Thomas F. Gallagher


                      CHANGE OF CONTROL SEVERANCE AGREEMENT

         THIS AGREEMENT  between  HomeBase,  Inc., a Delaware  corporation  (the
Company), and Thomas F. Gallagher (Executive),  dated as of August 21, 2001 (the
Effective Date).

         Executive  is a key  executive  of the Company or a  Subsidiary  and an
integral part of its management.

         The Company  recognizes  that the possibility of a change of control of
the Company may result in the  departure or  distraction  of  management  to the
detriment of the Company and its shareholders.

         The  Company  wishes  to  assure  Executive  of fair  severance  should
Executive's employment terminate in specified  circumstances  following a change
of control of the Company and to assure Executive of certain other benefits upon
a change of control.

         In consideration of Executive's  continued  employment with the Company
or a Subsidiary and other good and valuable consideration,  the parties agree as
follows:

         1.  Benefits Upon Change of Control.

         1.1 In General.  Within 30 days following a Change of Control,  whether
or not  Executive's  employment  has been  terminated,  the Company shall pay to
Executive the following in a lump sum:

          (a) an  amount  equal  to  the  "Target  Bonus"  under  the  Company's
         Management  Incentive Plan or any other annual  incentive plan which is
         applicable  to  Executive  for the  fiscal  year in which the Change of
         Control  occurs  (or if the  Target  Bonus is  reduced  within 180 days
         before the  commencement  of a Standstill  Period,  the "Target  Bonus"
         applicable  to  Executive  for the fiscal year in which such  reduction
         occurred); and



          (b) if Executive is a participant  in a  performance-based  long-range
         incentive plan at the Change of Control,  such amount as is required to
         be  paid  to  Executive  upon  a  Change  of  Control  pursuant  to the
         provisions of such plan.

         1.2 Benefits Following Qualified  Termination of Employment.  Executive
shall be entitled to the following benefits upon a Qualified Termination:

                  (a)  Within 30 days  following  the Date of  Termination,  the
Company shall pay to Executive the following in a lump sum:

                           (i) an  amount  equal to 2.5 times  Executive's  Base
                           Salary for one year at the rate in effect immediately
                           prior to the Date of  Termination  or the  Change  of
                           Control  (or if  Executive's  Base Salary was reduced
                           within  180  days  before  the   commencement   of  a
                           Standstill  Period,  the rate in  effect  immediately
                           prior to such reduction), plus the accrued and unpaid
                           portion of  Executive's  Base Salary through the Date
                           of Termination.  Any payments made to Executive under
                           any long term  disability  plan of the  Company  with
                           respect  to the 2.5 years  following  termination  of
                           employment  shall be  offset  against  such 2.5 times
                           Base Salary  payment.  Executive  shall promptly make
                           reimbursement  payments  to the Company to the extent
                           any such  disability  payments are received after the
                           Base Salary payment; and

                           (ii)  an  amount  equal  to  2.5  times   Executive's
                           automobile  allowance  for one  year  at the  rate in
                           effect  immediately  prior to the Date of Termination
                           or the  Change  of  Control,  (or if such  automobile
                           allowance  was  reduced  within  180 days  before the
                           commencement  of a  Standstill  Period,  the  rate in
                           effect  immediately  prior to such  reduction  unless
                           such  reduction  was  offset by an  increase  in Base
                           Salary during such 180-day period),  plus any portion
                           of  Executive's   automobile  allowance  payable  but
                           unpaid through the Date of Termination; and


                           (iii) an amount equal to the Target Bonus amount,  as
                           defined and determined under Section 1.1(a) above.

         (b)(i)  Until the day 30  months  after  the Date of  Termination,  the
Company  shall  maintain in full force and effect for the  continued  benefit of
Executive and Executive's family all life insurance and medical insurance (other
than long-term disability) plans and programs in which Executive was entitled to
participate  immediately prior to the Change of Control (or if Executive's title
was changed to a level below that of  Executive's  Current Title within 180 days
before the commencement of a Standstill  Period,  all such plans and programs in
which Executive was entitled to participate immediately prior to such change, if
the benefits  thereunder  are  greater),  provided  that  Executive's  continued
participation  is possible  under the general terms and provisions of such plans
and programs.  In the event that  participation in such plans or programs is not
available to Executive for any reason,  including  termination  of the plan, the
Company shall arrange upon comparable  terms to provide  Executive with benefits
substantially similar to those which Executive is entitled to receive under such
plans and programs.  Notwithstanding  the foregoing,  the Company's  obligations
hereunder with respect to life insurance or medical insurance plans and programs
shall be deemed  satisfied  to the extent  (but only to the  extent) of any such
insurance coverage or benefits provided by another employer.

         (b)(ii) If Qualified  Termination  occurs by reason of Disability,  the
Company  shall  maintain in full force and effect for the  continued  benefit of
Executive,  disability benefits and/or disability insurance at the same level to
which Executive was entitled immediately prior to the Qualified Termination.

         1.3  Coordination  With Certain Tax Rules.  Payments under Sections 1.1
and 1.2  shall be made  without  regard to  whether  the  deductibility  of such
payments  (or any other  payments to or for the benefit of  Executive)  would be
limited or precluded by Internal Revenue Code Section 280G and without regard to
whether such payments (or any other  payments)  would  subject  Executive to the
federal excise tax levied on certain "excess parachute  payments" under Internal
Revenue Code Section 4999; provided, that if the total of all payments to or for
the benefit of  Executive(including  acceleration  of vesting of benefits  under
existing  plans),  after  reduction  for all federal  taxes  (including  the tax
described in Internal  Revenue Code Section 4999, if applicable) with respect to
such payments  ("Executive's total after-tax  payments"),  would be increased by
the limitation or elimination of any payment under Sections 1.1 or 1.2,  amounts
payable under  Sections 1.1 and 1.2 shall be reduced to the extent,  and only to
the extent,  necessary to maximize  Executive's  total after-tax  payments.  The
determination  as to whether and to what extent  payments  under Sections 1.1 or
1.2 are required to be reduced in accordance  with the preceding  sentence shall
be made at the Company's expense by PricewaterhouseCoopers  LLP or by such other
certified public accounting firm as the Executive  Compensation Committee of the
Company's Board of Directors may designate prior to a Change of Control.  In the
event  of  any  underpayment  or  overpayment  under  Sections  1.1 or  1.2,  as
determined  by  PricewaterhouseCoopers  LLP (or such other firm as may have been
designated  in  accordance  with the  preceding  sentence),  the  amount of such
underpayment or overpayment  shall forthwith be paid to Executive or refunded to
the Company,  as the case may be, with interest at the  applicable  Federal rate
provided for in Section 7872(f)(2) of the Internal Revenue Code.

         2. Noncompetition;  No Mitigation of Damages; Other Severance Payments;
Withholding.

         2.1  Noncompetition.  Upon a Qualified  Termination,  any  agreement by
Executive  not to engage  in  competition  with the  Company  subsequent  to the
termination  of  Executive's  employment,  whether  contained  in an  employment
contract or other agreement, shall no longer be effective.

         2.2 No  Duty to  Mitigate  Damages.  Executive's  benefits  under  this
Agreement shall be considered severance pay in consideration of Executive's past
service and Executive's  continued service from the date of this Agreement,  and
Executive's  entitlement  thereto  shall  neither  be  governed  by any  duty to
mitigate  Executive's  damages by seeking  further  employment nor offset by any
compensation which Executive may receive from future employment.

         2.3 Other  Severance  Payments.  In the  event  that  Executive  has an
employment  contract or any other  agreement  with the Company (or a Subsidiary)
which  entitles   Executive  to  severance  payments  upon  the  termination  of
Executive's  employment  with the  Company,  the  amount  of any such  severance
payments shall be deducted from the payments to be made under this Agreement.

         2.4 Withholding. Anything to the contrary notwithstanding, all payments
required to be made by the Company  hereunder to  Executive  shall be subject to
the  withholding  of such  amounts,  if any,  relating to tax and other  payroll
deductions as the Company may reasonably  determine it should withhold  pursuant
to any applicable law or regulation.

         3. Arbitration.  Any controversy or claim arising out of or relating to
this  Agreement,  or  the  breach  thereof,  shall  be  settled  exclusively  by
arbitration  in Los  Angeles,  California  in  accordance  with  the  Commercial
Arbitration Rules of the American  Arbitration  Association then in effect,  and
judgment  upon the award  rendered  by the  arbitrator(s)  may be entered in any
court having jurisdiction thereof.

         4. Legal Fees and  Expenses.  The Company  shall pay all legal fees and
expenses, including but not limited to counsel fees, stenographer fees, printing
costs, etc. reasonably incurred by Executive in contesting or disputing that the
termination of Executive's employment during a Standstill Period is for Cause or
other than for good  reason (as  defined  in  paragraph  (j) of Exhibit A) or in
obtaining  any right or  benefit  to which  Executive  is  entitled  under  this
Agreement.  Any amount  payable under this  Agreement  that is not paid when due
shall accrue  interest at the prime rate as from time to time in effect at Wells
Fargo Bank, N.A., or its successors or assigns, until paid in full.

         5.  Notice of  Termination.  During a  Standstill  Period,  Executive's
employment may be terminated by the Company (or a Subsidiary) only upon 30 days'
written notice to Executive.

         6.  Notices.  All notices shall be in writing and shall be deemed given
five days after  mailing  in the  continental  United  States by  registered  or
certified  mail, or upon personal  receipt after  delivery,  telex,  telecopy or
telegram,  to the party entitled  thereto at the address stated below or to such
changed address as the addressee may have given by a similar notice:


         To the Company:   HomeBase, Inc.
                           3345 Michelson Drive
                           Irvine, CA 92612
                           Attention: General Counsel

         To Executive:     At Executive's home address, as last
                           shown on the records of the Company


         7.  Severability.  In the event that any  provision  of this  Agreement
shall be  determined to be invalid or  unenforceable,  such  provision  shall be
enforceable in any other  jurisdiction in which valid and enforceable and in any
event the  remaining  provisions  shall  remain in full  force and effect to the
fullest extent permitted by law.

         8.  General Provisions.

         8.1 Binding  Agreement.  This Agreement shall be binding upon and inure
to the benefit of the  parties and be  enforceable  by  Executive's  personal or
legal  representatives or successors.  If Executive dies while any amounts would
still be payable to  Executive  hereunder,  benefits  would still be provided to
Executive's  family  hereunder or rights would still be exercisable by Executive
hereunder if Executive  had  continued  to live,  such amounts  shall be paid to
Executive's  estate,  such benefits shall be provided to Executive's  family and
such rights shall remain  exercisable by Executive's  estate in accordance  with
the terms of this Agreement. This Agreement shall not otherwise be assignable by
Executive.

         8.2  Successors.  This Agreement shall inure to and be binding upon the
Company's successors, including any successor to all or substantially all of the
Company's  business and/or assets. The Company will require any successor to all
or  substantially  all of the  business  and/or  assets of the  Company by sale,
merger (where the Company is not the surviving corporation), lease or otherwise,
by  agreement  in form  and  substance  satisfactory  to  Executive,  to  assume
expressly this  Agreement.  If the Company shall not obtain such agreement prior
to the effective date of any such  succession,  Executive  shall have all rights
resulting from termination by Executive for good reason (as defined in paragraph
(j) of Exhibit A) under this  Agreement.  This Agreement  shall not otherwise be
assignable by the Company.


         8.3  Amendment  or  Modification;  Waiver.  This  Agreement  may not be
amended  unless agreed to in writing by Executive and the Company.  No waiver by
either  party of any  breach  of this  Agreement  shall be  deemed a waiver of a
subsequent breach.

         8.4  Titles.  No provision of this Agreement is to be construed by
reference to the title of any section.


         8.5 Continued  Employment.  This Agreement shall not give Executive any
right of continued  employment or any right to compensation or benefits from the
Company or any Subsidiary except the right specifically stated herein to certain
severance  and  other  benefits,  and  shall  not  limit  the  Company's  (or  a
Subsidiary's)  right  to  change  the  terms  of  or  to  terminate  Executive's
employment,  with or without  Cause,  at any time other than during a Standstill
Period,  except as may be otherwise provided in a written  employment  agreement
between the Company (or a Subsidiary) and Executive.

         8.6  Termination  of  Agreement  Outside  of  Standstill  Period.  This
Agreement shall be  automatically  terminated upon the first to occur of (i) the
date  five  (5)  years  after  the  Effective  Date of this  Agreement  unless a
Standstill  Period is in effect on such  date,  in which  case such  termination
shall  occur  upon  the  expiration  of  such  Standstill  Period  or  (ii)  the
termination  of  Executive's  employment  for any reason,  whether  voluntary or
involuntary,  at any time other  than  during a  Standstill  Period or (iii) the
180th  day  after  a  change  in  Executive's  title  to a level  below  that of
Executive's  Current Title unless a Standstill  Period was in effect on the date
of such change or within 180 days thereafter or (iv) if Executive is employed by
a Subsidiary of the Company,  the date on which the Subsidiary  either ceases to
be a  Subsidiary  of the  Company  or  sells  or  otherwise  disposes  of all or
substantially  all of its assets,  unless such event occurs  during a Standstill
Period and  Executive's  employment  shall have been  terminated  in a Qualified
Termination within 90 days of such event.

         8.7 Prior  Agreement.  This  Agreement  amends and  restates  and shall
supersede and replace any prior change of control  severance  agreement  between
the Company or any of its subsidiaries, or any predecessor, and Executive.

         8.8 Definitions.  The terms defined in Exhibits A and B hereto are used
herein as so defined.

         8.9  Governing  Law.  The  validity,  interpretation,  performance  and
enforcement  of this  Agreement  shall be  governed  by the laws of the State of
California.

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the day and year first above written.

                                                   HOMEBASE, INC.


                                                   /s/HERBERT J. ZARKIN
                                                   -----------------------------
                                                   By: Herbert J. Zarkin


                                                   Executive:

                                                   /s/THOMAS F. GALLAGHER
                                                   -----------------------------
                                                   Thomas F. Gallagher


<PAGE>


                                    EXHIBIT A

                                   Definitions

             The  following  terms  as used in this  Agreement  shall  have  the
    following meanings:

             (a) "Base  Salary"  shall  mean  Executive's  annual  base  salary,
    exclusive of any bonus or other benefits Executive may receive.

             (b) "Cause" shall mean  dishonesty,  conviction of a felony,  gross
    neglect  of duties  (other  than as a result of  Incapacity,  Disability  or
    death),  or conflict of interest  which  conflict shall continue for 30 days
    after the Company gives written notice to Executive requesting the cessation
    of such conflict.

             In respect of any termination during a Standstill Period, Executive
    shall not be deemed to have  been  terminated  for Cause  until the later to
    occur of (i) the 30th day after notice of  termination is given and (ii) the
    delivery  to  Executive  of a  copy  of a  resolution  duly  adopted  by the
    affirmative vote of not less than a majority of the Company's directors at a
    meeting  called  and held for  that  purpose  (after  reasonable  notice  to
    Executive),  and at which  Executive  together with his counsel was given an
    opportunity  to be heard,  finding  that  Executive  was  guilty of  conduct
    described in the definition of "Cause" above, and specifying the particulars
    thereof in detail; provided, however, that the Company may suspend Executive
    and withhold payment of Executive's Base Salary from the date that notice of
    termination  is given  until the  earliest  to occur of (a)  termination  of
    Executive for Cause effected in accordance with the foregoing procedures (in
    which case Executive  shall not be entitled to  Executive's  Base Salary for
    such period),  (b) a determination by a majority of the Company's  directors
    that Executive was not guilty of the conduct  described in the definition of
    "Cause" above (in which case  Executive  shall be reinstated and paid any of
    Executive's  previously unpaid Base Salary for such period), or (c) the 90th
    day after notice of termination  is given (in which case Executive  shall be
    reinstated  and paid any of  Executive's  previously  unpaid Base Salary for
    such period).

             (c) "Change of Control" shall have the meaning set forth in Exhibit
    B.

             (d) "Company" shall mean HomeBase, Inc. or any successor.

             (e) "Current  Title" shall mean  Executive's  title on the date 180
    days prior to the commencement of a Standstill Period.

             (f) "Date of Termination"  shall mean the date on which Executive's
    employment is terminated.

             (g)  "Disability"  shall have the meaning given it in the Company's
    long-term  disability  plan.  Executive's  employment  shall be deemed to be
    terminated  for  Disability  on the date on which  Executive  is entitled to
    receive  long-term  disability   compensation  pursuant  to  such  long-term
    disability plan.

         (h) "Executive" shall have the meaning set forth in the first paragraph
    of this Agreement.

             (i)  "Incapacity"  shall mean a disability  (other than  Disability
    within  the  meaning  of the  immediately  preceding  definition)  or  other
    impairment of health that renders  Executive  unable to perform  Executive's
    duties  to the  reasonable  satisfaction  of the Board of  Directors  of the
    Company.  If  by  reason  of  Incapacity  Executive  is  unable  to  perform
    Executive's  duties for at least six  months in any  12-month  period,  upon
    written notice by the Company the employment of Executive shall be deemed to
    have terminated by reason of Incapacity.

             (j)  "Qualified   Termination"   shall  mean  the   termination  of
    Executive's  employment  during a Standstill Period (1) by the Company other
    than for Cause,  or (2) by Executive  for good  reason,  or (3) by reason of
    death, Incapacity or Disability.

             For  purposes of this  definition,  termination  for "good  reason"
    shall mean the voluntary termination by Executive of Executive's  employment
    (A) within 120 days after the occurrence without Executive's express written
    consent of any of the events  described in clauses (I), (II),  (III),  (IV),
    (V) or (VI) below,  provided that  Executive  gives notice to the Company at
    least 30 days in advance  requesting  that the situation  described in those
    clauses be remedied, and the situation remains unremedied upon expiration of
    such  30-day  period;  (B)  within  120 days  after the  occurrence  without
    Executive's  express  written  consent (which must  expressly  refer to such
    consent as being  given under this  Agreement)  of the events  described  in
    clauses (VII) or (VIII) below,  provided that Executive  gives notice to the
    Company at least 30 days in advance;  or (C) upon  occurrence  of the events
    described in clause(IX)  below,  provided that Executive gives notice to the
    Company at least 30 days in advance:

             (I)      the assignment to Executive of any duties inconsistent
                      with Executive's positions, duties, responsibilities,
                      reporting requirements, and status with the Company (or a
                      Subsidiary) immediately prior to a Change of Control, or a
                      substantive change in Executive's titles or offices as in
                      effect immediately prior to a Change of Control, or
                      any removal of Executive from or any failure to reelect
                      Executive to such positions, except in connection with the
                      termination of Executive's employment by the Company (or a
                      Subsidiary) for Cause or by Executive other than for good
                      reason; or any other action by the Company (or a
                      Subsidiary) which results in a diminishment in such
                      position, authority, duties or responsibilities, other
                      than an insubstantial and inadvertent action which is
                      remedied by the Company or the Subsidiary promptly after
                      receipt of notice thereof given by Executive; or

             (II)     if Executive's rate of Base Salary for any fiscal year is
                      less than 100 percent of the rate of Base Salary paid to
                      Executive in the completed fiscal year immediately
                      preceding the Change of Control, or if Executive's total
                      cash compensation opportunities, including salary,
                      incentives and automobile allowance, for any fiscal year
                      are less than 100 percent of the total cash compensation
                      opportunities made available to Executive in the completed
                      fiscal year immediately preceding the Change of Control
                      unless any such reduction represents an overall reduction
                      of no more than 10 percent in the rate of Base Salary paid
                      or cash compensation opportunities made available, as the
                      case may be, and affects all other executives in the same
                      organizational level (it being the Company's burden to
                      establish this fact); or

             (III)    the failure of the Company (or a  Subsidiary)  to continue
                      in effect any  benefits or  perquisites,  or any  pension,
                      life  insurance,  medical  insurance or disability plan in
                      which Executive was  participating  immediately prior to a
                      Change of Control  unless the  Company  (or a  Subsidiary)
                      provides  Executive  with a plan  or  plans  that  provide
                      substantially  similar  benefits,  or  the  taking  of any
                      action  by  the  Company  (or  a  Subsidiary)  that  would
                      adversely   affect   Executive's   participation   in   or
                      materially reduce  Executive's  benefits under any of such
                      plans or deprive  Executive of any material fringe benefit
                      enjoyed  by  Executive  immediately  prior to a Change  of
                      Control  unless the  elimination  or reduction of any such
                      benefit, perquisite or plan is of an aggregate value of no
                      more than 5 percent of the rate of Base Salary and affects
                      all other executives in the same organizational  level (it
                      being the Company's burden to establish this fact); or

             (IV)     any purported termination of Executive's employment by the
                      Company (or a  Subsidiary)  for Cause  during a Standstill
                      Period which is not effected in compliance  with paragraph
                      (b) of this Exhibit; or

             (V)      any relocation of Executive of more than 40 miles from the
                      place  where  Executive  was  located  at the  time of the
                      Change of Control; or

             (VI)     any other breach by the Company of any provision of this
                      Agreement; or

             (VII)    the  Company  sells  or  otherwise  disposes  of,  in  one
                      transaction or a series of related transactions, assets or
                      earning  power  aggregating  more than 30  percent  of the
                      assets (taken at asset value as stated on the books of the
                      Company  determined in accordance with generally  accepted
                      accounting  principles  consistently  applied)  or earning
                      power  of the  Company  (on an  individual  basis)  or the
                      Company and its subsidiaries (on a consolidated  basis) to
                      any other Person or Persons (as those terms are defined in
                      Exhibit B); or

             (VIII)   if Executive  is employed by a Subsidiary  of the Company,
                      such  Subsidiary  either  ceases to be a Subsidiary of the
                      Company  or  sells  or  otherwise   disposes  of,  in  one
                      transaction or a series of related transactions, assets or
                      earning  power  aggregating  more than 30  percent  of the
                      assets (taken at asset value as stated on the books of the
                      Subsidiary   determined  in  accordance   with   generally
                      accepted accounting  principles  consistently  applied) or
                      earning power of such Subsidiary (on an individual  basis)
                      or such Subsidiary and its subsidiaries (on a consolidated
                      basis) to any other  Person or Persons (as those terms are
                      defined in Exhibit B); or

             (IX)     the  voluntary  termination  by Executive  of  Executive's
                      employment at any time during the period  commencing eight
                      months plus one day after the Change of Control and ending
                      12 months after the Change of Control,  provided,  that in
                      the event of any such  voluntary  termination  pursuant to
                      this  clause  (IX),  the  Executive  shall be  entitled to
                      receive  only  one-half  (1/2)  of  the  lump  sum  amount
                      provided for in Section  1.2(a) and the benefits  provided
                      for in Section  1.2(b)(i)  shall be provided  for one-half
                      (1/2) the  number of months  from the Date of  Termination
                      stipulated in that Section.

             (k) "Standstill  Period" shall be the period commencing on the date
    of a Change of Control  and  continuing  until the close of  business on the
    last  business  day of the 24th  calendar  month  following  such  Change of
    Control.

             (l)  "Subsidiary"  shall mean any  corporation in which the Company
    owns,  directly  or  indirectly,  50 percent  or more of the total  combined
    voting power of all classes of stock.


<PAGE>


                                    EXHIBIT B


                         Definition of Change of Control

    A Change of Control shall mean:

                      (a) The  acquisition  by an  individual,  entity  or group
    (within  the  meaning of Section  13(d)(3)  or  14(d)(2)  of the  Securities
    Exchange  Act of  1934,  as  amended  (the  Exchange  Act))  (a  Person)  of
    beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
    Exchange  Act) of 20% or more of either (i) the  then-outstanding  shares of
    common stock of the Company (the  Outstanding  Company Common Stock) or (ii)
    the combined voting power of the  then-outstanding  voting securities of the
    Company  entitled  to vote  generally  in the  election  of  directors  (the
    Outstanding Company Voting Securities); provided, however, that for purposes
    of this  subsection (a), the following  acquisitions  shall not constitute a
    Change of Control: (i) any acquisition  directly from the Company,  (ii) any
    acquisition by the Company,  (iii) any  acquisition by any employee  benefit
    plan (or  related  trust)  sponsored  or  maintained  by the  Company or any
    corporation  controlled  by the  Company,  or (iv)  any  acquisition  by any
    corporation pursuant to a transaction which satisfies the criteria set forth
    in clauses (i), (ii) and (iii) of subsection (c) of this definition; or

                      (b) Individuals who, as of the date hereof, constitute the
    Board (the  Incumbent  Board) cease for any reason to  constitute at least a
    majority of the Board;  provided,  however,  that any individual  becoming a
    director  subsequently to the date hereof whose election,  or nomination for
    election by the Company's stockholders, was approved by a vote of at least a
    majority of the  directors  then  comprising  the  Incumbent  Board shall be
    considered as though such  individual  were a member of the Incumbent  Board
    (except that this proviso  shall not apply to any  individual  whose initial
    assumption  of  office  as a  director  occurs  as a result  of an actual or
    threatened  election  contest  with  respect to the  election  or removal of
    directors or other actual or threatened  solicitation of proxies or consents
    by or on behalf of a Person other than the Board); or

                      (c)   Consummation   of  a   reorganization,   merger   or
    consolidation involving the Company or a sale or other disposition of all or
    substantially all of the assets of the Company (a Business Combination),  in
    each case, unless, immediately following such Business Combination,  (i) all
    or substantially all of the individuals and entities who were the beneficial
    owners,   respectively,   of  the  Outstanding   Company  Common  Stock  and
    Outstanding  Company Voting  Securities  immediately  prior to such Business
    Combination  beneficially  own,  directly or  indirectly,  more than 60% of,
    respectively,  the then-outstanding  shares of common stock and the combined
    voting  power of the  then-outstanding  voting  securities  entitled to vote
    generally in the election of directors,  of the  corporation  resulting from
    such Business  Combination  (which as used in section (c) of this definition
    shall include,  without limitation,  a corporation which as a result of such
    transaction  owns the Company or all or  substantially  all of the Company's
    assets either directly or through one or more subsidiaries) in substantially
    the same proportions as their ownership,  immediately prior to such Business
    Combination, of the Outstanding Company Common Stock and Outstanding Company
    Voting  Securities,  as the  case  may be,  (ii) no  Person  (excluding  any
    corporation resulting from such Business Combination or any employee benefit
    plan (or related  trust) of the Company or such  corporation  resulting from
    such Business Combination) beneficially owns, directly or indirectly, 20% or
    more of,  respectively,  the then outstanding  shares of common stock of the
    corporation resulting from such Business Combination, or the combined voting
    power of the  then-outstanding  voting  securities of such  corporation  and
    (iii)  at  least  half of the  members  of the  board  of  directors  of the
    corporation  resulting  from such Business  Combination  were members of the
    Incumbent Board at the time of the execution of the initial agreement, or of
    the action of the Board, providing for such Business Combination; or

                      (d)  Approval  by the  stockholders  of the  Company  of a
    complete liquidation or dissolution of the Company.