When Phil gets a chance to write his own series for the network, he doesn't hesitate to quit the Larry Sanders Show. And though Phil claims his doctor insisted he take some time off for health reasons, both Arthur and Larry know he's lying. Meanwhile, when Larry buys Arthur an expensive pen, Hank wonders what Larry is going to get him.
When Arthur loses his pen, he's forced to cover with Larry as he searches for it. Priming Larry for a gift of his own, Hank is delighted when Arthur tells him that all he got was a cheap travel alarm clock. However, Hank is unaware that the pen he found on the men's room floor was the expensive model Arthur bought for their boss. Meanwhile, during a meeting with a pair of young network executives, it isn't long before Phil's script has been completely revised to suit actor Dave Chappelle.
As Arthur enlists Beverly in an effort to replace the pen, Hank unwittingly turns it over to Sid. After Beverly spends $10,000 on one she suspects is just like the one he lost, Arthur feels responsible for buying a gift of equal value and sends her to get an original piece of artwork he knows Larry likes. But only after Beverly spends $19,000 on the wrong picture does Arthur learn that the pen Larry bought cost only $500. Finally, after Phil's project is killed, he returns to his old job, but not before Arthur and Larry press him to tell the truth about why he left in the first place.