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                                                                    EXHIBIT 4.10

                    1998 KEY EMPLOYEE STOCK PERFORMANCE PLAN
                                 OF CONOCO INC.

               (AS AMENDED AND RESTATED EFFECTIVE OCTOBER 8, 2001)

                                    RECITALS


                  Conoco Inc. (the "Company") established the 1998 Key Employee
Stock Performance Plan of Conoco Inc. (the "Plan") effective October 16, 1998.
Paragraph 5 specifies the number of shares of Common Stock with respect to which
Awards may be granted under the Plan. Paragraph 13 reserves to the Board the
right to amend the Plan. Paragraph 15 provides that in the event of certain
transactions, including a reorganization, the Board is authorized to (a) issue
or assume Awards by means of substitution of new Awards, as appropriate, for
previously issued Awards or an assumption of previously issued Awards as part of
such adjustment or (b) cancel Awards that are Options or SARs and give
Participants who are holders of such Awards notice and opportunity to exercise
for 30 days prior to such cancellation.

                  The Company intends to reclassify its Class A Common Stock and
Class B Common Stock into a single class of new common stock ("Common Stock") by
merging Conoco Delaware I, Inc., a wholly owned subsidiary of the Company
("Merger Sub"), with and into the Company (the "Merger"), pursuant to an
Agreement and Plan of Merger, dated as of July 17, 2001, between the Company and
Merger Sub. In connection with the Merger and pursuant to their authority under
Paragraph 13, the Board has authorized this amendment and restatement of the
Plan to provide for the issuance of Awards with respect to the new class of
Common Stock, such amendment and restatement to become effective upon the
effective time of the Merger (October 8, 2001). In addition, in connection with
the Merger and effective upon the effective time thereof, pursuant to its
authority under Paragraph 15, the Board will substitute a new Award for each
previously issued outstanding Award. The new Award will apply to a number of
shares of Common Stock equal to the total number of shares of Conoco Class A
Common Stock and Class B Common Stock for which the previously issued
outstanding Award has not been exercised, and shall provide for the same
exercise price and the same other terms and conditions as those applicable under
the previously issued outstanding Award.

                  Further, effective upon approval by the stockholders of the
Company, the Board has authorized the Plan to be amended to increase the number
shares of Common Stock available for Awards under the Plan.

                  Now, therefore, the Company hereby amends and restates the
Plan, effective as set forth in paragraph 19 hereof, to read as follows:

         1. Plan. The Plan was adopted by the Company to reward certain
Employees of the Company by enabling them to acquire shares of Common Stock of
the Company or receive payments determined by reference to such Common Stock.

         2. Objectives. The purpose of this Amended and Restated 1998 Key
Employee Stock Performance Plan of Conoco Inc. is to further the interests of
the Company, its Subsidiaries and



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its shareholders by providing incentives in the form of Awards to Employees and
to provide for issuance of Awards in connection with the "Option Program" under
which certain existing DuPont awards were canceled at the election of the
holder. Such Awards will give Participants in the Plan an interest in the
Company parallel to that of the shareholders, thus enhancing the proprietary and
personal interest of such Participants in the Company's continued success and
progress.

         3. Definitions. As used herein, the terms set forth below shall have
the following respective meanings:

                  "Authorized Officer" means the Chairman of the Board or the
Chief Executive Officer of the Company (or any other senior officer of the
Company to whom either of them shall delegate the authority to execute any Award
Agreement, where applicable).

                  "Award" means any Option or SAR granted to a Participant
pursuant to such applicable terms, conditions and limitations as the Committee
may establish in order to fulfill the objectives of the Plan.

                  "Award Agreement" means a written agreement setting forth the
terms, conditions and limitations applicable to an Award.

                  "Board" means the Board of Directors of the Company.

                  "Change of Control" is defined in Attachment A.

                  "Class A Common Stock" means the Class A Common Stock, par
value $.01 per share, of the Company.

                  "Class B Common Stock" means the Class B Common Stock, par
value $.01 per share, of the Company.

                  "Code" means the Internal Revenue Code of 1986, as amended
from time to time.

                  "Committee" means the Compensation Committee of the Board or
such other committee of the Board as is designated by the Board to administer
the Plan.

                  "Common Stock" means, from and after the effective time of the
Merger (as defined in the Recitals on page 1 of this Plan), Conoco common stock,
par value $.01 per share. Prior to the effective time of the Merger, "Common
Stock" means Class A Common Stock or Class B Common Stock, as appropriate.

                  "Company" means Conoco Inc., a Delaware corporation.

                  "Director" means an individual serving as a member of the
Board.

                  "DuPont" means E.I. du Pont de Nemours and Company, a Delaware
corporation.


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                  "DuPont Award" means an option or stock appreciation right
granted by DuPont pursuant to the DuPont Stock Performance Plan, the DuPont
Variable Compensation Plan, the DuPont Corporate Sharing Plan or the Conoco Unit
Option Plan.

                  "Employee" means an employee of the Company or any of its
Subsidiaries and an individual who has agreed to become an employee of the
Company or any of its Subsidiaries and is expected to become such an employee
within the following six months.

                  "Fair Market Value" of a share of Common Stock means, as of a
particular date, (i) if Common Stock is listed on a national securities
exchange, the mean between the highest and lowest sales price per share of such
Common Stock on the consolidated transaction reporting system for the principal
national securities exchange on which shares of Common Stock are listed on that
date, or, if there shall have been no such sale so reported on that date, on the
next succeeding date on which such a sale was so reported, or, at the discretion
of the Committee, the price prevailing on the exchange at the time of exercise,
(ii) if Common Stock is not so listed but is quoted on the Nasdaq National
Market, the mean between the highest and lowest sales price per share of Common
Stock reported by the Nasdaq National Market on that date, or, if there shall
have been no such sale so reported on that date, on the next succeeding date on
which such a sale was so reported, or, at the discretion of the Committee, the
price prevailing on the Nasdaq National Market at the time of exercise, (iii) if
Common Stock is not so listed or quoted, the mean between the closing bid and
asked price on that date, or, if there are no quotations available for such
date, on the next succeeding date on which such quotations shall be available,
as reported by the Nasdaq Stock Market, or, if not reported by the Nasdaq Stock
Market, by the National Quotation Bureau Incorporated or (iv) if Common Stock is
not publicly traded, the most recent value determined by an independent
appraiser appointed by the Company for such purpose.

                  "Grant Date" means the date an Award is granted to a
Participant pursuant to the Plan. The Grant Date for a substituted award is the
Grant Date of the original award.

                  "Grant Price" means the price at which a Participant may
exercise his or her right to receive cash or Common Stock, as applicable, under
the terms of an Award.

                  "Incentive Stock Option" means an Option that is intended to
comply with the requirements set forth in Section 422 of the Code.

                  "Nonqualified Stock Option" means an Option that is not an
Incentive Stock Option.

                  "Option" means a right to purchase a specified number of
shares of Common Stock at a specified Grant Price, which may be an Incentive
Stock Option or a Nonqualified Stock Option.

                  "Option Program" means a program involving the cancellation of
certain existing DuPont Awards.

                  "Option Program Award" means an Option or SAR granted in
connection with the Option Program.


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                  "Participant" means an Employee to whom an Award has been
granted under this Plan.

                  "Stock Appreciation Right" or "SAR" means a right to receive a
payment, in cash or in Common Stock, equal to the excess of the Fair Market
Value or other specified valuation of a specified number of shares of Common
Stock on the date the right is exercised over a specified Grant Price, in each
case, as determined by the Committee.

                  "Subsidiary" means (i) in the case of a corporation, any
corporation of which the Company directly or indirectly owns shares representing
50% or more of the combined voting power of the shares of all classes or series
of capital stock of such corporation which have the right to vote generally on
matters submitted to a vote of the stockholders of such corporation and (ii) in
the case of a partnership or other business entity not organized as a
corporation, any such business entity of which the Company directly or
indirectly owns 50% or more of the voting, capital or profits interests (whether
in the form of partnership interests, membership interests or otherwise).

         4. Eligibility. All Employees are eligible for the grant of Awards
under this Plan.

         5. Common Stock Available for Awards.

                  (a) Subject to the provisions of paragraph 15 hereof, no Award
         shall be granted if it shall result in the aggregate number of shares
         of Common Stock issued under the Plan plus the number of shares of
         Common Stock covered by or subject to Awards then outstanding (after
         giving effect to the grant of the Award in question) to exceed
         37,580,628. No more than 12,000,000 shares of Common Stock shall be
         available for Incentive Stock Options. The number of shares of Common
         Stock that are the subject of Awards under this Plan that are forfeited
         or terminated, expire unexercised, are settled in cash in lieu of
         Common Stock or in a manner such that all or some of the shares covered
         by an Award are not issued to a Participant, shall again immediately
         become available for Awards hereunder. The Committee may from time to
         time adopt and observe such procedures concerning the counting of
         shares against the Plan maximum as it may deem appropriate. The Board
         and the appropriate officers of the Company shall from time to time
         take whatever actions are necessary to file any required documents with
         governmental authorities, stock exchanges and transaction reporting
         systems to ensure that shares of Common Stock are available for
         issuance pursuant to Awards.

                  (b) Option Program Awards and awards assumed under the Plan or
         issued as substitute Awards, each pursuant to paragraph 15(b) of the
         Plan, (i) are not subject to the limitations in paragraph 8(b) and (ii)
         do not count against the limitations on Common Stock available for
         Awards set forth in paragraph 5(a).

         6. Administration.

                  (a) The Plan shall be administered by the Committee.

                  (b) The Committee shall have full and exclusive power and
         authority to administer this Plan and to take all actions that are
         specifically contemplated hereby or


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         are necessary or appropriate in connection with the administration
         hereof. The Committee shall also have full and exclusive power to
         interpret this Plan and to adopt such rules, regulations and guidelines
         for carrying out this Plan as it may deem necessary or proper, all of
         which powers shall be exercised in the best interests of the Company
         and in keeping with the objectives of this Plan. The Committee may, in
         its discretion, provide for the extension of the exercisability of an
         Award, accelerate the vesting or exercisability of an Award, eliminate
         or make less restrictive any restrictions applicable to an Award, waive
         any restriction or other provision of this Plan or otherwise amend or
         modify an Award in any manner that is either (i) not adverse to the
         Participant to whom such Award was granted or (ii) consented to by such
         Participant. The Committee may grant an Award to an Employee who it
         expects to become an employee of the Company or any of its Subsidiaries
         within the following six months, with such Award being subject to the
         individual's actually becoming an employee within such time period, and
         subject to such other terms and conditions as may be established by the
         Committee. The Committee may correct any defect or supply any omission
         or reconcile any inconsistency in this Plan or in any Award in the
         manner and to the extent the Committee deems necessary or desirable to
         further the Plan purposes. Any decision of the Committee in the
         interpretation and administration of this Plan shall lie within its
         sole and absolute discretion and shall be final, conclusive and binding
         on all parties concerned.

                  (c) No member of the Committee or officer of the Company to
         whom the Committee has delegated authority in accordance with the
         provisions of paragraph 7 of this Plan shall be liable for anything
         done or omitted to be done by him or her, by any member of the
         Committee or by any officer of the Company in connection with the
         performance of any duties under this Plan, except for his or her own
         willful misconduct or as expressly provided by statute.

         7. Delegation of Authority. The Committee may delegate to the Chief
Executive Officer and to other senior officers of the Company its duties under
this Plan pursuant to such conditions or limitations as the Committee may
establish. The Committee may engage or authorize the engagement of a third party
administrator to carry out administrative functions under the Plan.

         8. Awards.

                  (a) The Committee shall determine the type or types of Awards
         to be made under this Plan and shall designate from time to time the
         Employees who are to be the recipients of Awards. Each Award shall be
         embodied in an Award Agreement, which shall contain such terms,
         conditions and limitations as shall be determined by the Committee in
         its sole discretion and, if required by the Committee, shall be signed
         by the Participant to whom the Award is granted and by an Authorized
         Officer for and on behalf of the Company. Awards may consist of those
         listed in this paragraph 8(a) and may be granted singly, in combination
         or in tandem. Awards may also be granted in combination or in tandem
         with, in replacement of, or as alternatives to, grants or rights under
         this Plan or any other employee plan of the Company or any of its
         Subsidiaries, including the plan of any acquired entity. An Award may
         provide for the grant or issuance of additional, replacement or
         alternative Awards upon the occurrence of specified events, including
         the


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         exercise of the original Award granted to a Participant. All or part of
         an Award may be subject to conditions established by the Committee,
         which may include, but are not limited to, continuous service with the
         Company and its Subsidiaries, achievement of specific business
         objectives, increases in specified indices, attainment of specified
         growth rates and other comparable measurements of performance. Upon the
         termination of employment by a Participant, any unexercised, deferred,
         unvested or unpaid Awards shall be treated as set forth in the
         applicable Award Agreement.

                           (i) Options. An Award may be in the form of an
                  Option, which may be an Incentive Stock Option or a
                  Nonqualified Stock Option. The Grant Price of an Option shall
                  be not less than the Fair Market Value of the Common Stock
                  subject to such Option on the Grant Date. Subject to the
                  foregoing provisions, the terms, conditions and limitations
                  applicable to any Options awarded to Employees pursuant to
                  this Plan, including the Grant Price, the term of the Options
                  and the date or dates upon which they become exercisable,
                  shall be determined by the Committee.

                           (ii) Stock Appreciation Rights. An Award may be in
                  the form of an SAR. The terms, conditions and limitations
                  applicable to any SARs awarded to Employees pursuant to this
                  Plan, including the Grant Price, the term of any SARs and the
                  date or dates upon which they become exercisable, shall be
                  determined by the Committee.

                  (b) Notwithstanding anything to the contrary contained in this
         Plan excluding paragraph 5(b), no Participant may be granted, during
         any calendar year, Awards that are exercisable for more than 200,000
         shares of Common Stock.

         9. Change of Control. Notwithstanding the provisions of paragraph 8
hereof, unless otherwise expressly provided in the applicable Award Agreement,
in the event of a Change of Control during a Participant's employment with the
Company or one of its Subsidiaries, (i) each Award granted under this Plan to
the Participant shall be become immediately vested and fully exercisable
(regardless of the otherwise applicable vesting or exercise schedules or
performance goals provided for under the Award Agreement) and (ii) if the Award
is an Option or SAR, shall remain exercisable until the expiration of the term
of the Award or, if the Participant should die before the expiration of the term
of the Award, until the earlier of (a) the expiration of the term of the Award
or (b) two (2) years following the date of the Participant's death.

         10. Payment of Awards.

                  (a) General. Payment made to a Participant pursuant to an
         Award may be made in the form of cash or Common Stock, or a combination
         thereof, and may include such restrictions as the Committee shall
         determine, including, in the case of Common Stock, restrictions on
         transfer and forfeiture provisions.

                  (b) Deferral. With the approval of the Committee, amounts
         payable in respect of Awards may be deferred and paid either in the
         form of installments or as a lump-sum payment. The Committee may permit
         selected Participants to elect to defer payments of


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         some or all types of Awards or any other compensation otherwise payable
         by the Company in accordance with procedures established by the
         Committee and may provide that such deferred compensation may be
         payable in shares of Common Stock. Any deferred payment pursuant to an
         Award, whether elected by the Participant or specified by the Award
         Agreement or by the Committee, may be forfeited if and to the extent
         that the Award Agreement so provides.

                  (c) Substitution of Awards. At the discretion of the
         Committee, a Participant may be offered an election to substitute an
         Award for another Award or Awards of the same or different type.
         Subject to Paragraph 15, the Grant Price of any Option shall not be
         decreased, including by means of issuance of a substitute Award with a
         lower Grant Price.

                  (d) Cash-out of Awards. At the discretion of the Committee, an
         Award may be settled by a cash payment equal to the difference between
         the Fair Market Value per share of Common Stock on the date of exercise
         and the Grant Price of the Award, multiplied by the number of shares
         with respect to which the Award is exercised.

         11. Option Exercise. The Grant Price shall be paid in full at the time
of exercise in cash or, if permitted by the Committee and elected by the
optionee, the optionee may purchase such shares by means of tendering Common
Stock or surrendering another Award valued at Fair Market Value on the date of
exercise, or any combination thereof. The Committee shall determine acceptable
methods for Participants to tender Common Stock or other Awards. The Committee
may provide for procedures to permit the exercise or purchase of such Awards by
use of the proceeds to be received from the sale of Common Stock issuable
pursuant to an Award. The Committee may adopt additional rules and procedures
regarding the exercise of Options from time to time, provided that such rules
and procedures are not inconsistent with the provisions of this paragraph. An
optionee desiring to pay the Grant Price of an Option by tendering Common Stock
using the method of attestation may, subject to any such conditions and in
compliance with any such procedures as the Committee may adopt, do so by
attesting to the ownership of Common Stock of the requisite value, in which case
the Company shall issue or otherwise deliver to the optionee upon such exercise
a number of shares of Common Stock subject to the Option equal to the result
obtained by dividing (a) the excess of the aggregate Fair Market Value of the
shares of Common Stock subject to the Option for which the Option (or portion
thereof) is being exercised over the Grant Price payable in respect of such
exercise by (b) the Fair Market Value per share of Common Stock subject to the
Option, and the optionee may retain the shares of Common Stock the ownership of
which is attested.

         12. Taxes. The Company or its designated third party administrator
shall have the right to deduct applicable taxes from any payment hereunder and
withhold, at the time of delivery of cash or shares of Common Stock under this
Plan, an appropriate amount of cash or number of shares of Common Stock or a
combination thereof for payment of taxes or other amounts required by law or to
take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for withholding of such taxes. The Committee may also
permit withholding to be satisfied by the transfer to the Company of shares of
Common Stock theretofore owned by the holder of the Award with respect to which
withholding is required. If shares of Common Stock are used to satisfy tax
withholding, such shares shall be valued based


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on the Fair Market Value when the tax withholding is required to be made. The
Committee may provide for loans, on either a short term or demand basis, from
the Company to a Participant to permit the payment of taxes required by law.

         13. Amendment, Modification, Suspension or Termination of the Plan. The
Board may amend, modify, suspend or terminate this Plan for the purpose of
meeting or addressing any changes in legal requirements or for any other purpose
permitted by law, except that (i) no amendment or alteration that would
adversely affect the rights of any Participant under any Award previously
granted to such Participant shall be made without the consent of such
Participant and (ii) no amendment or alteration shall be effective prior to its
approval by the stockholders of the Company to the extent such approval is
required by applicable legal requirements.

         14. Assignability. Unless otherwise determined by the Committee and
provided in the Award Agreement, no Award or any other benefit under this Plan
shall be assignable or otherwise transferable except by will, beneficiary
designation or the laws of descent and distribution. In the event that a
beneficiary designation conflicts with an assignment by will, the beneficiary
designation will prevail. The Committee may prescribe and include in applicable
Award Agreements other restrictions on transfer. Any attempted assignment of an
Award or any other benefit under this Plan in violation of this paragraph 14
shall be null and void.

         15. Adjustments.

                  (a) The existence of outstanding Awards shall not affect in
         any manner the right or power of the Company or its stockholders to
         make or authorize any or all adjustments, recapitalizations,
         reorganizations or other changes in the capital stock of the Company or
         its business or any merger or consolidation of the Company, or any
         issue of bonds, debentures, preferred or prior preference stock
         (whether or not such issue is prior to, on a parity with or junior to
         the existing Common Stock) or the dissolution or liquidation of the
         Company, or any sale or transfer of all or any part of its assets or
         business, or any other corporate act or proceeding of any kind, whether
         or not of a character similar to that of the acts or proceedings
         enumerated above.

                  (b) In the event of any subdivision or consolidation of
         outstanding shares of Common Stock, declaration of a dividend payable
         in shares of Common Stock or other stock split, then (i) the number of
         shares of Common Stock reserved under this Plan, (ii) the number of
         shares of Common Stock covered by outstanding Awards, (iii) the Grant
         Price in respect of such Awards, (iv) the appropriate Fair Market Value
         and other price determinations for such Awards, and (v) the Award
         limitations shall each be proportionately adjusted by the Board as
         appropriate to reflect such transaction. In the event of any other
         recapitalization or capital reorganization of the Company, any
         consolidation or merger of the Company with another corporation or
         entity, the adoption by the Company of any plan of exchange affecting
         any Common Stock or any distribution to holders of Common Stock of
         securities or property (other than normal cash dividends or dividends
         payable in Common Stock), the Board shall make appropriate adjustments
         to (i) the number of shares of Common Stock covered by Awards, (ii) the
         Grant Price in respect of such Awards, (iii) the appropriate Fair
         Market Value and other


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         price determinations for such Awards, and (iv) the Award limitations to
         reflect such transaction; provided that such adjustments shall only be
         such as are necessary to maintain the proportionate interest of the
         holders of the Awards and preserve, without increasing, the value of
         such Awards. In the event of a corporate merger, consolidation,
         acquisition of property or stock, separation, reorganization or
         liquidation, the Board shall be authorized (x) to assume under the Plan
         previously issued compensatory awards, or to substitute new Awards for
         previously issued compensatory awards, including Awards as part of such
         adjustment or (y) to cancel Awards that are Options or SARs and give
         the Participants who are the holders of such Awards notice and
         opportunity to exercise for 30 days prior to such cancellation.

         16. Restrictions. No Common Stock or other form of payment shall be
issued with respect to any Award unless the Company shall be satisfied based on
the advice of its counsel that such issuance will be in compliance with
applicable federal and state securities laws. Certificates evidencing shares of
Common Stock delivered under this Plan (to the extent that such shares are so
evidenced) may be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any securities exchange
or transaction reporting system upon which the Common Stock is then listed or to
which it is admitted for quotation and any applicable federal or state
securities law. The Committee may cause a legend or legends to be placed upon
such certificates (if any) to make appropriate reference to such restrictions.

         17. Unfunded Plan. This Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Participants under this Plan, any
such accounts shall be used merely as a bookkeeping convenience. The Company
shall not be required to segregate any assets for purposes of this Plan or
Awards hereunder, nor shall the Company, the Board or the Committee be deemed to
be a trustee of any benefit to be granted under this Plan. Any liability or
obligation of the Company to any Participant with respect to an Award under this
Plan shall be based solely upon any contractual obligations that may be created
by this Plan and any Award Agreement, and no such liability or obligation of the
Company shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company. Neither the Company nor the Board nor the Committee
shall be required to give any security or bond for the performance of any
obligation that may be created by this Plan.

         18. Governing Law. This Plan and all determinations made and actions
taken pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall be
governed by and construed in accordance with the laws of the State of Delaware.

         19. Effectiveness. The Plan, as approved by the Board, was effective as
of October 16, 1998. This Plan was approved by the stockholders of the Company
on October 19, 1998. The amendments to the Plan to permit the grant of Awards
denominated in Class B Common Stock became effective on May 12, 1999 and were
conditioned upon the approval of the stockholders of the Company prior to
December 31, 1999, which approval was obtained on May 12, 1999. The amendment to
paragraph 11 of the Plan providing for option exercise payment by the
attestation method was effective on October 28, 1999. The Plan, as approved by
the Board for amendment and restatement as set forth herein, shall be effective
as set forth herein as of the


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effective time of the Merger (as defined in the Recitals on page 1 of this
Plan); provided, however, that the increase of shares available for Awards
(described in paragraph 5) shall not be effective unless separately approved by
the stockholders of the Company.


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                                 ATTACHMENT "A"

                               "CHANGE IN CONTROL"

                  The following definitions apply to the Change of Control
provision in paragraph 9 of the foregoing Plan.

                  "Affiliate" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in
effect on October 19, 2000.

                  "Associate" shall mean, with reference to any Person, (a) any
corporation, firm, partnership, association, unincorporated organization or
other entity (other than the Company or a subsidiary of the Company) of which
such Person is an officer or general partner (or officer or general partner of a
general partner) or is, directly or indirectly, the Beneficial Owner of 10% or
more of any class of equity securities, (b) any trust or other estate in which
such Person has a substantial beneficial interest or as to which such Person
serves as trustee or in a similar fiduciary capacity and (c) any relative or
spouse of such Person, or any relative of such spouse, who has the same home as
such Person.

                  "Beneficial Owner" shall mean, with reference to any
securities, any Person if:

                  (a) such Person or any of such Person's Affiliates and
         Associates, directly or indirectly, is the "beneficial owner" of (as
         determined pursuant to Rule 13d-3 of the General Rules and Regulations
         under the Exchange Act, as in effect on October 19, 2000) such
         securities or otherwise has the right to vote or dispose of such
         securities, including pursuant to any agreement, arrangement or
         understanding (whether or not in writing); provided, however, that a
         Person shall not be deemed the "Beneficial Owner" of, or to
         "beneficially own," any security under this subsection (a) as a result
         of an agreement, arrangement or understanding to vote such security if
         such agreement, arrangement or understanding: (i) arises solely from a
         revocable proxy or consent given in response to a public (i.e., not
         including a solicitation exempted by Rule 14a-2(b)(2) of the General
         Rules and Regulations under the Exchange Act) proxy or consent
         solicitation made pursuant to, and in accordance with, the applicable
         provisions of the General Rules and Regulations under the Exchange Act
         and (ii) is not then reportable by such Person on Schedule 13D under
         the Exchange Act (or any comparable or successor report);

                  (b) such Person or any of such Person's Affiliates and
         Associates, directly or indirectly, has the right or obligation to
         acquire such securities (whether such right or obligation is
         exercisable or effective immediately or only after the passage of time
         or the occurrence of an event) pursuant to any agreement, arrangement
         or understanding (whether or not in writing) or upon the exercise of
         conversion rights, exchange rights, other rights, warrants or options,
         or otherwise; provided, however, that a Person shall not be deemed the
         Beneficial Owner of, or to "beneficially own," (i) securities tendered
         pursuant to a tender or exchange offer made by such Person or any of
         such Person's Affiliates or Associates until such tendered securities
         are accepted for purchase or exchange or (ii) securities issuable upon
         exercise of Exempt Rights; or


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                  (c) such Person or any of such Person's Affiliates or
         Associates (i) has any agreement, arrangement or understanding (whether
         or not in writing) with any other Person (or any Affiliate or Associate
         thereof) that beneficially owns such securities for the purpose of
         acquiring, holding, voting (except as set forth in the proviso to
         subsection (a) of this definition) or disposing of such securities or
         (ii) is a member of a group (as that term is used in Rule 13d-5(b) of
         the General Rules and Regulations under the Exchange Act) that includes
         any other Person that beneficially owns such securities;

provided, however, that nothing in this definition shall cause a Person engaged
in business as an underwriter of securities to be the Beneficial Owner of, or to
"beneficially own," any securities acquired through such Person's participation
in good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition. For purposes hereof, "voting" a security
shall include voting, granting a proxy, consenting or making a request or demand
relating to corporate action (including, without limitation, a demand for a
stockholder list, to call a stockholder meeting or to inspect corporate books
and records) or otherwise giving an authorization (within the meaning of Section
14(a) of the Exchange Act) in respect of such security.

                  The terms "beneficially own" and "beneficially owning" shall
have meanings that are correlative to this definition of the term "Beneficial
Owner."


                  "Board" shall have the meaning set forth in the foregoing
Plan.

                  "Change of Control" shall mean any of the following occurring
on or after October 19, 2000:

                  (a) any Person (other than an Exempt Person) shall become the
         Beneficial Owner of 20% or more of the shares of Common Stock then
         outstanding or 20% or more of the combined voting power of the Voting
         Stock of the Company then outstanding; provided, however, that no
         Change of Control shall be deemed to occur for purposes of this
         subsection (a) if such Person shall become a Beneficial Owner of 20% or
         more of the shares of Common Stock or 20% or more of the combined
         voting power of the Voting Stock of the Company solely as a result of
         (i) an Exempt Transaction or (ii) an acquisition by a Person pursuant
         to a reorganization, merger or consolidation, if, following such
         reorganization, merger or consolidation, the conditions described in
         clauses (i), (ii) and (iii) of subsection (c) of this definition are
         satisfied;

                  (b) individuals who, as of October 19, 2000, 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 subsequent to October 19, 2000 whose election, or
         nomination for election by the Company's shareholders, 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; provided, further, that there shall be
         excluded, for this purpose, any such individual whose initial
         assumption of office occurs as a result of any actual or threatened
         election contest that is


                                       12
<PAGE>   13
         subject to the provisions of Rule 14a-11 of the General Rules and
         Regulations under the Exchange Act;

                  (c) the shareholders of the Company shall approve a
         reorganization, merger or consolidation, in each case, unless,
         following such reorganization, merger or consolidation, (i) more than
         70% of the then outstanding shares of common stock of the corporation
         resulting from such reorganization, merger or consolidation and the
         combined voting power of the then outstanding Voting Stock of such
         corporation beneficially owned, directly or indirectly, by all or
         substantially all of the Persons who were the Beneficial Owners of the
         outstanding Common Stock immediately prior to such reorganization,
         merger or consolidation in substantially the same proportions as their
         ownership, immediately prior to such reorganization, merger or
         consolidation, of the outstanding Common Stock, (ii) no Person
         (excluding any Exempt Person or any Person beneficially owning,
         immediately prior to such reorganization, merger or consolidation,
         directly or indirectly, 20% or more of the Common Stock then
         outstanding or 20% or more of the combined voting power of the Voting
         Stock of the Company then outstanding) beneficially owns, directly or
         indirectly, 20% or more of the then outstanding shares of common stock
         of the corporation resulting from such reorganization, merger or
         consolidation or the combined voting power of the then outstanding
         Voting Stock of such corporation and (iii) at least a majority of the
         members of the board of directors of the corporation resulting from
         such reorganization, merger or consolidation were members of the
         Incumbent Board at the time of the initial agreement or initial action
         by the Board providing for such reorganization, merger or
         consolidation; or

                  (d) the shareholders of the Company shall approve (i) a
         complete liquidation or dissolution of the Company unless such
         liquidation or dissolution is approved as part of a plan of liquidation
         and dissolution involving a sale or disposition of all or substantially
         all of the assets of the Company to a corporation with respect to
         which, following such sale or other disposition, all of the
         requirements of clauses (ii)(A), (B) and (C) of this subsection (d) are
         satisfied, or (ii) the sale or other disposition of all or
         substantially all of the assets of the Company, other than to a
         corporation, with respect to which, following such sale or other
         disposition, (A) more than 70% of the then outstanding shares of common
         stock of such corporation and the combined voting power of the Voting
         Stock of such corporation is then beneficially owned, directly or
         indirectly, by all or substantially all of the Persons who were the
         Beneficial Owners of the outstanding Common Stock immediately prior to
         such sale or other disposition in substantially the same proportion as
         their ownership, immediately prior to such sale or other disposition,
         of the outstanding Common Stock, (B) no Person (excluding any Exempt
         Person and any Person beneficially owning, immediately prior to such
         sale or other disposition, directly or indirectly, 20% or more of the
         Common Stock then outstanding or 20% or more of the combined voting
         power of the Voting Stock of the Company then outstanding) beneficially
         owns, directly or indirectly, 20% or more of the then outstanding
         shares of common stock of such corporation and the combined voting
         power of the then outstanding Voting Stock of such corporation and (C)
         at least a majority of the members of the board of directors of such
         corporation were members of the Incumbent Board at


                                       13
<PAGE>   14
         the time of the initial agreement or initial action of the Board
         providing for such sale or other disposition of assets of the Company.

                  "Common Stock" shall have the meaning set forth in the
foregoing Plan.

                  "Company" shall have the meaning set forth in the foregoing
Plan.

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

                  "Exempt Person" shall mean any of the Company, any subsidiary
of the Company, any employee benefit plan of the Company or any subsidiary of
the Company, and any Person organized, appointed or established by the Company
for or pursuant to the terms of any such plan.

                  "Exempt Rights" shall mean any rights to purchase shares of
Common Stock or other Voting Stock of the Company if at the time of the issuance
thereof such rights are not separable from such Common Stock or other Voting
Stock (i.e., are not transferable otherwise than in connection with a transfer
of the underlying Common Stock or other Voting Stock), except upon the
occurrence of a contingency, whether such rights exist as of October 19, 2000 or
are thereafter issued by the Company as a dividend on shares of Common Stock or
other Voting Securities or otherwise.

                  "Exempt Transaction" shall mean an increase in the percentage
of the outstanding shares of Common Stock or the percentage of the combined
voting power of the outstanding Voting Stock of the Company beneficially owned
by any Person solely as a result of a reduction in the number of shares of
Common Stock then outstanding due to the repurchase of Common Stock or Voting
Stock by the Company, unless and until such time as (a) such Person or any
Affiliate or Associate of such Person shall purchase or otherwise become the
Beneficial Owner of additional shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock or additional Voting Stock
representing 1% or more of the combined voting power of the then outstanding
Voting Stock, or (b) any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of the
then outstanding shares of Common Stock or Voting Stock representing 1% or more
of the combined voting power of the then outstanding Voting Stock shall become
an Affiliate or Associate of such Person.

                  "Person" shall mean any individual, firm, corporation,
partnership, association, trust, unincorporated organization or other entity.

                  "Voting Stock" shall mean, with respect to a corporation, all
securities of such corporation of any class or series that are entitled to vote
generally in the election of directors of such corporation (excluding any class
or series that would be entitled so to vote by reason of the occurrence of any
contingency, so long as such contingency has not occurred).


                                       14