<PAGE>
 
                                                                    EXHIBIT 10.4

                         ADVANCED RADIO TELECOM CORP.
               Amended and Restated Change of Control Agreement
               ------------------------------------------------

     AGREEMENT, made this 3/rd/ day of February, 1999 by and between William J.
Maxwell ("Executive") and ADVANCED RADIO TELECOM CORP. (the "Company");

RECITALS:

    A.    The Board of Directors of the Company (the "Board") recognizes that
the possibility of a change in control may exist and that such possibility, and
the uncertainty and questions which it may raise among management personnel, may
result in the departure or distraction of management personnel to the detriment
of the Company and its stockholders;

    B.    The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including Executive, to their duties, to assisting the
Board in assessing proposals with respect to a change in control and to advising
the Board as to the best interests of the Company and its shareholders with
respect to such potential change in control, without distraction and conflict
arising from the possibility of a change in control;

    C.    The Board wishes to induce Executive to remain in the employ of the
Company and to assure him of fair severance should his employment terminate in
specified circumstances following a change of control of the Company.

    NOW, THEREFORE, in consideration of the promises and the mutual covenants
contained herein, the parties hereto agree as follows:

    1.    If within 24 months following a Change of Control (as defined in
Exhibit A) (the "Post Change of Control Period") Executive's employment with the
Company is terminated (i) by the Company for any reason (other than for "Cause"
or "Disability" (as defined paragraph 4 below) or as a result of Executive's
death), or (ii) Executive terminates such employment for Good Reason (as defined
in paragraph 4 below):

        (a) The Company will pay to Executive within five business days of such
            termination of employment a lump-sum cash payment in an amount equal
            to the sum of (i) Executive's annual base salary ("Base Salary") at
            the time of termination through the date of such termination of
            employment to the extent not theretofore paid, (ii) a prorated
            portion of Executive's maximum incentive compensation for the fiscal
            year in which such termination shall occur, calculated by
            multiplying (A) such incentive compensation times (B) a fraction,
            the numerator of which is the number of days in the fiscal year
            through the date of termination of employment, and the 
<PAGE>
 
            denominator of which is 365, (iii) if Executive has not been paid
            incentive compensation with respect to the fiscal year prior to the
            year in which such termination occurs and during which Executive was
            employed by the Company (except where prior to the Change of Control
            the Board had determined that no such incentive compensation was to
            be paid to Executive with respect to such prior year), Executive's
            maximum incentive bonus for such prior fiscal year prorated for the
            period of his employment by the Company if less than a full year
            (provided that if any target incentive compensation under (ii) or
            (iii) was expressed in shares of common stock rather than cash, the
            Company will pay the cash equivalent of such compensation based on
            the closing price per share as reported in the Wall Street Journal
            (Eastern Edition), in the case of the Company's common stock as of
            the date prior to the date of the Change of Control), and (iv) any
            accrued and unpaid vacation pay through the date of termination; and

        (b) Any stock, stock option or other awards granted to Executive by the
            Company shall immediately vest and, if applicable, become
            exercisable in full, notwithstanding any provision to the contrary,
            and shall remain exercisable, if applicable, until the earlier of
            the fourth anniversary of such termination of employment or the
            latest date on which such grant could have been exercised, any
            restrictions on any restricted stock, deferred stock or other awards
            shall immediately terminate and all such awards shall immediately be
            vested in full, and any certificates for any deferred stock shall be
            delivered to Executive no later than five business days following
            such termination;

        (c) The Company will pay to Executive within five business days of such
            termination of employment a lump-sum cash payment in an amount equal
            to the greater of (i) an amount equal to Executive's aggregate Base
            Salary and maximum incentive compensation for the period from the
            date of termination through December 31, 2000 determined as if he
            had been employed through December 31, 2000 (but without duplication
            of amounts paid pursuant to Section 1(a) above) or (ii) an amount
            equal to:  (A) the amount of Executive's Base Salary at the rate in
            effect immediately prior to the date of termination or at the rate
            in effect immediately prior to the Change of Control, whichever is
            higher, and (B) the amount of Executive's maximum incentive
            compensation for the fiscal year during which the termination of
            employment occurs or the amount of Executive's maximum incentive
            compensation in effect immediately prior to the Change of Control,
            whichever is higher (provided that if any such incentive
            compensation is expressed or was paid in shares of common stock
            rather than cash, the calculation will be based on, and the Company
            will pay the cash equivalent of, such compensation based on the
            closing price per share as reported in the Wall Street Journal
            (Eastern Edition) in the case of a share of the Company's common
            stock determined on the date prior to the date of the Change of
            Control.

                                      -2-
<PAGE>
 
        (d) Executive, together with his dependents, will continue following
            such termination of employment to participate fully in the life and
            medical insurance plans maintained or sponsored by the Company
            immediately prior to the Change of Control on the same basis they
            participated prior to the Change in Control until the earlier of (i)
            the second anniversary of such termination or any longer period as
            may be provided by the terms of such plan or (ii) the date Executive
            becomes re-employed with another employer and is eligible to receive
            substantially equivalent life and medical benefits under another
            employer provided plan, provided that if the continued participation
            of Executive and his dependents is not possible under the terms of
            any of such Company plans, the Company shall instead either arrange
            to provide Executive and his dependents with substantially
            equivalent benefits or pay to Executive (within five days of the
            date of termination) an amount equal to the full value thereof in
            cash; and

        (e) the Company will promptly reimburse Executive for any and all legal
            fees and expenses (including, without limitation, stenographer fees
            and printing costs) incurred by him as a result of such termination
            of employment, including without limitation all fees and expenses
            incurred to enforce the provisions of this Agreement or contest or
            dispute that the termination of his employment is for Cause or other
            than for Good Reason (regardless of the outcome thereof).

     Notwithstanding anything herein to the contrary, (i) to the extent that any
payment or benefit provided for herein is required to be paid or vested on any
earlier date under the terms of any plan, agreement or arrangement, such plan,
agreement or arrangement shall control; and (ii) if the Company terminates
Executive's employment for a reason other than Cause prior to the date upon
which the Change of Control occurs, and Executive reasonably demonstrates that
such termination of employment (x) was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control or (y) otherwise
arose in connection with or in anticipation of a Change of Control, then for all
purposes of this Agreement, Executive shall be entitled to the benefits provides
in Section 1 above.

     To avert duplication of benefits, if Executive receives any payment of Base
Salary, incentive compensation or severance other than under this Agreement
("Other Termination Payments") upon the termination of his employment with the
Company, the amount of such payments shall be deducted from the amount paid
under this Agreement and the benefits to be provided hereunder shall be provided
only to the extent additional to the benefits to be provided other than under
this Agreement; provided, however, that neither this paragraph nor the
provisions of any other agreement shall be interpreted to reduce the amount
payable to Executive below the amount that would otherwise have been payable
under this Agreement if such Other Termination Payments had not been made.

                                      -3-
<PAGE>
 
     2.   Death, Disability, Cause, Other Than For Good Reason

          (a)  If Executive's employment shall terminate during the Post Change
               of Control Period by reason of Executive's death, this Agreement
               shall terminate without further obligations to Executive's legal
               representatives under this Agreement.

          (b)  If Executive's employment is terminated during the Post Change of
               Control Period by reason of Executive's Disability, this
               Agreement shall terminate without further obligations to
               Executive.  For purposes of this Agreement, "Disability" shall
               have the meaning given in the Company's long-term disability plan
               defining the date and conditions for which Executive is entitled
               to receive long-term disability compensation pursuant to such
               long-term disability plan. If the Company determines in good
               faith that the Disability of Executive has occurred during the
               Post Change of Control Period, it may give Executive written
               notice of its intention to terminate Executive's employment.  In
               such event, Executive's employment with the Company shall
               terminate effective on the 30th day after receipt of such notice
               by Executive, provided that, within the 30 days of such receipt,
               Executive shall not have returned to full-time performance of
               Executive's duties.

          (c)  If Executive's employment shall be terminated for Cause (as
               defined in Section 4 below) during the Post Change of Control
               Period, this Agreement shall terminate without further
               obligations to Executive other than the obligation to pay
               Executive (A) his Base Salary through the date of termination and
               (B) Other Benefits, in each case to the extent theretofore
               unpaid.

          (d)  If Executive voluntarily terminates employment during the Post
               Change of Control Period, excluding a termination for Good
               Reason, this Agreement shall terminate without further
               obligations to Executive.


     3.   "Cause" means only: (a) commission of a felony or gross neglect of
duty by Executive rising to the level of deliberate dereliction, (b) conviction
of a crime involving moral turpitude, or (c) willful failure by Executive in the
performance of his duties to the Company which failure is deliberate on
Executive's part, results in material injury to the Company, and continues for
more than 30 days after written notice given to Executive pursuant to a two-
thirds vote of all of the members of the Board at a meeting called and held for
such purpose (after reasonable notice to Executive) and at which meeting
Executive and his counsel were given an opportunity to be heard, such vote to
set forth in reasonable detail the nature of the failure.  For purposes of this
definition of Cause, no act or omission shall be considered to have been
"willful" unless it was not in good faith and Executive had knowledge at the
time that the act or omission was not in the best interest of the Company.  Any
act or failure to act based on authority given 

                                      -4-
<PAGE>
 
pursuant to a resolution duly adopted by the Board or based on the advice of
counsel of the Company shall be conclusively presumed to be done, or omitted to
be done, by Executive in good faith and in the best interest of the Company.
Cause shall not include willful failure due to incapacity resulting from
physical or mental illness or any actual or anticipated failure after Notice of
Termination for Good Reason.

     4.   Executive shall be deemed to have voluntarily terminated his
employment for Good Reason if Executive leaves the employ of the Company for any
reason following:

          (a)  The assignment to Executive of any duties inconsistent in any
               respect with Executive's position (including status, offices,
               titles and reporting requirements), authority, duties or
               responsibilities immediately prior to the Change of Control; or
               the diminution or adverse alteration in any material adverse
               respect of such position, authority, duties or responsibilities,
               excluding for this purpose an isolated, insubstantial and
               inadvertent action not taken in bad faith and which is remedied
               by the Company promptly after receipt of notice thereof given by
               Executive;

          (b)  Any reduction in Executive's rate of Base Salary for any fiscal
               year to less than 100% of the rate of Base Salary payable for the
               fiscal year immediately preceding the Change of Control or of the
               Base Salary provided for such fiscal year in any agreement
               between Executive and the Company, or reduction in Executive's
               total cash and stock compensation opportunities, including Base
               Salary and incentives, for any fiscal year to less than 100% of
               the total cash and stock compensation opportunities made
               available to him immediately preceding the Change of Control for
               the then current fiscal year or of the total cash and stock
               compensation opportunities which were to be made available to him
               for the fiscal year pursuant to any agreement between Executive
               and the Company  (for this purpose, such opportunities shall be
               deemed reduced if the objective standards by which Executive's
               incentive compensation measured becomes more stringent, the
               target or maximum amounts of such incentive compensation are
               reduced, or the amount of such incentive compensation is reduced
               on a discretionary basis from the amount that would be payable
               solely by reference to the objectives); or

          (c)  Failure of the Company to continue in effect any retirement,
               life, medical, dental, disability accidental death or travel
               insurance plan or other benefit plan or practice, in which
               Executive was participating immediately prior to the Change of
               Control unless the Company provides Executive with a plan or
               plans or practices that provide substantially similar benefits,
               or the taking of any action by the Company that would adversely
               affect Executive's participation in or materially reduce
               Executive's benefits under any of such 

                                      -5-
<PAGE>
 
               plans or practices or deprive Executive of any material fringe
               benefit enjoyed by Executive immediately prior to the Change of
               Control other than an isolated, insubstantial and inadvertent
               failure not occurring in bad faith and which is remedied by the
               Company promptly after receipt of notice thereof given by
               Executive; or

          (d)  The Company requires Executive to be based at any office or
               location further than 40 miles from the City of Bellevue, or the
               Company requires Executive to travel on Company business to a
               substantially greater extent than required immediately prior to
               the date of the Change of Control; or

          (e)  Any failure by the Company to comply with and satisfy Section 6
               of this Agreement.

     Executive's right to terminate his employment pursuant to this section
shall not be affected by his incapacity due to physical or mental illness.
Executive's continued employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstances constituting Good Reason hereunder.

     5.   In the case of any dispute under this Agreement, Executive may
initiate binding arbitration in Seattle, Washington before the American
Arbitration Association by serving a notice to arbitrate upon the Company or, at
Executive's election, institute judicial proceedings.  The Company shall not
have the right to initiate binding arbitration, and agrees that upon the
initiation of binding arbitration by Executive pursuant to this paragraph 5 the
Company shall cause to be dismissed any judicial proceedings it has brought
against Executive relating to this Agreement.  The Company authorizes Executive
from time to time to retain counsel of his choice to represent Executive in
connection with any and all actions, proceedings, and/or arbitration, whether by
or against the Company or any director, officer, shareholder, or other person
affiliated with the Company, which may affect Executive's rights under this
Agreement.  Company agrees to (i) pay the fees and expenses of such counsel,
(ii) to pay the cost of such arbitration and/or judicial proceeding, and (iii)
pay interest to Executive on all amounts owed to Executive under this Agreement
during any period of time that such amounts are withheld pending arbitration
and/or judicial proceedings.  Such interest will be at the base rate as
announced from time to time by Canadian Imperial Bank of Commerce.

     In addition, notwithstanding any existing or prior attorney-client
relationship between the Company and counsel retained by Executive, the Company
irrevocably consents to Executive entering into an attorney-client relationship
with such counsel and agrees that a confidential relationship shall exist
between Executive and such counsel.

     6.   If the Company is at any time before or after a Change of Control
merged or consolidated into or with any other corporation or other entity
(whether or not the Company is the surviving entity), or if substantially all of
the assets thereof are transferred to another corporation 

                                      -6-
<PAGE>
 
or other entity, the provisions of this Agreement will be binding upon and inure
to the benefit of the corporation or other entity resulting from such merger or
consolidation or the acquirer of such assets (the "Successor Entity"), and this
paragraph 6 will apply in the event of any subsequent merger or consolidation or
transfer of assets. The Company will require any such Successor Entity to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such transaction had
taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any Successor Entity which assumes and agrees to
perform this Agreement by operation of law or otherwise.

     In the event of any merger, consolidation, or sale of assets described
above, nothing contained in this Agreement will detract from or otherwise limit
Executive's right to or privilege of participation in any stock option or
purchase plan or any bonus, profit sharing, pension, group insurance,
hospitalization, or other incentive or benefit plan or arrangement which may be
or become applicable to executives of the corporation resulting from such merger
or consolidation or the corporation acquiring such assets of the Company.

     In the event of any merger, consolidation, or sale of assets described
above, references to the Company in this Agreement shall unless the context
suggests otherwise be deemed to include the entity resulting from such merger or
consolidation or the acquiror of such assets of the Company.

     7.   Any termination by the Company for Cause, or by Executive for Good
Reason, shall be communicated by Notice of Termination to the other party hereto
given in accordance with the last paragraph of Section 12 of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a written notice
that (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after the
giving of such notice).  The failure by Executive or the Company to set forth in
the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of Executive or the
Company, respectively, hereunder or preclude Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing Executive's
or the Company's rights hereunder.

     "Date of Termination" means (i) if Executive's employment is terminated by
the Company for Cause, or by Executive for Good Reason, the date of receipt of
the Notice of Termination or any later date specified therein, as the case may
be, (ii) if Executive's employment is terminated by the Company other than for
Cause or Disability, the Date of Termination shall be the date on which the
Company notifies Executive of such termination and (iii) if Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of Executive or the effective date of the
Disability, as the case may be.

                                      -7-
<PAGE>
 
     8.   All payments required to be made by the Company hereunder to Executive
or his dependents, beneficiaries, or estate will be subject to the withholding
of such amounts relating to tax and/or other payroll deductions as may be
required by law.

     In the event that it is determined that any payment or benefit provided by
the Company to or for the benefit of Executive, either under this Agreement or
otherwise, will be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code or any successor provision(s) ("Section 4999"), the
Company will, prior to the date on which any amount of the excise tax must be
paid or withheld, make an additional lump-sum payment (the "Gross-up Payment")
to Executive in an amount sufficient, after giving effect to all federal, state
and other taxes and charges (including interest and penalties, if any) with
respect to the gross-up payment, to make Executive whole for all taxes
(including withholding taxes) and any associated interest and penalties, imposed
under or as a result of Section 4999.

     Determinations under this Section 8 will be made by Coopers & Lybrand
unless Executive has reasonable objections to the use of that firm, in which
case the determinations will be made by a comparable firm chosen by Executive
after consultation with the Company (the firm making the determinations to be
referred to as the "Firm").  The determinations of the Firm will be binding upon
the Company and Executive except as the determinations are established in
resolution (including by settlement) of a controversy with the Internal Revenue
Service to have been incorrect.  All fees and expenses of the Firm will be paid
by the Company.

     If the Internal Revenue Service asserts a claim that, if successful, would
require the Company to make a Gross-up Payment or an additional Gross-up
Payment, the Company and Executive will cooperate fully in resolving the
controversy with the Internal Revenue Service.  The Company will make or advance
such Gross-up Payments as are necessary to prevent Executive from having to bear
the cost of payments made to the Internal Revenue Service in the course of, or
as a result of, the controversy.  The Firm will determine the amount of such
Gross-up Payments or advances and will determine after final resolution of the
controversy whether any advances must be returned by Executive to the Company.
The Company will bear all expenses of the controversy and will gross Executive
up for any additional taxes that may be imposed upon Executive as a result of
its payment of such expenses.

     9.   There shall be no requirement on the part of Executive to seek other
employment or otherwise mitigate damages in order to be entitled to the full
amount of any payments and benefits to which Executive is entitled under this
Agreement, and the amount of such payments and benefits shall not be reduced by
any compensation or benefits received by Executive from other employment other
than with respect to certain welfare benefits as provided in the first proviso
to Section 1(d).

                                      -8-
<PAGE>
 
     10.  Nothing contained in this Agreement shall be construed as a contract
of employment between Company and Executive, or as a right of Executive to
continue in the employ of Company, or as a limitation of the right of Company to
discharge Executive with or without Cause; provided that Executive shall have
the right to receive upon termination of his employment the payments and
benefits provided in this Agreement and shall not be deemed to have waived any
rights he may have either at law or in equity in respect of such discharge.

     11.  No amendment, change, or modification of this Agreement may be made
except in writing, signed by both parties.  This agreement amends and restates
in its entirety the Change of Control Agreement between the parties, dated
December 8, 1997.

     12.  This Agreement shall terminate on December 31, 2000, provided,
however, that commencing on December 31, 1999 and on each annual anniversary of
such date (each such date hereinafter referred to as a "Renewal Date"), unless
previously terminated, the term of this Agreement shall be automatically
extended so as to terminate three years from such Renewal Date, unless at least
sixty days prior to the Renewal Date the Company shall give notice to Executive
that the term of this Agreement shall not be so extended.  This Agreement shall
not apply to a Change of Control which takes place after the termination of this
Agreement.
 
     The provisions of this Agreement shall be binding upon and shall inure to
the benefit of Executive, his executors, administrators, legal representatives
and assigns, and the Company and its successors.

     The validity, interpretation, and effect of this Agreement shall be
governed by the laws of the State of Washington.  Any ambiguities in this
Agreement shall be construed in favor of Executive.

     The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

     The Company shall have no right of set-off or counterclaims, in respect of
any claim, debt, or obligation, against any payments to Executive, his
dependents, beneficiaries, or estate provided for in this Agreement.

     No right or interest to or in any payments shall be assignable by
Executive; provided, however, that this provision shall not preclude him from
           --------                                                          
designating one or more beneficiaries to receive any amount that may be payable
after his death and shall not preclude the legal representative of his estate
from assigning any right hereunder to the person or persons entitled thereto
under his will or, in the case of intestacy, to the person or persons entitled
thereto under the laws of intestacy applicable to his estate.  The term
"beneficiaries" as used in this Agreement shall mean a beneficiary or
beneficiaries so designated to receive any such amount, or if no beneficiary has
been so designated, the legal representative of Executive's estate.

                                      -9-
<PAGE>
 
     No right, benefit, or interest hereunder, shall be subject to anticipation,
alienation, sale, assignment, encumbrance, charge, pledge, hypothecation or set-
off in respect of any claim, debt or obligation, or to execution, attachment,
levy or similar process, or assignment by operation of law. Any attempt,
voluntary or involuntary, to effect any action specified in the immediately
preceding sentence shall, to the full extent permitted by law, be null, void,
and of no effect.

     All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

       If to Executive:  William J. Maxwell
       ---------------   528 Lake Street S. A-302
                         Kirkland, WA  98033      


       If to the Company:  Advanced Radio Telecom Corp.
       -----------------   500 108th Avenue, N.E.    
                           Suite 2600                
                           Bellevue, WA 98004        
                           Attention: General Counsel 

or to such other address as either party shall have furnished to the other in
writing in accordance herewith.  Notice and communications shall be effective
when actually received by the addressee.

     IN WITNESS WHEREOF, the Company and Executive have each caused this
Agreement to be duly executed and delivered as of the date set forth above.

                                 ADVANCED RADIO TELECOM CORP.


                                 By:
                                    ------------------------------


                                 ----------------------------------
                                 William J. Maxwell

                                      -10-
<PAGE>
 
                                   EXHIBIT A

       Change of Control.  For the purposes of this Agreement, a "Change of
       -----------------                                                   
Control" shall mean:

          (a)  The acquisition by any person, corporation, partnership, limited
               liability company or other entity (a "Person", which term shall
               include a group within the meaning of section 13(d) of the
               Securities Exchange Act of 1934 (the "Exchange Act")) of ultimate
               beneficial ownership (within the meaning of Rule 13d-3
               promulgated under the Exchange Act), directly or indirectly of
               30% 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 such acquisition directly from the
               Company, except for acquisition of securities upon conversion of
               other securities of the Company (ii) any such acquisition by the
               Company, (iii) any such 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 such
               acquisition by any corporation pursuant to a transaction which
               complies with clauses (i), (ii) and (iii) of subsection (c) of
               this Exhibit A; 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 subsequent to the date hereof 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, but excluding,
               for this purpose, any such individual whose initial assumption of
               office 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 or sale
               or other disposition of all or substantially all of the assets of
               the Company in one or a series of transactions (a "Business
               Combination"), in each case, unless, following such Business
               Combination, (i) all or substantially all of the individuals and
               entities who were the beneficial owners, respectively, of the

                                      -11-
<PAGE>
 
               Outstanding Company Common Stock and Outstanding Company Voting
               Securities immediately prior to such Business Combination
               beneficially own, directly or indirectly, immediately following
               such Business Combination more than 50% of, respectively, the
               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, as the case may be, of
               the corporation resulting from such Business Combination
               (including, 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) ultimately
               beneficially owns, directly or indirectly, 30% 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 except to the extent that such ownership
               existed prior to the Business Combination and (iii) at least a
               majority 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 shareholders of the Company of a complete
               liquidation or dissolution of the Company.

                                      -12-