AMENDMENT NO. 3
                                       TO
                           ATLANTIC RICHFIELD COMPANY
                    STOCK OPTION PLAN FOR OUTSIDE DIRECTORS

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

Pursuant to the authority contained in resolutions adopted by Board of Directors
on March 24, 1997, the Atlantic Richfield Company Stock Option Plan For Outside
Directors (the "Plan") is hereby amended effective as of April 1, 1997.

1.   Section 2.6 of the Plan is amended to read as follows:

          "2.6  "Dividend Share Credits"  means, with respect to a Stock Option
     granted prior to February 24, 1997, the number of units to be recorded as
     credited to an Outside Director, as of the record date established by the
     Board of Directors of the Company for each cash dividend declared on issued
     and outstanding shares of Common Stock, with respect to the Dividend Rights
     held by an Outside Director on such record date.  The number of units
     constituting each Dividend Share Credit shall be the aggregate number
     derived by (i) multiplying the dividend rate declared per share of Common
     Stock by the number of Dividend Rights held by an Outside Director as of
     the dividend record date, and then (ii) dividing the resulting figure by
     the Fair Market Value of a share of Common Stock on such record date."

2.   Section 4 of the Plan is amended to read as follows:

     "Grant of Stock Options
      ----------------------

     There is hereby granted to each Outside Director, effective on the date
     of the adoption of this Plan, a Stock Option to purchase 1,000 shares of
     Common Stock and, further, effective February 24, 1997, there is hereby
     granted to each person who becomes an Outside Director in the future,
     effective on the later of the date 

 
     such person becomes an Outside Director or the date which is 185 days after
     such Outside Director's last sale of ARCO Common Stock, whichever date is
     later, a Stock Option to purchase 2,500 shares of Common Stock, such Stock
     Options being subject to the terms, conditions, purposes and provisions of
     the Plan. No Stock Options may be granted under the Plan after December 31,
     2000."

Executed This 2nd day of October, 1997.

ATTEST:                                ATLANTIC RICHFIELD COMPANY

                      
BY: /s/ Donna McDugan                  BY: /s/ JOHN H. KELLY 
   ---------------------------------      ---------------------------------
                                           JOHN H. KELLY
                                           Senior Vice President
                                           Human Resources

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