Document:

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                                 Exhibit 10.3
                                 ------------

                       Capital One Financial Corporation
                       ---------------------------------
          Amended and Restated Change of Control Employment Agreement
                     -------------------------------------

Each of the following executive officers of Capital One Financial Corporation
has entered into an Amended and Restated Change of Control Employment Agreement
in the form filed herewith:

Richard D. Fairbank
Nigel W. Morris
John G. Finneran, Jr.
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                       CAPITAL ONE FINANCIAL CORPORATION
                       ---------------------------------

                              ___________________

          AMENDED AND RESTATED CHANGE OF CONTROL EMPLOYMENT AGREEMENT
          -----------------------------------------------------------

     AGREEMENT by and between CAPITAL ONE FINANCIAL CORPORATION, a Delaware
corporation (the "Company") and ___________________ (the "Executive"), dated as
of the 25/th/ day of January, 2000.

     The Board of Directors of the Company (the "Board") has determined that it
is in the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company.  The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1.   Certain Definitions.
          -------------------

          (a)  The "Effective Date" shall be the first date during the "Change
     of Control Period" (as defined in Section 1(b)) on which a Change of
     Control occurs. Anything in this Agreement to the contrary notwithstanding,
     if the Executive's employment with the Company is terminated or the terms
     and conditions of the Executive's employment are adversely changed in a
     manner which would constitute grounds for a termination of employment by
     the Executive for Good Reason prior to the date on which a Change of
     Control occurs, and it is reasonably demonstrated that such termination of
     employment or

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     adverse change (i) was at the request of a third party who has taken steps
     reasonably calculated to effect the Change of Control or (ii) otherwise
     arose within 12 months of and in connection with or anticipation of the
     Change of Control, then for all purposes of this Agreement the "Effective
     Date" shall mean the date immediately prior to the date of such termination
     of employment or adverse change.

          (b)  The "Change of Control Period" is the period commencing on the
     date hereof and ending on the third anniversary of such date; provided,
     however, that commencing on the date one year after the date hereof, and on
     each annual anniversary of such date (such date and each annual anniversary
     thereof is hereinafter referred to as the "Renewal Date"), the Change of
     Control Period shall be automatically extended so as to terminate three
     years from such Renewal Date, unless at least 60 days prior to the Renewal
     Date the Company shall give notice to the Executive that the Change of
     Control Period shall not be so extended.

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

          (a)  The acquisition by any 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")) of beneficial ownership (within the
     meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% (or, if
     such shares are purchased from the Company, 40%) 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 "Company Voting Securities"), provided,
                                                                  --------
     however, that any acquisition by (x) the Company or any of its
     -------
     subsidiaries, or any employee benefit plan (or related trust) sponsored or
     maintained by the Company or any of its subsidiaries or (y) any corporation
     with respect to which, immediately following such acquisition, more than
     60% of, respectively, the then outstanding shares of common stock of such
     corporation and the combined voting power of the then outstanding voting
     securities of such corporation entitled to vote generally in the election
     of directors is then beneficially owned, directly or indirectly, in the
     aggregate by all or substantially all of the individuals and entities who
     were the beneficial owners, respectively, of the Outstanding Company

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     Common Stock and Company Voting Securities immediately prior to such
     acquisition in substantially the same proportion as their ownership,
     immediately prior to such acquisition, of the Outstanding Company Common
     Stock and Company Voting Securities, as the case may be, shall not
     constitute a Change of Control; or

          (b)  Individuals who constitute the Board as of the date hereof (the
     "Incumbent Board") cease for any reason to constitute at least a majority
     of the Board, provided that any individual becoming a director subsequent
     to the date hereof whose appointment to fill a vacancy or to fill a new
     Board position or 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 is in
     connection with an actual or threatened election contest relating to the
     election of the Directors of the Company (as such terms are used in Rule
     14a-11 of Regulation 14A promulgated under the Exchange Act); or

          (c)  Approval by the shareholders of the Company of a reorganization,
     merger or consolidation (a "Business Combination"), in each case, with
     respect to which all or substantially all of the individuals and entities
     who were the respective beneficial owners of the Outstanding Company Common
     Stock and Company Voting Securities immediately prior to such Business
     Combination do not in the aggregate, immediately following 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, as the case may be, of the
     corporation resulting from such Business Combination in substantially the
     same proportion as their ownership immediately prior to such Business
     Combination of the Outstanding Company Common Stock and Company Voting
     Securities, as the case may be; or

          (d)  (i)  a complete liquidation or dissolution of the Company or (ii)
     sale or other disposition of all or substantially all of the assets of the
     Company other than to a corporation with respect to which, immediately
     following such sale or disposition, more than 60% of, respectively, the
     then outstanding shares of common stock and the

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     combined voting power of the then outstanding voting securities entitled to
     vote generally in the election of directors is then beneficially owned,
     directly or indirectly, in the aggregate by all or substantially all of the
     individuals and entities who were the beneficial owners, respectively, of
     the Outstanding Company Common Stock and Company Voting Securities
     immediately prior to such sale or disposition in substantially the same
     proportion as their ownership of the Outstanding Company Common Stock and
     Company Voting Securities, as the case may be, immediately prior to such
     sale or disposition.

          (e)  Notwithstanding the foregoing, a Change of Control shall not
     occur with respect to the Executive by reason of any event which would
     otherwise constitute a Change of Control if, immediately after the
     occurrence of such event, individuals including such Executive who were
     executive officers of the Company immediately prior to the occurrence of
     such event, own, directly or indirectly, on a fully diluted basis, (i) 15%
     or more of the then outstanding shares of common stock of the Company or
     any acquiror or successor to substantially all of the business of the
     Company or (ii) 15% or more of the combined voting power of the then
     outstanding voting securities of the Company or any acquiror or successor
     to substantially all of the business of the Company entitled to vote
     generally in the election of directors.

     3.   Employment Period.  The Company hereby agrees to continue the
          -----------------
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company, for the period commencing on the Effective Date and ending on
the third anniversary of such date (the "Employment Period").

     4.   Terms of Employment.
          -------------------

          (a)  Position and Duties.
               -------------------

               (i)  During the Employment Period, (A) the Executive's position
          (including status, offices, titles and reporting requirements),
          authority, duties and responsibilities shall be at least commensurate
          in all material respects with the most significant of those held,
          exercised and assigned at any time during the 90-day period
          immediately preceding the Effective Date and (B) the Executive's
          services shall be performed at the location where the Executive was
          employed immediately preceding the Effective Date or any office or
          location less than 35 miles from such location.

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               (ii) During the Employment Period, and excluding any periods of
          vacation, sabbatical, and sick or similar leave to which the Executive
          is entitled, the Executive agrees to devote reasonable attention and
          time during normal business hours to the business and affairs of the
          Company and, to the extent necessary to discharge the responsibilities
          assigned to the Executive hereunder, to use the Executive's reasonable
          best efforts to perform faithfully and efficiently such
          responsibilities. During the Employment Period it shall not be a
          violation of this Agreement for the Executive to (A) serve on
          corporate, civic or charitable boards or committees, (B) deliver
          lectures, fulfill speaking engagements or teach at educational
          institutions and (C) manage personal investments, so long as such
          activities do not significantly interfere with the performance of the
          Executive's responsibilities as an employee of the Company in
          accordance with this Agreement. It is expressly understood and agreed
          that to the extent that any such activities have been conducted by the
          Executive prior to the Effective Date, the continued conduct of such
          activities (or the conduct of activities similar in nature and scope
          thereto) subsequent to the Effective Date shall not thereafter be
          deemed to interfere with the performance of the Executive's
          responsibilities to the Company.

          (b)  Compensation.
               ------------

               (i)  Base Salary. During the Employment Period, the Executive
                    -----------
          shall receive an annual base salary ("Annual Base Salary"), which
          shall be paid at a monthly rate, at least equal to twelve times the
          highest monthly base salary paid or payable, including by reason of
          deferral and before any reduction for the amount of such annual base
          salary which the Executive may have agreed to forgo in exchange for
          the receipt of stock options from the Company, to the Executive by the
          Company and its affiliated companies in respect of the twelve-month
          period immediately preceding the month in which the Effective Date
          occurs. During the Employment Period, the Annual Base Salary shall be
          reviewed at least annually and shall be increased at any time and from
          time to time as shall be substantially consistent with increases in
          base salary awarded in the ordinary course of business to other peer
          executives of the Company and its affiliated

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          companies. Any increase in Annual Base Salary shall not serve to limit
          or reduce any other obligation to the Executive under this Agreement.
          Annual Base Salary shall not be reduced after any such increase and
          the term Annual Base Salary as utilized in this Agreement shall refer
          to Annual Base Salary as so increased. As used in this Agreement, the
          term "affiliated companies" includes any company controlled by,
          controlling or under common control with the Company. Any payments of
          the Executive's Annual Base Salary made under this Section 4(b)(i) may
          be reduced to the extent provided in an election made by the Executive
          to forgo any or all base salary otherwise payable in exchange for the
          receipt of stock options from the Company. The Company shall maintain
          an account (the "Stock Option Purchase Account"), the balance of
          which, as of any date, shall be equal to the aggregate dollar amount
          of base salary and bonuses that the Executive has agreed to forgo in
          exchange for the receipt of such stock options, less the amount of
          such base salary or bonuses or other compensation (including amounts
          payable upon termination of employment) actually forgone.

               (ii) Annual Bonus.  In addition to any Annual Base Salary payable
                    ------------
          as hereinabove provided, the Executive shall be awarded, for each
          fiscal year beginning or ending during the Employment Period, an
          annual bonus (the "Annual Bonus") in cash at least equal to the sum of
          the target award under the Company's Executive Annual Cash Incentive
          Plan and any other target awards under any other similar annual
          incentive plans (or if no such target award is designated under the
          Company's Executive Annual Cash Incentive Plan or any similar plan,
          the midpoint between the high and low bonus payable to the Executive
          under such plan); provided, however, that such target or midpoint, as
                            --------  -------
          the case may be, shall not be less than such target or midpoint under
          such plans in the year immediately preceding the Change of Control
          (the "Recent Annual Bonus"). Each such Annual Bonus shall be paid no
          later than the end of the third month of the fiscal year next
          following the fiscal year for which the Annual Bonus is awarded,
          unless the Executive shall elect to defer the receipt of such Annual
          Bonus. Any payments of the Executive's Annual Bonus made under this
          Section 4(b)(ii) may be reduced to the extent provided in an election
          made by the

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          Executive to forgo any or all bonus amounts otherwise payable in
          exchange for the receipt of stock options from the Company.

               (iii) Incentive, Savings and Retirement Plans.  In addition to
                     ---------------------------------------
          any Annual Base Salary and Annual Bonus payable as hereinabove
          provided, the Executive shall be entitled to participate during the
          Employment Period in all incentive, profit-sharing, savings and
          retirement plans, practices, policies and programs (including any
          stock-based plans) applicable generally to other peer executives of
          the Company and its affiliated companies, but in no event shall such
          plans, practices, policies and programs provide the Executive with
          incentive, savings and retirement benefit opportunities (including
          under any stock-based plans), in each case, less favorable, in the
          aggregate, except as required to comply with statutory requirements of
          general application which limit the level of benefit opportunity, than
          (A) the most favorable of those provided by the Company and its
          affiliated companies for the Executive under such plans, practices,
          policies and programs as in effect at any time during the 90-day
          period immediately preceding the Effective Date or (B) if more
          favorable to the Executive, those provided at any time after the
          Effective Date to other peer executives of the Company and its
          affiliated companies; provided that no award shall be granted or
          contributions made under any such plan, practice, policy or program to
          the extent the Executive has made an election to forgo awards or
          contributions under such plan, practice, policy or program of the
          Company in exchange for the receipt of stock options from the Company;
          and provided further that any effect on the Executive's participation
          or benefit level resulting from the Executive's not receiving an
          Annual Base Salary as a result of an election made by the Executive to
          forgo any or all base salary otherwise payable in exchange for the
          receipt of stock options from the Company shall be governed by the
          terms of those plans, practices, policies and programs of general
          applicability.

               (iv)  Welfare Benefit Plans.  During the Employment Period, the
                     ---------------------
          Executive and/or the Executive's family, as the case may be, shall be
          eligible for participation in and shall receive all benefits under
          welfare benefit plans, practices, policies and programs provided by
          the Company and its affiliated

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          companies (including, without limitation, medical, prescription,
          dental, disability, salary continuance, employee life, group life,
          split-dollar life insurance, accidental death and travel accident
          insurance plans and programs) to the extent generally applicable to
          other peer executives of the Company and its affiliated companies, but
          in no event shall such plans, practices, policies and programs provide
          the Executive with benefits which are less favorable, in the
          aggregate, than (x) the most favorable of such plans, practices,
          policies and programs in effect for the Executive at any time during
          the 90-day period immediately preceding the Effective Date or (y) if
          more favorable to the Executive, those provided at any time after the
          Effective Date generally to other peer executives of the Company and
          its affiliated companies.

               (v)   Expenses.  During the Employment Period, the Executive
                     --------
          shall be entitled to receive prompt reimbursement for all reasonable
          expenses incurred by the Executive in accordance with the most
          favorable policies, practices and procedures of the Company and its
          affiliated companies in effect for the Executive at any time during
          the 90-day period immediately preceding the Effective Date or, if more
          favorable to the Executive, as in effect generally at any time
          thereafter with respect to other peer executives of the Company and
          its affiliated companies.

               (vi)  Fringe Benefits.  During the Employment Period, the
                     ---------------
          Executive shall be entitled to fringe benefits in accordance with the
          most favorable plans, practices, programs and policies of the Company
          and its affiliated companies in effect for the Executive at any time
          during the 90-day period immediately preceding the Effective Date or,
          if more favorable to the Executive, as in effect generally at any time
          thereafter with respect to other peer executives of the Company and
          its affiliated companies.

               (vii) Office and Support Staff.  During the Employment Period,
                     ------------------------
          the Executive shall be entitled to an office or offices of a size and
          with furnishings and other appointments, and to exclusive personal
          secretarial and other assistance, at least equal to the most favorable
          of the foregoing provided to the Executive by the Company and its
          affiliated companies at any time during the 90-day period

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          immediately preceding the Effective Date or, if more favorable to the
          Executive, as provided generally at any time thereafter with respect
          to other peer executives of the Company and its affiliated companies.

               (viii) Vacation and Other Paid Leave.  During the Employment
                      -----------------------------
          Period, the Executive shall be entitled to paid vacation and other
          paid leave in accordance with the most favorable plans, policies,
          programs and practices of the Company and its affiliated companies as
          in effect at any time during the 90-day period immediately preceding
          the Effective Date or, if more favorable to the Executive, as in
          effect generally at any time thereafter with respect to other peer
          executives of the Company and its affiliated companies; provided that
          such vacation or other leave may not be paid vacation or paid leave to
          the extent provided in an election made by the Executive to forgo any
          or all base salary otherwise payable in exchange for the receipt of
          stock options from the Company.

     5.   Termination of Employment.
          -------------------------

          (a)  Death or Disability.  The Executive's employment shall terminate
               -------------------
     automatically upon the Executive's death during the Employment Period.  If
     the Company determines in good faith that the Disability of the Executive
     has occurred during the Employment Period (pursuant to the definition of
     Disability set forth below), it may give to the Executive written notice in
     accordance with Section 13(b) of this Agreement of its intention to
     terminate the Executive's employment.  In such event, the Executive's
     employment with the Company shall terminate effective on the 30th day after
     receipt of such notice by the Executive (the "Disability Effective Date"),
     provided that, within the 30 days after such receipt, the Executive shall
     not have returned to full-time performance of the Executive's duties.  For
     purposes of this Agreement, "Disability" means the absence of the Executive
     from the Executive's duties with the Company on a full-time basis for 180
     consecutive business days as a result of incapacity due to mental or
     physical illness which is determined to be total and permanent by a
     physician selected by the Company or its insurers and acceptable to the
     Executive or the Executive's legal representative (such agreement as to
     acceptability not to be withheld unreasonably).

          (b)  Cause.  The Company may terminate the Executive's employment
               -----
     during the Employment Period for Cause. For purposes of this Agreement,
     "Cause" means (i) an

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     action taken by the Executive involving willful and wanton malfeasance
     involving specifically a wholly wrongful and unlawful act, or (ii) the
     Executive being convicted of a felony.

          (c)  Good Reason.  The Executive's employment may be terminated during
               -----------
     the Employment Period by the Executive for Good Reason. For purposes of
     this Agreement, "Good Reason" means:

               (i)   The assignment to the Executive of any duties inconsistent
          in any respect with the Executive's position (including status,
          offices, titles and reporting requirements), authority, duties or
          responsibilities as contemplated by Section 4(a) of this Agreement, or
          any other action by the Company which results in a diminution in 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 the Executive;

               (ii)  Any failure by the Company to comply with any of the
          provisions of Section 4(b) of this Agreement, 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 the Executive;

               (iii) The Company's requiring the Executive to be based at any
          office or location other than that described in Section 4(a)(i)(B)
          hereof;

               (iv)  Any purported termination by the Company of the Executive's
          employment otherwise than as expressly permitted by this Agreement; or

               (v)   Any failure by the Company to comply with and satisfy
          Section 11(c) of this Agreement.

          For purposes of this Agreement, any good faith determination of Good
Reason made by the Executive shall be conclusive.  Anything in this Agreement to
the contrary notwithstanding, a termination by the Executive for any reason
during the 30-day period immediately following the first anniversary of the
Effective Date shall be deemed to be a termination for Good Reason for all
purposes of this Agreement.

          (d)  Notice of Termination.  Any termination by the Company for Cause
               ---------------------
     or by the Executive for Good Reason shall be communicated by Notice of
     Termination to the

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     other party hereto given in accordance with Section 13(b) of this
     Agreement. For purposes of this Agreement, a "Notice of Termination" means
     a written notice which (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 the 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 fifteen days after the giving of such
     notice). In the case of a termination of the Executive's employment for
     Cause, a Notice of Termination shall include a copy of a resolution duly
     adopted by the affirmative vote of not less than two-thirds of the entire
     membership of the Board at a meeting of the Board called and held for the
     purpose (after reasonable notice to the Executive and reasonable
     opportunity for the Executive, together with the Executive's counsel, to be
     heard before the Board prior to such vote), finding that in the good faith
     opinion of the Board the Executive was guilty of conduct constituting
     Cause. No purported termination of the Executive's employment for Cause
     shall be effective without a Notice of Termination. The failure by the
     Executive to set forth in the Notice of Termination any fact or
     circumstance which contributes to a showing of Good Reason shall not waive
     any right of the Executive hereunder or preclude the Executive from
     asserting such fact or circumstance in enforcing the Executive's rights
     hereunder.

          (e)  Date of Termination.  "Date of Termination" means the date of
               -------------------
     receipt of the Notice of Termination or any later date specified therein,
     as the case may be; provided, however, that (i) if the 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 the
     Executive of such termination and (ii) if the Executive's employment is
     terminated by reason of death or Disability, the Date of Termination shall
     be the date of death of the Executive or the Disability Effective Date, as
     the case may be.

          (f)  Transition Period.  "Transition Period" means the period
               -----------------
     commencing on the Date of Termination and ending on the thirty-six month
     anniversary of the Date of Termination.

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     6.   Obligations of the Company upon Termination.
          -------------------------------------------

          (a)  Death.  If the Executive's employment is terminated by reason of
               -----
     the Executive's death during the Employment Period, this Agreement shall
     terminate without further obligations to the Executive's legal
     representatives under this Agreement, other than the following obligations:
     (i) payment of the Executive's Annual Base Salary through the Date of
     Termination to the extent not theretofore paid, (ii) payment of the product
     of (x) the greater of (A) the annual bonus paid or payable, including by
     reason of deferral and before any reduction for the amount of such bonus
     which the Executive may have agreed to forgo in exchange for the receipt of
     stock options from the Company (and annualized for any fiscal year
     consisting of less than twelve full months or for which the Executive has
     been employed for less than twelve full months), for the most recently
     completed fiscal year and (B) the Recent Annual Bonus (such greater amount
     hereafter referred to as the "Highest Annual Bonus") and (y) a fraction,
     the numerator of which is the number of days in the current fiscal year
     through the Date of Termination, and the denominator of which is 365 and
     (iii) payment of any bonus earned or accrued by the Executive for the most
     recently completed fiscal year prior to the Date of Termination and not yet
     paid by the Company, any payment of any compensation previously deferred by
     the Executive (together with any accrued interest thereon) and not yet paid
     by the Company and any pay for vacation and sabbatical earned but not yet
     taken (the amounts described in paragraphs (i), (ii) and (iii) are
     hereafter referred to as "Accrued Obligations"). The amount of the
     Company's payment obligations under paragraphs (i), (ii) and (iii) of the
     Accrued Obligations shall be reduced by the amount of any such Annual Base
     Salary or Annual Bonus, respectively, that the Executive had elected to
     forgo in exchange for the receipt of stock options from the Company (the
     "Net Accrued Obligations"). All Net Accrued Obligations shall be paid to
     the Executive's estate or beneficiary, as applicable, in a lump sum in cash
     within 30 days of the Date of Termination. In addition, the Executive's
     estate or designated beneficiaries shall be entitled to receive the
     Executive's Annual Base Salary for the balance of the Employment Period;
     provided that such payments of Annual Base Salary shall be reduced to the
     extent provided in an election made by the Executive to forgo any or all
     base salary otherwise payable in exchange for the receipt of stock options
     from the Company; and provided

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     further that such payments of Annual Base Salary shall be reduced by any
     survivor benefits paid to the Executive's estate or designated beneficiary
     under the Company's Cash Balance Pension Plan (the "Pension Plan").
     Anything in this Agreement to the contrary notwithstanding, the Executive's
     estate and family shall be entitled to receive benefits at least equal to
     the most favorable benefits provided generally by the Company and any of
     its affiliated companies to the estates and surviving families of peer
     executives of the Company and such affiliated companies under such plans,
     programs, practices and policies relating to death benefits, if any, as in
     effect generally with respect to other peer executives and their estates
     and families at any time during the 90-day period immediately preceding the
     Effective Date or, if more favorable to the Executive and/or the
     Executive's family, as in effect on the date of the Executive's death
     generally with respect to other peer executives of the Company and its
     affiliated companies and their families; provided that this sentence shall
     not apply to benefits under any incentive, profit-sharing, savings and
     retirement plans, practices, policies and programs (including any stock-
     based plans) to the extent the Executive has made an election to forgo
     awards or contributions under such plan, practice, policy or program of the
     Company in exchange for the receipt of stock options from the Company.

          (b)  Disability.  If the Executive's employment is terminated by
               ----------
     reason of the Executive's Disability during the Employment Period, this
     Agreement shall terminate without further obligations to the Executive,
     other than for Net Accrued Obligations. All Net Accrued Obligations shall
     be paid to the Executive in a lump sum in cash within 30 days of the Date
     of Termination. In addition, the Executive shall be entitled to receive the
     Executive's Annual Base Salary for the balance of the Employment Period;
     provided that such payments of Annual Base Salary shall be reduced to the
     extent provided in an election made by the Executive to forgo any or all
     base salary otherwise payable in exchange for the receipt of stock options
     from the Company; and provided further that such payments of Annual Base
     Salary shall be reduced by any benefits paid to the Executive under the
     Company's disability plans. Anything in this Agreement to the contrary
     notwithstanding, the Executive shall be entitled after the Disability
     Effective Date to receive disability and other benefits at least equal to
     the most favorable of those generally provided by the Company and its
     affiliated companies to disabled executives

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     and/or their families in accordance with such plans, programs, practices
     and policies relating to disability, if any, as in effect generally with
     respect to other peer executives and their families at any time during the
     90-day period immediately preceding the Effective Date or, if more
     favorable to the Executive and/or the Executive's family, as in effect at
     any time thereafter generally with respect to other peer executives of the
     Company and its affiliated companies and their families; provided that this
     sentence shall not apply to benefits under any incentive, profit-sharing,
     savings and retirement plans, practices, policies and programs (including
     any stock-based plans) to the extent the Executive has made an election to
     forgo awards or contributions under such plan, practice, policy or program
     of the Company in exchange for the receipt of stock options from the
     Company.

          (c)  Cause; Other than for Good Reason.  If the Executive's employment
               ---------------------------------
     shall be terminated for Cause during the Employment Period, this Agreement
     shall terminate without further obligations to the Executive other than the
     obligation to pay to the Executive Annual Base Salary through the Date of
     Termination, plus the amount of any bonus earned or accrued by the
     Executive for the most recently completed fiscal year prior to the Date of
     Termination and any compensation previously deferred by the Executive, in
     each case to the extent theretofore unpaid. The amount of the Company's
     payment of such Annual Base Salary shall be reduced by the amount of any
     such Annual Base Salary that the Executive has elected to forgo in exchange
     for the receipt of stock options from the Company. If the Executive
     terminates employment during the Employment Period other than for Good
     Reason, this Agreement shall terminate without further obligations to the
     Executive, other than for Net Accrued Obligations. All applicable amounts
     due to the Executive pursuant to this Section 6(c) shall be paid to the
     Executive in a lump sum in cash within 30 days of the Date of Termination.

          (d)  Good Reason; Other Than for Cause or Disability.  If, during the
               -----------------------------------------------
     Employment Period, the Company shall terminate the Executive's employment
     other than for Cause or Disability, or if the Executive shall terminate
     employment under this Agreement for Good Reason:

                                      -15-
<PAGE>

               (i)  The Company shall pay to the Executive in a lump sum in cash
          within 30 days after the Date of Termination the aggregate of the
          following amounts:

                    (A)  All Net Accrued Obligations; and

                    (B)  The product of (x) three and (y) the sum of (i) Annual
               Base Salary and (ii) the Highest Annual Bonus; and

                    (C)  an amount equal to any unvested account balance in any
               defined contribution plan, and any supplemental and excess
               retirement plans with respect thereto, that would have vested had
               the Executive's employment with the Company continued for the
               duration of the Transition Period; and

                    (D)  an amount equal to the contributions and accrued
               earnings that would have been made under any defined contribution
               plan, and any supplemental and excess retirement plans with
               respect thereto, had the Executive's employment with the Company
               continued for the duration of the Transition Period and had the
               Executive contributed to such plans at the highest rate permitted
               by such plans, calculated assuming that the terms of such plans
               are no less favorable than those in effect during the 90-day
               period immediately prior to the Effective Date, or if more
               favorable to the Executive, those in effect generally at any time
               thereafter with respect to such plans for other peer executives
               of the Company and its affiliated companies; and

               (ii) For the remainder of the Employment Period, or such longer
          period as any plan, program, practice or policy may provide, the
          Company shall continue benefits to the Executive and/or the
          Executive's family at least equal to those which would have been
          provided to them in accordance with the plans, programs, practices and
          policies described in Section 4(b)(iv) of this Agreement if the
          Executive's employment had not been terminated in accordance with the
          most favorable plans, practices, programs or policies of the Company
          and its affiliated companies applicable generally to other peer
          executives and their families during the 90-day period immediately
          preceding the Effective Date or, if more favorable

                                      -16-
<PAGE>

          to the Executive, as in effect generally at any time thereafter with
          respect to other peer executives of the Company and its affiliated
          companies and their families. For purposes of determining eligibility
          of the Executive for retiree benefits pursuant to such plans,
          practices, programs and policies, the Executive shall be considered to
          have remained employed for the duration of the Employment Period and
          to have retired on the last day of such period. In lieu of the
          benefits provided for in this Section 6(d)(ii), the Executive may
          elect within 60 days of the Date of Termination to be paid an amount
          in cash equal to the present value of such benefits on an after-tax
          basis. In determining present value, a discount rate equal to the
          federal mid-term rate under Section 1274(d) of the Internal Revenue
          Code of 1986, as amended (the "Code") shall be utilized. The right to
          continued benefits granted to the Executive and/or his family pursuant
          to this Section 6(d)(ii) shall be in addition to any right of
          continued coverage under any of the plans, programs, practices and
          policies described in Section 4(b)(iv) of this Agreement which the
          Executive and/or his family may be entitled to under the Consolidated
          Omnibus Budget Reconciliation Act of 1985 ("COBRA") upon any loss of
          coverage under such plans, programs, practices and policies.

          The amount payable by the Company to the Executive pursuant to Section
6(d)(i)(B) above will be reduced by any remaining balance in the Stock Option
Purchase Account; provided that such reduction will not be made to the extent
that the remaining balance is paid to the Company pursuant to any other
repayment provision in any other agreement.

     7.   Non-exclusivity of Rights.  Except as otherwise specifically provided
          -------------------------
in this Agreement, nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any benefit, bonus, incentive
or other plans, programs, policies or practices, provided by the Company or any
of its affiliated companies and for which the Executive may qualify, nor shall
anything herein limit or otherwise affect such rights as the Executive may have
under any other agreements with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or program of the Company or any of
its affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program except as
explicitly modified by this Agreement.

                                      -17-
<PAGE>

     8.   Full Settlement.  The Company's obligation to make the payments
          ---------------
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of, and no amounts
earned by the Executive at such other employment or otherwise shall reduce, the
amounts payable to the Executive under any of the provisions of this Agreement.
The Company agrees to pay, to the full extent permitted by law, all legal fees
and expenses which the Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any payment pursuant to Section 9
of this Agreement), plus in each case interest at the applicable federal rate
provided for in Section 7872(f)(2) of the Code.

     9.   Certain Additional Payments by the Company.
          ------------------------------------------

          (a)  Anything in this Agreement to the contrary notwithstanding, in
     the event it shall be determined that any payment or distribution by the
     Company to or for the benefit of the Executive, whether paid or payable or
     distributed or distributable pursuant to the terms of this Agreement or
     otherwise (a "Payment"), would be subject to the excise tax imposed by
     Section 4999 of the Code or any interest or penalties are incurred by the
     Executive with respect to such excise tax (such excise tax, together with
     any such interest and penalties, are hereinafter collectively referred to
     as the "Excise Tax"), then the Executive shall be entitled to receive an
     additional payment (a "Gross-Up Payment") in an amount such that after
     payment by the Executive of all taxes (including any interest or penalties
     imposed with respect to such taxes), including, without limitation, any
     income taxes and Excise Tax imposed upon the Gross-Up Payment, the
     Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
     imposed upon the Payments.

          (b)  Subject to the provisions of Section 9(c), all determinations
     required to be made under this Section 9, including whether a Gross-Up
     Payment is required and the amount of such Gross-Up Payment and the
     assumptions not specified herein to be used in arriving at such
     determinations, shall be made by the Company's certified public accounting
     firm immediately prior to the Effective Date (the "Accounting Firm"). Such

                                      -18-
<PAGE>

     determination shall be made within fifteen business days after request
     therefor by notice from the Executive or the Company to such firm and to
     the other party hereto. In making such determination with respect to any
     matter which is uncertain, the Accounting Firm shall adopt the position
     which it believes more likely than not would be adopted by the Internal
     Revenue Service. The Accounting Firm shall provide detailed supporting
     calculations with respect to its determination both to the Company and the
     Executive within such fifteen business day period. All fees and expenses of
     the Accounting Firm under this Section 9(b) shall be borne solely by the
     Company. The initial Gross-Up Payment, if any, as determined pursuant to
     this Section 9(b), shall be paid by the Company to the Executive within
     five days of the receipt of the Accounting Firm's determination. If the
     Accounting Firm determines that no Excise Tax is payable by the Executive,
     it shall furnish the Executive with a written opinion that failure to
     report the Excise Tax on the Executive's applicable federal income tax
     return would not result in the imposition of a negligence or similar
     penalty. Any determination by the Accounting Firm shall be final, binding
     and conclusive upon the Company and the Executive, except as provided in
     the following sentences of this Section 9(b). As a result of uncertainty in
     the application of Section 4999 of the Code at the time of the initial
     determination by the Accounting Firm hereunder, it is possible that Gross-
     Up Payments which will not have been made by the Company should have been
     made ("Underpayment") or that Gross-Up Payments which have been made by the
     Company should not have been made ("Excess Gross-Up Payment"), consistent
     with the calculations required to be made hereunder. Either party hereto
     can request a redetermination by the Accounting Firm. An Underpayment can
     result from a claim by the Internal Revenue Service or from a determination
     by the Accounting Firm. In the event that the Internal Revenue Service
     makes a claim and the Company exhausts its remedies pursuant to Section
     9(c) and the Executive thereafter is required to make a payment of any
     Excise Tax, the Accounting Firm shall promptly determine the amount of the
     Underpayment that has occurred and any such Underpayment shall be promptly
     paid by the Company to or for the benefit of the Executive. In the event
     that the Accounting Firm determines that an Underpayment has occurred, the
     Accounting Firm shall promptly determine the amount of the Underpayment,
     which shall be promptly paid by the Company to or for the benefit of the

                                      -19-
<PAGE>

     Executive. An Excess Gross-Up Payment can result from a determination by
     the Internal Revenue Service or the Accounting Firm. If the Accounting Firm
     makes an Excess Gross-Up Payment determination, it must furnish the
     Executive with a written opinion that the basis for its determination would
     be accepted by the Internal Revenue Service and that the Executive has a
     right to a refund of taxes or credit against taxes with respect to the
     Excess Gross-Up Payment. The Executive shall promptly repay to the Company
     an amount equal to the reduction in aggregate taxes due by the Executive
     resulting from such determination by the Internal Revenue Service or the
     Accounting Firm, provided that the Executive shall only be required to
     repay any portion of such amount that had been paid to the Internal Revenue
     Service to the extent that and when the Executive receives a refund from
     the Internal Revenue Service (or is entitled and able to utilize such
     amount as a credit against other taxes due).

          (c)  The Executive shall notify the Company in writing of any claim by
     the Internal Revenue Service that, if successful, would require the payment
     by the Company of a Gross-Up Payment. Such notification shall be given as
     soon as practicable but no later than ten business days after the Executive
     is informed in writing of such claim and shall apprise the Company of the
     nature of such claim and the date on which such claim is requested to be
     paid. The Executive shall not pay such claim prior to the expiration of the
     30-day period following the date on which the Executive gives such notice
     to the Company (or such shorter period ending on the date that any payment
     of taxes with respect to such claim is due). If the Company notifies the
     Executive in writing prior to the expiration of such period that it desires
     to contest such claim, the Executive shall:

               (i)   Give the Company any information reasonably requested by
          the Company relating to such claim,

               (ii)  Take such action in connection with contesting such claim
          as the Company shall reasonably request in writing from time to time,
          including, without limitation, accepting legal representation with
          respect to such claim by an attorney reasonably selected by the
          Company,

               (iii) Cooperate with the Company in good faith in order
          effectively to contest such claim, and

                                      -20-
<PAGE>

               (iv) Permit the Company to participate in any proceedings
          relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any taxes, including, without limitation, any Excise Tax or
income tax, including interest and penalties with respect thereto, imposed as a
result of such representation and payment of costs and expenses.  Without
limitation on the foregoing provisions of this Section 9(c), the Company shall
control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct the Executive to pay the tax claimed and
sue for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any taxes, including, without limitation, any Excise Tax
or income tax, including interest or penalties with respect thereto, imposed
with respect to such advance or with respect to any imputed income with respect
to such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount.  Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

          (d)  If, after the receipt by the Executive of an amount advanced by
     the Company pursuant to Section 9(c), the Executive becomes entitled to
     receive any refund with respect to such claim, the Executive shall (subject
     to the Company's complying with the requirements of Section 9(c)) promptly
     pay to the Company the amount of such refund (together with any interest
     paid or credited thereon after taxes applicable thereto).

                                      -21-
<PAGE>

     If, after the receipt by the Executive of an amount advanced by the Company
     pursuant to Section 9(c), a determination is made that the Executive shall
     not be entitled to any refund with respect to such claim and the Company
     does not notify the Executive in writing of its intent to contest such
     denial of refund prior to the expiration of 30 days after such
     determination, then such advance shall be forgiven and shall not be
     required to be repaid and the amount of such advance shall offset, to the
     extent thereof, the amount of Gross-Up Payment required to be paid.

     10.  Confidential Information.  The Executive shall hold in a fiduciary
          ------------------------
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it. In no event shall an asserted
violation of the provisions of this Section 10 constitute a basis for deferring
or withholding any amounts otherwise payable to the Executive under this
Agreement.

     11.  Successors.
          ----------

          (a)  This Agreement is personal to the Executive and without the prior
     written consent of the Company shall not be assignable by the Executive
     otherwise than by will or the laws of descent and distribution. This
     Agreement shall inure to the benefit of and be enforceable by the
     Executive's legal representatives.

          (b)  This Agreement shall inure to the benefit of and be binding upon
     the Company and its successors and assigns.

          (c)  The Company will require any successor (whether direct or
     indirect, by purchase, merger, consolidation or otherwise) to all or
     substantially all of the business and/or assets of the Company 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 it if no such
     succession had taken place. As used in this Agreement, "Company" shall mean
     the Company as hereinbefore defined and any successor to its business
     and/or

                                      -22-
<PAGE>

     assets as aforesaid which assumes and agrees to perform this Agreement by
     operation of law, or otherwise.

     12.  Funding.  This Agreement constitutes an unfunded, unsecured obligation
          -------
of the Company and any payments made hereunder shall be made from the general
assets of the Company.  However, the Company has established a trust pursuant to
a trust agreement and shall make contributions to such trust in accordance with
the terms and conditions of such trust agreement for the purpose of assisting
the Company in meeting its payment obligations under this Agreement.

     13.  Miscellaneous.
          -------------

          (a)  This Agreement shall be governed by and construed in accordance
     with the laws of the State of Delaware, without reference to principles of
     conflict of laws. The captions of this Agreement are not part of the
     provisions hereof and shall have no force or effect. This Agreement may not
     be amended or modified otherwise than by a written agreement executed by
     the parties hereto or their respective successors and legal
     representatives.

          (b)  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 the Executive:
          -------------------

          To the address shown on the Company's records for tax reporting
          purposes.

          If to the Company:
          -----------------

          Capital One Financial Corporation
          2980 Fairview Park Drive
          Falls Church, Virginia 22042
          Attention: Officer-in-Charge,
                     Human Resources Division

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.

                                      -23-
<PAGE>

          (c)  The invalidity or unenforceability of any provision of this
     Agreement shall not affect the validity or enforceability of any other
     provision of this Agreement.

          (d)  The Company may withhold from any amounts payable under this
     Agreement such federal, state or local taxes as shall be required to be
     withheld pursuant to any applicable law or regulation.

          (e)  The Executive's failure to insist upon strict compliance with any
     provision hereof or the failure to assert any right the Executive may have
     hereunder, including, without limitation, the right to terminate employment
     for Good Reason pursuant to Section 5(c)(i)-(v), shall not be deemed to be
     a waiver of such provision or right or any other provision or right
     thereof.

          (f)  This Agreement contains the entire understanding of the Company
     and the Executive with respect to the subject matter hereof and supercedes
     in its entirety any prior Change of Control Agreement by and between the
     Company and the Executive. Until the Effective Date, subject to the terms
     of any other employment agreement between the Executive and the Company,
     the Executive shall continue to be an "employee at will".

                                      -24-
<PAGE>

          IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
     hand and, pursuant to the authorization from its Board of Directors, the
     Company has caused these presents to be executed in its name on its behalf,
     all as of the day and year first above written.

                                    _____________________________________

                                    CAPITAL ONE FINANCIAL CORPORATION

                                    By __________________________________

                                      -25-<PAGE>

                                 Exhibit 10.7
                                 ------------

                       CAPITAL ONE FINANCIAL CORPORATION

                           1994 STOCK INCENTIVE PLAN

                        (As Amended November 18, 1999)

     1.   Purpose.  The purpose of the Capital One Financial Corporation 1994
Stock Incentive Plan (the "Plan") is to further the long term stability and
financial success of Capital One Financial Corporation (the "Company") by
attracting and retaining key employees of the Company through the use of stock
incentives. It is believed that ownership of Company Stock will stimulate the
efforts of those employees of the Company upon whose judgment and interest the
Company is and will be largely dependent for the successful conduct of its
business. It is also believed that Awards granted to such employees under this
Plan will strengthen their desire to remain with the Company and will further
the identification of those employees' interests with those of the Company's
shareholders. The Plan was adopted by the Board of Directors and approved by the
Company's sole shareholder on October 28, 1994.

     The Plan is intended to satisfy the requirements of Securities and Exchange
Commission Rule 16b-3 ("Rule 16b-3").

     2.   Definitions.  As used in the Plan, the following terms have the
meanings indicated:

          (a)  "Award" means, collectively, the award of an Option, Stock
     Appreciation Right, Restricted Stock or Incentive Stock under the Plan.

          (b)  "Board" means the board of directors of the Company.
<PAGE>

          (c)  "Change of Control" means:

               (i)  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")) of beneficial ownership
          (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
          of 20% (or, if such shares are purchased from the Company, 40%) or
          more of either (A) the then outstanding shares of common stock of the
          Company (the "Outstanding Company Common Stock") or (B) the combined
          voting power of the then outstanding voting securities of the Company
          entitled to vote generally in the election of directors (the "Company
          Voting Securities"), provided, however, that any acquisition by (x)
                               --------  -------
          the Company or any of its subsidiaries, or any employee benefit plan
          (or related trust) sponsored or maintained by the Company or any of
          its subsidiaries or (y) any corporation with respect to which,
          immediately following such acquisition, more than 60% of,
          respectively, the then outstanding shares of common stock of such
          corporation and the combined voting power of the then outstanding
          voting securities of such corporation entitled to vote generally in
          the election of directors is then beneficially owned, directly or
          indirectly, by all or substantially all of the individuals and
          entities who were the beneficial owners, respectively, of the
          Outstanding Company Common Stock and Company Voting Securities
          immediately prior to such acquisition in substantially the same
          proportion as their ownership, immediately prior to such acquisition,
          of the

                                       2
<PAGE>

          Outstanding Company Common Stock and Company Voting Securities, as the
          case may be, shall not constitute a Change of Control; or

               (ii)  Individuals who constitute the Board as of September 1,
          1995 (the "Incumbent Board") cease for any reason to constitute at
          least a majority of the Board, provided that any individual becoming a
          director subsequent to September 1, 1995 whose appointment to fill a
          vacancy or to fill a new Board position or whose 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 is in connection with an actual or
          threatened election contest relating to the election of the Directors
          of the Company (as such terms are used in Rule 14a-11 of Regulation
          14A promulgated under the Exchange Act); or

               (iii) Approval by the shareholders of the Company of a
          reorganization, merger or consolidation (a "Business Combination"), in
          each case, with respect to which all or substantially all of the
          individuals and entities who were the respective beneficial owners of
          the Outstanding Company Common Stock and Company Voting Securities
          immediately prior to such Business Combination do not in the
          aggregate, immediately following 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,

                                       3
<PAGE>

          as the case may be, of the corporation resulting from such Business
          Combination in substantially the same proportion as their ownership
          immediately prior to such Business Combination of the Outstanding
          Company Common Stock and Company Voting Securities, as the case may
          be; or

               (iv) (A)  a complete liquidation or dissolution of the Company or
          (B) sale or other disposition of all or substantially all of the
          assets of the Company other than to a corporation with respect to
          which, immediately following such sale or disposition, 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 is then
          beneficially owned, directly or indirectly, in the aggregate by all or
          substantially all of the individuals and entities who were the
          beneficial owners, respectively, of the Outstanding Company Common
          Stock and Company Voting Securities immediately prior to such sale or
          disposition in substantially the same proportion as their ownership of
          the Outstanding Company Common Stock and Company Voting Securities, as
          the case may be, immediately prior to such sale or disposition.

               (v)  Neither the sale of Company common stock in an initial
          public offering, nor the distribution of Company common stock by
          Capital One Financial Corporation's parent corporation to its
          shareholders in a transaction to which Section 355 of the Internal
          Revenue Code applies, nor any restructuring of the

                                       4
<PAGE>

          Company or its Board of Directors in contemplation of or as the result
          of either of such events, shall constitute a Change of Control.

          (d)  "Code" means the Internal Revenue Code of 1986, as amended.

          (e)  "Company" means Capital One Financial Corporation, a Delaware
     corporation.

          (f)  "Company Stock" means Common Stock of the Company. If the par
     value of the Company Stock is changed, or in the event of a change in the
     capital structure of the Company (as provided in Section 15), the shares
     resulting from such a change shall be deemed to be Company Stock within the
     meaning of the Plan.

          (g)  "Date of Grant" means the date on which an Award is granted by
     the Committee or such later date specified by the Committee as the date as
     of which the Award is to be effective.

          (h)  "Disability" or "Disabled" means, as to an Incentive Stock
     Option, a Disability within the meaning of Code section 22(e)(3). As to all
     other Awards, the Committee shall determine whether a Disability exists and
     such determination shall be conclusive.

          (i)  "Distribution" means the distribution of the Company's common
     stock to shareholders of the Company's parent corporation in a transaction
     to which Code Section 355 applies.

          (j)  "Distribution Date" means the date on which the Distribution
     occurs.

          (k)  "Fair Market Value" means, on the date shares of the Company
     Stock are offered in an initial public offering, the offering price, and on
     any given date thereafter,

                                       5
<PAGE>

     the average of the high and low price on such date as reported on The New
     York Stock Exchange-Composite Transactions Tape. In the absence of any such
     sale, fair market value means the average of the highest bid and lowest
     asked prices of a share of Company Stock on such date as reported by such
     source. In the absence of such average or if shares of Company Stock are no
     longer traded on The New York Stock Exchange, the fair market value shall
     be determined by the Committee using any reasonable method in good faith.

          (l)  "Incentive Stock" means Company Stock awarded when performance
     goals are achieved pursuant to an incentive plan as provided in Section 9.

          (m)  "Incentive Stock Option" means an Option intended to meet the
     requirements of, and qualify for favorable Federal income tax treatment
     under, Code section 422.

          (n)  "Insider" means a person subject to Section 16(b) of the
     Securities Exchange Act of 1934.

          (o)  "Nonstatutory Stock Option" means an Option, which does not meet
     the requirements of Code section 422, or even if meeting the requirements
     of Code section 422, is not intended to be an Incentive Stock Option and is
     so designated.

          (p)  "Option" means a right to purchase Company Stock granted under
     the Plan, at a price determined in accordance with the Plan.

          (q)  "Parent" means, with respect to any corporation, a "parent
     corporation" of that corporation within the meaning of Code section 424(e).

          (r)  "Participant" means any employee who receives an Award under the
     Plan.

                                       6
<PAGE>

          (s)  "Reload Feature" means a feature of an Option described in an
     employee's stock option agreement that provides for the automatic grant of
     a Reload Option in accordance with the provisions described in Section
     10(d).

          (t)  "Reload Option" means an Option granted to an employee equal to
     the number of shares of already owned Company Stock delivered by the
     employee to exercise an Option described in Section 10(d).

          (u)  "Restricted Stock" means Company Stock awarded upon the terms and
     subject to the restrictions set forth in Section 8.

          (v)  "Restricted Stock Award" means an award of Restricted Stock
     granted under the Plan.

          (w)  "Rule 16b-3" means Rule 16b-3 of the Securities Exchange Act of
     1934. A reference in the Plan to Rule 16b-3 shall include a reference to
     any corresponding rule (or number redesignation) of any amendments to Rule
     16b-3 enacted after the effective date of the Plan's adoption.

          (x)  "Stock Appreciation Right" means a right granted under the Plan
     to receive from the Company amounts in cash or shares of Company Stock upon
     the surrender of an Option.

          (y)  "Stock Option Committee" or "Committee" means the committee
     appointed by the Board as described under Section 16.

          (z)  "Subsidiary" means, with respect to any corporation, a
     "subsidiary corporation" of that corporation within the meaning of Code
     section 424(f).

                                       7
<PAGE>

          (aa) "10% Shareholder" means a person who owns, directly or
     indirectly, stock possessing more than 10% of the total combined voting
     power of all classes of stock of the Company or any Parent or Subsidiary of
     the Company. Indirect ownership of stock shall be determined in accordance
     with Code section 424(d).

     3.   General. The following types of Awards may be granted under the Plan:
Options, Stock Appreciation Rights, Restricted Stock or Incentive Stock. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options.

     4.   Stock. Subject to Section 15 of the Plan, there shall be reserved for
issuance under the Plan an aggregate of 43,112,640 shares of Company Stock, of
which 41,612,640 shares (the "Existing Reserve") may be used for the grant of
any Award and 1,500,000 shares (the "New Reserve") may be used for the grant of
any Award except Incentive Stock Options, which shall be authorized, but
unissued shares. Shares granted under the Plan that expire or otherwise
terminate unexercised and shares forfeited pursuant to restrictions on
Restricted Stock or Incentive Stock may again be subjected to an Award under the
Plan. The Committee is expressly authorized to make an Award to a Participant
conditioned upon the surrender for cancellation of an existing Award. For
purposes of determining the number of shares that are available for Awards under
the Plan, such number shall include the number of shares surrendered by an
optionee or retained by the Company in payment of federal and state income tax
withholding liabilities upon exercise of a Nonstatutory Stock Option or a Stock
Appreciation Right.

     5.   Eligibility.

          (a)  Any employee of the Company (or Parent or Subsidiary of the
Company) who, in the judgment of the Committee has contributed or can be
expected to contribute to the

                                       8
<PAGE>

profits or growth of the Company (or Parent or Subsidiary) shall be eligible to
receive Awards under the Plan. Directors of the Company who are employees and
are not members of the Committee are eligible to participate in the Plan. The
Committee shall have the power and complete discretion, as provided in Section
16, to select eligible employees to receive Awards and to determine for each
employee the terms and conditions, the nature of the award and the number of
shares to be allocated to each employee as part of each Award.

          (b)  The grant of an Award shall not obligate the Company or any
Parent or Subsidiary of the Company to pay an employee any particular amount of
remuneration, to continue the employment of the employee after the grant or to
make further grants to the employee at any time thereafter.

     6.   Stock Options.

          (a)  Whenever the Committee deems it appropriate to grant Options,
notice shall be given to the eligible employee stating the number of shares for
which Options are granted, the Option price per share, whether the Options are
Incentive Stock Options or Nonstatutory Stock Options, the extent to which Stock
Appreciation Rights are granted (as provided in Section 7), and the conditions
to which the grant and exercise of the Options are subject. This notice shall
constitute the stock option agreement between the Company and the eligible
employee.

          (b)  The exercise price of shares of Company Stock covered by an
Option shall be not less than 100% of the Fair Market Value of such shares on
the Date of Grant. If the employee is a 10% Shareholder and the Option is an
Incentive Stock Option, the exercise price shall be not less than 110% of the
Fair Market Value of such shares on the Date of Grant.

                                       9
<PAGE>

          (c)  Options may be exercised in whole or in part at such times as may
be specified by the Committee in the employee's stock option agreement; provided
that the exercise provisions for Incentive Stock Options shall in all events not
be more liberal than the following provisions:

               (i)  No Incentive Stock Option may be exercised after the first
          to occur of (x) ten years (or, in the case of an Incentive Stock
          Option granted to a 10% Shareholder, five years) from the Date of
          Grant, (y) three months from the employee's retirement or termination
          of employment with the Company and its Parent and Subsidiary
          corporations for reasons other than Disability or death, or (z) one
          year from the employee's termination of employment on account of
          Disability or death.

               (ii) Except as otherwise provided in this paragraph, no Incentive
          Stock Option may be exercised unless the employee is employed by the
          Company or a Parent or Subsidiary of the Company at the time of the
          exercise (or was so employed not more than three months before the
          time of the exercise) and has been employed by the Company or a Parent
          or Subsidiary of the Company at all times since the Date of Grant. If
          an employee's employment is

                                       10
<PAGE>

          terminated other than by reason of his Disability or death at a time
          when the employee holds an Incentive Stock Option that is exercisable
          (in whole or in part), the employee may exercise any or all of the
          exercisable portion of the Incentive Stock Option (to the extent
          exercisable on the date of termination) within three months after the
          employee's termination of employment. If an employee's employment is
          terminated by reason of his Disability at a time when the employee
          holds an Incentive Stock Option that is exercisable (in whole or in
          part), the employee may exercise any or all of the exercisable portion
          of the Incentive Stock Option (to the extent exercisable on the date
          of Disability) within one year after the employee's termination of
          employment. If an employee's employment is terminated by reason of his
          death at a time when the employee holds an Incentive Stock Option that
          is exercisable (in whole or in part), the Incentive Stock Option may
          be exercised (to the extent exercisable on the date of death) within
          one year after the employee's death by the person to whom the
          employee's rights under the Incentive Stock Option shall have passed
          by will or by the laws of descent and distribution.

               (iii) An Incentive Stock Option by its terms, shall be
          exercisable in any calendar year only to the extent that the aggregate
          Fair Market Value (determined at the Date of Grant) of the Company
          Stock with respect to which incentive stock options are exercisable
          for the first time during the calendar year does not exceed $100,000
          (the "Limitation Amount"). Incentive Stock Options granted under the
          Plan and similar incentive options granted after 1986 under all other
          plans of the Company and any Parent or Subsidiary of the Company shall
          be aggregated for purposes of determining whether the Limitation
          Amount has been exceeded. The Board may impose such conditions as it
          deems appropriate on an Incentive Stock Option to ensure that the
          foregoing requirement is met. If Incentive Stock Options that first
          become exercisable in a calendar year exceed the Limitation

                                       11
<PAGE>

          Amount, the excess Options will be treated as Nonstatutory Stock
          Options to the extent permitted by law.

          (d)  The Committee may, in its discretion, grant Options which by
their terms become fully exercisable upon a Change of Control, notwithstanding
other conditions on exercisability in the stock option agreement.

          (e)  The maximum number of shares with respect to which Nonstatutory
Options or Stock Appreciation Rights may be granted in any calendar year to an
employee eligible to participate in the Plan is as follows: the Chief Executive
Officer, 1,500,000; each of the next four most highly compensated employees,
1,000,000; each other eligible employee, 500,000.

          (f)  The Committee may, in its discretion, grant Options containing or
amend Options previously granted to provide for a Reload Feature subject to the
limitations of Section 10(d).

          (g)  Notwithstanding paragraph (c) above, the Committee may, in its
discretion, amend a previously granted Incentive Stock Option to provide for
more liberal exercise provisions; provided however if the Incentive Stock Option
as amended no longer meets the requirements of Code section 422, and as a result
such Option no longer qualifies for favorable Federal income tax treatment under
Code section 422, the amendments shall not become effective without the written
consent of the Participant and provided further that no Incentive Stock Option
may be exercised after ten (10) years (or, in the case of an Incentive Stock
Option granted to a 10% Shareholder, five (5) years) from the Date of Grant.

                                       12
<PAGE>

     7.   Stock Appreciation Rights.

          (a)  Whenever the Committee deems it appropriate, Stock Appreciation
Rights may be granted in connection with all or any part of an Incentive Stock
Option. At the discretion of the Committee, Stock Appreciation Rights may also
be granted in connection with all or any part of a Nonstatutory Stock Option,
either concurrently with the grant of the Nonstatutory Stock Option or at any
time thereafter during the term of the Nonstatutory Stock Option. The following
provisions apply to all Stock Appreciation Rights that are granted in connection
with Options:

               (i)  Stock Appreciation Rights shall entitle the employee, upon
          exercise of all or any part of the Stock Appreciation Rights, to
          surrender to the Company unexercised that portion of the underlying
          Option relating to the same number of shares of Company Stock as is
          covered by the Stock Appreciation Rights (or the portion of the Stock
          Appreciation Rights so exercised) and to receive in exchange from the
          Company an amount in cash or shares of Company Stock (as provided in
          the Stock Appreciation Right) equal to the excess of (x) the Fair
          Market Value on the date of exercise of the Company Stock covered by
          the surrendered portion of the underlying Option over (y) the exercise
          price of the Company Stock covered by the surrendered portion of the
          underlying Option. The Committee may limit the amount that the
          employee will be entitled to receive upon exercise of the Stock
          Appreciation Right.

                                       13
<PAGE>

               (ii)  Upon the exercise of a Stock Appreciation Right and
          surrender of the related portion of the underlying Option, the Option,
          to the extent surrendered, shall not thereafter be exercisable.

               (iii) Subject to any further conditions upon exercise imposed by
          the Committee, a Stock Appreciation Right issued in tandem with an
          Option shall be exercisable only to the extent that the related Option
          is exercisable and shall expire no later than the date on which the
          related Option expires.

               (iv)  A Stock Appreciation Right may only be exercised at a time
          when the Fair Market Value of the Company Stock covered by the Stock
          Appreciation Right exceeds the exercise price of the Company Stock
          covered by the underlying Option.

          (b)  The manner in which the Company's obligation arising upon the
exercise of a Stock Appreciation Right shall be paid shall be determined by the
Committee and shall be set forth in the employee's Option or the related Stock
Appreciation Rights agreement. The Committee may provide for payment in Company
Stock or cash, or a fixed combination of Company Stock or cash, or the Committee
may reserve the right to determine the manner of payment at the time the Stock
Appreciation Right is exercised. Shares of Company Stock issued upon the
exercise of a Stock Appreciation Right shall be valued at their Fair Market
Value on the date of exercise.

     8.   Restricted Stock Awards.

          (a)  Whenever the Committee deems it appropriate to grant a Restricted
Stock Award, notice shall be given to the Participant stating the number of
shares of Restricted Stock

                                       14
<PAGE>

for which the Restricted Stock Award is granted and the terms and conditions to
which the Restricted Stock Award is subject. This notice, when accepted in
writing by the Participant shall become an award agreement between the Company
and the Participant and certificates representing the shares shall be issued and
delivered to the Participant. A Restricted Stock Award may be made by the
Committee in its discretion without cash consideration.

          (b)  Restricted Stock issued pursuant to the Plan shall be subject to
     the following restrictions:

               (i)   Unless otherwise provided by the Committee, Restricted
          Stock may not be sold, assigned, transferred or disposed of within a
          six-month period beginning on the Date of Grant.

               (ii)  None of such shares may be sold, assigned, transferred,
          pledged, hypothecated, or otherwise encumbered or disposed of until
          the restrictions on such shares shall have lapsed or shall have been
          removed pursuant to paragraph (d) or (e) below.

               (iii) If a Participant ceases to be employed by the Company or a
          Parent or Subsidiary of the Company, the Participant shall forfeit to
          the Company any shares of Restricted Stock, the restrictions on which
          shall not have lapsed or shall not have been removed pursuant to
          paragraph (d) or (e) below, on the date such Participant ceases to be
          so employed.

          (c)  Upon the acceptance by a Participant of a Restricted Stock Award,
     such Participant shall, subject to the restrictions set forth in paragraph
     (b) above, have all the rights of a shareholder with respect to the shares
     of Restricted Stock

                                       15
<PAGE>

Award, including, but not limited to, the right to vote such shares of
Restricted Stock and the right to receive all dividends and other distributions
paid thereon. Certificates representing Restricted Stock shall bear a legend
referring to the restrictions set forth in the Plan and the Participant's award
agreement.

          (d) The Committee shall establish as to each Restricted Stock Award
the terms and conditions upon which the restrictions set forth in paragraph (b)
above shall lapse. Such terms and conditions may include, without limitation,
the passage of time, the meeting of performance goals, the lapsing of such
restrictions as a result of the Disability, death or retirement of the
Participant, or the occurrence of a Change of Control.

          (e) Notwithstanding the forfeiture provisions of paragraph (b)(iii)
above, the Committee may at any time, in its sole discretion, accelerate the
time at which any or all restrictions will lapse or remove any and all such
restrictions.

          (f) Each Participant shall agree at the time his Restricted Stock
Award is granted, and as a condition thereof, to pay to the Company, or make
arrangements satisfactory to the Company regarding the payment to the Company
of, the aggregate amount of any Federal, state or local taxes of any kind
required by law to be withheld with respect to the shares of Restricted Stock
subject to the Restricted Stock Award. Until such amount has been paid or
arrangements satisfactory to the Company have been made, no stock certificate
free of a legend reflecting the restrictions set forth in paragraph (b) above
shall be issued to such Participant.

          (g) The Company may place on any certificate representing Company
Stock issued in connection with an Incentive Award any legend deemed desirable
by the Company's

                                       16
<PAGE>

counsel to comply with Federal or state securities laws, and the Company may
require a customary written indication of the Participant's investment intent.

  9.  Incentive Stock Awards.

      (a) Incentive Stock may be issued pursuant to the Plan in connection with
incentive programs established from time to time by the Committee when
performance criteria established by the Committee as part of the incentive
program have been achieved. If the objectives established by the Committee as a
prerequisite to the receipt of Incentive Stock have not been achieved, no stock
will be issued, except as provided in (c). A Participant eligible for the
receipt or issuance of incentive shares will have no rights as a stockholder
before actual receipt of the Incentive Stock.

     (b) Whenever the Committee deems it appropriate, the Committee may
establish an incentive program and notify Participants of their participation in
and the terms of the incentive program. More than one incentive program may be
established by the Committee and they may operate concurrently or for varied
periods of time and a Participant may be permitted to participate in more than
one incentive program at the same time. Incentive Stock will be issued only
subject to the incentive program and the Plan and consistent with meeting the
performance goals set by the Committee. Incentive Stock may be issued without
cash consideration.

     (c) The Committee may provide in the incentive program, or subsequently,
that Incentive Stock will be issued if a Change of Control occurs even though
the performance goals set by the Committee have not been met.

                                       17
<PAGE>

       (d) A Participant's interest in an incentive program may not be sold,
assigned, transferred, pledged, hypothecated, or otherwise encumbered.

       (e) Each Participant shall agree as a condition of his participation in
an incentive program and the receipt of Incentive Stock, to pay to the Company,
or make arrangements satisfactory to the Company regarding the payment to the
Company of, the aggregate amount of any Federal, state or local taxes of any
kind required by law to be withheld with respect to the shares of Incentive
Stock received. Until such amount has been paid or arrangements satisfactory to
the Company have been made, no stock certificate free of a legend reflecting the
restrictions set forth in paragraph (b) above shall be issued to such
Participant.

       (f) The Company may place on any certificate representing Company Stock
issued in connection with an Incentive Award any legend deemed desirable by the
Company's counsel to comply with Federal or state securities laws, and the
Company may require a customary written indication of the Participant's
investment intent.

  10.  Method of Exercise of Options and Stock Appreciation Rights.

       (a) Options and Stock Appreciation Rights may be exercised by the
employee giving written notice of the exercise to the Company, stating the
number of shares the employee has elected to purchase under the Option or the
number of Stock Appreciation Rights he has elected to exercise. In the case of
the purchase of shares under an Option, such notice shall be effective only if
accompanied by the exercise price in full in cash; provided that if the terms of
an Option so permit, the employee may (i) deliver Company Stock that the
Participant has owned for at least six (6) months (valued at Fair Market Value
on the date of exercise) in satisfaction of all or any part of the exercise
price, (ii) deliver a properly executed exercise notice together with

                                       18
<PAGE>

irrevocable instructions to a broker to promptly deliver to the Company the
amount of the sale or loan proceeds to pay the exercise price, or (iii) deliver
an interest bearing promissory note, payable to the Company, in payment of all
or part of the exercise price together with such collateral as may be required
by the Committee at the time of exercise. The interest rate under any such
promissory note shall be equal to the minimum interest rate required at the time
to avoid imputed interest to the Participant under the Code.

     (b) Options and Stock Appreciation Rights may also be exercised by the
employee in accordance with any other method or methods of exercise as may be
approved from time to time by the Committee;

     (c) The Company may place on any certificate representing Company Stock
issued upon the exercise of an Option or Stock Appreciation Right any legend
deemed desirable by the Company's counsel to comply with Federal or state
securities laws, and the Company may require of the employee a customary written
indication of his investment intent. Until the employee has made any required
payment, including any applicable Federal, state and local withholding taxes,
and has had issued to him a certificate for the shares of Company Stock
acquired, he shall possess no shareholder rights with respect to the shares.

     (d) If an employee exercises an Option that has a Reload Feature by
delivering already owned shares of Company Stock, the employee shall
automatically be granted a Reload Option. The Reload Option shall be subject to
the following provisions:

          (i) The Reload Option shall cover the number of shares of Company
      Stock delivered by the employee to the Company to exercise the Option with
      the Reload Feature;

                                       19
<PAGE>

          (ii)  The Reload Option will not have a Reload Feature;

          (iii) The exercise price of shares of Company Stock covered by a
       Reload Option shall be 100% of the Fair Market Value of such shares on
       the date the employee delivers shares of Company Stock to the Company to
       exercise the Option that has a Reload Feature;

          (iv)  The Reload Option shall be subject to the same restrictions on
       exercisability as those imposed on the underlying Option (possessing the
       Reload Feature);

          (v)   The Reload Option shall not be exercisable until the expiration
       of any retention holding period imposed on the disposition of any shares
       of Company Stock covered by the underlying Option (possessing the Reload
       Feature).

The Committee may, in its discretion, cause the Company to place on any
certificate representing Company Stock issued to a Participant upon the exercise
of an underlying Option (possessing a Reload Feature as evidenced by the stock
option agreement for such Option) delivered pursuant to this subsection (d), a
legend restricting the sale or other disposition of such Company Stock.

       (e) Notwithstanding anything herein to the contrary, Awards shall always
be granted and exercised in such a manner as to conform to the provisions of
Rule 16b-3, or any replacement rule adopted, as the same now exists or may, from
time to time, be amended.

  11.  Applicable Withholding Taxes.  As an alternative to making a cash payment
to the Company to satisfy tax withholding obligations, the Committee may
establish procedures permitting the Participant to elect to (a) deliver shares
of already owned Company Stock or (b)

                                       20
<PAGE>

have the Company retain that number of shares of Company Stock that would
satisfy all or a specified portion of the Federal, state and local tax
liabilities of the Participant arising in the year the Award becomes subject to
tax. Any such election shall be made only in accordance with procedures
established by the Committee.

  12.  Transferability of Awards and Options.  To the extent required by the
Code, Awards, by their terms, shall not be transferable by the Participant
except by will or by the laws of descent and distribution and shall be
exercisable, during the Participant's lifetime, only by the Participant or by
his guardian or legal representative.  The Committee is expressly authorized, in
its discretion, to provide that all or a portion of a Nonstatutory Stock Option
or Stock Appreciation Right may be granted to a Participant upon terms that
permit transfer of the Nonstatutory Stock Option or Stock Appreciation Right in
a form and manner determined by the Committee.

  13.  Effective Date of the Plan.  This Plan having been adopted by the
Company's Board and approved by the Company's sole shareholder shall be
effective on October 28, 1994.  Until the requirements of any applicable federal
and state securities laws have been met, no Option or Stock Appreciation Right
shall be exercisable and no award of Restricted Stock or Incentive Stock shall
be made.

  14.  Termination, Modification, Change.  If not sooner terminated by the
Board, this Plan shall terminate at the close of business on October 27, 2004.
No Awards shall be made under the Plan after its termination.  The Board may
terminate the Plan or may amend the Plan in such respects as it shall deem
advisable; provided, that, if and to the extent required by the Code, no change
shall be made that materially increases the total number of shares of Company
Stock

                                       21
<PAGE>

reserved for issuance pursuant to Awards granted under the Plan (except pursuant
to Section 15), materially expands the class of persons eligible to receive
Awards, or materially increases the benefits accruing to Participants under the
Plan, unless such change is authorized by the shareholders of the Company.
Notwithstanding the foregoing, the Board may amend the Plan and unilaterally
amend Awards as it deems appropriate to ensure compliance with Rule 16b-3 and to
cause Incentive Stock Options to meet the requirements of the Code and
regulations thereunder. Except as provided in the preceding sentence, a
termination or amendment of the Plan shall not, without the consent of the
Participant, detrimentally affect a Participant's rights under an Award
previously granted to him.

  15.  Change in Capital Structure.

       (a) In the event of a stock dividend, stock split or combination of
shares, spin-off, recapitalization or merger in which the Company is the
surviving corporation or other change in the Company's capital stock (including,
but not limited to, the creation or issuance to shareholders generally of
rights, options or warrants for the purchase of common stock or preferred stock
of the Company), the number and kind of shares of stock or securities of the
Company to be subject to the Plan and to Awards then outstanding or to be
granted under the Plan, the maximum number of shares or securities which may be
delivered under the Plan, the exercise price and other relevant provisions shall
be appropriately adjusted by the Committee, whose determination shall be binding
on all persons. If the adjustment would produce fractional shares with respect
to any unexercised Option, the Committee may adjust appropriately the number of
shares covered by the Option so as to eliminate the fractional shares.

                                       22
<PAGE>

       (b) If the Company is a party to a consolidation or a merger in which the
Company is not the surviving corporation, a transaction that results in the
acquisition of substantially all of the Company's outstanding stock by a single
person or entity, or a sale or transfer of substantially all of the Company's
assets, the Committee may take such actions with respect to outstanding
Incentive Awards as the Committee deems appropriate.

       (c) Notwithstanding anything in the Plan to the contrary, the Committee
may take the foregoing actions without the consent of any Participant, and the
Committee's determination shall be conclusive and binding on all persons for all
purposes.

  16.  Administration of the Plan.  The Plan shall be administered by the
Committee consisting solely of two or more nonemployee directors of the Company
(within the meaning of Rule 16b-3), who shall be appointed by the Board.  The
Committee shall have general authority to impose any limitation or condition
upon an Award the Committee deems appropriate to achieve the objectives of the
Award and the Plan and, in addition, and without limitation and in addition to
powers set forth elsewhere in the Plan, shall have the following specific
authority:

       (a) The Committee shall have the power and complete discretion to
  determine (i) which eligible employees shall receive an Award and the nature
  of the Award, (ii) the number of shares of Company Stock to be covered by each
  Award, (iii) whether Options shall be Incentive Stock Options or Nonstatutory
  Stock Options, (iv) when, whether and to what extent Stock Appreciation Rights
  shall be granted in connection with Options, (v) whether to include a Reload
  Feature in an Option and to impose limitations on the use of shares acquired
  through the exercise of a Reload Option to exercise Options, (vi) the fair
  market value of Company Stock, (vii) the time or times when an Award shall be
  granted,

                                       23
<PAGE>

     (viii) whether an Award shall become vested over a period of time and when
     it shall be fully vested, (ix) conditions relating to the length of time
     before disposition of Company Stock received in connection with an Award is
     permitted, (x) the terms and conditions on which restrictions upon
     Restricted Stock shall lapse, (xi) whether to accelerate the time of
     receipt of Incentive Stock or the time when any or all restrictions with
     respect to Restricted Stock will lapse or be removed, (xii) the terms of
     incentive programs, performance criteria and other factors relevant to the
     issuance of Incentive Stock or the lapse of restrictions on Restricted
     Stock, (xiii) when Options and Stock Appreciation Rights may be exercised,
     (xiv) whether a Disability exists, (xv) the manner in which payment will be
     made upon the exercise of Options or Stock Appreciation Rights, (xvi)
     whether to approve a Participant's election (x) to deliver shares of
     already owned Company Stock to satisfy tax liabilities arising upon the
     exercise of a Nonstatutory Stock Option or Stock Appreciation Right or (y)
     to have the Company withhold from the shares to be issued upon the exercise
     or receipt of an Award that number of shares necessary to satisfy tax
     liabilities arising from such exercise or receipt, (xvii) notice provisions
     relating to the sale of Company Stock acquired under the Plan, and (xviii)
     any additional requirements relating to Awards that the Committee deems
     appropriate. Notwithstanding the foregoing, no "tandem stock options"
     (where two stock options are issued together and the exercise of one option
     affects the right to exercise the other option) may be issued in connection
     with Incentive Stock Options. The Committee shall also have the power to
     amend the terms of previously granted Awards so long as the terms as
     amended are consistent with the terms of the Plan and provided that the
     consent of the Participant is

                                       24
<PAGE>

     obtained with respect to any amendment that would be detrimental to him,
     except that such consent will not be required if such amendment is for the
     purpose of complying with Rule 16b-3 or any requirement of the Code
     applicable to the Award.

          (b) The Committee may adopt rules and regulations for carrying out the
     Plan. The interpretation and construction of any provision of the Plan by
     the Committee shall be final and conclusive. The Committee may consult with
     counsel, who may be counsel to the Company, and shall not incur any
     liability for any action taken in good faith in reliance upon the advice of
     counsel.

          (c) A majority of the members of the Committee shall constitute a
     quorum, and all actions of the Committee shall be taken by a majority of
     the members present. Any action may be taken by a written instrument signed
     by all of the members, and any action so taken shall be fully effective as
     if it had been taken at a meeting.

          (d) The Board of Directors from time to time may appoint members
     previously appointed and may fill vacancies, however caused, in the
     Committee.

     17. Notice. All notices and other communications required or permitted to
be given under this Plan shall be in writing and shall be deemed to have been
duly given if delivered as follows: (a) if to the Company - delivery shall be
made personally or by first class mail, postage prepaid at its principal
business address to the attention of the Company's Director of Human Resources;
and (b) if to any Participant - personally, including by delivery through the
Company's internal electronic system with a return receipt requested or
interoffice mail system, or by first class mail, postage prepaid, at the last
known address of the Participant known to the sender at the time the notice or
other communication is sent.

                                       25
<PAGE>

       18. Interpretation. The terms of this Plan are subject to all present and
future regulations and rulings of the Secretary of the Treasury or his delegate
relating to the qualification of Incentive Stock Options under the Code.  If any
provision of the Plan conflicts with any such regulation or ruling, then that
provision of the Plan shall be void and of no effect.

       19. Foreign Equity Incentive Plans. The Committee may authorize any
foreign Subsidiary or any foreign unincorporated division of the Company or of a
Subsidiary to adopt a plan for granting Awards (a "Foreign Equity Incentive
Plan"). All Awards granted under a Foreign Equity Incentive Plan shall be
treated as grants under this Plan. A Foreign Equity Incentive Plan shall have
such terms as the Committee permits; provided that such terms are not
inconsistent with the provisions of this Plan; and provided further that such
terms may be more restrictive than those in this Plan. Awards granted under a
Foreign Equity Incentive Plan shall be governed by the terms of this Plan except
to the extent that the terms of the Foreign Equity Incentive Plan are more
restrictive than the terms of this Plan, in which case such terms of the Foreign
Equity Incentive Plan shall control.

       20. Substitute Award. The Committee may make a grant of an Award to an
employee of another corporation who becomes an employee of the Company (or
Parent or Subsidiary of the Company) by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization, liquidation or
similar transaction involving the Company (or Parent or Subsidiary of the
Company) in substitution for any award made by such corporation. The terms and
conditions of the substitute Award may vary from the terms and conditions
required by the Plan and from those of the substituted award. The Committee
shall prescribe the provisions of the substitute Award.

                                       26
<PAGE>

     21. Provisions Applicable to French Employees. Notwithstanding any other
provision of the Plan to the contrary, the following provisions shall apply to
Options granted to any employee who is employed by a French company or who works
primarily in France (hereinafter collectively referred to as a "French
Employee").

         (a) Notwithstanding anything to the contrary herein, whether a
Disability exists for a French Employee shall be determined in accordance with
French law.

         (b) Notwithstanding the provisions of Section 3 herein, only Options
may be granted to French Employees to the exclusion of any other type of Awards.
Moreover, Options granted under the Plan to French Employees may be Nonstatutory
Stock Options only.

         (c) Notwithstanding anything to the contrary herein, no Option shall
be granted to any French Employee who holds more than ten percent of the
Company's capital as of the Date of Grant.

         (d) Notwithstanding the provisions of Section 4 herein, (i) at no time
shall the number of shares underlying Options granted to French Employees but
not exercised exceed one-third of the total number of shares of Company Stock
issued and outstanding, and (ii) the Committee shall not make an Award to any
French Employee conditioned upon the surrender for cancellation of an existing
Award.

         (e) Notwithstanding the provisions of Section 6(b) herein, all Options
granted to French Employees shall be granted at an exercise price per share
equal to the greater of (i) the Fair Market Value per share of Company Stock as
of the Date of Grant and (ii) 80% of the average Fair Market Value per share of
Company Stock for the 20 trading days preceding the Date of Grant.

                                       27
<PAGE>

          (f) Notwithstanding anything to the contrary herein, in respect of a
Participant who is a French Employee, upon such French Employee's death, the
vested portion of such Participant's Option shall remain exercisable for a six-
month period after the date of his death and shall be exercisable by his heirs,
provided his heirs agree to comply with and be bound by the Plan and the
employee's stock option agreement, if applicable.

          (g) Notwithstanding anything to the contrary herein, in respect of a
Participant who is a French Employee, the method of exercise shall comply with
applicable French law.

          (h) Notwithstanding the provisions of Section 12 herein, no Option
granted to a French Employee shall be transferable except as provided in
paragraph (f) above.

          (i) Notwithstanding the provisions of Section 14 herein, no Options
shall be granted to any French Employee under the Plan five years after the
later of (i) the date the Company's shareholders initially approved the Plan or
(ii) the date on which the Plan has been subsequently re-authorized, in its
original form or as amended from time to time by the Board, by the Company's
shareholders.

          (j) Notwithstanding anything to the contrary herein, no portion of any
Option granted to a French Employee shall become exercisable before the second
anniversary of the Date of Grant. Moreover, notwithstanding anything to the
contrary herein, no share of the Company Stock received pursuant to the exercise
of an Option by a French Employee may be sold for a three-year period after the
date the Option is exercised, unless (i) such sale occurs on or after the fifth
anniversary of the Option's Date of Grant; (ii) the Optionee is dismissed or
retired from the Company (to the extent that the Optionee has exercised Options
at least three months prior to notice of such dismissal or retirement); (iii)
the Optionee's dies or terminates due to

                                       28
<PAGE>

disability. The stock option agreements with respect to French Employees shall
reflect these restrictions and may provide that if the Optionee sells shares in
breach of the foregoing restrictions, he or she shall be responsible for his or
her share of any taxes or social charges arising from such sale.

          (k) Notwithstanding anything to the contrary herein, the Company shall
not amend or terminate all or a portion of an Option granted to any French
Employee without the consent of such French Employee.

          (l) Notwithstanding the provisions of Section 15 herein, any
adjustment made to any Option granted to a French Employee shall comply with
applicable French law.

                                       29

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