1
  AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 8, 1997
                                                 Registration No. 333-__________
===============================================================================


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                               -----------------
                                    FORM S-8
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                               -----------------


                       PIONEER NATURAL RESOURCES COMPANY
             (Exact name of registrant as specified in its charter)

                                    DELAWARE
         (State or other jurisdiction of incorporation or organization)

                                   75-2702753
                                (I.R.S. Employer
                              Identification No.)

                           1400 WILLIAMS SQUARE WEST
                         5205 NORTH O'CONNOR BOULEVARD
                              IRVING, TEXAS 75039
          (Address of principal executive offices, including zip code)

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

           PIONEER NATURAL RESOURCES COMPANY LONG-TERM INCENTIVE PLAN

                            (Full title of the plan)

                                MARK L. WITHROW
                           1400 WILLIAMS SQUARE WEST
                         5205 NORTH O'CONNOR BOULEVARD
                              IRVING, TEXAS 75039
                                 (972) 444-9001
           (Name, address and telephone number of agent for service)

                                    copy to:

                               ROBERT L. KIMBALL
                             VINSON & ELKINS L.L.P.
                           3700 TRAMMELL CROW CENTER
                                2001 ROSS AVENUE
                            DALLAS, TEXAS 75201-2975
                                 (214) 220-7700

                        CALCULATION OF REGISTRATION FEE


======================================================================================================================= Proposed Title of securities Amount to be Proposed maximum maximum aggregate Amount of to be registered registered offering price per unit* offering price* registration fee - ----------------------------------------------------------------------------------------------------------------------- Common Stock, $0.01 par value per share................... 5,476,010 shares $38.30 $209,731,183 $63,555 =======================================================================================================================
* Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(h) under the Securities Act of 1933 and based on the average of the high and low prices of the Common Stock reported on The New York Stock Exchange on August 28, 1997. =============================================================================== 2 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents have been filed with the Securities and Exchange Commission by Pioneer Natural Resources Company, a Delaware corporation (the "Company"), and are incorporated herein by reference and made a part hereof: (a) The Company's Registration Statement on Form S-4 (File No. 333-26951) dated June 27, 1997; and (b) The Company's current Report on Form 8-K dated August 7, 1997; and (c) The description of the Company's Common Stock, $0.01 par value per share, contained in Item 1 of the Company's Registration Statement on Form 8-A filed with the Commission pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") on August 8, 1997. All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective amendment that indicates that all securities offered have been sold or that deregisters all securities then remaining unsold shall also be deemed to be incorporated by reference herein and to be a part hereof from the dates of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. Upon the written or oral request of any person to whom a copy of this Registration Statement has been delivered, the Company will provide without charge to such person a copy of any and all documents (excluding exhibits thereto unless such exhibits are specifically incorporated by reference into such documents) that have been incorporated by reference into this Registration Statement but not delivered herewith. Requests for such documents should be addressed to Pioneer Natural Resources Company, 1400 Williams Square West, 5205 North O'Connor Boulevard, Irving, Texas 75039, Attention: Secretary, (972) 444-9001. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Article Twelfth of the Restated Certificate of Incorporation of the Company provides that the Company shall indemnify its officers and directors to the maximum extent allowed by Delaware General Corporation Law. Pursuant to Section 145 of the Delaware General Corporation Law, the Company generally has the power to indemnify its present and former directors and officers against expenses and liabilities incurred by them in connection with any suit to which they are, or are threatened to be made, a party by reason of their serving in those positions so long as they acted in good faith and in a manner they reasonably believed to be in, or not opposed to, the best interests of the Company, and with respect to any criminal action, so long as they had no reasonable cause to believe their conduct was unlawful. With respect to suits by or in the right of the Company, however, indemnification is generally limited to attorney's fees and other expenses and is not available if the person is adjudged to be liable to the Company, unless the court determines that indemnification is appropriate. The statute expressly provides that the power to indemnify authorized thereby is not exclusive of any rights granted under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Company also has the power to purchase and maintain insurance for its directors and officers. Additionally, Article Twelfth of the Restated Certificate of Incorporation provides that, in the -2- 3 event that an officer or director files suit against the Company seeking indemnification of liabilities or expenses incurred, the burden will be on the Company to prove that the indemnification would not be permitted under the Delaware General Corporation Law. The preceding discussion of the Company's Restated Certificate of Incorporation and Section 145 of the Delaware General Corporation Law is not intended to be exhaustive and is qualified in its entirety by the Company's Restated Certificate of Incorporation and Section 145 of the Delaware General Corporation Law. The Company has entered into indemnity agreements with its directors and officers. Pursuant to such agreements, the Company will, to the extent permitted by applicable law, indemnify such persons against all expenses, judgments, fines and penalties incurred in connection with the defense or settlement of any actions brought against them by reason of the fact that they were directors or officers of the Company or assumed certain responsibilities at the direction of the Company. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. Unless otherwise indicated below as being incorporated by reference to another filing of the Company with the Commission, each of the following exhibits is filed herewith: 4.1 -- Pioneer Natural Resources Company Long-Term Incentive Plan 5.1 -- Opinion of Vinson & Elkins L.L.P. 23.1 -- Consent of KPMG Peat Marwick LLP 23.2 -- Consent of Arthur Andersen LLP 23.3 -- Consent of Coopers & Lybrand L.L.P. 23.2 -- Consent of Vinson & Elkins L.L.P. (included in its opinion filed as Exhibit 5.1 hereto) 24.1 -- Powers of Attorney ITEM 9. UNDERTAKINGS. The Company hereby undertakes: (1) to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act"); (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be -3- 4 included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Company pursuant to section 13 or section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement. (2) That, for the purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act, each filing of the Company's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (5) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. -4- 5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Irving, State of Texas, on the 5th day of September, 1997. PIONEER NATURAL RESOURCES COMPANY By: /s/ Scott D. Sheffield ----------------------------------- Scott D. Sheffield President and Chief Executive Officer Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.
Signature Capacity Date --------- -------- ---- /s/ Scott D. Sheffield President, Chief Executive Officer and September 5, 1997 - ------------------------------ Director Scott D. Sheffield (Principal Executive Officer) /s/ M. Garrett Smith Senior Vice President--Finance and September 5, 1997 - ------------------------------ Assistant Secretary M. Garrett Smith (Principal Financial Officer and Principal Accounting Officer) /s/ I. Jon Brumley Chairman of the Board September 5, 1997 - ------------------------------ I. Jon Brumley /s/ R. Hartwell Gardner Director September 5, 1997 - ------------------------------ R. Hartwell Gardner /s/ John S. Herrington Director September 5, 1997 - ------------------------------ John S. Herrington /s/ Kenneth A. Hersh Director September 5, 1997 - ------------------------------ Kenneth A. Hersh /s/ James L. Houghton Director September 5, 1997 - ------------------------------ James L. Houghton /s/ Jerry P. Jones Director September 5, 1997 - ------------------------------ Jerry P. Jones
6 /s/ T. Boone Pickens Director September 5, 1997 - ------------------------------ T. Boone Pickens /s/ Richard E. Rainwater Director September 5, 1997 - ------------------------------ Richard E. Rainwater /s/ Charles E. Ramsey, Jr. Director September 5, 1997 - ------------------------------ Charles E. Ramsey, Jr. /s/ Arthur L. Smith Director September 5, 1997 - ------------------------------ Arthur L. Smith /s/ Philip B. Smith Director September 5, 1997 - ------------------------------ Philip B. Smith /s/ Robert L. Stillwell Director September 5, 1997 - ------------------------------ Robert L. Stillwell /s/ Michael D. Wortley Director September 5, 1997 - ------------------------------ Michael D. Wortley
7 EXHIBIT INDEX
Exhibit Description of Exhibit - ------- ---------------------- 4.1 -- Pioneer Natural Resources Company Long-Term Incentive Plan 5.1 -- Opinion of Vinson & Elkins L.L.P. 23.1 -- Consent of KPMG Peat Marwick LLP 23.2 -- Consent of Arthur Andersen LLP 23.3 -- Consent of Coopers & Lybrand L.L.P. 23.2 -- Consent of Vinson & Elkins L.L.P. (included in its opinion filed as Exhibit 5.1 hereto) 24.1 -- Powers of Attorney
   1
                                                                     EXHIBIT 4.1



                       PIONEER NATURAL RESOURCES COMPANY
                            LONG-TERM INCENTIVE PLAN


                           SCOPE AND PURPOSE OF PLAN

       Pioneer Natural Resources Company, a Delaware corporation (the
"CORPORATION"), has adopted this Long-Term Incentive Plan (the "PLAN") to
provide for the granting of:

              (a)    Incentive Options to Employees;

              (b)    Nonstatutory Options to Employees, directors, and other
                     persons;

              (c)    Performance Units to Employees, directors, and other
                     persons;

              (d)    Restricted Stock Awards to Employees, directors, and other
                     persons; and

              (e)    Stock Appreciation Rights to Employees, directors, and
                     other persons.

       The purpose of the Plan is to provide an incentive for Employees,
directors, and certain consultants and advisors of the Corporation or its
Subsidiaries to remain in the service of the Corporation or its Subsidiaries,
to extend to them the opportunity to acquire a proprietary interest in the
Corporation so that they will apply their best efforts for the benefit of the
Corporation, and to aid the Corporation in attracting able persons to enter the
service of the Corporation and its Subsidiaries.


SECTION 1. DEFINITIONS

       1.1    "Annual Retainer" has the meaning given it in Subparagraph
5.2(a).

       1.2    "Annual Restricted Stock Award" has the meaning given it in
Paragraph 5.2.

       1.3    "Award" means the grant of any form of Option, Performance Unit,
Reload Option, Restricted Stock Award, or Stock Appreciation Right under the
Plan, whether granted singly, in combination, or in tandem, to a Holder
pursuant to the terms, conditions, and limitations that the Committee may
establish in order to fulfill the objectives of the Plan.

       1.4    "Award Agreement" means the written document or agreement
delivered to Holder evidencing the terms, conditions, and limitations of an
Award that the Corporation granted to that Holder.

       1.5    "Board of Directors" means the board of directors of the
Corporation.

       1.6    "Business Day" means any day other than a Saturday, a Sunday, or
a day on which banking institutions in the State of Texas are authorized or
obligated by law or executive order to close.
   2
       1.7    "Change in Control" means the occurrence of any of the following
events:

              (i)    The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "PERSON")
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (x) the then outstanding shares of
Common Stock of the Corporation (the "OUTSTANDING CORPORATION COMMON STOCK") or
(y) the combined voting power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of directors (the
"OUTSTANDING CORPORATION VOTING SECURITIES"); provided, however, that for
purposes of this subsection (i), the following acquisitions shall not
constitute a Change of Control: (A) any acquisition directly from the
Corporation, (B) any acquisition by the Corporation, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation or (D) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (A), (B) and (C) of paragraph (iii) below; or

              (ii)   Members of the Incumbent Board cease for any reason to
constitute at least a majority of the Board of Directors; or

              (iii)  Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of the
Corporation or an acquisition of assets of another corporation (a "BUSINESS
COMBINATION"), in each case, unless, following such Business Combination, (A)
all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Corporation Common Stock
and Outstanding Corporation Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Corporation or all
or substantially all of the Corporation's assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities, as the case may be,
(B) no Person (excluding any employee benefit plan (or related trust) of the
Corporation or the corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership
results solely from ownership of the Corporation that existed prior to the
Business Combination and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

              (iv)   Approval by the stockholders of the Corporation of a
complete liquidation or dissolution of the Corporation.

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

       1.9    "Committee" means the committee or subcommittee appointed
pursuant to Section 3 by the Board of Directors to administer this Plan.

       1.10   "Common Stock" means the authorized common stock, par value $.01
per share, as described in the Corporation's Certificate of Incorporation.




                                     -2-
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       1.11   "Common Stock Equivalent" means (without duplication with any
other Common Stock or Common Stock Equivalents) rights, warrants, options,
convertible securities, exchangeable securities or indebtedness, or other
rights, exercisable for or convertible or exchangeable into, directly or
indirectly, Common Stock or securities convertible or exchangeable into Common
Stock, whether at the time the number of shares of Common Stock Equivalents are
determined or within sixty days of that date and that are traded or are of the
same class as securities that are traded on a national securities exchange or
quoted on the NASDAQ National Market System, NASDAQ, or National Quotation
Bureau Incorporated. The number of shares of Common Stock Equivalents
outstanding shall equal the number of shares of Common Stock plus the number of
shares of Common Stock issuable upon exercise, conversion or exchange of all
other Common Stock Equivalents.

       1.12   "Corporation" means Pioneer Natural Resources Company, a Delaware
corporation.

       1.13   "Date of Grant" has the meaning given it in Paragraph 4.3.

       1.14   "Disability" has the meaning given it in Paragraph 11.5.

       1.15   "Effective Date" means August 7, 1997.

       1.16   "Eligible Individuals" means (a) Employees, (b) directors and (c)
any other Person that the Committee designates as eligible for an Award (other
than for Incentive Options) because the Person performs bona fide consulting or
advisory services for the Corporation or any of its Subsidiaries (other than
services in connection with the offer or sale of securities in a
capital-raising transaction).

       1.17   "Employee" means any employee of the Corporation or of any of its
Subsidiaries, including officers and directors of the Corporation who are also
employees of the Corporation or of any of its Subsidiaries.

       1.18   "Exchange Act" means the Securities Exchange Act of 1934.

       1.19   "Exercise Notice" has the meaning given it in Paragraph 6.5.

       1.20   "Exercise Price" has the meaning given it in Paragraph 6.4.

       1.21   "Fair Market Value" means, for a particular day:

              (a)    If shares of Stock of the same class are listed or
       admitted to unlisted trading privileges on any national or regional
       securities exchange at the date of determining the Fair Market Value,
       then the last reported sale price, regular way, on the composite tape of
       that exchange on the last Business Day before the date in question or,
       if no such sale takes place on that Business Day, the average of the
       closing bid and asked prices, regular way, in either case as reported in
       the principal consolidated transaction reporting system with respect to
       securities listed or admitted to unlisted trading privileges on that
       securities exchange; or

              (b)    If shares of Stock of the same class are not listed or
       admitted to unlisted trading privileges as provided in Subparagraph
       1.21(a) and if sales prices for shares of Stock of the same class in the
       over-the-counter market are reported by the NASDAQ National Market
       System (or a similar system then in use) at the date of determining the
       Fair Market Value, then the last reported





                                      -3-
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       sales price so reported on the last Business Day before the date in
       question or, if no such sale takes place on that Business Day, the
       average of the high bid and low asked prices so reported; or

              (c)    If shares of Stock of the same class are not listed or
       admitted to unlisted trading privileges as provided in Subparagraph
       1.21(a) and sales prices for shares of Stock of the same class are not
       reported by the NASDAQ National Market System (or a similar system then
       in use) as provided in Subparagraph 1.21(b), and if bid and asked prices
       for shares of Stock of the same class in the over-the-counter market are
       reported by NASDAQ (or, if not so reported, by the National Quotation
       Bureau Incorporated) at the date of determining the Fair Market Value,
       then the average of the high bid and low asked prices on the last
       Business Day before the date in question; or

              (d)    If shares of Stock of the same class are not listed or
       admitted to unlisted trading privileges as provided in Subparagraph
       1.21(a) and sales prices or bid and asked prices therefor are not
       reported by NASDAQ (or the National Quotation Bureau Incorporated) as
       provided in Subparagraph 1.21(b) or Subparagraph 1.21(c) at the date of
       determining the Fair Market Value, then the value determined in good
       faith by the Committee, which determination shall be conclusive for all
       purposes; or

              (e)    If shares of Stock of the same class are listed or
       admitted to unlisted trading privileges as provided in Subparagraph
       1.21(a) or sales prices or bid and asked prices therefor are reported by
       NASDAQ (or the National Quotation Bureau Incorporated) as provided in
       Subparagraph 1.21(b), Subparagraph 1.21(c) or Subparagraph 1.21(d) at
       the date of determining the Fair Market Value, but the volume of trading
       is so low that the Board of Directors determines in good faith that such
       prices are not indicative of the fair value of the Stock, then the value
       determined in good faith by the Committee, which determination shall be
       conclusive for all purposes notwithstanding the provisions of
       Subparagraphs 1.21(a), (b), (c) or (d).

For purposes of valuing Incentive Options, the Fair Market Value of Stock shall
be determined without regard to any restriction other than one that, by its
terms, will never lapse and will be determined on the date in question instead
of the last Business Day before the date in question. For purposes of the
redemption provided for in Subparagraph 10.3(e)(vi), Fair Market Value shall
have the meaning and shall be determined as provided above; provided, however,
that the Committee, with respect to any such redemption, shall have the right
to determine that the Fair Market Value for purposes of the redemption should
be an amount measured by the value of the shares of stock, other securities,
cash or property otherwise being received by holders of shares of Stock in
connection with the Restructure, and upon that determination the Committee
shall have the power and authority to determine Fair Market Value for purposes
of the redemption based upon the value of such shares of stock, other
securities, cash or property. Any such determination by the Committee shall be
conclusive for all purposes.

       1.22   "Holder" means an Eligible Individual to whom an Award has been
granted.

       1.23   "Incentive Option" means an incentive stock option as defined
under Section 422 of the Code and regulations thereunder.

       1.24   "Incumbent Board" means the individuals who, as of the Effective
Date, constitute the Board of Directors and any other individual who becomes a
director of the Corporation after that date and whose election or appointment
by the Board of Directors or nomination for election by the Corporation's
stockholders was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a





                                      -4-
   5
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Incumbent Board.

       1.25   "NASDAQ" means the National Association of Securities Dealers,
Inc. Automated Quotations, Inc.

       1.26   "Non-employee Director" means a director of the Corporation who
while a director is not an Employee.

       1.27   "Nonstatutory Option" means a stock option that does not satisfy
the requirements of Section 422 of the Code or that is designated at the Date
of Grant or in the applicable Option Agreement to be an option other than an
Incentive Option.

       1.28   "Non-Surviving Event" means an event of Restructure as described
in either subparagraph (b) or (c) of Paragraph 1.38.

       1.29   "Normal Retirement" means the separation of the Holder from
employment with the Corporation and its Subsidiaries on account of retirement
at any time on or after the date on which the Holder reaches age sixty.

       1.30   "Option Agreement" means an Award Agreement for an Incentive
Option or a Nonstatutory Option.

       1.31   "Option" means either an Incentive Option or a Nonstatutory
Option, or both.

       1.32   "Performance Period" means a period of one or more fiscal years
of the Corporation, beginning with the fiscal year for which Performance Units
are granted and over which performance is measured, for the purpose of
determining the payment value of Performance Units. A Performance Period shall
not exceed ten years.

       1.33   "Performance Unit" means a unit representing a contingent right
to receive a specified amount of cash or shares of Stock at the end of a
Performance Period.

       1.34   "Person" means any person or entity of any nature whatsoever,
specifically including (but not limited to) an individual, a firm, a company, a
corporation, a limited liability company, a partnership, a trust or other
entity. A Person, together with that Person's affiliates and associates (as
those terms are defined in Rule 12b-2 under the Exchange Act for purposes of
this definition only), and any Persons acting as a partnership, limited
partnership, joint venture, association, syndicate or other group (whether or
not formally organized), or otherwise acting jointly or in concert or in a
coordinated or consciously parallel manner (whether or not pursuant to any
express agreement), for the purpose of acquiring, holding, voting or disposing
of securities of the Corporation with that Person, shall be deemed a single
"Person."

       1.35   "Plan" means the Pioneer Natural Resources Company Long-Term
Incentive Plan, as it may be amended from time to time.

       1.36   "Reload Option" has the meaning given it in Paragraph 6.9.





                                      -5-
   6
       1.37   "Restricted Stock Award" means the grant or purchase, on the
terms and conditions that the Committee determines or on the terms and
conditions of Section 5, of Stock that is nontransferable or subject to
substantial risk of forfeiture until specific conditions are met.

       1.38   "Restructure" means the occurrence of any one or more of the
following:

              (a)    The merger or consolidation of the Corporation with any
       Person, whether effected as a single transaction or a series of related
       transactions, with the Corporation remaining the continuing or surviving
       entity of that merger or consolidation and the Stock remaining
       outstanding and not changed into or exchanged for stock or other
       securities of any other Person or of the Corporation, cash, or other
       property;

              (b)    The merger or consolidation of the Corporation with any
       Person, whether effected as a single transaction or a series of related
       transactions, with (i) the Corporation not being the continuing or
       surviving entity of that merger or consolidation or (ii) the Corporation
       remaining the continuing or surviving entity of that merger or
       consolidation but all or a part of the outstanding shares of Stock are
       changed into or exchanged for stock or other securities of any other
       Person or the Corporation, cash, or other property; or

              (c)    The transfer, directly or indirectly, of all or
       substantially all of the assets of the Corporation (whether by sale,
       merger, consolidation, liquidation or otherwise) to any Person whether
       effected as a single transaction or a series of related transactions.

       1.39   "Rule 16b-3" means Rule 16b-3 under Section 16(b) of the Exchange
Act, or any successor rule, as it may be amended from time to time.

       1.40   "SAR Exercise Price" has the meaning given it in Paragraph 1.44.

       1.41   "Section 162(m)" means Section 162(m) of the Code and the rules
and regulations adopted from time to time thereunder, or any successor law or
rule as it may be amended from time to time.

       1.42   "Securities Act" means the Securities Act of 1933.

       1.43   "Stock" means Common Stock, or any other securities that are
substituted for the Stock as provided in Section 10.

       1.44   "Stock Appreciation Right" means the right to receive an amount
equal to the excess of the Fair Market Value of a share of Stock (as determined
on the date of exercise) over, as appropriate, the Exercise Price of a related
Option or over a price specified in the related Award Agreement (the "SAR
EXERCISE PRICE") that is not less than eighty-five percent of the Fair Market
Value of the Stock on the Date of Grant of the Stock Appreciation Right.

       1.45   "Stockholder Approved Standard" means initially (a) total
stockholder return (Stock price appreciation plus dividends), (b) net income,
(c) earnings per share, (d) cash flow per share, (e) return on equity, (f)
return on assets, (g) revenues, (h) costs, (i) costs as a percentage of
revenues, (j) increase in the market price of Stock or other securities, (k)
the performance of the Corporation in any of the items mentioned in clauses (a)
through (j) in comparison to the average performance of the companies included
in the Standard & Poors' Corporation 500 Composite Stock Price Index or
successor index, or (l) the performance of the Corporation in any of the items
mentioned in clauses (a) through (j) in comparison to the





                                      -6-
   7
average performance of the companies used in a self-constructed peer group
established before the beginning of the Performance Period; and any other
performance objective approved by the stockholders of the Corporation in
accordance with section 162(m).

       1.46   "Subsidiary" means, with respect to any Person, any corporation,
limited partnership, limited liability company, or other entity of which a
majority of the voting power of the voting equity securities or equity interest
is owned, directly or indirectly, by that Person.

       1.47   "Total Shares" has the meaning given it in Paragraph 10.2.

       1.48   "Voting Securities" means any securities that are entitled to
vote generally in the election of directors, in the admission of general
partners, or in the selection of any other similar governing body.


SECTION 2. SHARES OF STOCK SUBJECT TO THE PLAN

       2.1    Maximum Number of Shares. Subject to the provisions of Paragraph
2.6 and Section 10 of the Plan, the aggregate number of shares of Stock that
the Corporation may have subject to outstanding Awards at one time under the
Plan shall be an amount equal to (a) ten percent of the total number of shares
of Common Stock Equivalents outstanding from time to time minus (b) the total
number of shares of Stock subject to outstanding awards on the date of
calculation under any other stock-based plan for employees or directors of the
Corporation and its Subsidiaries.

       2.2    Determination of Available Shares. In computing the total number
of shares of Stock subject to outstanding Awards at one time under the Plan,
the Committee shall count the number of shares of Stock subject to issuance
upon exercise of outstanding Options, the number of shares of Stock equal to
the number of outstanding Stock Appreciation Rights, the number of shares of
Stock subject to outstanding Restricted Stock Awards to the extent such shares
are subject to a risk of forfeiture under the restrictions governing such
Awards, and the number of shares of Stock that equal the value of outstanding
Performance Units determined in each case as of the Date of Grant of each Award
(other than Awards designated to be paid only in cash), but shall not (except
to the extent subject to the risk of forfeiture under the restriction governing
such Awards) count the number of shares of Stock that have been issued upon
prior exercise of Options, the number of shares of Stock that were subject to
previously settled Stock Appreciation Rights, the number of shares of Stock
issued under Restricted Stock Awards for which the risk of forfeiture has
lapsed, and the number of shares of Stock issued upon exercise or settlement of
Performance Units. The number of shares of Stock subject to Awards under any
employee stock purchase plan of the Corporation during any offering period of
that plan shall equal the number of shares of Stock that would be issued using
(a) the fair market value of the Stock on the first day of the offering period
and (b) an aggregate purchase price equal to the total projected payroll
deductions during the authorized period based solely on the number of
participants and authorized payroll deduction amounts for those participants on
the first day of the offering period.

       2.3    Restoration of Unused and Surrendered Shares. If Stock subject to
any Award is not issued or transferred, or ceases to be issuable or
transferable for any reason, including (but not exclusively) because an Award
is forfeited, terminated, expires unexercised, is settled in cash in lieu of
Stock, or is exchanged for other Awards, the shares of Stock that were subject
to that Award shall no longer be charged against the number of available shares
and shall again be available for issue, transfer, or exercise pursuant to
Awards under the Plan to the extent of such forfeiture, termination,
expiration, settlement or exchange.





                                      -7-
   8
       2.4    Description of Shares. The shares to be delivered under the Plan
shall be made available from (a) authorized but unissued shares of Stock, (b)
Stock held in the treasury of the Corporation, or (c) previously issued shares
of Stock reacquired by the Corporation, including shares purchased on the open
market, in each situation as the Board of Directors or the Committee may
determine from time to time at its sole option.

       2.5    Registration and Listing of Shares. From time to time, the Board
of Directors and appropriate officers of the Corporation shall be and are
authorized to take whatever actions are necessary to file required documents
with governmental authorities, stock exchanges, and other appropriate Persons
to make shares of Stock available for issuance pursuant to Awards.

       2.6    Reduction in Outstanding Shares of Stock. Nothing in this Section
2 shall impair the right of the Corporation to reduce the number of outstanding
shares of Stock pursuant to repurchases, redemptions, or otherwise; provided,
however, that no reduction in the number of outstanding shares of Stock shall
(a) impair the validity of any outstanding Award, whether or not that Award is
fully exercisable or fully vested, or (b) impair the status of any shares of
Stock previously issued pursuant to an Award or thereafter issued pursuant to a
then-outstanding Award as duly authorized, validly issued, fully paid, and
nonassessable shares.

       2.7    Individual Limitations on Awards. No Person may be granted,
during any one-year period, (a) Awards (other than Awards designated to be paid
only in cash) with respect to more than 250,000 shares of Stock and (b) Awards
designated to be paid only in cash having a value determined on the Date of
Grant in excess of $2,500,000.


SECTION 3. ADMINISTRATION OF THE PLAN

       3.1    Committee. The Board of Directors shall administer the Plan with
respect to all Eligible Individuals or may delegate all or part of its duties
under this Plan to the Committee or to any officer or committee of officers of
the Corporation, subject in each case to such conditions and limitations as the
Board of Directors may establish and subject to the following sentence. Unless
a majority of the members of the Board of Directors determines otherwise: (a)
the Committee shall be constituted in a manner that satisfies the requirements
of Rule 16b-3, which Committee shall administer the Plan with respect to all
Eligible Individuals who are subject to Section 16 of the Exchange Act in a
manner that satisfies the requirements of Rule 16b-3; and (b) the Committee
shall be constituted in a manner that satisfies the requirements of Section
162(m), which Committee shall administer the Plan with respect to "performance-
based compensation" for all Eligible Individuals who are reasonably expected to
be "covered employees" as those terms are defined in Section 162(m). The number
of persons that shall constitute the Committee shall be determined from time to
time by a majority of all the members of the Board of Directors. Except for
references in Paragraphs 3.1, 3.2, and 3.3 and unless the context otherwise
requires, references herein to the Committee shall also refer to the Board of
Directors as administrator of the Plan for Eligible Individuals or to the
appropriate delegate of the Committee or the Board of Directors.

       3.2    Duration, Removal, Etc. The members of the Committee shall serve
at the pleasure of the Board of Directors, which shall have the power, at any
time and from time to time, to remove members from or add members to the
Committee. Removal from the Committee may be with or without cause. Any
individual serving as a member of the Committee shall have the right to resign
from membership in the Committee by written notice to the Board of Directors.
The Board of Directors, and not the remaining members of the Committee, shall
have the power and authority to fill vacancies on the Committee, however
caused.





                                      -8-
   9
       3.3    Meetings and Actions of Committee. The Board of Directors shall
designate which of the Committee members shall be the chairman of the
Committee. If the Board of Directors fails to designate a Committee chairman,
the members of the Committee shall elect one of the Committee members as
chairman, who shall act as chairman until he ceases to be a member of the
Committee or until the Board of Directors elects a new chairman. The Committee
shall hold its meetings at those times and places as the chairman of the
Committee may determine. At all meetings of the Committee, a quorum for the
transaction of business shall be required, and a quorum shall be deemed present
if at least a majority of the members of the Committee are present. At any
meeting of the Committee, each member shall have one vote. All decisions and
determinations of the Committee shall be made by the majority vote or majority
decision of all of its members present at a meeting at which a quorum is
present; provided, however, that any decision or determination reduced to
writing and signed by all of the members of the Committee shall be as fully
effective as if it had been made at a meeting that was duly called and held.
The Committee may make any rules and regulations as it may deem advisable for
the conduct of its business that are not inconsistent with the provisions of
the Plan, the Certificate of Incorporation, the by-laws of the Corporation,
Rule 16b-3 so long as it is applicable, and Section 162(m) so long as it is
applicable.

       3.4    Committee's Powers. Subject to the express provisions of the Plan
and any applicable law with which the Corporation intends the Plan to comply,
the Committee shall have the authority, in its sole and absolute discretion,
(a) to adopt, amend, and rescind administrative and interpretive rules and
regulations relating to the Plan, including without limitation to adopt and
observe such procedures concerning the counting of Awards against the Plan and
individual maximums as it may deem appropriate from time to time; (b) to
determine the Eligible Individuals to whom, and the time or times at which,
Awards shall be granted; (c) to determine the amount of cash and the number of
shares of Stock, Stock Appreciation Rights, Restricted Stock Awards, or
Performance Units, or any combination thereof, that shall be the subject of
each Award; (d) to determine the terms and provisions of each Award Agreement
(which need not be identical), including provisions defining or otherwise
relating to (i) the term and the period or periods and extent of
exercisability of the Options, (ii) the extent to which the transferability of
shares of Stock issued or transferred pursuant to any Award is restricted,
(iii) the effect of termination of employment on the Award, and (iv) the effect
of approved leaves of absence (consistent with any applicable regulations of
the Internal Revenue Service); (e) to accelerate, pursuant to Section 10, the
time of exercisability of any Option or Employee that has been granted or the
time of vesting or settlement of any Restricted Stock Award or Performance
Unit; (f) to construe the respective Award Agreements and the Plan; (g) to make
determinations of the Fair Market Value of the Stock pursuant to the Plan; (h)
to delegate its duties under the Plan to such agents as it may appoint from
time to time, subject to the second sentence of Paragraph 3.1; and (i) to make
all other determinations, perform all other acts, and exercise all other powers
and authority necessary or advisable for administering the Plan, including the
delegation of those ministerial acts and responsibilities as the Committee
deems appropriate subject in all respects to the last two sentences of
Paragraph 6.13. The Committee may correct any defect, supply any omission or
reconcile any inconsistency in the Plan, in any Award, or in any Award
Agreement in the manner and to the extent it deems necessary or desirable to
carry the Plan into effect, and the Committee shall be the sole and final judge
of that necessity or desirability. The determinations of the Committee on the
matters referred to in this Paragraph 3.4 shall be final and conclusive. The
Committee shall not have the power to appoint members of the Committee or to
terminate, modify, or amend the Plan. Those powers are vested in the Board of
Directors.

       3.5    Transferability of Awards. Notwithstanding any limitation on a
Holder's right to transfer an Award, the Committee may (in its sole discretion)
permit a Holder to transfer an Award, or may cause the Corporation to grant an
Award that otherwise would be granted to an Eligible Individual, in any of the
following circumstances: (a) pursuant to a qualified domestic relations order,
(b) to a trust established for the benefit of the Eligible Individual or one or
more of the children, grandchildren, or spouse of the Eligible





                                      -9-
   10
Individual; (c) to a limited partnership in which all the interests are held by
the Eligible Individual and that Person's children, grandchildren or spouse; or
(d) to another Person in circumstances that the Committee believes will result
in the Award continuing to provide an incentive for the Eligible Individual to
remain in the service of the Corporation or its Subsidiaries and apply his or
her best efforts for the benefit of the Corporation or its Subsidiaries. If the
Committee determines to allow such transfers or issuances of Awards, any Holder
or Eligible Individual desiring such transfers or issuances shall make
application therefor in the manner and time that the Committee specifies and
shall comply with such other requirements as the Committee may require to
assure compliance with all applicable laws, including securities laws, and to
assure fulfillment of the purposes of this Plan. The Committee shall not
authorize any such transfer or issuance if it may not be made in compliance
with all applicable federal, state and foreign securities laws. The granting of
permission for such an issuance or transfer shall not obligate the Corporation
to register the shares of Stock to be issued under the applicable Award.

       3.6    Limitations on Terms of Awards. Notwithstanding anything to the
contrary in this Plan: (a) the exercise price per share of Stock subject to a
Nonstatutory Option shall not be less than 100% of the Fair Market Value on the
Date of Grant of the Option; (b) the exercise price of outstanding Options
shall not be amended to reduce the exercise price; and (c) restrictions on
Restricted Stock Awards granted pursuant to Section 8 of the Plan shall lapse
no sooner than in three equal installments over a three-year period, subject to
earlier lapses as provided in Section 10 and Section 11 of the Plan in limited
circumstances; provided, however, that at any time and from time to time Awards
may be outstanding that do not comply with the preceding clauses (a), (b) and
(c) so long as the aggregate number of shares of Stock subject to such
outstanding, noncomplying Awards does not exceed five percent of the aggregate
number of shares of Stock that the Corporation may have subject to outstanding
Awards at that time under the Plan (measured on the Date of Grant of any such
non-complying Award).


SECTION 4. ELIGIBILITY AND PARTICIPATION

       4.1    Eligible Individuals. Awards may be granted pursuant to the Plan
only to persons who are Eligible Individuals at the time of the grant thereof
or in connection with the severance or retirement of Eligible Individuals.

       4.2    Grant of Awards. Subject to the express provisions of the Plan,
the Committee shall determine which Eligible Individuals shall be granted
Awards from time to time. In making grants, the Committee shall take into
consideration the contribution the potential Holder has made or may make to the
success of the Corporation or its Subsidiaries and such other considerations as
the Board of Directors may from time to time specify. The Committee shall also
determine the number of shares or cash amounts subject to each of the Awards
and shall authorize and cause the Corporation to grant Awards in accordance
with those determinations.

       4.3    Date of Grant. The date on which an Award is granted (the "DATE
OF GRANT") shall be the date specified by the Committee as the effective date
or date of grant of an Award or, if the Committee does not so specify, shall be
the date effective as of which the Committee adopts the resolution approving
the offer of an Award to an individual, including the specification of the
number (or method of determining the number) of shares of Stock and the amount
(or method of determining the amount) of cash to be subject to the Award, even
though certain terms of the Award Agreement may not be determined at that time
and even though the Award Agreement may not be executed or delivered until a
later time. In no event shall a Holder gain any rights in addition to those
specified by the Committee in its grant, regardless of the time that may pass
between the grant of the Award and the actual execution or delivery of the
Award Agreement by the





                                      -10-
   11
Corporation or the Holder. The Committee may invalidate an Award at any time
before the Award Agreement is signed by the Holder (if signature is required)
or is delivered to the Holder (if signature is not required), and such Award
shall be treated as never having been granted.

       4.4    Award Agreements. Each Award granted under the Plan shall be
evidenced by an Award Agreement that incorporates those terms that the
Committee shall deem necessary or desirable. More than one Award may be granted
under the Plan to the same Eligible Individual and be outstanding concurrently.
If an Eligible Individual is granted both one or more Incentive Options and one
or more Nonstatutory Options, those grants shall be evidenced by separate Award
Agreements, one for each of the Incentive Option grants and one for each of the
Nonstatutory Option grants.

       4.5    Limitation for Incentive Options. Notwithstanding any provision
contained herein to the contrary, (a) a person shall not be eligible to receive
an Incentive Option unless he or she is an Employee of the Corporation or a
corporate Subsidiary (but not a partnership or other non-corporate Subsidiary),
and (b) a person shall not be eligible to receive an Incentive Option if,
immediately before the time the Incentive Option is granted, that person owns
(within the meaning of Sections 422 and 424 of the Code) stock possessing more
than ten percent of the total combined voting power or value of all classes of
stock of the Corporation or a Subsidiary. Nevertheless, this Subparagraph
4.5(b) shall not apply if, at the time the Incentive Option is granted, the
Exercise Price of the Incentive Option is at least one hundred and ten percent
of Fair Market Value and the Incentive Option is not, by its terms, exercisable
after the expiration of five years from the Date of Grant.

       4.6    No Right to Award. The adoption of the Plan shall not be deemed
to give any person a right to be granted an Award except pursuant to Section 5.


SECTION 5. AWARDS TO NON-EMPLOYEE DIRECTORS

       5.1    Ineligibility for Other Awards. Non-employee Directors shall not
be eligible to receive any Awards under the Plan other than the automatic
Awards specified in this Section 5.

       5.2    Annual Grant of Restricted Stock. An annual Restricted Stock
Award (the "ANNUAL RESTRICTED STOCK AWARD") shall be made automatically to Non-
employee Directors as follows:

              (a)    Each Non-employee Director who is a Non-employee Director
       immediately following the Effective Time of the Mergers shall
       automatically receive hereunder 50% of the amount of the annual retainer
       fee to be paid to such Non-employee Director as compensation for his
       services during the 1997 annual term as a Non-employee Director of the
       Corporation (the "ANNUAL RETAINER") in the form of an Annual Restricted
       Stock Award rather than cash.

              (b)    Commencing with the term year beginning with the 1998
       annual meeting of the Corporation's stockholders and each term year
       thereafter, each Non-employee Director shall automatically receive
       hereunder 50% of the amount of the Annual Retainer be paid to such Non-
       employee Director in the form of an Annual Restricted Stock Award.

              (c)    Notwithstanding the foregoing, each Non-employee Director
       may elect, in his sole discretion, to automatically receive hereunder
       100% of the Annual Retainer in the form of an Annual Restricted Stock
       Award. Each Non-employee Director may make such an election by giving
       notice of the election to the Corporation on or before the date of the
       first meeting of the Board of





                                      -11-
   12
       Directors of the annual term in which the Non-employee Director desires
       to receive 100% of his Annual Retainer in the form of an Annual
       Restricted Stock Award; provided, however, that each Non-employee
       Director who makes an election with respect to the Annual Restricted
       Stock Award granted pursuant to Paragraph 5.2(a) must give notice of
       that election before the Effective Time of the Mergers.

              (d)    Each Annual Restricted Stock Award shall be granted on the
       last Business Day of the month during which the annual meeting of
       stockholders of the Corporation is held; provided, however, that each
       Non-employee Director receiving an Annual Restricted Stock Award
       pursuant to Paragraph 5.3(a) shall be granted that award on the last
       Business Day of the month in which the Effective Time of the Mergers
       occurs.

              (e)    The total number of shares of Stock included in each
       Annual Restricted Stock Award granted pursuant to subparagraph 5.2(b)
       shall be determined by dividing 50% or 100% (as appropriate) of the
       amount of the Annual Retainer by the Fair Market Value of a share of
       Stock on the day the Annual Restricted Stock Award is granted.

       5.3    Available Stock. The automatic Awards specified in Paragraph 5.2
shall be made in the amounts specified in that Paragraph only if the number of
shares of Stock available to be issued, transferred or exercised pursuant to
Awards under the Plan (as calculated in Section 2) is sufficient to make all
automatic grants required to be made by Paragraph 5.2 on the Date of Grant of
those automatic Awards. In the event that a lesser number of shares of Stock
are available to be issued, transferred, or exercised pursuant to Awards under
the Plan on the Date of Grant of the automatic Awards described Paragraph 5.2,
but their number is insufficient to permit the grant of the entire number of
shares specified in the automatic Awards, then the number of available shares
shall be apportioned equally among the automatic Awards made on that date, and
the number of shares apportioned to each automatic Award shall be the number of
shares automatically subject to that automatic Award.

       5.4    Terms and Conditions of Automatic Award. Award Agreements for
Restricted Stock Awards to Non-employee Directors shall be in the form attached
as Exhibit A and, except as expressly provided in those Award Agreements, the
automatic Awards to Non-employee Directors shall not be subject to the
provisions of Section 10 or 11.

       The restrictions, with respect to Annual Restricted Stock Awards granted
pursuant to subparagraph 5.3(a) and (b), shall lapse on all of the shares
subject to the Annual Restricted Stock Award on the earlier of the next annual
meeting of the stockholders of the Corporation or the first anniversary of the
Date of Grant so long as the Non-Employee Director remains a director of the
Corporation after the Date of Grant through that date.

       5.5    Retention of Award, Termination. With respect to Annual
Restricted Stock Awards granted pursuant to subparagraph 5.2(a) and (b), if a
Non-employee Director's services as a member of the Board of Directors are
terminated at any time and for any reason before the earlier of the next annual
meeting of the Corporation's stockholders or the first anniversary of the Date
of Grant, a portion of the shares of Stock granted pursuant to the applicable
Award shall vest. The number of whole shares of Stock that vest shall be
determined by multiplying the number of shares of Stock included in such Award
by a fraction, the denominator of which is the number of regularly scheduled
director's meetings to occur during the time period commencing as of the Date
of the Grant and ending as of the earlier of the next annual meeting or the
first anniversary of the Date of Grant and the numerator of which is the number
of regularly scheduled director's meetings that have occurred to that date.





                                      -12-
   13
       5.6    Restrictions. Except as otherwise provided in the Plan, shares of
Stock received pursuant to a Restricted Stock Award may not be sold, assigned,
pledged, hypothecated, transferred, or otherwise disposed of until the
restrictions applicable to such Stock have lapsed pursuant to subparagraph 5.4.

       5.7    Privileges of a Stockholder. A Non-Employee Director shall have
all voting, dividend, liquidation, and other rights with respect to Stock
received by him as a Restricted Stock Award under this Section in accordance
with its terms.

       5.8    Retention as Director. Nothing contained in the Plan or in any
Restricted Stock Award granted under the Plan shall interfere with or limit in
any way the right of the stockholders of the Corporation to remove any Non-
employee Director from the Board in accordance with applicable law (and the
Corporation's governing documents) or confer upon any Non-employee Director any
right to continue in the service of the Corporation.

       5.9    Enforcement of Restrictions. The Committee shall cause a legend
to be placed on the Stock certificates issued pursuant to each Restricted Stock
Award referring to the restrictions imposed in the Plan and, in addition, may
in its sole discretion require one or more of the following methods of
enforcing such restrictions:

              (a)    Requiring the Non-employee Director to keep the Stock
certificates, duly endorsed, in the custody of the Corporation while the
restrictions remain in effect; or

              (b)    Requiring that the Stock certificates, duly endorsed, be
held in the custody of a third party while the restrictions remain in effect.

       5.10   Rights to Subscribe. If the Corporation shall at any time grant
to the holders of its Stock rights to subscribe pro rata for additional shares
thereof or for any other securities of the Corporation or of any other
corporation, there shall be reserved with respect to the shares then
outstanding pursuant to any Restricted Stock Award the Stock or other
securities that the Non-employee Director would have been entitled to subscribe
for if immediately prior to such grant the restrictions applicable to such
Restricted Stock Award had lapsed. Upon the lapse of all restrictions
applicable to Stock held pursuant to a Restricted Stock Award, the Non-employee
Director shall be provided the opportunity to subscribe for the additional
shares or other securities issuable with respect to such shares of Stock.

       5.11   Tax Withholding. The Corporation shall have the right, subject to
applicable law, to require a Non-employee Director to pay to the Corporation
the amount necessary to satisfy the Corporation's current or future obligation
to withhold federal, state or local income or other taxes that the Non-employee
Director incurs by vesting of a Restricted Stock Award. Tax withholding
obligations in respect of Restricted Stock Awards to Non-employee Directors may
not be satisfied by the Corporation's withholding of Stock subject to the Award
or by the Non-employee Director's transfer of Stock to the Corporation.


SECTION 6. TERMS AND CONDITIONS OF OPTIONS

       All Options granted under the Plan shall comply with, and the related
Option Agreements shall be deemed to include and be subject to, the terms and
conditions set forth in this Section 6 (to the extent each term and condition
applies to the form of Option) and also to the terms and conditions set forth
in Paragraph 10.1 and Section 11; provided, however, that the Committee may
authorize an Option Agreement that expressly contains terms and provisions that
differ from the terms and provisions of Section 11. The





                                      -13-
   14
Committee may also authorize an Option Agreement that contains any or all of
the terms and provisions of Paragraphs 10.2 and 10.3 or that contains terms and
provisions dealing with similar subject matter differently than do those
Paragraphs; nevertheless, no term or provision of Paragraph 10.2 or 10.3 (or
any such differing term or provision) shall apply to an Option Agreement unless
the Option Agreement expressly states that such term or provision applies.

       6.1    Number of Shares. Each Option Agreement shall state the total
number of shares of Stock to which it relates.

       6.2    Vesting. Each Option Agreement shall state the time, periods or
other conditions on which the right to exercise the Option or a portion thereof
shall vest and the number (or method of determining the number) of shares of
Stock for which the right to exercise the Option shall vest at each such time,
period or satisfaction of condition.

       6.3    Expiration of Options. Nonstatutory Options and Incentive Options
may be exercised during the term determined by the Committee and set forth in
the Option Agreement; provided that no Incentive Option shall be exercised
after the expiration of a period of ten years commencing on the Date of Grant
of the Incentive Option.

       6.4    Exercise Price. Each Option Agreement shall state the exercise
price per share of Stock (the "EXERCISE PRICE"). The exercise price per share
of Stock subject to an Incentive Option shall not be less than the greater of
(a) the par value per share of the Stock or (b) 100% of the Fair Market Value
per share of the Stock on the Date of Grant of the Option. The exercise price
per share of Stock subject to a Nonstatutory Option shall not be less than the
greater of (a) the par value per share of the Stock or (b) eighty-five percent
of the Fair Market Value per share of the Stock on the Date of Grant of the
Option.

       6.5    Method of Exercise. Each Option shall be exercisable only by
written, recorded electronic or other notice of exercise in the manner
specified by the Committee from time to time (the "EXERCISE NOTICE") delivered
to the Corporation or to the Person designated by the Committee during the term
of the Option, which notice shall (a) state the number of shares of Stock with
respect to which the Option is being exercised, (b) be signed or otherwise
given by the Holder of the Option or by the person authorized to exercise the
Option in the event of the Holder's death or disability, (c) be accompanied by
the Exercise Price for all shares of Stock for which the Option is exercised,
unless provision for the payment of the Exercise Price has been made pursuant
to Paragraph 6.7 or 6.8 or in another manner permitted by law and approved in
advance by the Committee, and (d) include such other information, instruments,
and documents as may be required to satisfy any other condition to exercise
contained in the Option Agreement. The Option shall not be deemed to have been
exercised unless all of the requirements of the preceding provisions of this
Paragraph 6.5 have been satisfied.

       6.6    Incentive Option Exercises. During the Holder's lifetime, only
the Holder may exercise an Incentive Option. The Holder of an Incentive Option
shall immediately notify the Corporation in writing of any disposition of the
Stock acquired pursuant to the Incentive Option that would disqualify the
Incentive Option from the incentive option tax treatment afforded by Section
422 of the Code. The notice shall state the number of shares disposed of, the
dates of acquisition and disposition of the shares, and the consideration
received upon that disposition.

       6.7    Medium and Time of Payment. The Exercise Price of an Option shall
be payable in full upon the exercise of the Option (a) in cash or by an
equivalent means (such as that specified in Paragraph 6.8) acceptable to the
Committee, (b) on the Committee's prior consent, with shares of Stock owned by
the





                                      -14-
   15
Holder (including shares received upon exercise of the Option or restricted
shares already held by the Holder) and having a Fair Market Value at least
equal to the aggregate Exercise Price payable in connection with such exercise,
or (c) by any combination of clauses (a) and (b). If the Committee chooses to
accept shares of Stock in payment of all or any portion of the Exercise Price,
then (for purposes of payment of the Exercise Price) those shares of Stock
shall be deemed to have a cash value equal to their aggregate Fair Market Value
determined as of the date of the delivery of the Exercise Notice. If the
Committee elects to accept shares of restricted Stock in payment of all or any
portion of the Exercise Price, then an equal number of shares issued pursuant
to the exercise shall be restricted on the same terms and for the restriction
period remaining on the shares used for payment.

       6.8    Payment with Sale Proceeds. In addition, at the request of the
Holder and to the extent permitted by applicable law, the Committee may (but
shall not be required to) approve arrangements with a brokerage firm under
which that brokerage firm, on behalf of the Holder, shall pay to the
Corporation the Exercise Price of the Option being exercised (either as a loan
to the Holder or from the proceeds of the sale of Stock issued pursuant to that
exercise of the Option), and the Corporation shall promptly cause the exercised
shares to be delivered to the brokerage firm. Such transactions shall be
effected in accordance with the procedures that the Committee may establish
from time to time.

       6.9    Reload Provisions. Options may contain a provision pursuant to
which a Holder who pays all or a portion of the Exercise Price of an Option or
the tax required to be withheld pursuant to the exercise of an Option by
surrendering shares of Stock shall automatically be granted an Option for the
purchase of the number of shares of Stock equal to the number of shares
surrendered (a "RELOAD OPTION"). The Date of Grant of the Reload Option shall
be the date on which the Holder surrenders the shares of Stock in respect of
which the Reload Option is granted. The Reload Option shall have an Exercise
Price equal to the Fair Market Value of a share of Stock on the Date of Grant
of the Reload Option and shall have a term that is no longer than the original
term of the underlying Option.

       6.10   Limitation on Aggregate Value of Shares That May Become First
Exercisable During Any Calendar Year Under an Incentive Option. Except as is
otherwise provided in subparagraph 10.2(b), with respect to any Incentive
Option granted under this Plan, the aggregate Fair Market Value of shares of
Stock subject to an Incentive Option and the aggregate Fair Market Value of
shares of Stock or stock of any Subsidiary (or a predecessor of the Corporation
or a Subsidiary) subject to any other incentive stock option (within the
meaning of Section 422 of the Code) of the Corporation or its Subsidiaries (or
a predecessor corporation of any such corporation) that first become
purchasable by a Holder in any calendar year may not (with respect to that
Holder) exceed $100,000, or such other amount as may be prescribed under
Section 422 of the Code or applicable regulations or rulings from time to time.
As used in the previous sentence, Fair Market Value shall be determined as of
the date the Incentive Option is granted. For purposes of this Paragraph 6.10
"predecessor corporation" means (a) a corporation that was a party to a
transaction described in Section 424(a) of the Code (or which would be so
described if a substitution or assumption under that Section had been effected)
with the Corporation, (b) a corporation which, at the time the new incentive
stock option (within the meaning of Section 422 of the Code) is granted, is a
Subsidiary of the Corporation or a predecessor corporation of any such
corporations, or (c) a predecessor corporation of any such corporations.
Failure to comply with this provision shall not impair the enforceability or
exercisability of any Option, but shall cause the excess amount of shares to be
reclassified in accordance with the Code.

       6.11   No Fractional Shares. The Corporation shall not in any case be
required to sell, issue, or deliver a fractional share with respect to any
Option. In lieu of the issuance of any fractional share of Stock, the
Corporation shall pay to the Holder an amount in cash equal to the same
fraction (as the fractional Stock) of the Fair Market Value of a share of Stock
determined as of the date of the applicable Exercise Notice.





                                      -15-
   16
       6.12   Modification, Extension and Renewal of Options. Subject to the
terms and conditions of and within the limitations of the Plan and any
applicable law, and any consent required by the last two sentences of this
Paragraph 6.12, the Committee may (a) modify, extend or renew outstanding
Options granted under the Plan, (b) accept the surrender of Options outstanding
hereunder (to the extent not previously exercised) and authorize the granting
of new Options in substitution for outstanding Options (to the extent not
previously exercised), and (c) amend the terms of an Incentive Option at any
time to include provisions that have the effect of changing the Incentive
Option to a Nonstatutory Option. Nevertheless, without the consent of the
Holder, the Committee may not modify any outstanding Options so as to specify a
higher Exercise Price or accept the surrender of outstanding Incentive Options
and authorize the granting of new Options in substitution therefor specifying a
higher Exercise Price. In addition, no modification of an Option granted
hereunder shall, without the consent of the Holder, materially alter or impair
any rights of the Holder or materially increase the obligations of a Holder
under any Option theretofore granted hereunder to that Holder under the Plan
except, with respect to Incentive Options, as may be necessary to satisfy the
requirements of Section 422 of the Code or as permitted in clause (c) of this
Paragraph 6.12.

       6.13   Other Agreement Provisions. The Option Agreements authorized
under the Plan shall contain such provisions in addition to those required by
the Plan (including, without limitation, restrictions or the removal of
restrictions upon the exercise of the Option and the retention or transfer of
shares thereby acquired) as the Committee may deem advisable. Each Option
Agreement shall identify the Option evidenced thereby as an Incentive Option or
Nonstatutory Option, as the case may be, and no Option Agreement shall cover
both an Incentive Option and a Nonstatutory Option. Each Agreement relating to
an Incentive Option granted hereunder shall contain such limitations and
restrictions upon the exercise of the Incentive Option to which it relates as
shall be necessary for the Incentive Option to which such Agreement relates to
constitute an incentive stock option, as defined in Section 422 of the Code.


SECTION 7. STOCK APPRECIATION RIGHTS

       All Stock Appreciation Rights granted under the Plan shall comply with,
and the related Award Agreements shall be deemed to include and be subject to,
the terms and conditions set forth in this Section 7 (to the extent each term
and condition applies to the form of Stock Appreciation Right) and also to the
terms and conditions set forth in Paragraph 10.1 and Section 11; provided,
however, that the Committee may authorize an Award Agreement relating to a
Stock Appreciation Right that expressly contains terms and provisions that
differ from the terms and provisions of Section 11. The Committee may also
authorize an Award Agreement relating to a Stock Appreciation Right that
contains any or all of the terms and provisions of Paragraphs 10.2 and 10.3 or
that contains terms and provisions dealing with similar subject matter
differently than do those Paragraphs; nevertheless, no term or provision of
Paragraph 10.2 or 10.3 (or any such differing term or provision) shall apply to
an Award Agreement relating to a Stock Appreciation Right unless the Award
Agreement expressly states that such term or provision applies.

       7.1    Form of Right. A Stock Appreciation Right may be granted to an
Eligible Individual (a) in connection with an Option, either at the time of
grant or at any time during the term of the Option, or (b) without relation to
an Option.

       7.2    Rights Related to Options. A Stock Appreciation Right granted
pursuant to an Option shall entitle the Holder, upon exercise, to surrender
that Option or any portion thereof, to the extent unexercised, and to receive
payment of an amount computed pursuant to Subparagraph 7.2(b). That Option
shall then cease to be exercisable to the extent surrendered. Stock
Appreciation Rights granted in connection with an





                                      -16-
   17
Option shall be subject to the terms of the Award Agreement governing the
Option, which shall comply with the following provisions in addition to those
applicable to Options:

              (a)    Exercise and Transfer. Subject to Paragraph 11.10, a Stock
       Appreciation Right granted in connection with an Option shall be
       exercisable only at such time or times and only to the extent that the
       related Option is exercisable and shall not be transferable except to
       the extent that the related Option is transferable. To the extent that
       an Option has been exercised, the Stock Appreciation Rights granted in
       connection with that Option shall terminate.

              (b)    Value of Right. Upon the exercise of a Stock Appreciation
       Right related to an Option, the Holder shall be entitled to receive
       payment from the Corporation of an amount determined by multiplying:

                     (i)    The difference obtained by subtracting the Exercise
              Price of a share of Stock specified in the related Option from
              the Fair Market Value of a share of Stock on the date of exercise
              of the Stock Appreciation Right, by

                     (ii)   The number of shares as to which that Stock
              Appreciation Right has been exercised.

       7.3    Right Without Option. A Stock Appreciation Right granted without
relationship to an Option shall be exercisable as determined by the Committee
and set forth in the Award Agreement governing the Stock Appreciation Right,
which Award Agreement shall comply with the following provisions:

              (a)    Number of Shares. Each Award Agreement shall state the
       total number of shares of Stock to which the Stock Appreciation Right
       relates.

              (b)    Vesting. Each Award Agreement shall state the time,
       periods or other conditions on which the right to exercise the Stock
       Appreciation Right or a portion thereof shall vest and the number of
       shares of Stock for which the right to exercise the Stock Appreciation
       Right shall vest at each such time, period or satisfaction of condition.

              (c)    Expiration of Rights. Each Award Agreement shall state the
       date at which the Stock Appreciation Rights shall expire if not
       previously exercised.

              (d)    Value of Right. A Stock Appreciation Right granted without
       relationship to an Option shall entitle the Holder, upon exercise of the
       Stock Appreciation Right, to receive payment of an amount determined by
       multiplying:

                     (i)    The difference obtained by subtracting the SAR
              Exercise Price from the Fair Market Value of a share of Stock on
              the date of exercise of that Stock Appreciation Right, by

                     (ii)   The number of rights as to which the Stock
              Appreciation Right has been exercised.

       7.4    Limitations on Rights. Notwithstanding Subparagraph 7.2(b) and
Subparagraph 7.3(d), the Committee may limit the amount payable upon exercise
of a Stock Appreciation Right. Any such limitation





                                      -17-
   18
must be determined as of the Date of Grant and be noted on the instrument
evidencing the Stock Appreciation Right.

       7.5    Payment of Rights. Payment of the amount determined under
Subparagraph 7.2(b) or Subparagraph 7.3(d) and Paragraph 7.4 may be made solely
in whole shares of Stock valued at Fair Market Value on the date of exercise of
the Stock Appreciation Right or, in the sole discretion of the Committee,
solely in cash or a combination of cash and Stock. If the Committee decides to
make full payment in shares of Stock and the amount payable results in a
fractional share, payment for the fractional share shall be made in cash.

       7.6    Other Agreement Provisions. The Award Agreements authorized
relating to Stock Appreciation Rights shall contain such provisions in addition
to those required by the Plan (including, without limitation, restrictions or
the removal of restrictions upon the exercise of the Stock Appreciation Right
and the retention or transfer of shares thereby acquired) as the Committee may
deem advisable.


SECTION 8. RESTRICTED STOCK AWARDS

       All Restricted Stock Awards granted under the Plan (other than the
automatic Awards to Non-employee Directors pursuant to Section 5) shall comply
with, and the related Award Agreements shall be deemed to include, and be
subject to the terms and conditions set forth in this Section 8 and also to the
terms and conditions set forth in Paragraph 10.1 and Section 11; provided,
however, that the Committee may authorize an Award Agreement relating to a
Restricted Stock Award that expressly contains terms and provisions that differ
from the terms and provisions of Section 11. The Committee may also authorize
an Award Agreement relating to a Restricted Stock Award that contains any or
all of the terms and provisions of Paragraphs 10.2 and 10.3 or that contains
terms and provisions dealing with similar subject matter differently than do
those Paragraphs; nevertheless, no term or provision of Paragraph 10.2 or 10.3
(or any such differing term or provision) shall apply to an Award Agreement
relating to a Restricted Stock Award unless the Award Agreement expressly
states that such term or provision applies.

       8.1    Restrictions. All shares of Restricted Stock Awards granted or
sold pursuant to the Plan shall be subject to the following conditions:

              (a)    Transferability. The shares may not be sold, transferred
       or otherwise alienated or hypothecated until the restrictions are
       removed or expire.

              (b)    Conditions to Removal of Restrictions. Conditions to
       removal or expiration of the restrictions may include, but are not
       required to be limited to, continuing employment or service as a
       director, officer, consultant, or advisor or achievement of performance
       objectives described in the Award Agreement.

              (c)    Legend. Each certificate representing Restricted Stock
       Awards granted pursuant to the Plan shall bear a legend making
       appropriate reference to the restrictions imposed.

              (d)    Possession. At its sole discretion, the Committee may (i)
       authorize issuance of a certificate for shares in the Holder's name only
       upon lapse of the applicable restrictions, (ii) require the Corporation,
       transfer agent or other custodian to retain physical custody of the
       certificates representing Restricted Stock Awards during the restriction
       period and may require the Holder of the Award to execute stock powers,
       endorsed or in blank, for those certificates and deliver those





                                      -18-
   19
       stock powers to the Corporation, transfer agent or custodian, or (iii)
       may require the Holder to enter into an escrow agreement providing that
       the certificates representing Restricted Stock Awards granted or sold
       pursuant to the Plan shall remain in the physical custody of an escrow
       holder until all restrictions are removed or expire. The Corporation may
       issue shares subject to stop-transfer restrictions or may issue such
       shares subject only to the restrictive legend described in subparagraph
       8.1(c).

              (e)    Other Conditions. The Committee may impose other
       conditions on any shares granted or sold as Restricted Stock Awards
       pursuant to the Plan as it may deem advisable, including, without
       limitation, (i) restrictions under the Securities Act or Exchange Act,
       (ii) the requirements of any securities exchange upon which the shares
       or shares of the same class are then listed, and (iii) any state
       securities law applicable to the shares.

       8.2    Expiration of Restrictions. The restrictions imposed in Paragraph
8.1 on Restricted Stock Awards shall lapse as determined by the Committee and
set forth in the applicable Award Agreement, and the Corporation shall promptly
cause to be delivered to the Holder of the Restricted Stock Award a certificate
representing the number of shares for which restrictions have lapsed, free of
any restrictive legend relating to the lapsed restrictions. Each Restricted
Stock Award may have a different restriction period, in the discretion of the
Committee. The Committee may, in its discretion, prospectively reduce the
restriction period applicable to a particular Restricted Stock Award. The
foregoing notwithstanding, no restriction not required by law shall remain in
effect for more than ten years after the date of the Award.

       8.3    Changes in Accounting Rules. Notwithstanding any other provision
of the Plan to the contrary, if, during the term of the Plan, any changes in
the financial or tax accounting rules applicable to Restricted Stock Awards
shall occur that, in the sole judgement of the Board of Directors, may have a
material adverse effect on the reported earnings, assets, or liabilities of the
Corporation, the Committee shall have the right and power to modify as
necessary any then outstanding Restricted Stock Awards as to which the
applicable restrictions have not been satisfied.

       8.4    Rights as Stockholder. Subject to the provisions of Paragraphs
8.1 and 11.11, the Committee may, in its discretion, determine what rights, if
any, the Holder shall have with respect to the Restricted Stock Awards granted
or sold, including the right to vote the shares and receive all dividends and
other distributions paid or made with respect thereto.

       8.5 Other Agreement Provisions. The Award Agreements relating to
Restricted Stock Awards shall contain such provisions in addition to those
required by the Plan as the Committee may deem advisable.


SECTION 9. PERFORMANCE UNITS

       All Performance Units granted under the Plan shall comply with, and the
related Award Agreements shall be deemed to include and be subject to, the
terms and conditions set forth in this Section 9 (to the extent each term and
condition applies to the form of Performance Unit) and also to the terms and
conditions set forth in Paragraph 10.1 and Section 11; provided, however, that
the Committee may authorize an Award Agreement related to a Performance Unit
that expressly contains terms and provisions that differ from the terms and
provisions of Section 11. The Committee may also authorize an Award Agreement
related to a Performance Unit that contains any or all of the terms and
provisions of Paragraphs 10.2 and 10.3 or that contains terms and provisions
dealing with similar subject matter differently than do those Paragraphs;
nevertheless, no term or provision of Paragraph 10.2 or 10.3 (or any such
differing term or provision) shall





                                      -19-
   20
apply to an Award Agreement related to a Performance Unit unless the Award
Agreement expressly states that such term or provision applies.

       9.1    Multiple Grants. The Committee may make grants of Performance
Units in such a manner that more than one Performance Period is in progress
simultaneously. At or before the beginning of each Performance Period, the
Committee will establish the contingent value of each Performance Unit, if any,
for that Performance Period, which may vary depending on the degree to which
performance objectives established by the Committee are met.

       9.2    Performance Standards. At or before the beginning of each
Performance Period, the Committee will (a) establish the beginning and ending
dates of the Performance Period, (b) establish for that Performance Period
specific performance objectives as the Committee (in its sole discretion)
believes are relevant to the Corporation's overall business objectives, (c)
determine the minimum and maximum value of a Performance Unit and the value of
a Performance Unit based on the degree to which performance objectives are
achieved, exceeded or not achieved, (d) determine a minimum performance level
below which Performance Units will be assigned a value of zero, and a maximum
performance level above which the value of Performance Units will not increase,
and (e) notify each Holder of a Performance Unit for that Performance Period in
writing of the established performance objectives and minimum, target, and
maximum Performance Unit value for that Performance Period.

       9.3    Modification of Standards. If the Committee determines in its
sole discretion that the established performance measures or objectives are no
longer suitable to the Corporation's objectives because of a change in the
Corporation's business, operations, corporate structure, capital structure, or
other conditions the Committee deems to be material, the Committee may modify
the performance measures and objectives as it considers appropriate and
equitable.

       9.4    Payment. The basis for payment of Performance Units for a given
Performance Period will be the achievement of those performance objectives
determined by the Committee at the beginning of the Performance Period. If
minimum performance is not achieved or exceeded for a Performance Period, no
payment will be made and all contingent rights will cease. If minimum
performance is achieved or exceeded, the value of a Performance Unit will be
based on the degree to which actual performance exceeded the pre-established
minimum performance standards. The amount of payment will be determined by
multiplying the number of Performance Units granted at the beginning of the
Performance Period by the final Performance Unit value. Payments will be made
in cash or Stock as soon as administratively possible following the close of
the applicable Performance Period.

       9.5 Other Agreement Provisions. The Award Agreements, if any, authorized
relating to Performance Units shall contain such provisions in addition to
those required by the Plan (including, without limitation, restrictions or the
removal of restrictions upon the transfer of shares thereby acquired) as the
Committee may deem advisable.


SECTION 10. ADJUSTMENT PROVISIONS

       The Committee may authorize an Award that contains any or all of the
terms and provisions of this Section 10 or, with respect to Paragraphs 10.2 and
10.3, that contains terms and provisions dealing with similar subject matter
differently than do those Paragraphs; nevertheless, no term or provision of
Paragraph 10.2 or 10.3 (or any such differing term or provision) shall apply to
an Award Agreement unless the Award Agreement expressly states that such term
or provision applies.





                                      -20-
   21
       10.1   Adjustment of Awards and Authorized Stock. The terms of an Award,
the number of shares of Stock authorized pursuant to Paragraph 2.1 for issuance
under the Plan, and the number shares of Stock that constitute the individual
limitations in Paragraph 2.7 shall be subject to adjustment, from time to time,
in accordance with the following provisions:

              (a)    If at any time or from time to time, the Corporation shall
       subdivide as a whole (by reclassification, by a Stock split, by the
       issuance of a distribution on Stock payable in Stock or otherwise) the
       number of shares of Stock then outstanding into a greater number of
       shares of Stock, then (i) the maximum number of shares of Stock
       available for the Plan and for any individual as provided in Paragraph
       2.1 and Paragraph 2.7, respectively, shall be increased proportionately,
       and the kind of shares or other securities available for the Plan shall
       be appropriately adjusted, (ii) the number of shares of Stock (or other
       kind of shares or securities) that may be acquired under any Award shall
       be increased proportionately, and (iii) the price (including Exercise
       Price) for each share of Stock (or other kind of shares or unit of other
       securities) subject to then outstanding Awards shall be reduced
       proportionately, without changing the aggregate purchase price or value
       as to which outstanding Awards remain exercisable or subject to
       restrictions.

              (b)    If at any time or from time to time the Corporation shall
       consolidate as a whole (by reclassification, reverse Stock split, or
       otherwise) the number of shares of Stock then outstanding into a lesser
       number of shares of Stock, (i) the maximum number of shares of Stock
       available for the Plan and for any individual as provided in Paragraph
       2.1 and Paragraph 2.7, respectively shall be decreased proportionately,
       and the kind of shares or other securities available for the Plan shall
       be appropriately adjusted, (ii) the number of shares of Stock (or other
       kind of shares or securities) that may be acquired under any Award shall
       be decreased proportionately, and (iii) the price (including Exercise
       Price) for each share of Stock (or other kind of shares or unit of other
       securities) subject to then outstanding Awards shall be increased
       proportionately, without changing the aggregate purchase price or value
       as to which outstanding Awards remain exercisable or subject to
       restrictions.

              (c)    Whenever the number of shares of Stock subject to
       outstanding Awards and the price for each share of Stock subject to
       outstanding Awards are required to be adjusted as provided in this
       Paragraph 10.1, the Committee shall promptly prepare a notice setting
       forth, in reasonable detail, the event requiring adjustment, the amount
       of the adjustment, the method by which such adjustment was calculated,
       and the change in price and the number of shares of Stock, other
       securities, cash or property purchasable subject to each Award after
       giving effect to the adjustments. The Committee shall promptly give each
       Holder such a notice.

              (d)    Adjustments under Paragraph 10(a) and (b) shall be made by
       the Committee, and its determination as to what adjustments shall be
       made and the extent thereof shall be final, binding and conclusive. No
       fractional interest shall be issued under the Plan on account of any
       such adjustments.

       10.2   Changes in Control. Upon the occurrence of a Change in Control,
with respect only to Awards held by Participants who are employees or directors
of the Corporation (and their permitted transferees pursuant to Paragraph 3.5)
at the occurrence of the Change in Control, (a) all outstanding Stock
Appreciation Rights and Options shall immediately become fully vested and
exercisable in full, including that portion of any Stock Appreciation Right or
Option that pursuant to the terms and provisions of the applicable Award
Agreement had not yet become exercisable (the total number of shares of Stock
as to which a Stock Appreciation Right or Option is exercisable upon the
occurrence of a Change in Control is





                                      -21-
   22
referred to herein as the "TOTAL SHARES"); (b) the restriction period of any
Restricted Stock Award shall immediately be accelerated and the restrictions
shall expire; and (c) the target payout opportunity attainable under the
Performance Units will be deemed to have been fully earned for all Performance
Periods upon the occurrence of the Change in Control and the Holder will be
paid a pro rata portion of all associated targeted payout opportunities (based
on the number of complete and partial calendar months elapsed as of the
occurrence of the Change in Control) in cash within thirty days following the
Change in Control or in Stock effective as of the Change in Control, for cash
and stock-based Performance Units, respectively. If a Change in Control
involves a Restructure or occurs in connection with a series of related
transactions involving a Restructure and if such Restructure is in the form of
a Non-Surviving Event and as a part of such Restructure shares of stock, other
securities, cash or property shall be issuable or deliverable in exchange for
Stock, then the Holder of an Award shall be entitled to purchase or receive (in
lieu of the Total Shares that the Holder would otherwise be entitled to
purchase or receive), as appropriate for the form of Award, the number of
shares of stock, other securities, cash or property to which that number of
Total Shares would have been entitled in connection with such Restructure (and,
for Options, at an aggregate exercise price equal to the Exercise Price that
would have been payable if that number of Total Shares had been purchased on
the exercise of the Option immediately before the consummation of the
Restructure). Nothing in this Paragraph 10.2 shall impose on a Holder the
obligation to exercise any Award immediately before or upon the Change of
Control, nor shall the Holder forfeit the right to exercise the Award during
the remainder of the original term of the Award because of a Change in Control
or because the Holder's employment is terminated for any reason following a
Change in Control.

       10.3   Restructure and No Change in Control. In the event a Restructure
should occur at any time while there is any outstanding Award hereunder and
that Restructure does not occur in connection with a Change in Control or in
connection with a series of related transactions involving a Change in Control,
then:

              (a)    no Holder of an Option shall automatically be granted
       corresponding Stock Appreciation Rights;

              (b)    neither any outstanding Stock Appreciation Rights nor any
       outstanding Options shall immediately become fully vested and
       exercisable in full merely because of the occurrence of the Restructure;

              (c)    the restriction period of any Restricted Stock Award shall
       not immediately be accelerated and the restrictions expire merely
       because of the occurrence of the Restructure;


              (d)    the target payout opportunity attainable under the
       Performance Units will not be deemed to have been fully earned for all
       Performance Periods merely because of the occurrence of the Restructure;
       and

              (e)    at the option of the Committee, the Corporation may (but
       shall not be required to) take any one or more of the following actions:


                     (i)    grant each Holder of an Option corresponding Stock
              or cash Stock Appreciation Rights;

                     (ii)   accelerate in whole or in part the time of the
              vesting and exercisability of any one or more of the outstanding
              Stock Appreciation Rights and Options so as to provide





                                      -22-
   23
              that those Stock Appreciation Rights and Options shall be
              exercisable before, upon, or after the consummation of the
              Restructure;

                     (iii)  accelerate in whole or in part the expiration of
              some or all of the restrictions on any Restricted Stock Award so
              that the Stock subject to that Restricted Stock Award shall be
              owned by the Holder without restriction or risk of forfeiture;

                     (iv)   treat the outstanding Performance Units as having
              fully or partially met their targets and pay, in full or in part,
              the targeted payout;

                     (v)    if the Restructure is in the form of a Non-
              Surviving Event, cause the surviving entity to assume in whole or
              in part any one or more of the outstanding Awards upon such terms
              and provisions as the Committee deems desirable; or

                     (vi)   redeem in whole or in part any one or more of the
              outstanding Awards (whether or not then exercisable) in
              consideration of a cash payment, as such payment may be reduced
              for tax withholding obligations as contemplated in the section
              governing the particular form of Award, in an amount equal to:

                            (A)    for Options and Stock Appreciation Rights
                     granted in connection with Options, the excess of (1) the
                     Fair Market Value, determined as of the date immediately
                     preceding the consummation of the Restructure, of the
                     aggregate number of shares of Stock subject to the Award
                     and as to which the Award is being redeemed over (2) the
                     Exercise Price for that number of shares of Stock;

                            (B)    for Stock Appreciation Rights not granted in
                     connection with an Option, the excess of (1) the Fair
                     Market Value, determined as of the date immediately
                     preceding the consummation of the Restructure, of the
                     aggregate number of shares of Stock subject to the Award
                     and as to which the Award is being redeemed over (2) the
                     Fair Market Value of the number of shares of Stock on the
                     Date of Grant;

                            (C)    for Restricted Stock Awards, the Fair Market
                     Value, determined as of the date immediately preceding the
                     consummation of the Restructure, of the aggregate number
                     of shares of Stock subject to the Award and as to which
                     the Award is being redeemed; and

                            (D)    for Performance Units, the amount per
                     Performance Unit as the Committee in its sole discretion
                     may determine (which may be zero dollars).

The Corporation shall promptly notify each Holder of any election or action
taken by the Corporation under this Paragraph 10.3. In the event of any
election or action taken by the Corporation pursuant to this Paragraph 10.3
that requires the amendment or cancellation of any Award Agreement as may be
specified in any notice to the Holder thereof, that Holder shall promptly
deliver that Award Agreement to the Corporation in order for that amendment or
cancellation to be implemented by the Corporation and the Committee. The
failure of the Holder to deliver any such Award Agreement to the Corporation as
provided in the preceding sentence shall not in any manner effect the validity
or enforceability of any action taken by the Corporation and the Committee
under this Paragraph 10.3, including, without limitation, any redemption of an
Award as of the consummation of a Restructure. Any cash payment to be made by
the Corporation





                                      -23-
   24
pursuant to this Paragraph 10.3 in connection with the redemption of any
outstanding Awards shall be paid to the Holder thereof currently with the
delivery to the Corporation of the Award Agreement evidencing that Award;
provided, however, that any such redemption shall be effective upon the
consummation of the Restructure notwithstanding that the payment of the
redemption price may occur subsequent to the consummation. If all or any
portion of an outstanding Award is to be exercised or accelerated upon or after
the consummation of a Restructure that is in the form of a Non-Surviving Event
and as a part of that Restructure shares of stock, other securities, cash or
property shall be issuable or deliverable in exchange for Stock, then the
Holder of the Award shall thereafter be entitled to purchase or receive (in
lieu of the number of shares of Stock that the Holder would otherwise be
entitled to purchase or receive) the number of shares of stock, other
securities, cash or property to which such number of shares of Stock would have
been entitled in connection with the Restructure (and, for Options, at an
aggregate exercise price equal to the Exercise Price that would have been
payable if that number of Total Shares had been purchased on the exercise of
the Option immediately before the consummation of the Restructure).

       10.4   Notice of Change in Control or Restructure. The Corporation shall
attempt to keep all Holders informed with respect to any Change in Control or
Restructure or of any potential Change in Control or Restructure to the same
extent that the Corporation's stockholders are informed by the Corporation of
any such event or potential event.


SECTION 11. ADDITIONAL PROVISIONS

       11.1   Termination of Employment. Subject to the last sentence of
Paragraph 10.2, if a Holder is an Eligible Individual because the Holder is an
Employee and if that employment relationship is terminated for any reason other
than Normal Retirement or that Holder's death or Disability, then the following
provisions shall apply to all Awards held by that Holder that were granted
because that Holder was an Employee:

              (a)    If the termination is by the Holder's employer, then the
       following provisions shall apply: (i) if the termination is in breach of
       the terms and provisions of any written employment agreement between
       that Holder and the Holder's employer, then all Awards held by that
       Holder shall become immediately exercisable, all restrictions on those
       Awards shall immediately lapse, and the Awards shall survive the
       termination of employment; or (ii) if the termination is not in breach
       of the terms and provisions of any written employment agreement between
       that Holder and the Holder's employer (or if there is no existing
       written employment agreement between that Holder and the Holder's
       employer), then that portion, if any, of any and all Awards held by that
       Holder that are not yet exercisable (or for which restrictions have not
       lapsed) as of the date of the termination shall become null and void as
       of the date of the termination; provided, however, that the portion, if
       any, of any and all Awards held by that Holder which are exercisable (or
       for which restrictions have lapsed) as of the date of such termination
       shall survive such termination.

              (b)    If such termination is by the Holder, then the following
       provisions shall apply: (i) if the termination is in breach of the terms
       and provisions of any written employment agreement between that Holder
       and the Holder's employer or if there is no existing written employment
       agreement between that Holder and the Holder's employer, then any and
       all Awards held by that Holder, whether or not then exercisable and
       whether or not restrictions thereon have lapsed (except in full), shall
       become null and void as of the date of the termination; or (ii) if the
       termination is in accordance with a right of termination granted to a
       Holder pursuant to the terms and provisions of any written employment
       agreement between that Holder and his employer, then all Awards held by





                                      -24-
   25
       that Holder shall become immediately exercisable (and all restrictions
       thereon shall lapse) and shall survive the termination of employment.

With respect to any Option or Stock Appreciation Right that survives the
termination of employment pursuant to this Paragraph 11.1, the right to
exercise that Option or Stock Appreciation Right shall terminate in all cases
on the 180th day following the last date of employment with the Corporation or
its Subsidiary.

       11.2   Other Loss of Eligibility. If a Holder is an Eligible Individual
because the Holder is serving in a capacity other than as an Employee and if
that capacity is terminated for any reason other than the Holder's death, then
that portion, if any, of any and all Awards held by the Holder that were
granted because of that capacity which are not yet exercisable (or for which
restrictions have not lapsed) as of the date of the termination shall become
null and void as of the date of the termination; provided, however, that the
portion, if any, of any and all of the Awards held by the Holder that are
exercisable (or for which restrictions have lapsed) as of the date of the
termination shall survive the termination.

       11.3   Death. Upon the death of a Holder, then any and all Awards held
by the Holder that are not yet exercisable (or for which restrictions have not
lapsed) as of the date of the Holder's death shall become null and void as of
the date of death; provided, however, that the portion, if any, of any and all
Awards held by the Holder that are exercisable as of the date of death shall be
exercisable by that Holder's legal representatives, legatees or distributees
for a period of the lesser of (a) the remainder of the term of the Award or (b)
180 days following the date of the Holder's death. Any portion of an Award not
exercised upon the expiration of the periods specified in (a) or (b) shall be
null and void. Except as expressly provided in this Paragraph 11.3, all Awards
held by a Holder shall not be exercisable after the death of that Holder.

       11.4   Retirement. If a Holder is an Eligible Individual because the
Holder is an Employee and if that employment relationship is terminated by
reason of the Holder's Normal Retirement, then the portion, if any, of any and
all Awards held by the Holder that are not yet exercisable (or for which
restrictions have not lapsed) as of the date of that retirement shall become
null and void as of the date of retirement; provided, however, that the
portion, if any, of any and all Awards held by the Holder that are exercisable
as of the date of that retirement shall survive the retirement for their
original term.

       11.5   Disability. If a Holder is an Eligible Individual because the
Holder is an Employee and if that employment relationship is terminated by
reason of the Holder's Disability, then the portion, if any, of any and all
Awards held by the Holder that are not yet exercisable (or for which
restrictions have not lapsed) as of the date of that termination for Disability
shall become null and void as of the date of termination; provided, however,
that the portion, if any, of any and all Awards held by the Holder that are
exercisable as of the date of that termination shall survive the termination
for its original term and shall be exercisable by the Holder, his guardian, or
his legal representative. "Disability" shall have the meaning given it in the
employment agreement of the Holder; provided, however, that if that Holder has
no employment agreement, "Disability" shall mean a physical or mental
impairment of sufficient severity that, in the opinion of the Corporation,
either the Holder is unable to continue performing the duties he performed
before such impairment or the Holder's condition entitles him to disability
benefits under any insurance or employee benefit plan of the Corporation or its
Subsidiaries and that impairment or condition is cited by the Corporation as
the reason for termination of the Holder's employment.

       11.6   Leave of Absence. With respect to an Award, the Committee may, in
its sole discretion, determine that any Holder who is on leave of absence for
any reason will be considered to still be in the employ of the Corporation,
provided that rights to that Award during a leave of absence will be limited to
the extent to which those rights were earned or vested when the leave of
absence began.





                                      -25-
   26
       11.7   Transferability of Awards. In addition to such other terms and
conditions as may be included in a particular Award Agreement, an Award
requiring exercise shall be exercisable during a Holder's lifetime only by that
Holder or by that Holder's guardian or legal representative. An Award requiring
exercise shall not be transferrable other than by will or the laws of descent
and distribution, except as permitted in accordance with Paragraph 3.5.

       11.8   Forfeiture and Restrictions on Transfer. Each Award Agreement may
contain or otherwise provide for conditions giving rise to the forfeiture of
the Stock acquired pursuant to an Award or otherwise and may also provide for
those restrictions on the transferability of shares of the Stock acquired
pursuant to an Award or otherwise that the Committee in its sole and absolute
discretion may deem proper or advisable. The conditions giving rise to
forfeiture may include, but need not be limited to, the requirement that the
Holder render substantial services to the Corporation or its Subsidiaries for a
specified period of time. The restrictions on transferability may include, but
need not be limited to, options and rights of first refusal in favor of the
Corporation and stockholders of the Corporation other than the Holder of such
shares of Stock who is a party to the particular Award Agreement or a
subsequent holder of the shares of Stock who is bound by that Award Agreement.

       11.9   Delivery of Certificates of Stock. Subject to Paragraph 11.10,
the Corporation shall promptly issue and deliver a certificate representing the
number of shares of Stock as to which (a) an Option has been exercised after
the Corporation receives an Exercise Notice and upon receipt by the Corporation
of the Exercise Price and any tax withholding as may be requested; (b) a Stock
Appreciation Right has been exercised and upon receipt by the Corporation of
any tax withholding as may be requested; (c) restrictions have lapsed with
respect to a Restricted Stock Award and upon receipt by the Corporation of any
tax withholding as may be requested; and (d) performance objectives have been
achieved during a Performance Period relating to a Performance Unit for Stock.
The value of the shares of Stock, cash or notes transferable because of an
Award under the Plan shall not bear any interest owing to the passage of time,
except as may be otherwise provided in an Award Agreement. If a Holder is
entitled to receive certificates representing Stock received for more than one
form of Award under the Plan, separate Stock certificates shall be issued with
respect to each such Award and for Incentive Options and Nonstatutory Stock
Options separately.

       11.10  Conditions to Delivery of Stock. Nothing herein or in any Award
granted hereunder or any Award Agreement shall require the Corporation to issue
any shares with respect to any Award if that issuance would, in the opinion of
counsel for the Corporation, constitute a violation of the Securities Act or
any similar or superseding statute or statutes, any other applicable statute or
regulation, or the rules of any applicable securities exchange or securities
association, as then in effect. At the time of any exercise of an Option or
Stock Appreciation Right, or at the time of any grant of a Restricted Stock
Award or Performance Unit, the Corporation may, as a condition precedent to the
exercise of such Option or Stock Appreciation Right or vesting of any
Restricted Stock Award or Performance Unit, require from the Holder of the
Award (or in the event of his death, his legal representatives, heirs,
legatees, or distributees) such written representations, if any, concerning the
Holder's intentions with regard to the retention or disposition of the shares
of Stock being acquired pursuant to the Award and such written covenants and
agreements, if any, as to the manner of disposal of such shares as, in the
opinion of counsel to the Corporation, may be necessary to ensure that any
disposition by that Holder (or in the event of the Holder's death, his legal
representatives, heirs, legatees, or distributees) will not involve a violation
of the Securities Act or any similar or superseding statute or statutes, any
other applicable state or federal statute or regulation, or any rule of any
applicable securities exchange or securities association, as then in effect.

       11.11  Certain Directors and Officers. With respect to Holders who are
directors or officers of the Corporation or any Subsidiary and who are subject
to Section 16(b) of the Exchange Act, Awards shall





                                      -26-
   27
contain such other terms and conditions as may be required by Rule 16b-3 unless
the majority of the Board of Directors or the Holder has determined not to have
the Award comply with Rule 16b-3.

       11.12  Securities Act Legend. Certificates for shares of Stock, when
issued, may have the following legend, or statements of other applicable
restrictions endorsed thereon and may not be immediately transferable:

       THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
       REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
       SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED,
       TRANSFERRED, OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES
       EVIDENCE SATISFACTORY TO THE ISSUER (WHICH, IN THE DISCRETION OF THE
       ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER)
       THAT SUCH OFFER, SALE, PLEDGE, TRANSFER, OR OTHER DISPOSITION WILL NOT
       VIOLATE APPLICABLE FEDERAL OR STATE LAWS.

This legend shall not be required for shares of Stock issued pursuant to an
effective registration statement under the Securities Act.

       11.13  Legend for Restrictions on Transfer. Each certificate
representing shares issued to a Holder pursuant to an Award granted under the
Plan shall, if such shares are subject to any transfer restriction, including a
right of first refusal, provided for under this Plan or an Award Agreement,
bear a legend that complies with applicable law with respect to the
restrictions on transferability contained in this Paragraph 11.13, such as:

       THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
       RESTRICTIONS ON TRANSFERABILITY IMPOSED BY THAT CERTAIN INSTRUMENT
       ENTITLED "PIONEER NATURAL RESOURCES COMPANY LONG-TERM INCENTIVE PLAN" AS
       ADOPTED BY PIONEER NATURAL RESOURCES COMPANY (THE "CORPORATION") ON
       AUGUST 7, 1997, AND AN AGREEMENT THEREUNDER BETWEEN THE CORPORATION AND
       [HOLDER] DATED ______________________, ____, AND MAY NOT BE TRANSFERRED,
       SOLD, OR OTHERWISE DISPOSED OF EXCEPT AS THEREIN PROVIDED. THE
       CORPORATION WILL FURNISH A COPY OF SUCH INSTRUMENT AND AGREEMENT TO THE
       RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE ON REQUEST TO THE
       CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE.

       11.14  Rights as a Stockholder. A Holder shall have no right as a
stockholder with respect to any shares covered by his Award until a certificate
representing those shares is issued in his name. No adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash or other property) or
distributions or other rights for which the record date is before the date that
certificate is issued, except as contemplated by Section 10. Nevertheless,
dividends and dividend equivalent rights may be extended to and made part of
any Award denominated in Stock or units of Stock, subject to such terms,
conditions, and restrictions as the Committee may establish. The Committee may
also establish rules and procedures for the





                                      -27-
   28
crediting of interest on deferred cash payments and dividend equivalents for
deferred payment denominated in Stock or units of Stock.

       11.15  Furnish Information. Each Holder shall furnish to the Corporation
all information requested by the Corporation to enable it to comply with any
reporting or other requirement imposed upon the Corporation by or under any
applicable statute or regulation.

       11.16  Obligation to Exercise. The granting of an Award hereunder shall
impose no obligation upon the Holder to exercise the same or any part thereof.

       11.17  Adjustments to Awards. Subject to the general limitations set
forth in Sections 6, 7 and 10, the Committee may make any adjustment in the
exercise price of, the number of shares subject to or the terms of a
Nonstatutory Option or Stock Appreciation Right by canceling an outstanding
Nonstatutory Option or Stock Appreciation Right and regranting a Nonstatutory
Option or Stock Appreciation Right. Such adjustment shall be made by amending,
substituting or regranting an outstanding Nonstatutory Option or Stock
Appreciation Right. Such amendment, substitution or regrant may result in terms
and conditions that differ from the terms and conditions of the original
Nonstatutory Option or Stock Appreciation Right. The Committee may not,
however, impair the rights of any Holder to previously granted Nonstatutory
Options or Stock Appreciation Rights without that Holder's consent. If such
action is effected by amendment, the effective date of such amendment shall be
the date of the original grant.

       11.18  Remedies. The Corporation shall be entitled to recover from a
Holder reasonable attorneys' fees incurred in connection with the enforcement
of the terms and provisions of the Plan and any Award Agreement whether by an
action to enforce specific performance or for damages for its breach or
otherwise.

       11.19  Information Confidential. As partial consideration for the
granting of each Award hereunder, the Holder shall agree with the Corporation
that he will keep confidential all information and knowledge that he has
relating to the manner and amount of his participation in the Plan; provided,
however, that such information may be disclosed as required by law and may be
given in confidence to the Holder's spouse, tax and financial advisors, or to a
financial institution to the extent that such information is necessary to
secure a loan. In the event any breach of this promise comes to the attention
of the Committee, it shall take into consideration that breach in determining
whether to recommend the grant of any future Award to that Holder, as a factor
militating against the advisability of granting any such future Award to that
individual.

       11.20  Consideration. No Option or Stock Appreciation Right shall be
exercisable, no restriction on any Restricted Stock Award shall lapse, and no
Performance Unit shall be settled in Stock with respect to a Holder unless and
until the Holder shall have paid cash or property to, or performed services
for, the Corporation or any of its Subsidiaries that the Committee believes is
equal to or greater in value then the par value of the Stock subject to such
Award.

       11.21  Payment of Taxes. The Committee may, in its discretion, require a
Holder to pay to the Corporation (or the Corporation's Subsidiary if the Holder
is an employee of a Subsidiary of the Corporation), at the time of the exercise
of an Award, the amount that the Committee deems necessary to satisfy the
Corporation's or its Subsidiary's current or future obligation to withhold
federal, state or local income or other taxes that the Holder incurs by
exercising an Award. Upon the exercise of an Award requiring tax withholding, a
Holder may (a) direct the Corporation to withhold from the shares of Stock to
be issued to the Holder the number of shares necessary to satisfy the
Corporation's obligation to withhold taxes, that determination to be based on
the shares' Fair Market Value as of the date of exercise; (b) deliver to the
Corporation sufficient shares of Stock (based upon the Fair Market Value at
date of exercise) to satisfy





                                      -28-
   29
the Corporation's tax withholding obligations, based on the shares' Fair Market
Value as of the date of exercise; or (c) deliver sufficient cash to the
Corporation to satisfy its tax withholding obligations. Holders who elect to
use such a stock withholding feature must make the election at the time and in
the manner that the Committee prescribes. The Committee may, at its sole
option, deny any Holder's request to satisfy withholding obligations through
Stock instead of cash. In the event the Committee subsequently determines that
the aggregate Fair Market Value (as determined above) of any shares of Stock
withheld as payment of any tax withholding obligation is insufficient to
discharge that tax withholding obligation, then the Holder shall pay to the
Corporation, immediately upon the Committee's request, the amount of that
deficiency.


SECTION 12. DURATION AND AMENDMENT OF PLAN

       12.1   Duration. No Awards may be granted hereunder after the date that
is ten (10) years from the date the last amendment to this Plan involving an
increase in authorized shares is approved by the stockholders of the
Corporation.

       12.2   Amendment. The Board of Directors may, insofar as permitted by
law, with respect to any shares which, at the time, are not subject to Awards,
suspend or discontinue the Plan or revise or amend it in any respect
whatsoever, and may amend any provision of the Plan or any Award Agreement to
make the Plan or the Award Agreement, or both, comply with Section 16(b) of the
Exchange Act and the exemptions therefrom, the Code, the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), the regulations promulgated
under the Code or ERISA, or any other law, rule or regulation that may affect
the Plan. The Board of Directors may also amend, modify, suspend or terminate
the Plan for the purpose of meeting or addressing any changes in other legal
requirements applicable to the Corporation or the Plan or for any other purpose
permitted by law. The Plan may not be amended without the consent of the
holders of a majority of the shares of Stock then outstanding to increase
materially the aggregate number of shares of Stock that may be issued under the
Plan (except for adjustments pursuant to Section 10 of the Plan) or to increase
materially the benefits accruing to Eligible Individuals under the Plan.


SECTION 13. GENERAL

       13.1   Application of Funds. The proceeds received by the Corporation
from the sale of shares pursuant to Awards shall be used for general corporate
purposes.

       13.2   Right of the Corporation and Subsidiaries to Terminate
Employment. Nothing contained in the Plan, or in any Award Agreement, shall
confer upon any Holder the right to continue in the employ of the Corporation
or any Subsidiary, or interfere in any way with the rights of the Corporation
or any Subsidiary to terminate his or her employment at any time.

       13.3   No Liability for Good Faith Determinations. Neither the members
of the Board of Directors nor any member of the Committee shall be liable for
any act, omission, or determination taken or made in good faith with respect to
the Plan or any Award granted under it, and members of the Board of Directors
and the Committee shall be entitled to indemnification and reimbursement by the
Corporation in respect of any claim, loss, damage, or expense (including
attorneys' fees, the costs of settling any suit, provided such settlement is
approved by independent legal counsel selected by the Corporation, and amounts
paid in satisfaction of a judgment, except a judgment based on a finding of bad
faith) arising therefrom to the full extent permitted by law and under any
directors and officers liability or similar insurance coverage that may





                                      -29-
   30
from time to time be in effect. This right to indemnification shall be in
addition to, and not a limitation on, any other indemnification rights any
member of the Board of Directors or the Committee may have.

       13.4   Other Benefits. Participation in the Plan shall not preclude the
Holder from eligibility in any other stock or stock option plan of the
Corporation or any Subsidiary or any old age benefit, insurance, pension,
profit sharing retirement, bonus, or other extra compensation plans that the
Corporation or any Subsidiary has adopted, or may, at any time, adopt for the
benefit of its Employees. Neither the adoption of the Plan by the Board of
Directors nor the submission of the Plan to the stockholders of the Corporation
for approval shall be construed as creating any limitations on the power of the
Board of Directors to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of stock options and the
awarding of stock and cash otherwise than under the Plan, and such arrangements
may be either generally applicable or applicable only in specific cases.

       13.5   Exclusion From Pension and Profit-Sharing Compensation. By
acceptance of an Award (whether in Stock or cash), as applicable, each Holder
shall be deemed to have agreed that the Award is special incentive compensation
that will not be taken into account in any manner as salary, compensation or
bonus in determining the amount of any payment under any pension, retirement or
other employee benefit plan of the Corporation or any Subsidiary. In addition,
each beneficiary of a deceased Holder shall be deemed to have agreed that the
Award will not affect the amount of any life insurance coverage, if any,
provided by the Corporation or a Subsidiary on the life of the Holder that is
payable to the beneficiary under any life insurance plan covering employees of
the Corporation or any Subsidiary.

       13.6   Execution of Receipts and Releases. Any payment of cash or any
issuance or transfer of shares of Stock or other property to the Holder, or to
his legal representative, heir, legatee, or distributee, in accordance with the
provisions hereof, shall, to the extent thereof, be in full satisfaction of all
claims of such persons hereunder. The Committee may require any Holder, legal
representative, heir, legatee, or distributee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as it shall
determine.

       13.7   Unfunded Plan. Insofar as it provides for Awards of cash and
Stock, the Plan shall be unfunded. Although bookkeeping accounts may be
established with respect to Holders who are entitled to cash, Stock, other
property or rights thereto under the Plan, any such accounts shall be used
merely as a bookkeeping convenience. The Corporation shall not be required to
segregate any assets that may at any time be represented by cash, Stock, other
property or rights thereto, nor shall the Plan be construed as providing for
such segregation, nor shall the Corporation nor the Board of Directors nor the
Committee be deemed to be a trustee of any cash, Stock, other property or
rights thereto to be granted under the Plan. Any liability of the Corporation
to any Holder with respect to a grant of cash, Stock, other property or rights
thereto under the Plan shall be based solely upon any contractual obligations
that may be created by the Plan and any Award Agreement; no such obligation of
the Corporation shall be deemed to be secured by any pledge or other
encumbrance on any property of the Corporation. Neither the Corporation nor the
Board of Directors nor the Committee shall be required to give any security or
bond for the performance of any obligation that may be created by the Plan.

       13.8   No Guarantee of Interests. The Board of Directors, the Committee
and the Corporation do not guarantee the Stock of the Corporation from loss or
depreciation.

       13.9   Payment of Expenses. All expenses incident to the administration,
termination, or protection of the Plan, including, but not limited to, legal
and accounting fees, shall be paid by the Corporation or its Subsidiaries;
provided, however, the Corporation or a Subsidiary may recover any and all
damages, fees,





                                      -30-
   31
expenses, and costs arising out of any actions taken by the Corporation to
enforce its right to purchase Stock under this Plan.

       13.10  Corporation Records. Records of the Corporation or its
Subsidiaries regarding the Holder's period of employment, termination of
employment and the reason therefor, leaves of absence, re-employment, and other
matters shall be conclusive for all purposes hereunder, unless determined by
the Committee to be incorrect.

       13.11  Information. The Corporation and its Subsidiaries shall, upon
request or as may be specifically required hereunder, furnish or cause to be
furnished, all of the information or documentation which is necessary or
required by the Committee to perform its duties and functions under the Plan.

       13.12  Corporation Action. Any action required of the Corporation shall
be by resolution of its Board of Directors or by a person authorized to act by
resolution of the Board of Directors.

       13.13  Severability. If any provision of this Plan is held to be illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining provisions hereof, but such provision shall be fully severable and
the Plan shall be construed and enforced as if the illegal or invalid provision
had never been included herein. If any of the terms or provisions of this Plan
conflict with the requirements of Rule 16b-3 (as those terms or provisions are
applied to Eligible Individuals who are subject to Section 16(b) of the
Exchange Act) or Section 422 of the Code (with respect to Incentive Options),
then those conflicting terms or provisions shall be deemed inoperative to the
extent they so conflict with the requirements of Rule 16b-3 or Section 422 of
the Code unless the Committee has determined that the Plan should not comply
with such requirements. With respect to Incentive Options, if this Plan does
not contain any provision required to be included herein under Section 422 of
the Code, that provision shall be deemed to be incorporated herein with the
same force and effect as if that provision had been set out at length herein;
provided, further, that, to the extent any Option that is intended to qualify
as an Incentive Option cannot so qualify, that Option (to that extent) shall be
deemed a Nonstatutory Option for all purposes of the Plan.

       13.14  Notices. Whenever any notice is required or permitted hereunder
other than any Exercise Notice or notice to exercise an Stock Appreciation
Right, such notice must be in writing and personally delivered or sent by mail.
Any such notice required or permitted to be delivered hereunder shall be deemed
to be delivered on the date on which it is personally delivered, or, whether
actually received or not, on the third Business Day after it is deposited in
the United States mail, certified or registered, postage prepaid, addressed to
the person who is to receive it at the address which such person has
theretofore specified by written notice delivered in accordance herewith. The
Corporation or a Holder may change, at any time and from time to time, by
written notice to the other, the address which it or he had previously
specified for receiving notices. Until changed in accordance herewith, the
Corporation and each Holder shall specify as its and his address for receiving
notices the address set forth in the Award Agreement pertaining to the shares
to which such notice relates. Any Exercise Notice or notice to exercise a Stock
Appreciation Right shall be valid only when it is in fact received by the
Corporation or the Person it designates in accordance with procedures that the
Committee may adopt from time to time.

       13.15  Waiver of Notice. Any person entitled to notice hereunder may
waive such notice.

       13.16  Successors. The Plan shall be binding upon the Holder, his legal
representatives, heirs, legatees, and distributees, upon the Corporation, its
successors, and assigns, and upon the Committee, and its successors.





                                      -31-
   32
       13.17  Headings. The titles and headings of Sections and Paragraphs are
included for convenience of reference only and are not to be considered in
construction of the provisions hereof.

       13.18  Governing Law. All questions arising with respect to the
provisions of the Plan shall be determined by application of the laws of the
State of Delaware except to the extent Delaware law is preempted by federal
law. Questions arising with respect to the provisions of an Award Agreement
that are matters of contract law shall be governed by the laws of the state
specified in the Award Agreement, except to the extent Delaware corporate law
conflicts with the contract law of such state, in which event Delaware
corporate law shall govern. The obligation of the Corporation to sell and
deliver Stock hereunder is subject to applicable laws and to the approval of
any governmental authority required in connection with the authorization,
issuance, sale, or delivery of such Stock.

       13.19  Word Usage. Words used in the masculine shall apply to the
feminine where applicable, and wherever the context of this Plan dictates, the
plural shall be read as the singular and the singular as the plural.

       IN WITNESS WHEREOF, Pioneer Natural Resources Company, acting by and
through its officer hereunto duly authorized, has executed this Pioneer Natural
Resources Company Long-term Incentive Plan this 7th day of August, 1997.



                                           PIONEER NATURAL RESOURCES COMPANY




                                           By:     /s/ MARK L. WITHROW
                                              ----------------------------------
                                                       Mark L. Withrow
                                                Executive Vice President and
                                                       General Counsel





                                      -32-
   33
                                EXHIBIT A TO THE
           PIONEER NATURAL RESOURCES COMPANY LONG-TERM INCENTIVE PLAN

                                    FORM OF
                       PIONEER NATURAL RESOURCES COMPANY
                        RESTRICTED STOCK AWARD AGREEMENT
                           FOR NON-EMPLOYEE DIRECTORS

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

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

Dear   ______________

       1.     Restricted Stock Award. Pioneer Natural Resources Company, a
Delaware corporation (the "CORPORATION"), hereby grants to you an aggregate of
______ shares of Common Stock, par value $.01 per share, of the Corporation
(the "RESTRICTED SHARES") pursuant to Section 5 of the Pioneer Natural
Resources Company Long-Term Incentive Plan (the "PLAN"). This award is subject
to your acceptance of and agreement to all of the terms, conditions and
restrictions described in the Plan that are applicable to Awards under Section
5 and to your acceptance of and agreement to the further terms, conditions and
restrictions described in this Restricted Stock Award Agreement (the
"AGREEMENT"). To the extent that any provision of this Agreement conflicts with
the expressly applicable terms of the Plan, you acknowledge and agree that
those terms of the Plan shall control and, if necessary, the applicable
provisions of this Agreement shall be deemed amended so as to carry out the
purpose and intent of the Plan. Terms that have their initial letters
capitalized but that are not otherwise defined in this Agreement shall have the
meanings given them in the Plan in effect as of the date of this Agreement.

       2.     Escrow of Restricted Shares. The Corporation shall issue in your
name a certificate or certificates for the Restricted Shares and retain that
certificate or those certificates during the restriction period. You shall
execute stock powers in blank for those certificates and deliver those stock
powers to the Corporation. You agree that the Corporation shall hold the
Restricted Shares and the related stock powers pursuant to the terms of this
Agreement until such time as the Restricted Shares are either delivered to you
or canceled pursuant to Section 4 of this Agreement.

       3.     Ownership of Restricted Shares. You are entitled to all the
rights of absolute ownership of the Restricted Shares, including the right to
vote those shares and to receive dividends thereon if, as, and when declared by
the Board of Directors of the Corporation, subject, however, to the terms,
conditions and restrictions described in the Plan and in this Agreement.

       4.     Restrictions. Until the restrictions set forth in this Section 4
shall lapse pursuant to Section 5, the Restricted Shares that are still subject
to such restrictions:

              (a)    shall not be sold, assigned, transferred, pledged,
       hypothecated or otherwise disposed of, and

              (b)    shall be returned to the Corporation, and all of your
       rights to those Restricted Shares shall terminate without any payment of
       consideration by the Corporation, if your continuous service as





                                      -33-
   34
       a director of the Corporation shall terminate for any reason, except as
       provided in Section 5(a) or (b). If your interest in any Restricted
       Shares shall terminate pursuant to this Section 4(b), those Restricted
       Shares shall be canceled; provided, however, that the portion, if any,
       of any and all of the Restricted Shares held by you for which
       restrictions have lapsed as of the date of the termination shall survive
       the termination.

       5.     Lapse of Restrictions. Except as set forth in the following
paragraphs of this Section 5, the restrictions set forth in Section 4 shall
lapse with respect to the Restricted Shares in cumulative increments of the
total shares of Stock subject to the Award, with restrictions relating to one-
third of the shares lapsing on ____________________, another one-third lapsing
on _______________, and the last one-third lapsing on __________________, so
long as you have remained a director of the Corporation continuously after the
Date of Grant through each applicable lapse date. The Date of Grant of this
Restricted Stock Award is the date first set forth above.

              (a)    Any provision of Section 4 to the contrary
       notwithstanding, if, having been in the continuous service as a director
       of the Corporation since the Date of Grant of this Restricted Stock
       Award, you shall while in that status die or terminate that status by
       reason of Disability (hereafter defined), then the restrictions set
       forth in Section 4 shall lapse on the date of that event.

              (b)    Notwithstanding any provision of Section 5 or any other
       provision hereunder to the contrary, all of the restrictions set forth
       in Section 4 shall lapse with respect to all Restricted Shares upon and
       simultaneously with any Change in Control of the Corporation.

              (c)    As used in this Section 5, Disability means a physical or
       mental impairment of sufficient severity such that, in the opinion of a
       physician selected by the Corporation, you are unable to continue to
       serve as a director of the Corporation and that in fact results in the
       cessation of your service.

       6.     Agreement Respecting Taxes. You agree that:

              (a)    You will pay to the Corporation, or make arrangements
       satisfactory to the Corporation regarding payment of, any federal, state
       or local taxes of any kind required by law to be withheld by the
       Corporation with respect to the Restricted Shares; provided, however,
       that you shall not be entitled or permitted to satisfy this obligation
       by the Corporation's withholding of Stock that is subject to this
       Agreement or by your transfer of other shares of Stock to the
       Corporation; and

              (b)    the Corporation shall, to the extent permitted by law,
       have the right to deduct from any payments of any kind otherwise due to
       you any federal, state or local taxes of any kind required by law to be
       withheld with respect to those Restricted Shares.

       7.     Adjustment of Shares. The number of shares of Restricted Stock
subject to this Agreement shall be adjusted as provided in Paragraph 10.1 of
the Plan.

       8.     Agreement Respecting Securities Act of 1933. You represent and
agree that you will not sell Restricted Shares except pursuant to an effective
registration statement under the Securities Act of 1933 or pursuant to an
exemption from registration under the Securities Act.

       9.     Restrictive Legend. You hereby acknowledge that the certificate
or certificates for the Restricted Shares bear a legend noted conspicuously
thereon referring to the terms, conditions and restrictions described





                                      -34-
   35
in the Plan and in this Agreement. Any attempt to dispose of any Restricted
Shares in contravention of the terms, conditions and restrictions described in
the Plan or in this Agreement shall be ineffective.

       If you accept this Restricted Stock Award and agree to the foregoing
terms and conditions, please so confirm by signing and returning the duplicate
copy of this Agreement enclosed for that purpose.


                                   Very truly yours,

                                   PIONEER NATURAL RESOURCES COMPANY


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

                     
- ---------------------
[Date]





                                      -35-
   36
       The foregoing Award is accepted by me in ____________ (city),
______________ (state), as of the ___ day of _______ 19____, and I agree to the
terms, conditions and restrictions set forth above and in the Plan.


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

Print Name:                        
           ------------------------

                     
- ---------------------
[Date]





                                      -36-
   1
                                                                    EXHIBIT 5.1




(214) 220-7700                                                  (214) 999-7700


                                September 5, 1997


Pioneer Natural Resources Company
1400 Williams Square West
5205 North O'Connor Boulevard
Irving, Texas  75039

Ladies and Gentlemen:

         We have acted as counsel for Pioneer Natural Resources Company, a
Delaware corporation (the "COMPANY"), in connection with the Company's
registration under the Securities Act of 1933, as amended (the "ACT"), of
3,553,033 shares of common stock, par value $0.01 per share (the "SHARES"), of
the Company pursuant to the Company's Registration Statement on Form S-8 (the
"REGISTRATION STATEMENT") filed with the Securities and Exchange Commission
(the "COMMISSION") on September 5, 1997.

         In reaching the opinions set forth herein, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of such documents and records of the Company and such statutes,
regulations and other instruments as we deemed necessary or advisable for
purposes of this opinion, including (i) the Registration Statement, (ii) the
Restated Certificate of Incorporation of the Company, as filed with the
Secretary of State of the State of Delaware, (iii) the Bylaws of the Company,
and (iv) certain minutes of meetings of, and resolutions adopted by, the Board
of Directors of the Company.

         We have assumed that (i) all information contained in all documents we
reviewed is true, correct and complete, (ii) all signatures on all documents we
reviewed are genuine, (iii) all documents submitted to us as originals are true
and complete, (iv) all documents submitted to us as copies are true and
complete copies of the originals thereof, and (v) all persons executing and
delivering the documents we examined were competent to execute and deliver such
documents. In addition, we have assumed that, upon exercise of the stock
options pursuant to which the Shares will be issued (the "OPTIONS"), (i) the
Shares will be issued in accordance with the Company's Long- Term Incentive
Plan (the "LONG-TERM INCENTIVE PLAN"), (ii) the full consideration for each
Share shall be paid to the Company and in no event will be less than the par
value for each Share, and (iii)

   2


Pioneer Natural Resources Company
September 5, 1997
Page 2


certificates evidencing the Shares will be properly executed and delivered by
the Company in accordance with the Delaware General Corporation Law (the
"DGCL").

         Based on the foregoing, and having due regard for the legal
considerations we deem relevant, we are of the opinion that the Shares, when
issued by the Company upon exercise of the Options in accordance with the
Long-Term Incentive Plan, will be legally issued, fully paid and
non-assessable.

         This opinion is limited in all respects to the laws of the State of
Texas, the DGCL and the federal laws of the United States of America. You
should be aware that we are not admitted to the practice of law in the State of
Delaware.

         This opinion letter may be filed as an exhibit to the Registration
Statement. In giving this consent, we do not thereby admit that we come within
the category of persons whose consent is required under Section 7 of the Act or
the rules and regulations of the Commission promulgated thereunder.

                                        Very truly yours,

                                        /s/ Vinson & Elkins L.L.P.

   1
                                                                   EXHIBIT 23.1



                        CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
Pioneer Natural Resources Company

We consent to the use of our reports incorporated herein by reference.


                                        KPMG PEAT MARWICK LLP

Midland, Texas
September 5, 1997

   1


                                                                    EXHIBIT 23.2



                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our reports
and to all references to our Firm included in or made a part of this
Registration Statement.


                                             ARTHUR ANDERSEN LLP

Dallas, Texas
September 5, 1997
   1
                                                                    EXHIBIT 23.3



                       CONSENT OF INDEPENDENT ACCOUNTANTS


We consent to the incorporation by reference in this Form S-8 registration
statement of Pioneer Natural Resources Company of our report dated July 26,
1996, on our audit of the financial statements of Greenhill Petroleum
Corporation as of June 30, 1996, and for the year ended.


                                        /s/ COOPERS & LYBRAND L.L.P.

                                            Coopers & Lybrand L.L.P.    


Houston, Texas
September 2, 1997

Data Provided by Refinitiv. Minimum 15 minutes delayed.