<PAGE>

                                                                   EXHIBIT 10.40

                                 BUY.COM INC.
                      SPECIAL EXECUTIVE STOCK OPTION PLAN
                      -----------------------------------

                                  ARTICLE ONE

                              GENERAL PROVISIONS
                              ------------------

I.   PURPOSE OF THE PLAN

     This Special Executive Stock Option Plan is intended to promote the
interests of Buy.com Inc., a Delaware corporation, by providing eligible persons
in the Corporation's employ or service with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary interest, in the
Corporation as an incentive for them to continue in such employ or service.

     Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.

II.  ADMINISTRATION OF THE PLAN

     A.  The Plan shall be administered by the Board.  However, any or all
administrative functions otherwise exercisable by the Board may be delegated to
the Committee.  Members of the Committee shall serve for such period of time as
the Board may determine and shall be subject to removal by the Board at any
time.  The Board may also at any time terminate the functions of the Committee
and reassume all powers and authority previously delegated to the Committee.

     B.  The Plan Administrator shall have full power and authority (subject to
the provisions of the Plan) to establish such rules and regulations as it may
deem appropriate for proper administration of the Plan and to make such
determinations under, and issue such interpretations of, the Plan and any
outstanding options thereunder as it may deem necessary or advisable.  Decisions
of the Plan Administrator shall be final and binding on all parties who have an
interest in the Plan or any option grant thereunder.

     C.  All stock options under the Plan shall be made in compliance with the
applicable requirements of Section 25102(f) of the California Corporations Code
so that the qualification of those securities shall not be required in the State
of California.

III. ELIGIBILITY

     A.  The persons eligible to participate in the Plan shall be limited
solely to (i) Employees who are officers of the Corporation or other highly
compensated individuals and (ii) the non-employee members of the Board.
<PAGE>

     B.  The Plan Administrator shall have full authority to determine which
eligible persons are to receive such grants, the time or times when those grants
are to be made, the number of shares to be covered by each such grant, the
status of the granted option as either an Incentive Option or a Non-Statutory
Option, the time or times when each option is to become exercisable, the vesting
schedule (if any) applicable to the option shares and the maximum term for which
the option is to remain outstanding.


IV.  STOCK SUBJECT TO THE PLAN

     A.  The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock.  The maximum number of shares of Common
Stock which may be issued over the term of the Plan shall not exceed 5,000,000
shares.

     B.  Shares of Common Stock subject to outstanding options shall be
available for subsequent issuance under the Plan to the extent (i) the options
expire or terminate for any reason prior to exercise in full or (ii) the options
are cancelled in accordance with the cancellation-regrant provisions of Article
Two.  Unvested shares issued under the Plan and subsequently repurchased by the
Corporation, at the option exercise price paid per share, pursuant to the
Corporation's repurchase rights under the Plan shall be added back to the number
of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through one or more subsequent option
grants under the Plan.

     C.  Should any change be made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made to (i) the maximum number and/or class of securities issuable under the
Plan and (ii) the number and/or class of securities and the exercise price per
share in effect under each outstanding option in order to prevent the dilution
or enlargement of benefits thereunder.  The adjustments determined by the Plan
Administrator shall be final, binding and conclusive.  In no event shall any
such adjustments be made in connection with the conversion of one or more
outstanding shares of the Corporation's preferred stock into shares of Common
Stock.


                                  ARTICLE TWO

                              OPTION GRANT PROGRAM
                              --------------------

I.   OPTION TERMS

     Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
                                    --------
shall comply with the terms specified below.  Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.

                                       2
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     A.  Exercise Price.
         --------------

         1.  The exercise price per share shall be fixed by the Plan
Administrator, but in no event shall such exercise price per share be less than
eighty-five percent (85%) of the Fair Market Value per share of Common Stock on
the option grant date.

         2.  The exercise price shall become immediately due upon exercise of
the option and shall, subject to the provisions of Section I of Article Four and
the documents evidencing the option, be payable in cash or check made payable to
the Corporation.  Should the Common Stock be registered under Section 12 of the
1934 Act at the time the option is exercised, then the exercise price may also
be paid as follows:

             (i)   in shares of Common Stock held for the requisite period
     necessary to avoid a charge to the Corporation's earnings for financial
     reporting purposes and valued at Fair Market Value on the Exercise Date, or

             (ii)  to the extent the option is exercised for vested shares,
     through a special sale and remittance procedure pursuant to which the
     Optionee shall concurrently provide irrevocable instructions (A) to a
     Corporation-designated brokerage firm to effect the immediate sale of the
     purchased shares and remit to the Corporation, out of the sale proceeds
     available on the settlement date, sufficient funds to cover the aggregate
     exercise price payable for the purchased shares plus all applicable
     Federal, state and local income and employment taxes required to be
     withheld by the Corporation by reason of such exercise and (B) to the
     Corporation to deliver the certificates for the purchased shares directly
     to such brokerage firm in order to complete the sale.

     Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.

     B.  Exercise and Term of Options.  Each option shall be exercisable at
         ----------------------------
such time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option grant. However, no option shall have a term in excess of ten (10)
years measured from the option grant date.

     C.  Effect of Termination of Service.
         --------------------------------
         1.  The following provisions shall govern the exercise of any options
held by the Optionee at the time of cessation of Service or death:

             (i)   Should the Optionee cease to remain in Service for any reason
     other than death, Disability or Misconduct, then the Optionee shall have a
     period of three (3) months following the date of such cessation of Service
     during which to exercise each outstanding option held by such Optionee.

                                       3
<PAGE>

             (ii)  Should Optionee's Service terminate by reason of Disability,
     then the Optionee shall have a period of twelve (12) months following the
     date of such cessation of Service during which to exercise each outstanding
     option held by such Optionee.

             (iii) If the Optionee dies while holding an outstanding option,
     then the personal representative of his or her estate or the person or
     persons to whom the option is transferred pursuant to the Optionee's will
     or the laws of inheritance shall have a twelve (12)-month period following
     the date of the Optionee's death to exercise such option.

             (iv)  Under no circumstances, however, shall any such option be
     exercisable after the specified expiration of the option term.

             (v)   During the applicable post-Service exercise period, the
     option may not be exercised in the aggregate for more than the number of
     vested shares for which the option is exercisable on the date of the
     Optionee's cessation of Service. Upon the expiration of the applicable
     exercise period or (if earlier) upon the expiration of the option term, the
     option shall terminate and cease to be outstanding for any vested shares
     for which the option has not been exercised. However, the option shall,
     immediately upon the Optionee's cessation of Service, terminate and cease
     to be outstanding with respect to any and all option shares for which the
     option is not otherwise at the time exercisable or in which the Optionee is
     not otherwise at that time vested.

             (vi)  Should Optionee's Service be terminated for Misconduct or
     should Optionee otherwise engage in Misconduct while holding one or more
     outstanding options under the Plan, then all outstanding options held by
     the Optionee shall terminate immediately and cease to remain outstanding.

     2.  The Plan Administrator shall have the discretion, exercisable either
at the time an option is granted or at any time while the option remains
outstanding, to:

             (i)   extend the period of time for which the option is to remain
     exercisable following Optionee's cessation of Service or death from the
     limited period otherwise in effect for that option to such greater period
     of time as the Plan Administrator shall deem appropriate, but in no event
     beyond the expiration of the option term, and/or

             (ii)  permit the option to be exercised, during the applicable
     post-Service exercise period, not only with respect to the number of vested
     shares of Common Stock for which such option is exercisable at the time of
     the Optionee's cessation of Service but also with respect to one or more
     additional installments in which the Optionee would have vested under the
     option had the Optionee continued in Service.

                                       4
<PAGE>

     D. Stockholder Rights.  The holder of an option shall have no stockholder
        ------------------
rights with respect to the shares subject to the option until such person shall
have exercised the option, paid the exercise price and become the recordholder
of the purchased shares.

     E. Unvested Shares.  The Plan Administrator shall have the discretion to
        ---------------
grant options which are exercisable for unvested shares of Common Stock. Should
the Optionee cease Service while holding such unvested shares, the Corporation
shall have the right to repurchase, at the exercise price paid per share, any or
all of those unvested shares. The terms upon which such repurchase right shall
be exercisable (including the period and procedure for exercise and the
appropriate vesting schedule for the purchased shares) shall be established by
the Plan Administrator and set forth in the document evidencing such repurchase
right.

     F. First Refusal Rights.  Until such time as the Common Stock is first
        --------------------
registered under Section 12 of the 1934 Act, the Corporation shall have the
right of first refusal with respect to any proposed disposition by the Optionee
(or any successor in interest) of any shares of Common Stock issued under the
Plan. Such right of first refusal shall be exercisable in accordance with the
terms established by the Plan Administrator and set forth in the document
evidencing such right.

     G. Limited Transferability of Options.  During the lifetime of the
        ----------------------------------
Optionee, the option shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by will or by the laws of inheritance
following the Optionee's death.  However, a Non-Statutory Option may be assigned
in whole or in part during the Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established exclusively for one or
more such family members or to the Optionee's former spouse, to the extent such
assignment is in connection with the Optionee's estate plan or pursuant to a
domestic relations order.  The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment.  The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate.

II.  INCENTIVE OPTIONS

     The terms specified below shall be applicable to all Incentive Options.
Except as modified by the provisions of this Section II, all the provisions of
Articles One, Two and Three shall be applicable to Incentive Options. Options
which are specifically designated as Non-Statutory Options shall not be subject
to the terms of this Section II.

     A.  Eligibility.  Incentive Options may only be granted to Employees.
         -----------

     B.  Exercise Price.  The exercise price per share shall not be less than
         --------------
one hundred percent (100%) of the Fair Market Value per share of Common Stock on
the option grant date.

                                       5
<PAGE>

     C.  Dollar Limitation.  The aggregate Fair Market Value of the shares of
         -----------------
Common Stock (determined as of the respective date or dates of grant) for which
one or more options granted to any Employee under the Plan (or any other option
plan of the Corporation or any Parent or Subsidiary) may for the first time
become exercisable as Incentive Options during any one (1) calendar year shall
not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the
Employee holds two (2) or more such options which become exercisable for the
first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.

     D.  10% Stockholder.  If any Employee to whom an Incentive Option is
         ---------------
granted is a 10% Stockholder, then the exercise price paid shall not be less
than the one hundred ten percent (110%) of the Fair Market value per share of
Common Stock on the option grant date and the option term shall not exceed five
(5) years measured from the option grant date.

III. CORPORATE TRANSACTION

     A.  The shares subject to each option outstanding under the Plan at the
time of a Corporate Transaction shall automatically vest in full so that each
such option shall, immediately prior to the effective date of the Corporate
Transaction, become exercisable for all of the shares of Common Stock at the
time subject to that option and may be exercised for any or all of those shares
as fully vested shares of Common Stock.  However, the shares subject to an
outstanding option shall not vest on such an accelerated basis if and to the
extent:  (i) such option is assumed by the successor corporation (or parent
thereof) in the Corporate Transaction and any repurchase rights of the
Corporation with respect to the unvested option shares are concurrently assigned
to such successor corporation (or parent thereof) or (ii) such option is to be
replaced with a cash incentive program of the successor corporation which
preserves the spread existing on the unvested option shares at the time of the
Corporate Transaction and provides for subsequent payout in accordance with the
same vesting schedule applicable to those unvested option shares or (iii) the
acceleration of such option is subject to other limitations imposed by the Plan
Administrator at the time of the option grant.

     B.  All outstanding repurchase rights shall also terminate automatically,
and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction, except to
the extent: (i) those repurchase rights are assigned to the successor
corporation (or parent thereof) in connection with such Corporate Transaction or
(ii) such accelerated vesting is precluded by other limitations imposed by the
Plan Administrator at the time the repurchase right is issued.

     C.  Immediately following the consummation of the Corporate Transaction,
all outstanding options shall terminate and cease to be outstanding, except to
the extent assumed by the successor corporation (or parent thereof).

     D.  Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in

                                       6
<PAGE>

consummation of such Corporate Transaction, had the option been exercised
immediately prior to such Corporate Transaction. Appropriate adjustments shall
also be made to (i) the number and class of securities available for issuance
under the Plan following the consummation of such Corporate Transaction and
(ii) the exercise price payable per share under each outstanding option,
provided the aggregate exercise price payable for such securities shall remain
--------
the same. To the extent the actual holders of the Corporation's outstanding
Common Stock receive cash consideration for their Common Stock in consummation
of the Corporate Transaction, the successor corporation may, in connection with
the assumption of the outstanding options under this Plan, substitute one or
more shares of its own common stock with a fair market value equivalent to the
cash consideration paid per share of Common Stock in such Corporate Transaction.

     E.  The Plan Administrator shall have the discretion, exercisable either
at the time the option is granted or at any time while the option remains
outstanding, to structure one or more options so that those options shall
automatically accelerate and vest in full (and any repurchase rights of the
Corporation with respect to the unvested shares subject to those options shall
immediately terminate) upon the occurrence of a Corporate Transaction, whether
or not those options are to be assumed in the Corporate Transaction.

     F.  The Plan Administrator shall also have full power and authority,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to structure such option so that the shares subject
to that option will automatically vest on an accelerated basis should the
Optionee's Service terminate by reason of an Involuntary Termination within a
designated period (not to exceed eighteen (18) months) following the effective
date of any Corporate Transaction in which the option is assumed and the
repurchase rights applicable to those shares do not otherwise terminate.  Any
option so accelerated shall remain exercisable for the fully vested option
shares until the expiration or sooner termination of the option term.  In
addition, the Plan Administrator may provide that one or more of the
Corporation's outstanding repurchase rights with respect to shares held by the
Optionee at the time of such Involuntary Termination shall immediately terminate
on an accelerated basis, and the shares subject to those terminated rights shall
accordingly vest at that time.

     G.  The portion of any Incentive Option accelerated in connection with a
Corporate Transaction shall remain exercisable as an Incentive Option only to
the extent the applicable One Hundred Thousand Dollar ($100,000) limitation is
not exceeded.  To the extent such dollar limitation is exceeded, the accelerated
portion of such option shall be exercisable as a Non-Statutory Option under the
Federal tax laws.

     H.  The grant of options under the Plan shall in no way affect the right
of the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.

                                       7
<PAGE>

IV.  CANCELLATION AND REGRANT OF OPTIONS

     The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefor new options covering the same or different number of
shares of Common Stock but with an exercise price per share based on the Fair
Market Value per share of Common Stock on the new option grant date.

                                 ARTICLE THREE

                                 MISCELLANEOUS
                                 -------------
I.  FINANCING

    The Plan Administrator may permit any Optionee to pay the option
exercise price by delivering a full-recourse, interest-bearing promissory note
payable in one or more installments and secured by the purchased shares.
However, any promissory note delivered by a consultant must be secured by
collateral in addition to the purchased shares of Common Stock.  In no event may
the maximum credit available to the Optionee exceed the sum of (i) the aggregate
option exercise price payable for the purchased shares plus (ii) any Federal,
state and local income and employment tax liability incurred by the Optionee in
connection with the option exercise.

II.  EFFECTIVE DATE AND TERM OF PLAN

     A.  The Plan shall become effective when adopted by the Board, but no
option granted under the Plan may be exercised, until the Plan is approved by
the Corporation's stockholders.  If such stockholder approval is not obtained
within twelve (12) months after the date of the Board's adoption of the Plan,
then all options previously granted under the Plan shall terminate and cease to
be outstanding, and no further options shall be granted under the Plan.  Subject
to such limitation, the Plan Administrator may grant options under the Plan at
any time after the effective date of the Plan and before the date fixed herein
for termination of the Plan.

     B.  The Plan shall terminate upon the earliest of (i) the expiration of
                                           --------
the ten (10)-year period measured from the date the Plan is adopted by the
Board, (ii) the date on which all shares available for issuance under the Plan
shall have been issued as vested shares or (iii) the termination of all
outstanding options in connection with a Corporate Transaction.  All options
outstanding at the time of a clause (i) termination event shall continue to have
full force and effect in accordance with the provisions of the documents
evidencing those options.

III. AMENDMENT OF THE PLAN

     A.  The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects.  However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
options at the time outstanding under the Plan unless the Optionee consents to
such amendment or modification.  In addition,

                                       8
<PAGE>

certain amendments may require stockholder approval pursuant to applicable laws
and regulations.

     B.  Options may be granted in excess of the number of shares of Common
Stock then available for issuance under the Plan, provided any excess shares
actually issued under the Plan shall be held in escrow until there is obtained
stockholder approval of an amendment sufficiently increasing the number of
shares of Common Stock available for issuance under the Plan.  If such
stockholder approval is not obtained within twelve (12) months after the date
the first such excess grants are made, then (i) any unexercised options granted
on the basis of such excess shares shall terminate and cease to be outstanding
and (ii) the Corporation shall promptly refund to the Optionees the exercise
price paid for any excess shares issued under the Plan and held in escrow,
together with interest (at the applicable Short Term Federal Rate) for the
period the shares were held in escrow, and such shares shall thereupon be
automatically cancelled and cease to be outstanding.

IV.  USE OF PROCEEDS

     Any cash proceeds received by the Corporation from the sale of shares
of Common Stock under the Plan shall be used for general corporate purposes.

V.   WITHHOLDING

     The Corporation's obligation to deliver shares of Common Stock upon
the exercise of any options granted under the Plan shall be subject to the
satisfaction of all applicable Federal, state and local income and employment
tax withholding requirements.

VI.  REGULATORY APPROVALS

     The implementation of the Plan, the granting of any options under the
Plan and the issuance of any shares of Common Stock upon the exercise of any
option shall be subject to the Corporation's procurement of all approvals and
permits required by regulatory authorities having jurisdiction over the Plan and
the options granted under it.

VII. NO EMPLOYMENT OR SERVICE RIGHTS

     Nothing in the Plan shall confer upon the Optionee any right to continue in
Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining such person) or of the Optionee, which rights are hereby
expressly reserved by each, to terminate such person's Service at any time for
any reason, with or without cause.

                                       9
<PAGE>

                                   APPENDIX
                                   --------

     The following definitions shall be in effect under the Plan:

     A.   Board shall mean the Corporation's Board of Directors.
          -----

     B.   Code shall mean the Internal Revenue Code of 1986, as amended.
          ----

     C.   Committee shall mean a committee of two (2) or more Board members
          ---------
appointed by the Board to exercise one or more administrative functions under
the Plan.

     D.  Common Stock shall mean the Corporation's common stock.
         ------------

     E.  Corporate Transaction shall mean either of the following stockholder-
         ---------------------
approved transactions to which the Corporation is a party:

         (i)  a merger or consolidation in which securities possessing more
     than fifty percent (50%) of the total combined voting power of the
     Corporation's outstanding securities are transferred to a person or persons
     different from the persons holding those securities immediately prior to
     such transaction, or

         (ii) the sale, transfer or other disposition of all or substantially
     all of the Corporation's assets in complete liquidation or dissolution of
     the Corporation.

     F.  Corporation shall mean Buy.com Inc., a Delaware corporation, and
         -----------
any successor corporation to all or substantially all of the assets or voting
stock of Buy.com Inc. which shall by appropriate action adopt the Plan.

     G.  Disability shall mean the inability of the Optionee to engage in
         ----------
any substantial gainful activity by reason of any medically determinable
physical or mental impairment and shall be determined by the Plan Administrator
on the basis of such medical evidence as the Plan Administrator deems warranted
under the circumstances.

     H.  Employee shall mean an individual who is in the employ of the
         --------
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

     I.  Exercise Date shall mean the date on which the Corporation shall
         -------------
have received written notice of the option exercise.

                                      A-1
<PAGE>

     J.  Fair Market Value per share of Common Stock on any relevant date shall
         -----------------
be determined in accordance with the following provisions:

         (i)   If the Common Stock is at the time traded on the Nasdaq National
     Market, then the Fair Market Value shall be the closing selling price per
     share of Common Stock on the date in question, as such price is reported by
     the National Association of Securities Dealers on the Nasdaq National
     Market. If there is no closing selling price for the Common Stock on the
     date in question, then the Fair Market Value shall be the closing selling
     price on the last preceding date for which such quotation exists.

         (ii)  If the Common Stock is at the time listed on any Stock Exchange,
     then the Fair Market Value shall be the closing selling price per share of
     Common Stock on the date in question on the Stock Exchange determined by
     the Plan Administrator to be the primary market for the Common Stock, as
     such price is officially quoted in the composite tape of transactions on
     such exchange. If there is no closing selling price for the Common Stock on
     the date in question, then the Fair Market Value shall be the closing
     selling price on the last preceding date for which such quotation exists.

         (iii) If the Common Stock is at the time neither listed on any Stock
     Exchange nor traded on the Nasdaq National Market, then the Fair Market
     Value shall be determined by the Plan Administrator after taking into
     account such factors as the Plan Administrator shall deem appropriate.

     K.  Incentive Option shall mean an option which satisfies the
         ----------------
requirements of Code Section 422.

     L.  Involuntary Termination shall mean the termination of the Service
         -----------------------
of any individual which occurs by reason of:

         (i)   such individual's involuntary dismissal or discharge by the
     Corporation for reasons other than Misconduct, or

         (ii)  such individual's voluntary resignation following (A) a change
     in his or her position with the Corporation which materially reduces his or
     her duties and responsibilities or the level of management to which he or
     she reports, (B) a reduction in his or her level of compensation (including
     base salary, fringe benefits and target bonus under any corporate-
     performance based bonus or incentive programs) by more than fifteen percent
     (15%) or (C) a relocation of such individual's place of employment by more
     than fifty (50) miles, provided and only if such change, reduction or
     relocation is effected without the individual's consent.


                                      A-2
<PAGE>

     M.  Misconduct shall mean the commission of any act of fraud, embezzlement
         ----------
or dishonesty by the Optionee, any unauthorized use or disclosure by such person
of confidential information or trade secrets of the Corporation (or any Parent
or Subsidiary), or any other intentional misconduct by such person adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not be deemed
to be inclusive of all the acts or omissions which the Corporation (or any
Parent or Subsidiary) may consider as grounds for the dismissal or discharge of
any Optionee or other person in the Service of the Corporation (or any Parent or
Subsidiary).

     N.  1934 Act shall mean the Securities Exchange Act of 1934, as amended.
         --------

     O.  Non-Statutory Option shall mean an option not intended to satisfy
         --------------------
the requirements of Code Section 422.

     P.  Optionee shall mean any person to whom an option is granted under
         --------
the Plan.

     Q.  Parent shall mean any corporation (other than the Corporation) in
         ------
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

     R.  Plan shall mean the Corporation's Special Executive Stock Option
         ----
Plan, as set forth in this document.

     S.  Plan Administrator shall mean either the Board or the Committee
         ------------------
acting in its capacity as administrator of the Plan.

     T.  Service shall mean the provision of services to the Corporation
         -------
(or any Parent or Subsidiary) by a person in the capacity of an Employee or a
nonemployee member of the board of directors, except to the extent otherwise
specifically provided in the documents evidencing the option grant.

     U.  Stock Exchange shall mean either the American Stock Exchange or the
         --------------
New York Stock Exchange.

     V.  Subsidiary shall mean any corporation (other than the Corporation) in
         ----------
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

     W.  10% Stockholder shall mean the owner of stock (as determined under
         ---------------
Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).

                                      A-3