AMENDMENT NO. 11
TO
ATLANTIC RICHFIELD COMPANY
1985 EXECUTIVE LONG-TERM INCENTIVE PLAN
______________________________________
Pursuant to the power of amendment reserved therein, the
following amendment is hereby made to the Atlantic Richfield
Company 1985 Executive Long-Term Incentive Plan (the "Plan"),
effective as of July 28, 1997.
1. Article I, Subsections 2(c), (d), (s), (w), (aa), (cc) and
(gg) of the Plan are amended to read as follows:
"(c) "Committee" means the Organization and
Compensation Committee of the Board."
"(d) "Common Stock" means the common stock of ARCO
having a par value of $2.50 per share."
"(s) "Restriction Period" means the period specified by
the Subcommittee at the time of grant of Restricted Stock
during which the restriction and forfeitability conditions
described under Section 2 of Article III apply."
"(w) "Subsidiary" means any corporation, the majority
of the voting stock of which, or any partnership or joint
venture, the majority of the profits interest or capital
interest of which, is owned directly or indirectly by ARCO
or a member of the Comparison Group, as applicable."
"(aa) "Anticipatory Change of Control" means (i)
the execution of an agreement or a written document which,
if the subject thereof were consummated, would result in a
Change of Control; (ii) a public announcement by any Person,
including ARCO, of an intent to take an action(s) which, if
consummated, would result in a Change of Control; or (iii)
the delivery of a signed, written statement to the Trustee
of the Change of Control Trust and ARCO's Independent
Auditor by the Chief Financial Officer of ARCO and General
Counsel of ARCO that an Anticipatory Change of Control is in
effect, provided that, with respect to any of the above
three circumstances, the Anticipatory Change of Control
shall not be effective until approved by either the Board or
the Executive Committee of the Board."
"(cc) "Change of Control Trust" means the trust
established by ARCO to provide for the payment of any
benefits, in whatever form is required, under this Plan on
and after a Change of Control."
"(gg) "Special Plan Administrator" means the entity
designated in the Change of Control Trust as having full
Administrative powers under Article I, Section 3 of this Plan
on and after a Change of Control, including, but not limited
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to, all interpretive and decision powers reserved to
the Committee or the Subcommittee prior to a Change of
Control."
2. Article I, Subsections 2(hh) and 2(ii) are added to the Plan
to read as follows:
"(hh) "Board" means the Board of Directors of ARCO
established by the Articles of Incorporation of ARCO.
(ii) "Executive Committee" means the Executive
Committee of the Board as established by the Board of
Directors of ARCO."
3. Article I, Subsections 3(c) and (d) of the Plan are amended
to read as follows:
"(c) No member of the Committee or Subcommittee, as
applicable, shall be personally liable by reason of any
contract or other instrument executed by such member, or on
such member's behalf, in such member's capacity as a member
of the Committee or Subcommittee nor for any mistake of
judgment made in good faith, and the Company shall indemnify
and hold harmless each member of the Committee or
Subcommittee, as applicable, and each other officer,
employee or director of the Company to whom any duty or
power relating to the administration or interpretation of
the Plan has been delegated, against any cost or expense
(including counsel fees) or liability (including any sum
paid in settlement of a claim with the approval of the
Committee or Subcommittee) arising out of any act or
omission in connection with the Plan unless arising out of
such person's own fraud or bad faith.
(d) Subject to the terms and limitations of Subsection
1(a) of Article II and Section 1 of Article III of the Plan,
the Committee or Subcommittee, as applicable, may at the
time of the annual grants, make adjustments within the Total
Investment Value applicable to all Eligible Employees
provided that any reallocation resulting from changes in
individual grants may be made only to Eligible Employees in
the same Salary Grade Level as the affected individuals, so
that the Total Investment Value by Salary Grade Level may
not be exceeded."
4. Article II, Section 2(d)(i) of the Plan is amended to read
as follows:
"(i) If an optionee's Employment is terminated prior to
entitlement to exercise all or a portion of a grant of Stock
Options, the optionee will be entitled to exercise all of
his or her outstanding Stock Options during the remainder of
the term of the Stock Options, if the optionee's termination
is due to (1) total and permanent disability, (2)
termination, other than for cause, with a right to an
immediate allowance under a retirement plan of the Company,
or (3) involuntary termination, other than for cause."
5. Article III, Subsection 5(c) of the Plan is amended to read
as follows:
"(c) If, prior to the end of a Performance Period, a
grantee of Contingent Restricted Stock terminates Employment
due to death, the designated beneficiary
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of the grantee or, absent a beneficiary designation, his or
her estate, shall be paid the value determined under Subsection
5(a) of this Article III based on the Company's Performance
Ranking for the year of the Performance Period which ends closest
to the grantee's death, with payment to be made in shares of Common
Stock as soon as practicable following the end of such year
of the Performance Period."
6. Article V, Section 1 of the Plan is amended to read as follows:
"(a) The number of shares of Common Stock upon which
Stock Options may be granted or which may be the subject of
a grant of Restricted Stock or Performance-Based Restricted
Stock during a calendar year shall be eight-tenths of one
percent (0.8%) of the total issued and outstanding shares of
Common Stock as of December 31 of the immediately preceding
calendar year. Any shares of Common Stock available for
grant that are not made the subject of a grant during a
calendar year, or portion thereof, will be available for
grant in any subsequent year, or portion thereof, until the
end of the term of the Plan. The number of available shares
described in the preceding sentences is subject to
adjustment as provided in Section 2 of this Article V. The
shares shall be made available from authorized Common Stock,
issued or unissued, or from Common Stock issued and held in
the treasury of the Company as shall be determined by the
Committee. Shares of Common Stock subject to Stock Options,
shares of Restricted Stock and shares of Performance-Based
Restricted Stock that are canceled pursuant to Subsection
2(d) of Article II, Section 2 of Article III or Section 5 of
Article III of the Plan may be reallocated under the Plan.
(b) No individual may be granted more than 500,000
shares of Restricted Stock, Performance-Based Restricted
Stock and/or Stock Options, regardless of the combination,
in any calendar year."
7. Article III, Subsection 3(b)(v)(2) of the Plan is amended to
read as follows:
"(2) If a Change of Control under Article I, Section
2(b)(ii), other than by reason of the application of
Footnote 2, occurs, and a grantee of Contingent Restricted
Stock is terminated by the Company after a Person attains an
ownership level of 25 percent but before a Change of Control
occurs for any other reason or any Person attains an
ownership level of 40 percent or more of the Outstanding
Shares of Stock of the Company or the corporation resulting
from a Business Combination, as defined in Article I,
Section 2(b)(i), any actual award of Performance-Based
Restricted Stock to which the grantee would otherwise be
entitled, based on the Company's performance ranking as of
the earlier of (A) the end of the Performance Period, or (B)
the occurrence of a Change of Control by reason of the
application of Footnote 2 to Article I, Section 2(b)(ii),
shall be multiplied by a fraction, the numerator of which is
the number of completed months (or fraction thereof) of the
Performance Period as of the grantee's date of termination
and the denominator of which is the number of
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months in such Performance Period, with payment to be made
in shares of Common Stock."
Executed this 5th day of November, 1998.
ATTEST ATLANTIC RICHFIELD COMPANY
/s/ ARMINEH SIMONIAN /s/ JOHN H. KELLY
BY: ______________________ BY: _________________________
John H. Kelly
Senior Vice President
Human Resources
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