FIFTH AMENDMENT TO

                           SEAGULL ENERGY CORPORATION

                            MANAGEMENT STABILITY PLAN

         WHEREAS,  SEAGULL  ENERGY  CORPORATION  (the  "Company") has heretofore
adopted and  currently  maintains  the  SEAGULL  ENERGY  CORPORATION  MANAGEMENT
STABILITY PLAN (the "Plan"); and

         WHEREAS, the Company desires to amend the Plan in certain respects;

         NOW, THEREFORE, the Plan is hereby amended as follows,  effective as of
March 29, 1999:

         1. Section 1.1(n) of the Plan shall be deleted and the following  shall
be substituted therefor:

                  "(n)     'Involuntary Termination' shall mean any termination 
                           of a Covered Employee's employment with the Employer 

                           which:

                           (1) does not result from a voluntary  resignation  by
                  the Covered  Employee  (other than a  resignation  pursuant to
                  Clause (2) of this Section 1.1(n)); or

                           (2) results from a resignation by a Covered  Employee
                  on or before  the date  which is sixty days after the date the
                  Covered Employee receives notice of a Change in Duties;

         provided,  however,  that the term 'Involuntary  Termination' shall not
         include a Termination for Cause, a termination of a Covered  Employee's
         employment  occurring as a result of or in connection  with the sale or
         other divestiture by the Employer of a division,  subsidiary,  or other
         business segment (including,  without limitation, a divestiture by sale
         of shares of stock or of assets) if such  Covered  Employee  is offered
         continued   employment  by  the  acquiror  of  such  business   segment
         immediately  upon such sale or  divestiture,  or any  termination  as a
         result of a Covered  Employee's death,  disability under  circumstances
         entitling him to benefits  under the  Employer's  long-term  disability
         plan or Retirement."

         2. As amended hereby, the Plan is specifically ratified and reaffirmed.

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         EXECUTED this _________ day of March, 1999.

                           SEAGULL ENERGY CORPORATION

                                       By:

                                      Name:

                                     Title:

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