stock shall be
         determined by the Committee in its absolute discretion.

                  (j)  "Incentive  Stock Option" shall mean an Option that is an
         "incentive stock option" within the meaning of Section 422 of the Code.

                  (k) "LSAR" shall mean a limited stock  appreciation right that
         is granted  pursuant  to the  provisions  of Section 4 hereof and which
         related to an  Option.  Each LSAR  shall be  exercisable  only upon the
         occurrence  of a Change in Control and only in the  alternative  to the
         exercise of its related Option.

                  (l) "Non-Qualified  Stock Option" shall mean an Option that is
         not an Incentive Stock Option.

                  (m)  "Option"  shall  mean an  option  to  purchase  shares of
         Company Stock granted pursuant to Section 3 hereof.

                                       2
<PAGE>

                  (n)  "Person"  shall mean a "person,"  as such term is used in
         sections 13(d) and 14(d) of the Exchange Act.

                  (o) "Securities Act" shall mean the Securities Act of 1933, as
         amended.

                  (p)  "Subsidiary"  shall mean any corporation in which, at the
         time of reference,  the Company  owns,  directly or  indirectly,  stock
         comprising  more than fifty percent of the total combined  voting power
         of all classes of stock of such corporation.

2.       Administration

         The Committee  shall have full authority to administer  this agreement,
including  authority to interpret and construe any provision of this  agreement.
Decisions of the committee shall be final and binding on all parties.

         The Committee  may, in its absolute  discretion,  without  amendment to
this  agreement,  accelerate  the date on which  any  Option  granted  hereunder
becomes exercisable or otherwise adjust any of the terms of such Option.

3.       Options

         (a)      Term and Exercise of Options

         (1) Each Option  shall be  exercisable  in whole or in part;  provided,
that no partial  exercise of an Option shall be for an aggregate  exercise price
of less than  $1,000.  The  partial  exercise  of an Option  shall not cause the
expiration,  termination or cancellation of the remaining portion thereof.  Upon
the partial exercise of an Option, the agreements evidencing such Option and any
related LSARs,  marked with such notations as the Committee may deem appropriate
to evidence  such partial  exercise,  shall be returned to the Grantee  together
with the delivery of the certificates described in Section 3(a)(4) hereof.

         (2) An Option shall be exercised by delivering  notice to the Company's
principal office,  to the attention of its Secretary,  no less than one business
day in advance of the effective date of the proposed exercise. Such notice shall
be accompanied  by the  agreements  evidencing the Option and any related LSARs,
shall  specify the number of shares of Company  Stock with  respect to which the
Option is being  exercised and the effective  date of the proposed  exercise and
shall be signed by the Grantee. The Grantee may withdraw such notice at any time
prior to the close of business on the business  day  immediately  preceding  the
effective date of the proposed exercise,  in which case such agreements shall be
returned to him. Payment for shares of Company Stock purchased upon the exercise
of an Option shall be made on the effective date of such exercise  either (i) in
cash, by certified check,  bank cashier's check or wire transfer or (ii) subject
to the  approval  of the  committee,  in shares of  Company  Stock  owned by the
Participant  and valued at their Fair Market Value on the effective date of such
exercise,  or partly in shares of  Company

                                       3
<PAGE>

Stock with the balance in cash, by certified check, bank cashier's check or wire
transfer.  Any  payment  in shares of Company  Stock  shall be  effected  by the
delivery of such shares to the Secretary of the Company,  duly endorsed in blank
or accompanied  by stock powers duly executed in blank,  together with any other
documents  and evidences as the Secretary of the Company shall require from time
to time.

         (3) During the lifetime of Grantee, each Option granted to him shall be
exercisable only by him. No Option shall be assignable or transferable otherwise
than by will or by the laws off descent and  distribution,  nor shall any option
be permitted to be pledged in any manner.

         (4)  Certificates  for  shares  of  Company  Stock  purchased  upon the
exercise of an Option shall be issued in the name of Grantee or his beneficiary,
as the case may be, and delivered to the Grantee or his beneficiary, as the case
may be, as soon as practicable  following the effective date on which the Option
is exercised.

         (b)      Effect of Termination of Employment

         (1) In the event that the  employment of Grantee with the Company shall
terminate  for any reason  other than  Cause,  Disability  or death (I)  Options
granted to such Grantee, to the extent that they were exercisable at the time of
such termination,  shall remain exercisable until the expiration of three months
after  such  termination,  on which  date they shall  expire,  and (ii)  Options
granted to such  Grantee,  to the extent that they were not  exercisable  at the
time of such  termination,  shall expire at the close of business on the date of
such  termination;  provided,  however that no Option shall be exercisable after
the expiration of its term.

         (2) In the event that the  employment of Grantee with the Company shall
terminate  on account of the  Disability  or death of the  Grantee  (i)  Options
granted to Grantee, to the extent that they were exercisable at the time of such
termination,  shall remain  exercisable  until the  expiration of one year after
such termination,  on which date they shall expire,  and (ii) Options granted to
Grantee,  to the  extent  that  they  were not  exercisable  at the time of such
termination,  shall  expire  at the  close  of  business  on the  date  of  such
termination;  provided,  however,  that no Option shall be exercisable after the
expiration of its term.

         (3) In the event of the termination of Grantee's  employment for Cause,
all outstanding  Options granted to Grantee shall expire at the  commencement of
business on the date of such termination.

         (c)      Acceleration of Exercise Date Upon Change in Control

         Upon the  occurrence  of a  Change  in  Control,  each  Option  granted
hereunder  and  outstanding  at such time  shall  become  fully and  immediately
exercisable and shall remain  exercisable  until its expiration,  termination or
cancellation pursuant to the terms hereof.

                                       4
<PAGE>

4.       Limited SARs

         (a)      Benefit Upon Exercise

         (1) The exercise of an LSAR  relating to a  Non-Qualified  Stock Option
with respect to any number of shares of Company Stock shall entitle Grantee to a
cash payment, for each such share, equal to the excess of (i) the greater of (A)
the  highest  price per share of Company  Stock paid in the Change in Control in
connection with which such LSAR became exercisable and (B) the Fair Market Value
of a share of Company  Stock on the date of such Change in Control over (ii) the
exercise  price of the related  Option.  Such  payment  shall be made as soon as
practicable,  but in no event later than the  expiration  of five  business days
after the effective date of such exercise.

         (b)      Term and Exercise of LSARs

         (1) An LSAR shall be exercisable  only during the period  commencing on
the first day following the occurrence of a Change in Control and terminating on
the  expiration  of sixty days after such date.  Notwithstanding  the  preceding
sentence of this Section 4(b), in the event that an LSAR held by any Grantee who
is or may be subject to the  provisions  of Section  16(b) of the  Exchange  Act
becomes  exercisable prior to the expiration of six months following the date on
which it is granted,  then the LSAR shall also be exercisable  during the period
commencing on the first day  immediately  following  the  expiration of such six
month period and  terminating  on the  expiration of sixty days  following  such
date. Notwithstanding anything else herein, an LSAR may be exercised only if and
to the extent that the Option to which it relates is exercisable.

         (2) The  exercise  of an LSAR  with  respect  to a number  of shares of
Company Stock shall cause the immediate and automatic cancellation of the Option
to which it relates with  respect to an equal number of shares.  the exercise of
an Option,  or the  cancellation,  termination or expiration of an Option (other
than  pursuant to this  Paragraph  (2)),  with  respect to a number of shares of
Company  Stock,  shall  cause the  cancellation  of the LSAR  related to it with
respect to an equal number of shares.

         (3) Each LSAR shall be exercisable in whole or in part; provided,  that
no partial exercise of an LSAR shall be for an aggregate  exercise price of less
than  $1,000.  The partial  exercise of an LSAR shall not cause the  expiration,
termination or cancellation of the remaining  portion thereof.  Upon the partial
exercise of an LSAR, the agreements  evidencing the LSAR and the related Option,
marked with such  notations as the  committee may deem  appropriate  to evidence
such partial  exercise,  shall be returned to the Grantee  exercising  such LSAR
together with the payment described in Paragraph 4(a)(1) hereof.

         (4) During the  lifetime of Grantee,  each LSAR granted to him shall be
exercisable  only by him. No LSAR shall be assignable or transferable  otherwise
than by will or by the laws of  descent  and  distribution  and  otherwise  than
together with its related Option,  nor shall any LSAR be permitted to be pledged
in any manner.

                                       5
<PAGE>

         (5) An LSAR shall be exercised by  delivering  notice to the  Company's
principal office,  to the attention of its Secretary,  no less than one business
day in advance of the effective date of the proposed exercise. Such notice shall
be accompanied by the applicable  agreements evidencing the LSAR and the related
Option,  shall  specify  the number of shares of Company  Stock with  respect to
which  the  LSAR is  being  exercised  and the  effective  date of the  proposed
exercise  and shall be signed by the  Grantee.  The  Grantee may  withdraw  such
notice  at any  time  prior  to the  close  of  business  on  the  business  day
immediately preceding the effective date of the proposed exercise, in which case
such agreement shall be returned to him.

5.       Adjustment Upon Changes in Company Stock

         (a)      Outstanding Options and LSARs - Increase or Decrease in Issued
                  Shares Without Consideration

         Subject to any required action by the  shareholders of the Company,  in
the event of any increase or decrease in the number of issued  shares of Company
Stock resulting from a subdivision or  consolidation  of shares of Company Stock
or the payment of a stock dividend (but only on the shares of Company Stock), or
any other  increase or decrease  in the number of such shares  effected  without
receipt of  consideration  by the Company,  the Committee  shall  proportionally
adjust the number of shares of Company Stock subject to each outstanding  Option
and LSAR,  and the exercise price per share of Company Stock of each such Option
and LSAR.

         (b)      Outstanding Options and LSARs - Certain Mergers

         Subject to any required action by the  shareholders of the Company,  in
the event that the Company shall be the surviving  corporation  in any merger or
consolidation (except a merger or consolidation as a result of which the holders
of shares of Company Stock  receive  securities  of another  corporation),  each
Option and LSAR  outstanding on the date of such merger or  consolidation  shall
pertain to and apply to the securities which a holder of the number of shares of
Company Stock subject to such Option and LSAR would have received in such merger
or consolidation.

         (c)      Outstanding Options and LSARs - Certain Other Transactions

         In the event of (i) a dissolution or liquidation of the Company, (ii) a
sale of all or  substantially  all of the  Company's  assets,  (iii) a merger or
consolidation  involving  the company in which the Company is not the  surviving
corporation or (iv) a merger or consolidation involving the Company in which the
Company is the surviving  corporation but the holders of shares of Company Stock
receive securities of another corporation and/or other property, including cash,
the Committee shall, in its absolute discretion, have the power to:

                  (i) cancel,  effective  immediately prior to the occurrence of
         such  event,   each  Option   (including  each  LSAR  related  thereto)
         outstanding  immediately  prior  to such  event  (whether  or not  then
         exercisable),  and, in full consideration of such cancellation,  pay to

                                       6
<PAGE>

         Grantee an amount in cash,  for each share of Company  Stock subject to
         such Option equal to the excess of (A) the value,  as determined by the
         committee in its absolute discretion,  of the property (including cash)
         received by the holder of a share of Company  Stock as a result of such
         event over (B) the exercise price of such Option; or

                  (ii)  provide for the exchange of each Option  (including  any
         related LSAR)  outstanding  immediately prior to such event (whether or
         not then exercisable) for an option on or stock appreciation right with
         respect to, as appropriate,  some or all of the property for which such
         Option is exchanged and, incident thereto, make an equitable adjustment
         as  determined  by the  Committee  in its  absolute  discretion  in the
         exercise price of the option or stock appreciation right, or the number
         of  shares  or  amount  of  property  subject  to the  option  or stock
         appreciation  right or, if  appropriate,  provide for a cash payment to
         Grantee in partial consideration for the exchange of the Option.

         (d)      Outstanding Options and LSARs - Other Changes

         In the event of any change in the  capitalization  of the  Company or a
corporate change other than those specifically  referred to in Section 5(a), (b)
or (c)  hereof,  the  Committee  may,  in its  absolute  discretion,  make  such
adjustments  in the  number and class of shares  subject  to  Options  and LSARs
outstanding  on the  date on  which  such  change  occurs  and in the  per-share
exercise  price of each such  Option and LSAR,  as the  Committee  may  consider
appropriate to prevent dilution or enlargement of rights.

         (e)      No Other Rights

         Except as expressly  provided herein,  Grantee shall have any rights by
reason of any subdivision or  consolidation of shares of stock of any class, the
payment of any  dividend,  any  increase  or decrease in the number of shares of
stock of any class or any dissolution,  liquidation,  merger or consolidation of
the Company or any other  corporation.  Except as expressly  provided herein, no
issuance  by the  Company  of  shares  of  stock  of any  class,  or  securities
convertible into shares of stock of any class,  shall affect,  and no adjustment
by reason thereof shall be made with respect to, the number of shares of Company
Stock subject to the exercise price of any Option or LSAR.

6.       Rights as a Stockholder

         No person  shall have any rights as a  stockholder  with respect to any
shares of Company  Stock  covered by or relating  to any Option or LSAR  granted
hereunder until the date of the issuance of a stock  certificate with respect to
such shares.  Except as  otherwise  expressly  provided in Section 5 hereof,  no
adjustment to any Option or LSAR shall be made for dividends or other rights for
with the record date occurs prior to the date such stock certificate is issued.

                                       7
<PAGE>

7.       No Special Employment Rights; No Right to Options or LSARs

         Nothing  contained  herein  shall  confer  upon  Grantee any right with
respect to the continuation of his employment by the Company or interfere in any
way with  the  right  of the  Company,  subject  to the  terms  of any  separate
employment  agreement to the contrary,  at any time to terminate such employment
or to  increase  or  decrease  the  compensation  of  Grantee  from  the rate in
existence at the time of the grant hereunder.

         Grantee shall have no claim or right to receive any additional  Options
or LSARs hereunder.  The Committee's granting of Options and LSARs to Grantee at
any time shall  neither  require  the  Committee  to grant  Options and LSARs to
Grantee at any time nor preclude the Committee from making  subsequent grants to
Grantee.

8.       Securities Matters

         (a) The Company shall be under no obligation to effect the registration
pursuant to the  Securities  Act of any interests in any shares of Company Stock
to be issued  hereunder or to effect  similar  compliance  under any state laws.
Notwithstanding  anything  herein  to the  contrary,  the  Company  shall not be
obligated to cause to be issued or delivered any certificates  evidencing shares
of Company  Stock  pursuant  to this  agreement  unless and until the Company is
advised by its counsel that the issuance and delivery of such certificates is in
compliance with all applicable laws,  regulations of governmental  authority and
the  requirements  of the New  York  Stock  Exchange  and any  other  securities
exchange on which shares of Company Stock are traded. The Committee may require,
as a condition of the issuance and delivery of certificates evidencing shares of
Company Stock  pursuant to the terms  hereof,  that the recipient of such shares
make such covenants, agreements and representations,  and that such certificates
bear such legends, as the Committee, in its sole discretion,  deems necessary or
desirable.

         (b) The  exercise of any Option  granted  hereunder  shall be effective
only at such time as  counsel to the  Company  shall  have  determined  that the
issuance and delivery of shares of Company Stock pursuant to such exercise is in
compliance with all applicable laws,  regulations of governmental  authority and
the  requirements  of the New  York  Stock  Exchange  and any  other  securities
exchange on which shares of Company Stock are traded.  The Committee may, in its
sole  discretion,  defer the  effectiveness of any exercise of an Option granted
hereunder  in order to allow the  issuance of shares of Company  Stock  pursuant
thereto to be made pursuant to registration or an exemption from registration or
other methods for compliance  available under federal or state  securities laws.
The  Committee  shall  inform  Grantee in writing of its  decision  to defer the
effectiveness of the exercise of an Option granted hereunder.  During the period
that the  effectiveness of the exercise of an Option has been deferred,  Grantee
may, by written  notice,  withdraw  such  exercise  and obtain the refund of any
amount paid with respect thereto.

                                       8
<PAGE>

9.       Withholding Taxes

         (a)      Cash Remittance

         Whenever  shares of Company Stock are to be issued upon the exercise of
an Option,  the Company shall have the right to require  Grantee to remit to the
Company  in cash an  amount  sufficient  to  satisfy  federal,  state  and local
withholding tax requirements,  if any,  attributable to such exercise,  prior to
the delivery of any  certificate or certificates  for such shares.  In addition,
upon the exercise of an LSAR,  the Company shall have the right to withhold from
any cash payment  required to be made pursuant  thereto an amount  sufficient to
satisfy the  federal,  state and local  withholding  tax  requirements,  if any,
attributable to such exercise.

         (b)      Stock Remittance

         Subject to Section 9(d) hereof at the  election of Grantee,  subject to
the  approval of the  Committee,  when shares of Company  Stock are to be issued
upon the exercise of an Option,  in lieu of the  remittance  required by Section
9(a) hereof, the Grantee may tender to the Company a number of shares of Company
Stock  determined by Grantee,  the Fair Market Value of which at the tender date
the Committee  determines  to be  sufficient  to satisfy the federal,  state and
local withholding tax requirements,  if any, attributable to such exercise,  and
not  greater  than  Grantee's  estimated  total  federal,  state  and  local tax
obligations associated with such exercise.

         (c)      Stock Withholding

         The Company  shall have the right,  when shares of Company Stock are to
be issued upon the exercise of an Option,  in lieu of requiring  the  remittance
required by Section 9(a) hereof,  to withhold a number of such shares,  the Fair
Market  Value of which at the  exercise  date  the  Committee  determines  to be
sufficient to satisfy the federal, state and local withholding tax requirements,
if any,  attributable  to  such  exercise,  and is not  greater  than  Grantee's
estimated total federal,  state and local tax  obligations  associated with such
exercise.

         (d)      Timing and Method of Elections

         Notwithstanding  any  other  provisions  of the  Plan,  Grantee  who is
subject to Section 16(b) of the Exchange Act may not make the election described
in Section 9(b) hereof prior to the  expiration  of six months after the date on
which the applicable  Option,  was granted,  except in the event of the death or
Disability  of Grantee.  If Grantee is subject to Section  16(b) of the Exchange
Act,  Grantee may not make such election other than (i) during the 10-day window
period  beginning on the third  business day  following  the date of release for
publication of the Company's  quarterly and annual  summary  statements of sales
and earnings and ending on the twelfth  business day following such date or (ii)
at least six months  prior to the date such  election  is made.  Such  elections
shall  be  irrevocable  and  shall  be made  by the  delivery  to the  Company's
principal office, to the attention of its Secretary, of written notice signed by
Grantee.

                                       9
<PAGE>

10.      No Obligation to Exercise

         The grant to Grantee of an Option and LSAR,  shall impose no obligation
upon such Grantee to exercise such Option or LSAR.

11.      Transfers Upon Death

         Upon  the  death of  Grantee,  outstanding  Options  and  LSARs  may be
exercised only by the executors or  administrators of Grantee's estate of by any
person or persons who shall have  acquired  such right to exercise by will or by
the laws of descent and distribution. No transfer by will or the laws of descent
and  distribution  of any Option or LSAR, or the right to exercise any Option or
LSAR,  shall be effective to bind the Company  unless the  Committee  shall have
been  furnished  with (a)  written  notice  thereof  and with a copy of the will
and/or such  evidence as the  Committee  may deem  necessary  to  establish  the
validity of the transfer and (b) an agreement by the  transferee  to comply with
all the terms  and  conditions  of this  agreement  that are or would  have been
applicable to Grantee and to be bound by the acknowledgments  made by Grantee in
connection  with the grant of the Option and LSAR.  Except as  provided  in this
Section 11, no Option or LSAR shall be  transferable,  and shall be  exercisable
only by a Grantee during the Grantee's lifetime.

12.      Failure to Comply

         In addition  to the  remedies of the  Company  elsewhere  provided  for
herein,  failure by Grantee (or beneficiary) to comply with any of the terms and
conditions  hereof,  unless such failure is remedied by Grantee (or beneficiary)
within ten days after  having been  notified of such  failure by the  Committee,
shall be grounds for the cancellation and forfeiture of such Option and LSAR, in
whole or in part, as the Committee, in its absolute discretion, may determine.

13.      Applicable Law

         Except to the extent  preempted by any  applicable  federal  law,  this
agreement will be construed and  administered in accordance with the laws of the
State of Arkansas, without reference to the principles of conflicts of law.

                                       10

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